HBM HEALTHCARE INVESTMENTS AG Half-Year Report2023
September
At a Glance
Profile and Portfolio
HBM Healthcare Investments invests in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. The company holds and actively manages an international portfolio of promising companies.
Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided on their strategic directions. This is what makes HBM Healthcare Investments an interesting alternative to investing in big pharma and biotech companies. HBM Health- care Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Investments by continents 2)
Global portfolio.
Europe | |
20% | |
Asia | |
Americas | 34% |
46% |
- Total consolidated assets as at 30.9.2023: CHF 1 775 million.
- Total investments as at 30.9.2023: CHF 1 644 million.
HBM Healthcare Investments Ltd / Half-Year Report September 2023 | 2 |
Allocation of assets 1)
Mainly invested in private companies or in companies originating from the private companies portfolio.
39% | Private companies | ||||||||
24% | Public (from private) | ||||||||
companies | |||||||||
20% | Public companies | ||||||||
10% | Funds | ||||||||
5% | Cash and cash equivalents | ||||||||
2% | Other assets | ||||||||
Currency allocation of assets 1) | |||||||||
Emphasis on US dollar investments. | |||||||||
60% | US dollar (USD) | ||||||||
17% | Renminbi (CNY) | ||||||||
12% | Euro (EUR) | ||||||||
5% | Indian rupee (INR) | ||||||||
4% | Other currencies | ||||||||
(CAD, DKK, GBP, HKD, SEK) | |||||||||
2% | Swiss franc (CHF) | ||||||||
Development phase of portfolio companies 2)
Mainly invested in revenue generating companies orin companies with products at an advanced stage of development.
40% | Profitable | |
27% | Products on the market | |
5% | Phase III | |
13% | Phase II | |
8% | Phase I | |
7% | Preclinical | |
Therapeutic area of the lead product of portfolio companies 2)
Broadly diversified areas of activity.
24% | Others | ||
17% | Synthetic biology | ||
17% | Oncology | ||
11% | Digital health | ||
11% | Central nervous system | ||
8% | Orphan diseases | ||
7% | Immunology / inflammation | ||
5% | Medical technology / | ||
diagnostics |
At a Glance | HBM Healthcare Investments Ltd / Half-Year Report September 2023 | 3 |
Key Figures and Performance |
Key Figures | 30.9.2023 | |
Net assets | CHF million | 1 649.5 |
Investments in private companies and funds | 856.1 | |
Investments in public companies | 787.8 | |
Cash and cash equivalents | ||
(net of liability from market hedging) | 86.9 | |
Net result for the period | CHF million | - 70.3 |
Basic earnings per share | CHF | - 10.11 |
Net asset value (NAV) per share | CHF | 237.22 |
Share price | CHF | 175.80 |
Premium (+) / discount (-) | % | - 25.9 |
Distribution per share | CHF | |
Distribution yield | % | |
Shares issued | Registered shares (m) | 7.0 |
Shares outstanding | Registered shares (m) | 7.0 |
31.3.2023 | 31.3.2022 | 31.3.2021 | 31.3.2020 | |
1 | 772.7 | 1 986.5 | 2 151.5 | 1 448.8 |
846.1 | 790.3 | 662.8 | 706.4 | |
847.0 | 1 130.2 | 1 404.2 | 629.9 | |
232.0 | 223.7 | 327.0 | 224.2 | |
- 146.3 | - 78.0 | 756.3 | 182.7 | |
- 21.03 | - 11.22 | 108.71 | 26.26 | |
254.80 | 285.53 | 309.25 | 208.25 | |
214.00 | 276.00 | 332.50 | 190.00 | |
- 16.0 | - 3.3 | +7.5 | - 8.8 | |
7.50 | 9.70 | 12.50 1) | 7.70 | |
3.5 | 3.5 | 3.8 | 4.1 | |
7.0 | 7.0 | 7.0 | 7.0 | |
7.0 | 7.0 | 7.0 | 7.0 |
- Thereof CHF 9.50 as ordinary distribution and CHF 3.00 as a special distribution to mark the 20th anniversary of the Company.
