HBM Healthcare Investments Ltd - Unique Access to a Global and Diversified Healthcare Portfolio of Private and Public Companies - August 2019
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HBM Healthcare Investments Ltd Unique Access to a Global and Diversified Healthcare Portfolio of Private and Public Companies August 2019
HBM Healthcare Investments Ltd About HBM Healthcare Investments Ltd Investment Strategy / Investment Process Healthcare Sector Portfolio Structure Investment Positions Outlook & Concluding Remarks Appendix: Organisation, Team
A Leading Investment Company in Healthcare 3
► A healthcare sector focused investment company holding a global diversified portfolio of
private and public companies with currently over CHF 1.4bn in net assets
► Founded in 2001 and listed on SIX Swiss Exchange since 2008
► Proven track record of exits validated by over 60 trade sales and IPOs since 2001
► International and stable shareholder base with significant investment from HBM team and
board members
► Attractive distribution policy (3-5% p.a.)
HBM Partners Organisation (Investment Advisor to HBM Healthcare Investments)
Investment management
Investment advisors (14)
& accounting (4)
Contractually assured access to more than 70 industry experts worldwide
As of 31 July 2019Facts & Figures 4
Registered Shares (CHF) Performance (CHF)
5Y 10Y
Total assets 1’572 million Net return
(including Return Return
Net assets (NAV) 1’397 million distributions) 2019 2018 2017 2016 p.a p.a.
Market capitalisation 1’358 million Share price 25.6% 21.8% 40.5% 2.5% 22.0% 20.7%
Share price 195.20
NAV 17.3% 9.9% 25.8% -7.2% 15.0% 14.8%
NAV per share 200.80
Dividend CHF 7.50 7.00 5.80 5.50
Discount 2.8%
Dividend yield 4.4% 4.9% 5.2% 5.5%
Average daily liquidity (1 year) 7’013 shares
~ 1.4 million
5Y Volatility p.a. 1Y Volatility p.a.
Number of issued shares 6.96 million Share price 16.8% 18.5%
Number of shareholders 2’174
Data as of 31 July 2019Value Creation over 5 Years 5
CHF Performance USD Performance
220 400
200
350
180
300
160
140 250
120
200
100
80 150
60
100
40
50
20
0 0
Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19
NAV HBM Share price HBM MSCI World Health Care Index
Data as of 31 July 2019, indexed (12.7.2001 = 100)About 40 Trade Sales and IPOs during the past 10 Years 6
Trade
IPOs
sales
Anthera (US)
Turning Point
Asthmatx (US)
(US)
ChemoCentryx
Micrus (US) Y-mAbs (US)
(US)
Sloning (DE) Vivacta (UK) Paratek (US) Obseva (CH) Principia (US)
Probiodrug
Nuokang (CN) Pacira (US) Eiger (US) AnaptysBio (US) Aptinyx (US)
(DE)
Interventional
Ziemer (CH) mtm (DE) Ophthotech (US) Kolltan (US) Homology (US)
Spine (US)
Skyepharma ARMO Bio
Brahms (DE) Mpex (US) PTC (US) Curetis (DE) True North (US)
(UK) (US)
PharmaSwiss TandemLife
Esbatech (CH) Enanta (US) Nabriva (US) Ellipse (US) AAAP (US)
(CH) (Cardiac) (US)
2009-10 2011-12 2013-14 2015 2016 2017 2018-2019
Data as of 31 July 2019HBM Healthcare Investments Ltd About HBM Healthcare Investments Ltd Investment Strategy / Investment Process Healthcare Sector Portfolio Structure Investment Positions Outlook & Concluding Remarks Appendix: Organisation, Team
HBM Investment Focus along the Healthcare Value Chain 8
Suppliers Manufacturers Service Providers Payers
Life Sciences
Pharmaceuticals
Tools & Services
Distributors /
Patients
wholesalers
Contract
Insurers
research Biotechnology
(managed health)
Organizations
Services
Employers
(pharmacies)
Pharmacy
Chemicals Medical devices
benefit managers
Facilities
(hospitals / Government
clinics)
Diagnostics & Generics /
Genomics specialty pharma
Core
Opportunistic
Digital health Out of focusPrivate Equity Investment Process 9
Personal contacts, Investment Other VCs Direct
industry network banks
Deal Sourcing
(>700 deals p.a., 45% USA/Canada, 40% Western Europe, 15% RoW)*
Initial Due Diligence
(~200 deals p.a.)
Comprehensive Due Diligence
(~25 deals p.a.)
