The holding company BB Biotech posted a high loss in the first quarter of 2020 due to the price declines on the stock exchanges.
The period presented an extraordinary challenge for investors, the company wrote in a message on Friday.
For the first three months, BB Biotech posted a net loss of CHF 758 million after a profit of CHF 890 million in the same period last year. BB Biotech’s share price developed negatively in the reporting period with a total return of -15.7 percent in Swiss francs and -14.8 percent in euros. The dividend distribution of CHF 3.40 per share approved at the Annual General Meeting on March 19 is also taken into account.
The intrinsic value (NAV) corrected from the beginning of the year to the end of March by 22.0 percent in Swiss francs, 20.1 percent in euros and 21.4 percent in US dollars.
After hitting all-time highs in many indices in February, the strong global expansion of Covid-19 led to violent sell-offs in almost all asset classes, including stocks. Shares in companies in the health sector, especially large caps, would have behaved more defensively than the broad share indices. Despite the difficult stock market environment, the portfolio companies had developed solidly and published important clinical data.
In view of attractive valuations, the level of investment was raised to 113.5 percent from 103.8 percent in the first quarter. The bottom line was that dividend payments and investments exceeded the income from the sale of positions and profit-taking. In addition to investments in existing portfolio holdings, the small capitalized companies Fate Therapeutics and Black Diamond Therapeutics were added to the portfolio, as BB Biotech writes.
The biotech industry will grow in importance, it is said with a view to the current year. The challenges and opportunities resulting from the current global crisis would be assessed jointly by the board of directors and the investment management team. A return to normality currently seems unlikely. On the other hand, completely new behavior patterns can be expected. For example, there will be a reassessment of global health risks and health systems.
In the Zurich trade, the BB Biotech share now sells 2.58 percent to CHF 60.50.
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