BB Biotech positions move on first day of ASCO

Two of BB Biotech’s holdings were among the largest movers – one up and one down – on Friday, the first day of ASCO – the American Society of Clinical Oncology – when stocks responded to an avalanche of updated clinical trial data released at the start of the virtual scientific meeting.

Fate Therapeutics, BB Biotech’s tenth largest holding accounting for 3.9% of the portfolio value on March 31, was the largest riser among ASCO-affected stocks, gaining more than 9% on the day. Fate disclosed updated data from an ongoing Phase I trial of FT516, an iPSC-derived NK cell therapy, which showed some initial objective responses in patients with aggressive lymphoma, including some who have failed prior CAR-T therapy.

However, Fate’s stock price gain only part recovers some of its recent losses and it remains 11% down into the second quarter. Nevertheless, over the longer term, Fate’s performance has been very strong with the shares up by 111% over the past year, such that it ranks as BB Biotech’s fourth best performing holding over this period.

Meanwhile, Macrogenics, BB’s 11^th largest holding accounting for 3.6% on the portfolio value at the end of the first quarter, was one of the highest profile casualties of the ASCO stock moves. Its stock fell by 10%, as investors responded to reports of an apparently high discontinuation rate (57%) in clinical trials with MGC018, an early-stage product on which there is a lot of attention. MacroGenics has, however, also performed well over the longer term and remains the third best performing stock for BB Biotech this year.

BB Biotech has holdings in 13 companies primarily involved in oncology, the Asco opening day performance of which is shown in the table below. On balance, the ASCO main data release was probably marginally positive for this portfolio within a portfolio, with gainers outnumbering decliners by around 2:1.

Oncology can be one of the most volatile areas of biotech stock investment, as can be seen in the performance in the year to date. Essa Pharmaceuticals, which is developing a small molecule drug coded EPI-7386 in metastatic castration-resistant prostate cancer and is a new investment for BB Biotech this year, has seen its stock rise by 167%. On the other hand, Black Diamond Therapeutics – a new investment in 2020 – has fallen by 60%. Much of this fall occurred on the first ASCO disclosure of data, around three weeks ago, when the abstracts were published online. These movements highlight the fact that biotech can be very volatile and perhaps is best approached through a collective investment vehicle, such as BB Biotech.

BB Biotech Oncology stocks

Meanwhile, the outcome of the FDA’s review of Biogen’s controversial Alzheimer’s disease therapy aducanumab should be revealed later today (Monday 7^th), in what is widely held to be the largest – in terms of market capitalisation – biotech binary event of 2021. BB Biotech has a stake in Biogen (accounting for 3.3% of its 31 March portfolio value), which it acquired late last year on the belief that there was a better chance of approval than was factored in by the market. Analysts believe the $41bn market cap company could see its stock could rise by as much as 50% – or fall by 25% – depending on the outcome of the FDA’s review.

As of the close on Friday, BB Biotech’s stock was trading at CHF80.9 while NAV was CHF65.7/share.

BION : BB Biotech positions move on first day of ASCO