Investments
(8-12 deals p.a.) *
60% Biotech
30% Medtech & Diagnostics
10% OtherInvestment Approach 10
► Fundamental long with private and public healthcare investments
► Bottom-up selection of investments with solid long-term growth potential
► Sourcing of proprietary private deal flow
► Active lead/co-lead investor in private companies with board representation
► HBM takes an active role and assumes entrepreneurial responsibility together with the
management team
► Maximum single position limit at time of investment up to 10% of NAVPublic Equity Investment Process 11
Portfolio & Risk Idea Generation
Management Universe of 750+ companies
Evaluation of global Tracking of healthcare trends
markets and macro incl conference attendances
themes and close relationship to
Continuous Portfolio experts and executives
review and adjustment Company pre-selection
Comprehensive risk
management process
Stock Selection & Due Diligence
Portfolio Construction Fundamental qualitative
Determination of exposure and quantitative analysis
and position size Stakeholder assessment
Individual stock selection and intellectual property
review
Initiating new positions
Investment write-up and
conclusionInvestment Case Advanced Accelerator Applications 12
Investment rationale
► Combination of unique business proposition with strong growing medical
imaging business (profitable) and promising late-stage therapeutic (phase III)
First institutional investor in
Investment process (2014)
2014
► Growth capital and partial buyout of existing founders
► Founders wanted specialist (non-US) investor with know-how and good Sold in 2017 to Novartis for
industry network
approx USD 3.9 billion
Investment period (2014-2017)
► Board representation
► Strategy executed on three pillars: Gain of over CHF 200
► Expanding its diagnostic business for PET/CT and SPECT organically million (IRR > 60%)
and through acquisitions
► Bringing first therapeutic to the market
► Broadening of pipeline through in-house development and in-licensing
► HBM backed pre-IPO financing round to strengthen investor syndicate
Exit (2016-2017)
► IPO and take over by NovartisInvestment Case Skyepharma 13
Investment rationale
► Uniquely positioned and patented drug delivery technology for oral and
inhalation products; significant recurring revenue streams through technology
outlicensing
Merger with Vectura in 2016
Investment period (2005-2016) created a global leader of
► Pacira was spun-out from Skyepharma formulation and inhalation
► The delayed approval of Flutiform® resulted in indebtedness and negative devices for respiratory
balance sheet diseases
► HBM led the turnaround financing round and participated in capital increase
and debt purchase at high discount Impressive rebound
between 2011 and 2016
► Positive pipeline development of Flutiform® led to continuous company
revaluation, Skyepharma turned into a highly profitable cash flow positive
company
► Debt to equity swap allowed share price moving back to fair value
Exit process (2015-2016)
► Further growth source was needed as revenue growth started to flatten out
and pipeline investments was very limited during the last years due to
restructuring and indebtedness that company went through
► Combination with Vectura resulted in highly attractive new platform of
complementary products and technologiesInvestment Case Ellipse Technologies 14
Business Medical devices for Products
spinal/orthopaedic ► MAGEC – To treat spine deformations
surgery
► PRECICE – Limb lengthening system
Platform technology for
non-invasive adjustable
implants Revenues
50
Stage of Company Substantial revenues
(sales growth 60%+ p.a.) 40
Products successfully 30 23.7
USD m
launched worldwide;
R&D focus on additional 20 13.4
indications 9.1
10 7.7
Return on Multiple of 7.5 – 8.1x 12.3 11.2
0 4.2
Investment IRR 66 – 68 % 2013 2014 2015 H1
Gain USD 104 – 114m
Magec Precice LLD 2015 H2 (P)
Sold in Jan. 2016 to NuVasive for $ 380m in cash plus $ 30m milestonesHBM Healthcare Investments Ltd About HBM Healthcare Investments Ltd Investment Strategy / Investment Process Healthcare Sector Portfolio Structure Investment Positions Outlook & Concluding Remarks Appendix: Organisation, Team
Investment Opportunities in Healthcare 16
Large and Growing Industry
Revenues > $1.3 trillion p.a.*
Resilient to economic cycles
High profit margins, strong cash-flows
Many small & innovative firms and
spin-offs
Investment Approach Compelling Exit Markets
Proprietary global deal sourcing Attractive M&A environment
Long-term investment expertise Cash-rich corporate buyers
Active lead/co-lead investor Strategic premiums paid
Exit-driven investments IPO as option for mature firms
* Worldwide sales (2015) for pharma, medtech and diagnostics onlyPublic Healthcare Generated Strong Returns 17
1600
MSCI World Health Care Index: +684% (8.7% p.a.)
MSCI World Index: +254% (5.3% p.a.)
800
430%
400
% log
200
100
50
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Data as of 31 July 2019, in USDStill Significant Industry Growth 18
Global Pharma Drug Sales Global Biotech Drug Sales
$ bn CAGR (2016-2022): 4.3% $ bn CAGR (2016-2022): 8.3%
900 350
326
775
800 728 302
300
683
645 276
700
628 604 600 611 594 616 253
601 596 250
578 591 231
600 572
214
202
500 200 183
178
165
400 152
150 141
129
300 118 120
100
200
50
100
0 0
2008 2010 2012 2014 2016 2018 2020 2022 2008 2010 2012 2014 2016 2018 2020 2022
Source: Evaluate Pharma World Preview 2017, June 2017Significant Revenue Contribution from Biotech 19
Global Branded Pharmaceutical Revenues: 1997 – 2020 (in $ bn)
800 45%
Growth from 1997 to 2022E
700 40%
Pharmaceuticals: 4.5% p.a.
Biotech: 12.5% p.a.
