HBM Healthcare Investments - Revision history

95.149.241.133 at 01:43, 20 August 2022

2022-08-20T01:43:08Z

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	[[Category:Thesis]]		[[Category:Thesis]]
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			__INDEX__

>Louis at 16:17, 22 July 2022

2022-07-22T16:17:13Z

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	==Notes==		==Notes==
	<references />		<references />
			[[Category:Thesis]]
			[[Category:Equities]]

>George at 10:21, 8 June 2022

2022-06-08T10:21:19Z

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			[[File:FBCictZK 400x400.jpg\|thumb]]

	== Summary ==		== Summary ==
	HBM Healthcare Investments (HBMN) posted its first NAV loss in a decade for FY22 (ended 31 March), but, as shown in the chart below, its long-term performance record remains very impressive. The recent fall in the share price from a premium to a discount to NAV (10.0% at 20 May) could present an opportunity for long-term investors who, like HBMN’s management team, remain convinced of the long-term opportunities afforded by careful investment in the healthcare and biotechnology space. HBMN is unusual among its peers in offering a portfolio made up of private companies, listed equities and funds, broadly spread by geography and clinical focus, with a high distribution policy (current yield of 3.8%).		HBM Healthcare Investments (HBMN) posted its first NAV loss in a decade for FY22 (ended 31 March), but, as shown in the chart below, its long-term performance record remains very impressive. The recent fall in the share price from a premium to a discount to NAV (10.0% at 20 May) could present an opportunity for long-term investors who, like HBMN’s management team, remain convinced of the long-term opportunities afforded by careful investment in the healthcare and biotechnology space. HBMN is unusual among its peers in offering a portfolio made up of private companies, listed equities and funds, broadly spread by geography and clinical focus, with a high distribution policy (current yield of 3.8%).

172.18.0.3: /* Notes */

2022-06-08T08:47:48Z

Notes

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	Following the retirement of three long-serving board members, Prof Dr Heinz E Riesenhuber, Dr Eduard E Holdener and Robert A Ingram, at the June 2021 AGM, HBMN now has five directors – three men and two women – with an average tenure of nine years. All of the board members have relevant scientific and/or business expertise, and each director has specific responsibilities regarding the monitoring of HBMN’s portfolio and the wider market environment. The chairman, Hans Peter Hasler, covers regulatory (FDA) approval and sector and marketing strategies; Mr Giuliani monitors management, production and audit; Dr Lanz (a lawyer and corporate financier) also covers audit, as well as finance and M&A transactions; Dr Xu assesses research and development; and Dr Jones brings sector and venture capital expertise.		Following the retirement of three long-serving board members, Prof Dr Heinz E Riesenhuber, Dr Eduard E Holdener and Robert A Ingram, at the June 2021 AGM, HBMN now has five directors – three men and two women – with an average tenure of nine years. All of the board members have relevant scientific and/or business expertise, and each director has specific responsibilities regarding the monitoring of HBMN’s portfolio and the wider market environment. The chairman, Hans Peter Hasler, covers regulatory (FDA) approval and sector and marketing strategies; Mr Giuliani monitors management, production and audit; Dr Lanz (a lawyer and corporate financier) also covers audit, as well as finance and M&A transactions; Dr Xu assesses research and development; and Dr Jones brings sector and venture capital expertise.

			==Actions==

			To invest in HBM Healthcare Investments, click [https://www.hl.co.uk/shares/shares-search-results/h/hbm-healthcare-investments-ag-chf41.80 here].

			To contact HBM Healthcare Investments, click [mailto:info@hbmhealthcare.com here].


	==Notes==		==Notes==
	<references />		<references />

172.18.0.3: /* Asset allocation */

2022-06-08T08:43:46Z

Asset allocation

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	It is worth noting that while the proportion of profitable companies in HBMN’s portfolio has jumped from 21% to 47% during the year, this represents the most advanced stage of development in any company’s product portfolio, and should not be taken to indicate a lack of innovation in the remaining holdings. Indeed, HBMN’s portfolio companies are expected to have a busy year of trial readouts (Phases I, II and III) and product approvals during the remainder of 2022.		It is worth noting that while the proportion of profitable companies in HBMN’s portfolio has jumped from 21% to 47% during the year, this represents the most advanced stage of development in any company’s product portfolio, and should not be taken to indicate a lack of innovation in the remaining holdings. Indeed, HBMN’s portfolio companies are expected to have a busy year of trial readouts (Phases I, II and III) and product approvals during the remainder of 2022.
	{\| class="wikitable"		{\| class="wikitable"
	\|+Exhibit 7: Portfolio exposure by clinical development stage* (% unless stated)<ref>Source: HBM Healthcare Investments, Edison Investment Research. Note: *Classified by most advanced development stage.</ref>		\|+Exhibit 7: Portfolio exposure by clinical development stage (% unless stated)<ref>Source: HBM Healthcare Investments, Edison Investment Research. Note: *Classified by most advanced development stage.</ref>
	!		!
	!Portfolio end-March 2022		!Portfolio end-March 2022

