HBM HEALTHCARE INVESTMENTS AG Annual Report20232024
342°
Chameleons have a horizontal field of vision of up to 342 degrees. But these lizards are best known for their ability to change colour, making some masters of camouflage. In the human body, we also find amazing examples of mimicry, such as tumours masquerading as healthy cells. Understanding these mechanisms is often a promising starting point for drug development.
Chameleons can move each eye independently and can see up to a thousand metres. Their tongue is sometimes longer than the entire animal and can move at split-second speeds. But chameleons are most famous for their ability to change colour. This effect is caused by the arrangement of nanocrystals in the lizards' skin. The bright colours are used for communication between conspecifics. Their ability to perfectly mimic their surroundings also makes some species masters of camouflage. Camouflage and mimicry also occur in the human body: mutations in viruses fool the immune system; cancer cells mimic the surface of a healthy cell to evade the immune response. Research into these mechanisms often provides targets for the development of new drugs and therapies. Promising examples - for example in immuno therapy - can also be found among the companies in the HBM Healthcare Investments portfolio.
At a Glance | HBM Healthcare Investments Ltd / Annual Report 2023 / 2024 | 3 |
Content and Profile |
HBM Healthcare Investments actively invests in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. The company holds and manages an international portfolio of promi sing 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 Healthcare Investments has an international share holder base and is listed on SIX Swiss Exchange (ticker: HBMN).
7 Letter from the Chairman of the Board of Directors and the Management
- Portfolio Companies
- Corporate Governance
- Report by Ernst & Young
- Investment Guidelines
- Compensation Report
- Report by Ernst & Young
- Group Financial Statements IFRS
- Report of the Statutory Auditor
- Parent Company Financial Statements
- Report of the Statutory Auditor
- Investor Information
At a Glance | HBM Healthcare Investments Ltd / Annual Report 2023 / 2024 | 4 |
Portfolio |
Currency allocation of assets 1)
Emphasis on US dollar investments.
63% US dollar (USD)
13% Renminbi (CNY)
13% Euro (EUR)
5% Indian rupee (INR)
3% Swiss franc (CHF)
3% Other currencies
(CAD, DKK, GBP, HKD, SEK)
Allocation of assets 1)
Mainly invested in private companies or in companies originating from the private companies' portfolio.
35% | Private companies |
22% | Public (from private) |
companies | |
20% | Public companies |
10% | Funds |
11% | Cash and cash equivalents |
2% | Other assets |
Development phase of portfolio companies 2) Mainly invested in revenue generating companies or in companies with products at an advanced stage of development.
38% | Profitable |
25% | Products on the market |
4% | Phase III |
16% | Phase II |
9% | Phase I |
8% | Preclinical |
Therapeutic area of the lead product of portfolio companies 2)
Broadly diversified areas of activity.
26% | Others | |||
19% | Oncology | |||
13% | Central nervous system | |||
12% | Synthetic biology | |||
9% | Digital health | |||
8% | Orphan diseases | |||
7% | Immunology / inflammation | |||
6% | Medical technology / | |||
diagnostics |
Investments by regions 2)
Global portfolio with focus on North America.
Europe 21%
Americas 48%
Asia 31%
1) Total consolidated assets as at 31.3.2024: CHF 1 823 million.
2) Total investments as at 31.3.2024: CHF 1 578 million.