Performance (including distributions) | 2023/2024 |
(6 months) |
2022/2023 2021/2022 2020/2021 2019/2020
Net asset value (NAV) | % | - 4.0 | - 7.4 | - 3.6 | 52.2 | 13.9 |
Registered share HBMN | % | - 14.3 | - 18.9 | - 13.2 | 79.1 | 17.0 |
Indexed performance since launch in CHF (12.7.2001 = 100), distributions reinvested 560
500
HBM Healthcare Investments Share
440
380
HBM Healthcare Investments NAV
320
NASDAQ Biotechnology Index
260
200
MSCI World Health Care Index
140 | ||||||||||
80 | ||||||||||
20 | ||||||||||
1.10.2013 | 30.9.2014 | 30.9.2015 | 30.9.2016 | 30.9.2017 | 30.9.2018 | 30.9.2019 | 30.9.2020 | 30.9.2021 | 30.9.2022 | 30.9.2023 |
Management Report | HBM Healthcare Investments Ltd / Half-Year Report September 2023 | 4 |
1 April to 30 September 2023 |
HBM Healthcare Investments posted a loss of CHF 70 million for the first six months of the 2023/2024 financial year. With a 4 percent decline in net asset value (NAV), HBM Healthcare's performance was in line with the general performance of the biotechnology sector. The result is owed mainly to declining valuations of some public companies, which overall led to a loss of CHF - 59 million in the quarter ended 30 September. However, the situation is not homo- geneous. While the market environment in China remains very challenging, companies in India benefited from good growth prospects. Notwithstanding the current negative market sentiment, many private companies in HBM Health- care's well-diversified portfolio are growing successfully and thus gradually create value that is not immediately reflected in the Company's net asset value. HBM Healthcare therefore remains confident but proceeds cautiously in line with the current market environment.
Dear Shareholders
HBM Healthcare Investments reports a loss of CHF 59 million for the second quarter of the 2023/2024 financial year as at 30 September. The net asset value per share (NAV) declined by 3.4 percent.
For the first half of the financial year, this adds up to a loss of CHF 70 million, with a 4.0 percent decline in NAV. This is in line with the general performance of the biotechnology sector. In the same period, the Nasdaq Biotechnology Index lost 3.7 percent and the S&P SPDR Biotech declined
4.1 percent. The more broadly based MSCI World Health Care Index was more stable, down 0.1 percent.
Management Report | HBM Healthcare Investments Ltd / Half-Year Report September 2023 | 5 |
1 April to 30 September 2023 |
Market environment remains challenging
The biotechnology sector continues to be characterised by significant investor restraint and few developments with relevance to valuation. Accordingly, HBM Healthcare's half-year result was mainly influenced by the decline in market valuation of public companies to the tune of CHF 58 million.
The picture is not homogeneous though: A few public, formerly private companies depressed the result by a total of CHF 70 million, primarily Cathay Biotech with CHF - 44 million and Mineralys Therapeutics with CHF - 15 million. The other public companies increased in value by a total of CHF 12 million benefitting also from biopharma companies in India with good local growth prospects.
The market environment in China in particular is challenging. Here, Cathay Biotech's share price gave back some of the gains the company had made following the announcement of the advantageous strategic agreement with China Merchants Group. Nevertheless, after a holding period of more than 15 years and the expiry of the 3-yearlock-up period, HBM Healthcare Investments was able to rea- lise its first gains on the investment.
The funds' portfolio recorded a slight decline in value of CHF 5 million. In the reporting period, the funds called CHF 6 million from existing investment commitments. This was offset by repayments of CHF 2 million from realisations.
The portfolio of private companies burdened the result with CHF 10 million. Of this, CHF 4 million was due to unfavourable currency developments and CHF 6 million net to value adjustments. A positive revaluation was made on the investment in Upstream Bio (CHF + 13 million), which was acquired only about one and a half years ago. Value adjustments were made for Farmalatam (CHF - 8 million), Adrenomed (CHF - 4 million), Valcare (CHF - 3 million), Odyssey Therapeutics (CHF - 3 million) and other companies (CHF - 1 million, net).
Other assets increased by CHF 16 million net, primarily due to the revaluation of milestone and royalty claims from previous company sales. The focus is on an asset of the former private portfolio company Surface Logix. Due to a lack of financing, Kadmon Pharmaceuticals took over the company's rights in 2011, while the shareholders of Surface Logix - including HBM Healthcare - were granted claims to future sales proceeds. In 2021, Kadmon was in turn acquired by Sanofi, and the FDA granted market approval in the USA for the drug RezurockTM - originally developed by Surface - for the treatment of chronic graft-versus-host disease (GvHD). The successful launch led to the revaluation of the corresponding asset at HBM Healthcare. The first licence payment of CHF 2 million received from these claims underlines the substance of the revaluation.
The financial result amounted to CHF 1 million. Administrative costs decreased to CHF 14 million.
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HBM Healthcare Investments AG published this content on 12 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 October 2023 04:42:25 UTC.