35%
600
$268
30%
500
25%
400
20%
300
15%
$415
200
10%
100 5%
0 0%
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019E
2020E
Small molecules Biologics % from Biotech
Source: Evercore Gene Therapy Outlook 2019Biotech as the Innovation Powerhouse 20
R&D Spend (USDbn, 2017) Pipeline (number of clinical programs, 2017)
120 5000
100
x 2.6 4000 x 0.4
80
3000
60
2000
40
20 1000
0 0
Biotech Pharma Biotech Pharma
Source: EY Biotechnology Report 2017, Evaluate Pharma World Preview 2018 Source: Biotechnology Innovation Organization Report, 2018
Market Cap (USDm, 2018) Approvals by origin (count, over last 10yrs)
2’500 250
2’000 x 3.1 200 x 0.5
1’500 150
1’000 100
500 50
0 0
Biotech Pharma Biotech Pharma
Source: MSCI World Healthcare Index, Bloomberg 2018 Source: HBM Biopharma Drug Approval Report, 2018It’s all about Innovation 21
Past and current holdings
In last 1-2 years, multiple "targeted cancer"
Immuno- and companies (drugs for mutations or sub-groups of
targeted oncology broader population) have been acquired
Administered via the bloodstream, in principle RNAi
therapeutics permit any gene that is responsible for
Gene Silencing causing illness to be silenced
Gene editing is the process of changing, replacing,
or removing genes with precision of a single base
Gene editing / pair change if desired
therapy
Antibodies have had a terrific run, but small molecules
Immunology and are making a comeback for I&I, promising oral dosing,
Inflammation ease of travel, transport and safety of dose withdrawal
Dementia psychosis, agitation, behavioral market have
blockbuster potential
Neurology
The complement system helps prevent infection and
Complement fight off invading pathogens like bacteria. But
disorders hyperactivation of the complement system can lead to
autoimmunity and inflammatory diseases
Source: HBM ResearchSupportive Regulatory Climate 22
Number of New Drug Approvals and Applications at the US FDA
60 57
50
50
45
43 43 43
41 41 41 41
40 38
36 35 36 36 35
34
32
30
30 28
26 26 26 26
55
Average: 31
53 23
22
45 46
20 39 39 41
35 36
29 30 30
25 27 26 27
24 22 24 22
10 21 21 20 21
17 18
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
New Drug Approvals New Drug Applications
Source: FDA, CDER (2017)Steady Flow of New Investment Opportunities 23
Global venture investments into biotech Biotech IPOs on western exchanges
16 600 97
8 100
512 514
457 500 79
450 442 80
12 6 68
393
400
54 60
8 16.8 300 4 45
50 7.2
6.5 6.3 40
12.2
11.1 200 5.2
9.7
4 2 4.1
7.2 3.3 20
5.1 100
0 0 0 0
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
VC Investments ($bn) Number of Investments Total amount raised ($bn) IPO count
Source: Evaluate Pharma, November 2018Ongoing Pharma and Biotech M&A Activity 24
50% premium over stock price before aquisition
Allergan / Actavis
Deal-Volume in $ bn Forest / Actavis
Cubist / Merck & Co
Intermune / Roche
250 Idenix / Merck & Co
Viropharma / Shire Pharmacyclics /
AbbVie
Hospira / Pfizer
Top 20 Pharma
Synageva / Alexion
Receptos / Celgene
have approx.
200 ZS Pharma / Astra $162bn in cash
Shire / Takeda
Onyx / Amgen Baxalta / Shire
Bioverativ / Sanofi
Juno / Celgene
and could
ViroPharma / Shire
Algeta / Bayer
Medivation / Pfizer
Meda / Mylan
Avexis / Novartis
Impact Biomedicines /
acquire over 90%
150 Santarus / Salix Stemcentrx / AbbVie Celgene of US Biotech
Map / Allergan Anacor / Pfizer
Actavis / Watson Actelion / J&J
companies at a
Amylin / BMS
219
Kite / Gilead
Ariad / Takeda
premium of 50%*
Inhibitex / BMS
100 Ardea / Astra Akorn / Fresenius
185 Ignyta / Roche
Pharmasset
/ Gilead
137
50 109 107
79 79
57 48
0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Evaluate Pharma (2019); BIO Industry Analysis (March 2016)*HBM Healthcare Investments Ltd About HBM Healthcare Investments Ltd Investment Strategy / Investment Process Healthcare Sector Portfolio Structure Investment Positions Outlook & Concluding Remarks Appendix: Organisation, Team
Balance Sheet and Currency Allocation 26
1’520
12%; 163
1’370
3%; 44
1’220 Others
INR 4%
Cash 4%
CHF
1’070 7%
47%; 654 Other Assets
920
Public Equity
EUR
770 9%
CHF m
Private Equity Funds
USD 64%
620 Private Equity
10%; 140 CNY 12%
470 Short-term liabilities
320 Long-term liabilities
36%; 505 2021/23
170
20
-7%; -100
-130 -1%; -9
*Around 9% of public exposure hedged
HBM Research, data as of 31 July 2019, in % of net assets in % of assetsPortfolio Breakdown by Market Cap and Geography 27
Market Capitalisation Geography
> CHF 10
billion; 0%
Europe; 20%
Asia; 26%
CHF 2-10 billion; 36%
Market Cap < CHF 2
billion; 64%
North and
South
America;
54%
HBM Research, data as of 30 June 2019, in % of investmentsPortfolio Breakdown by Sector, Therapy and Stage 28
Sector Breakdown Therapeutic Area Development Stage
Spec. Phase I 4% Pre-Clinical 1%
Medical Pharma 8%
Devices &
Diagnostics
6%
Orphan
diseases 15% Profitable
Phase II 19%
18%
Others 32% Oncology
Health IT,
Services & 15%
Supplies Biotech
21% 65% Market
20%
Phase III
Infectious 38%
diseases 2%
Immunology /
Metabolic
Inflammation 12%
diseases 4%
Central nervous
