BB Biotech AG (BION) Earnings Call Transcript & Summary

We saw a strong outperformance of our portfolio and share price versus the NBI benchmark by executing our investment strategy and our investment process. This was mainly driven by stock selection versus allocation. Biotech market stabilized after the April tariff shock, and there was a return back to fundamentals. Our portfolio was well positioned because of the focus on late-stage clinical and early commercial stories. So as less allocation, there was more stock selection in our case. Some of our mid-caps emerged to larger mid-caps, large caps. Our RNA plays delivered greatly, Ionis Alnylam during the year. And then we had a couple of takeouts based on our new investment that we made. Well, it tells us that the patent cliff that we climbed as [ larger ] companies is very large cover the next 5 to 10 years, and there is a strong need for external innovation. And that can happen through [ licensing ] and can happen through acquisition also. And we see that if there's a large [indiscernible] over the next 4 to 5 years, then those acquisition have to happen more in the late-stage clinical or early commercial realm. And there is a scarcity of value, an infinite amount of companies that are situated in that maturity stage. So we remain very long-term committed with our IRR targets. We are a little bit more cautious for 2026 versus '25 or last year. Valuations have, of course, increased after that run-up last year. The interest rates will go lower but less than expected, and that can also be volatile. The ground driver still for the industry is still the need for external innovation and M&A. And so if we put that all together, we're positioning the portfolio in a way that we can be long-term focused, but we're going to very actively manage our risk.