Bellevue Asia Pacific Healthcare

Asian stock markets posted broad gains in August, with the Nikkei 225 climbing +6.8%, the Hang Seng Index up +2.1%, and the CSI 300 advancing +11.6%. Australia’s benchmark S&P/ASX 200 also rose +5.1%. Overall, Asia-Pacific equities ended the month higher, gaining +3.1%.

The Asia-Pacific healthcare sector (-2.4%) lagged the broader Asia-Pacific equity market. Persistent concerns over the most-favored-nation (MFN) pricing model in the US and potential tariffs on biopharma products weighed on sentiment. The Bellevue Asia Pacific Healthcare (Lux) Fund (-1.0%) outperformed its benchmark.

JD Health (+25.7%), Sino Biopharm (+9.3%), Otsuka (+9.1%), Takeda (+8.0%), and Terumo (+6.7%) were among the top contributors to the fund’s absolute performance. JD Health’s Q2 results beat expectations, and the company raised its full-year guidance. Strong performance in the branded drug segment, coupled with disciplined investment in its platform and AI, drove the upside. Sino Biopharm reported results ahead of investor expectations and predicted double-digit revenue and EPS growth in FY 2025. With over 19 products expected to gain approval in the next three years and a strong likelihood of out-licensing deals, Sino Biopharm is becoming increasingly attractive to investors. Otsuka raised its H2 royalty income guidance, driven primarily by Kisqali, a breast cancer therapy licensed to Novartis, came in strong. Despite a weak Q1, investor sentiment regarding Takeda has improved ahead of the anticipated launch of its key orexin drug for the treatment of narcolepsy, a disorder that causes excessive daytime sleepiness and sudden sleep attacks. Previous data suggest the drug could be first to market with strong efficacy. Terumo delivered a positive earnings surprise, with revenue growth and margin expansion supported by favorable pricing and cost-cutting initiatives.

Sysmex (-22.6%), CSL (-20.0%), Legend Biotech (-11.1%), Chugai (-9.3%), and Celltrion (-6.2%) were the largest detractors from the fund’s absolute performance. Sysmex reported disappointing results, dashing investor hopes of a China recovery story. CSL declined on the back of weak results and a guidance cut driven by macroeconomic uncertainties. . Despite solid results, Legend Biotech saw waning investor interest as the company has few catalysts lined up post-Q2, prompting investors to shift focus to other outperforming biotech stocks. Chugai suffered after orforglipron failed to demonstrate a differentiated profile versus Novo Nordisk’s rival therapy. Celltrion delivered largely in-line Q2 results, and lowered guidance that had previously been viewed as aggressive.

All performance figures are in USD, with fund performance shown for B shares.

Asia is the world’s most dynamic growth region, home to more than half of the global population. By 2050, Asian emerging markets are projected to account for over 50% of global GDP. As household incomes rise, economic growth in many Asian countries is expected to shift from manufacturing toward services. A growing middle class is driving stronger demand for modern medicine, with healthcare increasingly ranking as a top priority. Billions are being invested in infrastructure, technology, and research to modernize healthcare systems across emerging markets, expanding access to quality care. At the same time, rapid population aging is further boosting demand. In 25 years’ time, China alone is expected to have nearly 400 million people over the age of 65, creating a significant need for advanced health services and medicines.

Japan, often referred to as «the world’s demographic laboratory,» has been a champion of cutting-edge innovation for decades. The country holds technology leadership in fields ranging from therapeutic antibody development and immunotherapy to robotics, digitalization, diagnostics, and medical imaging systems.

The fund provides defensive exposure to Asian emerging markets while offering attractive opportunities in the region’s technology leaders. Its investments span the entire healthcare value chain, from generic drug manufacturers and biotechnology firms to medical device makers and digital health specialists.