Digital health 4% system disorders 11%
Medtech / Diagnostics
5%
HBM Research, data as of 30 June 2019, in % of investmentsInvestment Portfolio 29
Shanghai Cathay
Other Positions
Biotechnology R&D
(< 1%) 15.1% Neurelis 2.4%
Center
Immunomedics 1.1% 12.4%
Acadia Pharmaceuticals Harmony Biosciences 2.1%
1.1% Swixx Biopharma 1.4%
Alnylam 1.2%
1mg 1.3%
Arena Pharmaceuticals Viela Bio 1.3%
1.2%
SAI Life Sciences 1.2%
Ultragenyx 1.3%
Jianke 0.9%
Esperion 1.3%
Galapagos 1.5% Westmed 0.8%
RA Pharmaceuticals 1.5%
SpringWorks Therapeutics
Vectura 1.7% 0.8%
Zogenix 1.7%
Other Positions 7.4%
Principia* 1.8%
Private Equity
Argenx Y-mAbs Private equity positions
Turning Point* 2.2% 2.6% Therapeutics* Funds 9.0%
4.1% Public equity positions
Pacira* 2.6%
* ex private positions
HBM Research, data as of 31 July 2019, in % of assets, Top 10 positions (direct investments): 33.6%Asset Allocation over Time 30
1’440
5% 11%
6%
1’200 6%
8% 12%
5% 9%
960 5%
10% 23% 26%
19% 16% 11%
8%
720 16% 14%
15%
CHF m
32% 9%
36%
53% 8%
25%
480 30%
67%
36% 62% 56% 25% 59%
37%
55% 59% 44%
240 51%
46% 43% 46% 68% 63%
32% 27%
36%
17% 13% 13%
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
-5% -9% -11% -10%
-14%
-240 -12% -16% -23%
Public companies Private companies Private Funds Other assets Cash Liabilities
HBM Research, data as of the end of each financial year (31 March), in % of assetsDevelopment Stage of Lead Product of Portfolio Companies 31
100%
4%
11% 10%
11%
17% 15%
16% 21% 26%
80% 11% 12% 19% 27%
21%
46% 30% 30%
20%
17%
23% 25% 11% 35%
10% 26%
60% 30% 50%
22% 23%
34%
40%
36%
32% 58% 59% 57% 59% 57% 57%
51% 49% 48%
45% 46% 45%
20% 37%
35%
14% 16%
0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Product(s) on the market and/or profitable Phase III Phase II Phase I Preclinical
HBM Research, data as of the end of each financial year (31 March), in % of investmentsHBM Portfolio by Development Stage of Lead Asset 32
Well balanced portfolio from a risk perspective
200
HBM book value
in CHF m Blue: Public
180
Green: Private
160
140
120
100
About half of total assets is exposed to companies
with lead phase II and phase III drugs
80
60
40
20
0
Profitable Market Phase III Phase II Phase I / Preclinical
HBM Research, data as of 30 June 2019Private Portfolio Positioning 33
Company valuation (CHF m)
4000
1’200
2000
1’000 Size corresponds to
HBM’s book value
1000
800
Shanghai Cathay Biotechnology
R&D
600
Viela Bio
Harmony
Jianke
SpringWorks
400 Sai Life Sciences
Neurelis
Valcare Sphingotec
200 Shriji
Adrenomed Vascular Dynamics Farmalatam
Nuance
Arrakis
Sublimity Shape Memory
0
Preclinical Phase I Phase II Phase III Products on Profitable
Market
Development Stage of Lead Asset
-200
HBM Research, data as of 30 June 2019Contribution to NAV 34
Private and Ex Private Equity Positions Account for 65 Percent of Contribution
NAV impact per share (in CHF)
10.04
0.59
0.25 12.25
0.46
12.52
0.54
1.63
5.54
17.45
7.61
29.99 32.20
24.11
9.82
18.75
5.12
-0.02 -1.97 -0.99
-1.22 -7.40 -5.40
-7.41
-4.88 -5.48
-5.20
-2.43
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Private and ex private positions Funds Public positions Other gains/losses (e.g. milestones) Fees Share buy-back
Note: IPO allocations in previously private companies are attributed to P&L from private positionsHBM Healthcare Investments Ltd About HBM Healthcare Investments Ltd Investment Strategy / Investment Process Healthcare Sector Portfolio Structure Investment Positions Outlook & Concluding Remarks Appendix: Organisation, Team
Global Reach 36
Sphingotec Argenx
Alnylam Galapagos Adrenomed
Cardialen Y-mabs
Principia Esperion Immunomedics Vectura Swixx Biopharma
Vascular Dynamics Ultragenyx SpringWorks Everest Medicines
Turning Point Viela Bio Harmony Biosciences
Zogenix Valcare
Neurelis Cathay
1mg
Pacira Shriji Polymers Jianke
SAI Life Sciences
Farmalatam
Private companies
Public companies
HBM Research, data as of 31 July 2019 (Selection)Largest Investments (1/2) 37
Phase of Market Owner- Book % of
Lead Capitalisation ship Value Total
Company Core Business Product Ticker (CHF m) (%) (CHF m) Assets
Long chain diacids, Market Private 2’360* 8.3 195.7 12.4
carbohydrates and special
enzymes
Developing novel antibody Phase III YMAB 760 8.4 64.0 4.1
therapeutics for oncology (ex private)
targets
Drugs for autoimmune and Phase II ARGX 5’236 0.8 42.0 2.6
cancer diseases
Injectable medicines with Market PCRX 1’803 2.3 41.5 2.6
(patented) controlled release (ex private)
of active drug
Late-stage drug for the Phase III Private 250 15.0 37.5 2.4
treatment of acute
breakthrough seizures in
epilepsy patients
Drugs for the treatment of Phase II TPTX 1’234 2.7 33.8 2.2
severe cancers (ex private)
HBM Research, data as of 31 July 2019, * Implied company valuationLargest Investments (2/2) 38
Phase of Market Owner- Book % of
Lead Capitalisation ship Value Total
Company Core Business Product Ticker (CHF m) (%) (CHF m) Assets
Drug for the treatment of Phase III Private 427* 7.6 32.4 2.1
narcolepsy (with and without
cataplexy)
Proprietary platform with Phase II PRNB 881 3.1 27.7 1.8