>George: /* Asset allocation */

2022-06-08T08:36:21Z

Asset allocation

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	'''Exhibit 2: Asset allocation at 31 March 2022'''<ref name=":0">Source: HBM Healthcare Investments, Edison Investment Research.</ref>		'''Exhibit 2: Asset allocation at 31 March 2022'''<ref name=":0">Source: HBM Healthcare Investments, Edison Investment Research.</ref>

			[[File:Asset allocation at 31 March 2022.png\|400px]]

	'''Exhibit 3: Asset allocation at 31 March 2021'''<ref name=":0" />		'''Exhibit 3: Asset allocation at 31 March 2021'''<ref name=":0" />

			[[File:Asset allocation at 31 March 2021.png\|400px]]

	As shown in Exhibits 4 and 5, HBMN is well spread geographically, with less than half of its underlying holdings based in the Americas (the higher US dollar weighting can be attributed to the base currency of funds investing internationally). In particular there is a high weighting to Asia (35%), principally in China through holdings such as Cathay Biotech, Fangzhou (formerly Jianke), the WuXi Healthcare Ventures II fund and a new investment in Hong Kong based Hutchmed China, but also in India via names including Tata 1mg and SAI Life Sciences. Europe is also well represented, with a variety of Swiss and Nordic companies among others, including the largest private holding Swixx BioPharma (7.5% of NAV), which distributes medicines in Central and Eastern Europe. The level of geographical diversification sets HBMN apart from many of its peers, which tend to have a much greater focus on the US (an average of 72.3% for the AIC Biotechnology & Healthcare peer group).		As shown in Exhibits 4 and 5, HBMN is well spread geographically, with less than half of its underlying holdings based in the Americas (the higher US dollar weighting can be attributed to the base currency of funds investing internationally). In particular there is a high weighting to Asia (35%), principally in China through holdings such as Cathay Biotech, Fangzhou (formerly Jianke), the WuXi Healthcare Ventures II fund and a new investment in Hong Kong based Hutchmed China, but also in India via names including Tata 1mg and SAI Life Sciences. Europe is also well represented, with a variety of Swiss and Nordic companies among others, including the largest private holding Swixx BioPharma (7.5% of NAV), which distributes medicines in Central and Eastern Europe. The level of geographical diversification sets HBMN apart from many of its peers, which tend to have a much greater focus on the US (an average of 72.3% for the AIC Biotechnology & Healthcare peer group).
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	'''Exhibit 4: Portfolio breakdown by geography'''<ref name=":1">Source: HBM Healthcare Investments, Edison Investment Research. Note: Data at 31 March 2022.</ref>		'''Exhibit 4: Portfolio breakdown by geography'''<ref name=":1">Source: HBM Healthcare Investments, Edison Investment Research. Note: Data at 31 March 2022.</ref>

			[[File:Portfolio breakdown by geography.png\|400px]]

	'''Exhibit 5: Portfolio breakdown by currency'''<ref name=":1" />		'''Exhibit 5: Portfolio breakdown by currency'''<ref name=":1" />

			[[File:Portfolio breakdown by currency.png\|400px]]

	Exhibit 6 shows the development of HBMN’s sector allocation over FY22, with the biggest rise (+7.9pp in synthetic biology via Cathay Biotech) and the biggest fall (-11.0% in oncology) both largely attributable to the market performance of listed holdings. The second largest increase, in digital health, comes after an external financing round substantially increased the valuation of unlisted US nurse-sourcing platform ConnectRN, now a top 10 holding.		Exhibit 6 shows the development of HBMN’s sector allocation over FY22, with the biggest rise (+7.9pp in synthetic biology via Cathay Biotech) and the biggest fall (-11.0% in oncology) both largely attributable to the market performance of listed holdings. The second largest increase, in digital health, comes after an external financing round substantially increased the valuation of unlisted US nurse-sourcing platform ConnectRN, now a top 10 holding.

