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Stellar Moderna share drives BB Biotech back to near all time high

BB Biotech tops biotech trust league in January

Swiss investor BB Biotech’s (SWX:BION) large position in US covid vaccine producer Moderna continues to drive a remarkable performance in a volatile US biotech market. Yesterday, Moderna (Nasdaq: MRNA) surged 17% to a new all-time high of $484.5/share, giving it a market capitalisation of $167bn.

Moderna is the largest of BB Biotech’s holdings accounting for 12.2% of portfolio value on 30 June 2021. Its share price rise yesterday drove BB Biotech’s NAV up by 2.7% to CHF76.6/share. Meanwhile, BB Biotech’s share price rose by 2.3% to CHF91.7/share, just short of its all time high of CHF92.2 reached briefly on 8 February 2021.

Moderna’s share price has added 37% – or $61bn in value – just in the six weeks since 30 June and has now given its pre-IPO investors – which include BB Biotech – a 20-fold return in the two and a half years since its IPO.

Moderna’s share price has in fact risen by 363% in the eight-month year-to-date period, easily beating even other top performers in BB Biotech’s portfolio. Four other BB Biotech-held stocks have increased in value by 30-50% in this period (Alnylam, Essa Pharmaceuticals, Biogen and Beam Therapeutics), although a majority of the holdings – reflecting the performance of the much of the US biotech sector – have shown declines this year, some quite sizeable.

Nevertheless, Moderna has been a standout performer. The company has now leapfrogged Amgen in terms of market capitalisation to become the world’s largest biotech company and now ranks among the top 10 largest pharma companies, between Bristol Myers Squibb and AstraZeneca and above Sanofi and GlaxoSmithKline.

[QuotedData comment: Moderna’s stellar share price rise this year, including the 17% rise yesterday, highlights the strengths of BB Biotech’s investment strategy. It has a relatively small number of holdings and often large positions a small number of companies where it has a high conviction. These can provide significant rewards, if they perform well, as with the case of Moderna. This approach differentiates it from peers, particularly UK-listed biotech investment trusts, which tend to have a larger number of individually smaller positions. As ever, we highlight that the stock price volatility inherent in biotech and urge individual investors who are looking for exposure to this sector, to take a portfolio approach, which can probably be best achieved by collective investment vehicles.]

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