drugs in clinical stage for (ex private)
autoimmune diseases
Therapeutic solutions for CNS Phase III ZGNX 2’038 1.3 26.5 1.7
disorders and rare diseases
Formulation and inhalation Market VEC 647 4.0 26.1 1.7
devices for the treatment of
respiratory diseases
Drugs for complement- Phase II RARX 1’590 1.5 23.5 1.5
mediated (autoimmune)
diseases
Drugs for the treatment of Phase III GLPG 9’553 0.2 22.9 1.5
cystic fibrosis and
inflammation disorders
HBM Research, data as of 31 July 2019, * Implied company valuationDevelopment of Share Prices (1/2) 39
Market Cap: USD 765m – (ex private) USD 5.3bn – (ex private) USD 1.8m
40 150 140
120
120
30
100
90
80
20
60 60
10 40
30
20
0 0 0
2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
USD 1.2bn – (ex private) USD 887m – (ex private) USD 2.0bn
50 45 70
40 60
40
50
35
30
40
30
20 30
25
20
10
20
10
0 15 0
2019 2018 2019 2014 2015 2016 2017 2018 2019
HBM Research, data as of 31 July 2019Development of Share Prices (2/2) 40
USD 535m USD 1.6bn USD 8.7bn
180 40 180
35 160
160
140
30
140 120
25
100
120 20
80
15 60
100
10 40
80
5 20
60 0 0
2016 2017 2018 2019 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
USD 1.1bn USD 3.5bn USD 3.1bn
120 140 80
120
90 60
100
60 80 40
60
30 20
40
0 20 0
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
HBM Research, data as of 31 July 2019Largest Private Investments over the last 5 Years 41
IPO or
trade sale
2014 2015 2016 2017 2018 / 2019
Year of initial investment, only investments > CHF 5 million
Data as of 31 July 2019Strategic Fund Investments 42
BioVeda WuXi 6- Dimensions HBM
China Healthcare Capital Tata Capital Medfocus Genomics
Invested: 2005 2015 2018 2015 2005 2015
Investment: 8.5 m 20 m 14 m 10 m 16 m 15 m
Investment multiple: 3.7x 2.4x 0.9x 1.4x 2.1x 0.9x
Ownership: 34% 7% 5% 67% 100% 100%
Healthcare Healthcare Healthcare Healthcare Medical devices Genomics
Fund strategy: Later Access to early stage Invest and build Growth and expansion Incubator and Early and
and growth stage investment quality platform phase accelerator concept, development stage
opportunities opportunities with a companies currently selective later stage opportunities
focus on China missing in China investments
Investment thesis: Seasoned investment VC with capabilities in Partnering with one of Access to promising Access to early stage
One of the first local team, former China and U.S. to the leading on-shore early stage investments in later
investors specialised WuXiAppTec, with access innovation and private equity investments in later rounds; Network of top
in the Chinese vast network build category leaders investors in Indian life rounds; “raised” by Silicon Valley
healthcare market facilitating / offering in healthcare sectors sciences successful investors and
deal flow possibilities entrepreneurs companies with a
focus on genomics
Currently no co- Currently no co-
investment investment
Data as of 31 July 2019, in CHFPrivate Companies with significant Value-Increasing Potential 43
Full representation service in CEE markets
196 Long-chain dicarboxylic acids / bio-based diamine 5 22 Profitable company with net sales exceeding
Strong revenue growth and profitable EUR 70 million in 2018; high double-digit sales
Potentially first company with a commercial scale growth for 2019
production of bio-based diamine 5 Signed agreements with 17 multinationals
across 17 countries
37 Diazepam (Valtoco) nasal spray for use in 21
breakthrough epilepsy seizures
India’s leading online pharmacy, medicines app
NDA filed, orphan designation in the US and EU
and health platform
Major unmet need in epilepsy patients, where no
Strong sales growth
drug is approved for controlling break through
Highest ranked medical app on the Indian
seizures
Google play-store
32 Narcolepsy (with and without cataplexy) 15 Smart care platform (online pharmacy, chronic
NDA acceptance and priority review for Pitolisant disease management service center)
First-in-class, selective, histamine H3 inverse agonist Commercial stage
which promotes wakefulness (alertness and One of the top three on-line pharmacy and
attention), and reduces the frequency of cataplectic healthcare on-line services businesses in China
episodes, limited abuse potential
Size corresponds to
HBM’s book value (in
Data as of 31 July 2019 Mio. CHF)Promising Public Company Holdings 44
21 Cholesterol-lowering drugs, alternative to statins
64 Pediatric oncology (neuroblastoma), radio-
immunotherapy
Bempedoic Acid (BA) is an orally available drug
that lowers LDL (“bad” cholesterol)
Filing for both lead compounds with the FDA Phase III results showed sizable and consistent
expected in 2019 LDL reduction (by BA) on top of standard of care
First FDA approval expected in H2 2019
Severe autoimmune diseases (MG, ITP, PV)
42 Novel antibody-based therapies, combining the
diversity of the llama immune system with antibody 19 Immune and inflammatory-mediated diseases
engineering
(ulcerative colitis, chronic kidney disease)
Positive proof-of-concept clinical data for lead