At a Glance | HBM Healthcare Investments Ltd / Annual Report 2023 / 2024 | 5 |
Key Figures and Performance |
Key Figures | 31.3.2024 | 31.3.2023 | 31.3.2022 | 31.3.2021 | 31.3.2020 | |
Net assets | CHF million | 1 703.9 | 1 772.7 | 1 986.5 | 2 151.5 | 1 448.8 |
Investments in private companies and funds | 809.4 | 846.1 | 790.3 | 662.8 | 706.4 | |
Investments in public companies | 768.8 | 1 130.2 | 1 404.2 | 629.9 | ||
847.0 | ||||||
Cash and cash equivalents | ||||||
(net of liability from market hedging) | 203.4 | 232.0 | 223.7 | 327.0 | 224.2 | |
Net result for the year | CHF million | - 1.1 | - 146.3 | - 78.0 | 756.3 | 182.7 |
Basic earnings per share | CHF | - 0.16 | - 21.03 | - 11.22 | 108.71 | 26.26 |
Net asset value (NAV) per share | CHF | 248.10 | 285.53 | 309.25 | 208.25 | |
254.80 | ||||||
Share price | CHF | 193.60 | 214.00 | 276.00 | 332.50 | 190.00 |
Premium (+) / discount (-) | % | - 22.0 | - 16.0 | - 3.3 | +7.5 | - 8.8 |
Distribution per share | CHF | 7.50 1) | 7.50 | 9.70 | 12.50 2) | 7.70 |
Distribution yield | % | 3.9 | 3.5 | 3.5 | 3.8 | 4.1 |
Shares issued | Registered shares (m) | 7.0 | 7.0 | 7.0 | 7.0 | 7.0 |
Shares outstanding | Registered shares (m) | 6.9 | 7.0 | 7.0 | 7.0 | 7.0 |
Performance (including distributions) | ||||||
2023/2024 | 2022/2023 | 2021/2022 | 2020/2021 | 2019/2020 | ||
Net asset value (NAV) | % | 0.3 | - 7.4 | - 3.6 | 52.2 | 13.9 |
Registered share HBMN | % | - 6.0 | - 18.9 | - 13.2 | 79.1 | 17.0 |
- Proposal to the Shareholders' Meeting for a cash distribution from repayment of par value per registered share entitled to dividend.
- Thereof CHF 9.50 as ordinary distribution and CHF 3.00 as a special distribution to mark the 20th anniversary of the Company.
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
20 | ||||||||||
1.4.2014 | 31.3.2015 | 31.3.2016 | 31.3.2017 | 31.3.2018 | 31.3.2019 | 31.3.2020 | 31.3.2021 | 31.3.2022 | 31.3.2023 | 31.3.2024 |
At a Glance | HBM Healthcare Investments Ltd / Annual Report 2023 / 2024 | 6 |
Highlights |
EUR1billion
> revenues
expected in 2024 by Swixx BioPharma
10 years after foundation
CHF 7.50per share
proposed cash distribution
5 to shareholders
acquisitions
of portfolio companies
USD175million
IPO
of ArriVent Biopharma
from the private companies portfolio
HBM Healthcare Investments Ltd / Annual Report 2023 / 2024 | 7 |
Letter from the Chairman of the Board of Directors and the Management
Letter from the Chairman of the Board of Directors and the Management | HBM Healthcare Investments Ltd / Annual Report 2023 / 2024 | 8 |
HBM Healthcare Investments almost broke even in the 2023/2024 financial year with a slight loss of CHF 1 million. By contrast, the net asset value per share (NAV), including distribution, rose by 0.3 percent. The portfolio of public companies made a positive contribution to earnings - not least thanks to five acquisitions - while the performance of private companies and funds declined overall. Currency effects reduced the annual result by a total of around
2.5 percent despite the positive development in the final quarter. The market environment was mixed: while the biotech sector in the United States and to some extent in Europe recovered, the markets in China continued to decline. Only India remained consistently strong. The private portfolio was supplemented by two new investments.
In addition, a distribution to shareholders similar to the pre- vious year will be proposed and the share buy-backs will be continued. Given the fundamentally positive performance
of the biotech sector and many portfolio companies, HBM Healthcare is confident about the future.
Dear Shareholders
As expected, the market environment for our portfolio companies was challenging and uneven in the reporting year. While the biotechnology sector in the USA and to some extent in Europe recovered, the markets in China continued to decline. India, on the other hand, was in consistently strong shape.
