BB Biotech (BION) Q2 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached CHF 173 mn, reversing a CHF 267 mn loss in H1 2023, driven by portfolio gains and favorable currency effects, despite a Q2 2024 net loss of CHF 87 mn.

• Share price total return for H1 2024 was -2.0% in CHF, with portfolio performance at +7.3% in CHF, supported by USD strength; Q2 2024 share price return was -12.0% in CHF.

• Portfolio rejuvenation continued with gains on large-cap positions, new investments in Edgewise Therapeutics, and positive clinical milestones from Alnylam, Intra-Cellular Therapies, and Agios.

• Leadership transition announced: Dr. Daniel Koller to retire as head of Investment Management Team, succeeded by Dr. Christian Koch in 2025.

Financial highlights

• Market capitalization at June 30, 2024: CHF 2,221.5 mn; Net Asset Value: CHF 2,386.9 mn; Earnings per share for H1 2024: CHF 3.16.

• Dividend of CHF 2.00 per share paid in March 2024.

• Investment level at quarter-end: 113.5%, near the upper end of the target range.

• Total expense ratio (TER) p.a.: 1.35%.

• Portfolio comprised 31 stocks at end of Q2 2024.

Outlook and guidance

• Anticipates robust news flow from portfolio companies in H2 2024, including key clinical trial readouts and product approvals.

• Expects increased M&A activity in H2 2024 as pharma seeks to replenish pipelines amid patent expirations.

• Central bank rate decisions, US elections, and Inflation Reduction Act seen as pivotal for sector valuations and capital flows.

• Optimistic on sector fundamentals, with improved capital markets and strengthened portfolio company balance sheets.

• Improved borrowing conditions for biotech firms with attractive pipelines.