Potential best-in-class safety for Etrasimod (currently
antibody ARGX-113, in the treatment of myasthenia
completed phase II) among S1P’s
gravis (MG)
Autoimmune / inflammatory diseases and oncology
19 RNAi targeting therapies
28 PRN1008, a reversible covalent BTK inhibitor
Highly differentiated and potentially best-in-class small
Patisiran which targets TTR amyloidosis was the first
approved product in 2018
molecule drug platform Pivotal data for givosiran (porphyria), lumasiran and
Phase II top-line results in ITP expected in Q4 2019 fitusiran expected over the course of 2019
24
Complement-mediated diseases (aHUS, MG)
17
Potential competitive threat to Alexion’s Soliris due to Antibody drug conjugate, solid tumors
convenience of SC dosing and planned discounted Sacituzumab govitecan targeting Trop-2
pricing strategy Impressive data in 3rd-line, triple negative breast
cancer, which led to breakthrough designation from
FDA
Data as of 31 July 20192019 Busy Event Calendar of Main Positions 45
2019 2020
Q3 Q4 H1 H2
Omburtamab B7-H3: Nuplazid
Valtoco: ETC-1002 bempedoic US NDA Filing (pimavanserin): Phase Naxitamab GD2:
PFIC (Odevixibat):
US approval (Epilepsy acid: Phase II top-line (CNS/LM from III (HARMONY) final Approval (R/R high-
Phase III top-line data
cluster seizures) results (type 2 neuroblastoma) data (DRP) risk neuroblastoma)
(pediatric liver)
diabetes)
Etrasimod (APD334): OBE2109 (Linzagolix): Omburtamab B7-H3:
Naxitamab GD2: US Fintepla (fenflur-
DTX401: Phase I/II Phase IIa data primary endpoint data Approval (CNS/LM
NDA Filing (R/R high- amine): EMA Decision
cohort 2 results (primary biliary PRIMROSE 1 and 2 from neuroblastoma)
risk neuroblastoma) (pre-market) (dravet
(GSDIa) cholangitis) (uterine fibroids)
syndrome)
IMMU-132 (sacituzumab
Fintepla (fenflur- Sparsentan: Phase III
DTX301: Phase I/II govitecan): Phase II NASH (Elobixibat):
PRN1008: Phase II amine): Phase III data (DUPLEX) top-line
cohort 3 results (OTC BLA re-submission Phase II top-line data
data (ITP) (lennox-gastaut data (FSGS)
deficiency) (mTNBC) (adult liver)
syndrome)
Nuplazid Nuplazid Repotrectinib: Phase II
(pimavanserin): Phase Lumasiran: Phase III Filgotinib: Phase IIb/III
(pimavanserin): Phase PRN1008: Phase II (TRIDENT-1) interim
III (HARMONY) interim (Illuminate-B) results (SELECTIVITY) results
III (ENHANCE) top-line extension top-line data data (non small cell
data (DRP) (hyperoxaluria) (Ulcerative colitis)
data (schizophrenia) (pemphigus vulgaris) lung cancer)
Pitolisant:
US approval Lumasiran: Phase III ALN-AS1 (Givosiran): ARGX-113
CLN6: Phase I/II - 2 Filgotinib: US approval
(Narcolepsy (Illuminate-A) results US Approval (acute (Efgartigimod): Phase
year data (batten (rheumatoid arthritis)
with/without cataplexy) (hyperoxaluria) hepatic porphyrias) II results (Pemphigus
disease)
vulgaris)
RE-024 ARGX-113
Inclisiran: Phase III Exparel: Phase III Fitusiran: Phase III ETC-1002 bempedoic
(Fosmetpantotenate): (Efgartigimod): Phase
(ORION) results (PLAY) top-line results (ATLAS) topline results acid: US & EU
Phase III (FORT) top- III results (ADAPT)
(hypercholesterolemia) (post-operative pain) (haemophilia) approval (hyper-
line data (PKAN) (gMG) lipidemia)
HBM ResearchHBM Healthcare Investments Ltd – Attractions for Investors 46
Growing Industry Value Creation
Equity investment into promising Portfolio with significant value-
private and public companies increasing potential
Expertise Commitment
Expertise of the HBM Partners Transparent valuation and
team in selecting investments with reporting, annual cash distribution
attractive risk and reward and share buy-back programHBM Healthcare Investments Ltd About HBM Healthcare Investments Ltd Investment Strategy Healthcare Sector Portfolio Structure Investment Positions Outlook & Concluding Remarks Appendix: Organisation, Team
Timely & Transparent Investment Valuations 48
► Positions in listed companies are valued at market prices
► Positions in private companies are valued at acquisition cost in the investment currency,
except when:
Portfolio company is valued higher or lower in connection with a new round of financing with a third
party lead investor (not strategic investors)
Portfolio company is performing below expectations, leading to a write down in steps
of 25, 50, 75 or 100%
Portfolio company has significant revenues and profits, in which case an appropriate price/sales or
price/earnings multiple is applied (“sales and earnings multiple method”)
Negative events are reflected in the valuations as they occur. Positive developments (i.e.
good clinical data, partnering deals, etc.) will only be reflected in the valuations if there is a
„liquidity event“ (financing round with third party investor, IPO or trade sale).Investor Information 49
Share Information Largest shareholders
Latest
% Shareholder Notification
Swiss security number 1.262.725 15-20 Nogra SA, Luxemburg 9.11.2016
German security number 984345
ISIN CH 0012627250 Distribution policy
CUSIP H 3553X112
Withholding tax-exempt distribution yield of 3-5% p.a.