The US biotechnology sector recovered from the lows of the previous year and rose in local currency by 8.3 percent (Nasdaq Biotechnology Index) and 24.5 percent (SPDR S&P Biotech ETF) in a volatile environment. However, the development was by no means linear and was strongly influenced by market participants' assessments of inflation and interest rate trends in the United States. The increase in takeover activity in the second half of 2023 had a supporting effect. Most of our public investments in the United States benefited from the overall positive development.
Letter from the Chairman of the Board of Directors and the Management | HBM Healthcare Investments Ltd / Annual Report 2023 / 2024 | 9 |
"The financing environment and M&A activity in the healthcare sector are becoming increasingly favourable."
Hans Peter Hasler
Chairman of the Board of Directors
In China, on the other hand, the market environment remained difficult. This was against the backdrop of a weakening economy, a crisis-ridden property sector and increasing tensions between the major powers. The Shanghai Shenzhen CSI 300 Index, which includes our investment Cathay Biotech, lost 10.9 percent in the reporting year.
One bright spot was the Indian healthcare market, which remained consistently strong.
The relevant BSE Healthcare Index rose by 61.3 percent, which benefited our Indian stocks too.
The performance of our private equity portfolio was also mixed. Many of our companies are performing well and offer significant value potential for the future. At the same time, we have had to take some painful write-downs on some investments. Overall, however, we continue to assess the quality and value potential of our private equity portfolio as very good.
Volatility of investment currencies
Our investment currencies were subject to strong exchange rate fluctuations in the reporting year. The Swiss National Bank's unexpectedly early interest rate cut towards the end of the first quarter of 2024 corrected the strong appreciation of the Swiss franc somewhat. Nevertheless, all investment currencies lost ground against the Swiss franc in the reporting year (US dollar - 1.5 percent, Chinese yuan - 6.3 percent, euro - 2.0 percent and Indian rupee - 3.0 percent). Overall, the currency effects weighed on our performance by around 2.5 percent.
Letter from the Chairman of the Board of Directors and the Management | HBM Healthcare Investments Ltd / Annual Report 2023 / 2024 | 10 |
Dr Andreas Wicki
Chief Executive Officer
"We continue to assess the quality and value potential of our portfolio as very good."
Balanced annual result
In this challenging market environment, HBM Healthcare Investments achieved a balanced annual result in the 2023/2024 financial year, with a slight loss of CHF 1 million. Net asset value per share (NAV) rose by 0.3 percent, as the number of shares outstanding was reduced by share buy-backs.
The following investments contributed the most to the NAV development:
Winner | NAV % | Loser | NAV % |
Y-mAbs Therapeutics | 1.9 | Cathay Biotech | - 5.6 |
Biohaven | 1.2 | Farmalatam (private) | - 1.5 |
Longboard Pharmaceuticals 1.1 | ConnectRN (private) | - 1.4 | |
ImmunoGen | 1.1 | Travere | - 0.5 |
Cytokinetics | 0.8 | Mineralys Therapeutics | - 0.5 |
The portfolio of public companies made the largest positive contribution to earnings with a total increase in value of CHF 69 million or 3.9 percent. This was despite negative currency effects totalling CHF - 32 million.
The public companies originating from the private portfolio depressed the result by a total of CHF - 44 million despite the positive contributions from Y-mAbs Therapeutics (CHF 33 million), Longboard Pharmaceuticals (CHF 19 million) and Ambrx Pharmaceuticals (CHF 10 million), the latter due to the acquisition by Johnson & Johnson for USD 2 billion.
Cathay Biotech's share price fell by 28 percent in a persistently difficult market environment in China, resulting in a book loss on our investment of CHF - 98 million. The company's key operating metrics weakened in 2023 compared to the previous year, but rebounded significantly in the first quarter of 2024. In addition, the implementation of the strategic partnership with the China Merchants Group is progressing more slowly than planned. As a leader in the field of synthetic biology, Cathay's positioning for the future remains excellent.
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HBM Healthcare Investments AG published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 16:46:03 UTC.