>George: /* Performance: Stabilising after a more difficult year */

2022-06-08T08:34:00Z

Performance: Stabilising after a more difficult year

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	'''Exhibit 9a: Price, NAV and benchmark total return performance, one-year rebased'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>		'''Exhibit 9a: Price, NAV and benchmark total return performance, one-year rebased'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>

	[[File:Price, NAV and benchmark total return performance, one-year ~~rebased~~.png\|400px]]		[[File:Price, NAV and benchmark total return performance, one-year rebased2.png\|400px]]

	'''Exhibit 9b: Price, NAV and benchmark total return performance (%)'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>		'''Exhibit 9b: Price, NAV and benchmark total return performance (%)'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>

>George: /* Performance: Stabilising after a more difficult year */

2022-06-08T08:33:07Z

Performance: Stabilising after a more difficult year

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	'''Exhibit 9a: Price, NAV and benchmark total return performance, one-year rebased'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>		'''Exhibit 9a: Price, NAV and benchmark total return performance, one-year rebased'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>

			[[File:Price, NAV and benchmark total return performance, one-year rebased.png\|400px]]

	'''Exhibit 9b: Price, NAV and benchmark total return performance (%)'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>		'''Exhibit 9b: Price, NAV and benchmark total return performance (%)'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>

	[[File:Price, NAV and benchmark total return performance (%).png\|400px]]		[[File:Price, NAV and benchmark total return performance (%)2.png\|400px]]

	The funds portfolio declined in value by CHF35m, mainly as a result of falls in the value of funds’ listed equity holdings, while the public portfolio saw broad based declines, although the two largest (ex-private) holdings – Cathay Biotech and Harmony Biosciences – both did well, adding an aggregate CHF186m and limiting the overall loss on public holdings to CHF82m (c 3.8% of opening NAV). The majority of the losses came from oncology companies with clinical development candidates, many of which were ex-private companies that had come to the public markets via IPO in the past two years. The managers note that in most cases these losses came after significant gains in previous years, and that clinical developments are largely proceeding according to plan.		The funds portfolio declined in value by CHF35m, mainly as a result of falls in the value of funds’ listed equity holdings, while the public portfolio saw broad based declines, although the two largest (ex-private) holdings – Cathay Biotech and Harmony Biosciences – both did well, adding an aggregate CHF186m and limiting the overall loss on public holdings to CHF82m (c 3.8% of opening NAV). The majority of the losses came from oncology companies with clinical development candidates, many of which were ex-private companies that had come to the public markets via IPO in the past two years. The managers note that in most cases these losses came after significant gains in previous years, and that clinical developments are largely proceeding according to plan.

>George: /* Performance: Stabilising after a more difficult year */

2022-06-08T08:31:42Z

Performance: Stabilising after a more difficult year

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	'''Exhibit 9b: Price, NAV and benchmark total return performance (%)'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>		'''Exhibit 9b: Price, NAV and benchmark total return performance (%)'''<ref>Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.</ref>

			[[File:Price, NAV and benchmark total return performance (%).png\|400px]]

	The funds portfolio declined in value by CHF35m, mainly as a result of falls in the value of funds’ listed equity holdings, while the public portfolio saw broad based declines, although the two largest (ex-private) holdings – Cathay Biotech and Harmony Biosciences – both did well, adding an aggregate CHF186m and limiting the overall loss on public holdings to CHF82m (c 3.8% of opening NAV). The majority of the losses came from oncology companies with clinical development candidates, many of which were ex-private companies that had come to the public markets via IPO in the past two years. The managers note that in most cases these losses came after significant gains in previous years, and that clinical developments are largely proceeding according to plan.		The funds portfolio declined in value by CHF35m, mainly as a result of falls in the value of funds’ listed equity holdings, while the public portfolio saw broad based declines, although the two largest (ex-private) holdings – Cathay Biotech and Harmony Biosciences – both did well, adding an aggregate CHF186m and limiting the overall loss on public holdings to CHF82m (c 3.8% of opening NAV). The majority of the losses came from oncology companies with clinical development candidates, many of which were ex-private companies that had come to the public markets via IPO in the past two years. The managers note that in most cases these losses came after significant gains in previous years, and that clinical developments are largely proceeding according to plan.

>George: /* Performance: Stabilising after a more difficult year */

2022-06-08T08:29:41Z

Performance: Stabilising after a more difficult year

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	'''Exhibit 11: NAV performance versus MSCI World Health Care Index over five years'''<ref>Source: Refinitiv, Edison Investment Research.</ref>		'''Exhibit 11: NAV performance versus MSCI World Health Care Index over five years'''<ref>Source: Refinitiv, Edison Investment Research.</ref>

			[[File:NAV performance versus MSCI World Health Care Index over five years.png\|600px]]

	As shown in Exhibits 10 and 11, the past 12 months have been a more difficult period of relative performance versus the broad healthcare equity market and the MSCI World Index, although HBMN’s longer-term performance record versus all comparator indices remains compelling in both share price and NAV terms.		As shown in Exhibits 10 and 11, the past 12 months have been a more difficult period of relative performance versus the broad healthcare equity market and the MSCI World Index, although HBMN’s longer-term performance record versus all comparator indices remains compelling in both share price and NAV terms.