Telekurs 126,126272 from par value repayment
SIX Swiss Exchange Ticker HBMN
Fees
0.75% of company assets plus
Annual Management fees (paid quarterly)
0.75% of the company's market capitalisation
Performance fee (paid annually) 15% on increase in value above the high water mark
High water mark (per share for all outstanding shares) NAV of CHF 194.36Board of Directors 50
Hans Peter Hasler Prof Dr Dr h.c. mult. Heinz Riesenhuber Mario G. Giuliani
Chairman and Member of the Compensation Vice Chairman and Member of the Audit Member of the Compensation Committee
Committee Committee
Member of the Board of Directors Jukka LLC since
Chairman of the Board of Directors MIAC AG since Chairman of the Advisory Board Rock Tech Lithium
2015, NGR (MONACO) SAM since 2015, Giuliani
2012. Member of the Board of Directors Minerva Inc. since 2018; Member of the Investors’
Group SpA since 2010, and Giuliani SpA since
Neurosciences since 2017, member of the Board Committee Heidelberg Innovation BioScience
1999; Member of the Investment Committee
of Directors Shield Therapeutics plc since 2018 Venture II GmbH since 2001
Royalty Pharma since 2001, and Mosaix Ventures
Since 2017 CEO of Vicarius Pharma. Prior to this, Member of the German Parliament 1976 to 2017; LLP since 2000 as well as various other
international management positions at Wyeth German Federal Minister of Research 1982 to directorships within the Nogra Group
Pharmaceuticals, Biogen and Biogen Idec, as well 1993; Chairman of German Parliamentary Society
Previously executive positions and directorships at
as Elan Corporation 2006 to 2018; numerous directorships
Giuliani SpA, Recordati SpA, and Nogra Group SA
Dr Eduard Holdener Robert A. Ingram Dr Rudolf Lanz
Board Member Member of the Compensation and Nominating Member of the Audit and Nominating
Committee Committee
Chairman of the Board of Directors NovImmune Chairman of the Board of Directors Viamet Chairman of the Board of Directors Dr. Rudolf Lanz
S.A. since 2008, CEO since 2016 Pharmaceuticals Inc. since 2015, BioCryst AG since 2009; Member of the Board of Directors
Medical doctor. Prior to this, specialist in internal Pharmaceuticals Inc. since 2015, Novan Inc. since MIAC AG since 2015, and Pearls Fashion Holding
medicine and oncology; various international 2011, and Cree Inc. since 2008 AG since 2009
executive positions at F. Hoffmann-La Roche Ltd General Partner of Hatteras Venture Partners USA Previously Partner of The Corporate Finance
Group and head of M&A & Corporate Finance of
Ernst & Young SwitzerlandManagement HBM Healthcare Investments Zug / Cayman 51
Dr Andreas Wicki Erwin Troxler Jean Marc Lesieur
(2001) (2005) (2001)
Chief Executive Officer Chief Financial Officer Managing Director and Member of the Board of Directors
HBM Healthcare Investments (Cayman) Ltd
Doctorate in chemistry and biochemistry; since Economist and Swiss Certified Public Accountant; More than twenty years of experience in trust and corporate
2001 Chief Executive Officer HBM Healthcare since 2005 HBM Healthcare Investments Ltd and management and administration. Before joining HBM
Investments Ltd and HBM Partners Ltd. Prior to HBM Partners Ltd, since 2011 Chief Financial Healthcare Investments, he was with Vontobel Private Equity
this, chief executive of several pharmaceutical Officer. Prior to this, auditor Management Ltd, acting as an executive director with
companies (1988 to 2001), investment and venture PricewaterhouseCoopers Ltd (1996 to 2002) and responsibilities for personnel and all corporate and company
capital advisor (1993 to 2001) Julius Baer Family Office (2002 to 2005) management matters of the private equity business in the
Cayman Islands
Member of the Board of Directors Harmony Chairman of the Swiss Association of Investment
Biosciences since 2017, Vitaeris Inc. since 2016, Companies (SAIC) since 2014 Associate of the Chartered Institute of Bankers, ACIB
Pacira Pharmaceuticals Inc. since 2007, HBM (Trustee), a member of the Society of Trust and Estate
Healthcare Investments (Cayman) Ltd since 2001, Practitioners (STEP) and a Notary Public in the Cayman
and Buchler GmbH since 2000 Islands. He was educated in the Cayman Islands and
EnglandPrivate Equity Team 52
Dr Ulrich Geilinger Dr Alexander Asam, MBA Dr Matthias Fehr, CFA Dr Chandra P. Leo, MBA
(2001) (2007) (2002) (2007)
Head Private Equity Investment Advisor Investment Advisor Investment Advisor
More than 25 years of experience in the More than twenty years of experience in the Over twenty years of experience in private and Over fifteen years of experience in private
Venture Capital Industry life sciences and private equity businesses public equity investment management and equity, clinical practice and biomedical
PhD ETH Zurich in Natural Sciences and MBA degree from ASTON Business School, research research
Industrial Engineering Birmingham and a MSc and PhD in chemistry MSc and PhD in chemistry from ETH, Zurich Completed medical studies in Berlin and
Previously in management functions at from University of Heidelberg Former senior sell-side analyst at Lombard London, doctoral degree from Freie Universität
Innoventure, Credit Suisse, Apax and Former managing director and partner of Odier for biotech and medical technology Berlin, MBA degree from INSEAD
Vontobel. Deutsche Venture Capital / Deutsche Bank. industries; former scientist at the Swiss Former postdoctoral scientist at Stanford
Various positions at Hoechst, Aventis and Federal Institute of Technology University, physician at University Hospital
LION Bioscience Leipzig and principal at Wellington Partners
Dr Priyanka Belawat Dr Emil Bujak Dr Michael Buschle Axel Bolte
(2007) (2015) (2017) (2003)
Investment Advisor Investment Advisor Investment advisor Venture Partner
Over ten years of experience in venture and Over six years of experience in life sciences, More than 25 years of experience in biotech Over fifteen years of experience in the life
private equity investing in the healthcare space including one year in investment analysis and and pharma sciences and private equity businesses
in the US, Europe and selected emerging industry report preparation PhD from the University of London. Research Graduated in biochemistry at ETH and the
markets Holds a PhD in Pharmaceutical Sciences and at St. Jude’s Children’s Research Hospital, University of Cambridge. MBA from the
Holds a doctorate in molecular biology and an MSc in Medicinal and Industrial Boehringer Ingelheim-owned Institute of University of St. Gallen
genetics from the University of Zurich and a Pharmaceutical Sciences from ETH Zurich Molecular Pathology, Vienna Former investment manager and partner at
post-doc at HKUST Prior experience as registered pharmacist Co-founder of Intercell with successful IPO, New Medical Technologies. Position in R&D
CSO of Glenmark Pharma management at Serono SAPublic Equity Team 53
Dr Ivo Staijen, CFA Dr Thomas Thaler Gavin MacGregor Mirjam Heeb
(2003) (2006) (2017) (2019)
Head Public Equity Investment Advisor Investment Advisor Investment Advisor
Over 20 years experience in the pharma Over 25 years of experience in the investment Over 13 years’ experience in the pharma Over 15 years experience in the pharma industry and
industry and in investment analysis and management, financial research and in the industry and in global healthcare investment global healthcare investment analysis and portfolio
portfolio management biotechnology and medical technology industry analysis management
PhD in biotechnology from ETH Zurich and PhD in life sciences and MSc in biochemistry 1st Class BSc in Biomedical Sciences from the MSc in Molecular Biology from the University of Basel
MSc in chemistry from the University of and a master’s degree in business University of Manchester and a Chartered and McGill University, Montreal
Groningen administration from ETH Zurich Management Accountant (CIMA) Previously senior portfolio manager of GAM Health
Previously senior biotechnology analyst at Previously senior equity analyst at Bank Julius Previously senior global healthcare analyst at Innovation Fund, senior manager with Vifor Pharma,
Bank Sarasin and department head at MDS Baer and in senior management positions with Martin Currie Investment Management, sell-side and buy-side analyst, portfolio manager at
Pharma Services Sulzer Medica, Schneider and Boston European pharmaceuticals analyst at Credit Bellevue Group.
Scientific Suisse and Lehman Brothers
Michael Jasulavic Miles Schofield Ny Ken Thomas Heimann
(2012) (2007) (2004) (2010)
Investment Advisor to HBM Partners Trading & Execution Investment Control Risk Manager and Analyst
Over ten years of experience in healthcare Over 15 years experience in trading & More than 10 years experience in trading & Over eight years of experience in Investment
investment research, strategy and trade execution execution and administration Research, Analysis, FINMA Risk Management
execution and client services
Bachelors of Science (Hons) degree from the Bachelor in business administration from
MS in Medical Science from MCP/Hahnemann Open University UK Zurich University of Applied Sciences MSc and BSc in Banking & Finance from the
University Lucerne University of Applied Sciences
Previously in US Equities Middle Office Previously in administrative functions at HBM
Previously biotechnology analyst at Traxis activities at Salomon Smith Barney and Partners AG Previously in investment analysis and valuation
Partners, Sivik Global Healthcare and Jefferies Citigroup and in client advisory at a Swiss bank
Asset ManagementDisclaimer 54 This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument and should therefore not be relied on for accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but HBM does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions. HBM has expressed its own views in this document and these may change. Past performance is not a reliable indicator of future results, prices of shares and the income from them may fall as well as rise and investors may not get back the amount originally invested. All investments involve risk including the risk of possible loss of the invested amount. Investors should consider all potential risks and further disclosure information associated with the investment disclosed in the fund documents and the appropriateness with their financial profile and objectives. Changes in foreign-exchange rates may also cause the value of investments to fall as well as rise. Some information quoted was obtained from external sources HBM considers to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. Third party data is owned or licensed by the data provider and may not be reproduced or extracted and used for any other purpose without the data provider's consent. Third party data is provided without any warranties of any kind. The data provider and HBM shall have no liability in connection with third party data. Issued by HBM Healthcare Investments AG, Bundesplatz 1, 6300 Zug, Switzerland.
Your Contact 55 HBM Healthcare Investments Ltd Bundesplatz 1 6301 Zug Switzerland Phone +41 41 710 75 77 Fax +41 41 710 75 78 investor.relations@hbmhealthcare.com www.hbmhealthcare.com
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