Profile
As a venture capital company, HBM BioVentures is invested globally in some 35 mature emerging companies in the biotechnology/human medicine, diagnostics and medical technology sectors. The lead products of HBM BioVentures’ portfolio companies are either at an advanced stage of development or already available on the market. The company focuses on unlisted emerging companies, with two-thirds of assets being invested in private companies that offer high value creation potential. This has enabled HBM BioVentures to carve out a unique and distinctive market position. HBM BioVentures has a broad shareholder base and is listed on the SIX Swiss Exchange (ticker: HBMN).» Top
Who we are
HBM BioVentures is a leading venture capital company with a carefully selected, diversified portfolio of some 35 investments in private and public enterprises in the biotechnology/human medicine, diagnostics and medical technology sectors.
HBM BioVentures takes an active long-term role in its portfolio companies in order to support their value creation over an investment holding period of several years. HBM BioVentures is neither a passive investment fund nor a stock trader, but takes an entrepreneurial stance towards its portfolio companies.
The investment process rigorously follows three key steps:
HBM BioVentures selects quality
HBM BioVentures’ investment advisors and external experts perform thorough due diligence on scientific, business/financial/patent and tax/legal issues surrounding attractive potential portfolio companies.
HBM BioVentures supports winners
Once an investment has been made, HBM BioVentures provides strategic advice to its portfolio companies on clinical development and commercialisation. HBM BioVentures takes an active role in every one of its top 20 private portfolio companies.
HBM BioVentures exits successfully
HBM BioVentures uses its global industry and financial network to help portfolio companies achieve an IPO or trade sale at attractive valuations. HBM BioVentures has a proven track record of successful exit transactions.
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How does the HBM BioVentures business model function?
HBM BioVentures invests most of its funds in emerging, private companies in the human medicine, biotechnology and medical technology sectors. HBM Partners has about 15 investment experts who give these portfolio companies intensive support and development assistance. These experts usually take seats on the boards of directors of portfolio companies. The most successful companies receive follow-on financing. HBM BioVentures sometimes retains holdings originally taken in private companies even after they have been brought to the stock market, provided they still have high value creation potential. If they no longer have that potential, the holdings are sold and the proceeds reinvested in private companies. This investment cycle lasts an average of five to seven years. The HBM BioVentures portfolio, which has been carefully built up since 2001, is thus in its harvest phase.
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Portfolio Strategy
HBM BioVentures has started sales negotiations for several portfolio companies and investment holdings and is participating actively in the selling process. As demand from major pharma and biotech companies for new products continues to rise, and with many mature portfolio companies, HBM BioVentures is well positioned for successful divestments.
HBM BioVentures' investment activity is focused at present on follow-on financing for existing portfolio companies. Each individual financing round is analysed in detail from the scientific, technical, business, financial, legal and patent persepctives. Investments are made only if the company has attractive value-creation potential. HBM BioVentures takes an active role and entrepreneurial responsibility in each of the 20 largest private portfolio companies.
HBM BioVentures will not make any further investments in private companies (except follow-on financings) until the average discount of the share price compared with the average net asset value (NAV) per share is less than 15% for a continuous three-month period. Until then, any disposable liquid funds shall be used to repurchase own shares.
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Who we are
HBM BioVentures is a leading venture capital company with a carefully selected, diversified portfolio of some 35 investments in private and public enterprises in the biotechnology/human medicine, diagnostics and medical technology sectors.
HBM BioVentures takes an active long-term role in its portfolio companies in order to support their value creation over an investment holding period of several years. HBM BioVentures is neither a passive investment fund nor a stock trader, but takes an entrepreneurial stance towards its portfolio companies.
The investment process rigorously follows three key steps:
HBM BioVentures selects quality
HBM BioVentures’ investment advisors and external experts perform thorough due diligence on scientific, business/financial/patent and tax/legal issues surrounding attractive potential portfolio companies.
HBM BioVentures supports winners
Once an investment has been made, HBM BioVentures provides strategic advice to its portfolio companies on clinical development and commercialisation. HBM BioVentures takes an active role in every one of its top 20 private portfolio companies.
HBM BioVentures exits successfully
HBM BioVentures uses its global industry and financial network to help portfolio companies achieve an IPO or trade sale at attractive valuations. HBM BioVentures has a proven track record of successful exit transactions.
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How is HBM BioVentures organised?
HBM BioVentures is a Swiss holding company based in Zug, Switzerland. Its Board of Directors consists of five members with extensive experience in various relevant disciplines. HBM BioVentures is advised by HBM Partners, one of the leading investment-advisory companies in the field of human medicine. It has about 15 investment experts, all of them with operational experience in pharmaceutical or biotech companies, the venture-capital field or finance. For its advisory services HBM Partners receives a management fee from HBM BioVentures, plus a performance-related fee if applicable.
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What is the HBM BioVentures corporate form?
HBM BioVentures is a Swiss joint-stock company domiciled in Zug, Switzerland. Its shareholders, which currently number about 1,200, enjoy the same codetermination and information rights as shareholders in any other Swiss joint-stock company.
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To what extent is HBM BioVentures an active investor?
HBM BioVentures does not simply invest money in its portfolio companies. The HBM Partners advisory team actively collaborates with company managements – putting them in touch with their comprehensive network of sector experts, for example. To this end, a representative of HBM Partners usually takes a seat on the portfolio company’s Board of Directors and becomes actively involved in its work. Given this active level of involvement, each of the HBM Partners investment experts is actively involved with an average of no more than 3-5 portfolio companies.
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What is the composition of the portfolio?
HBM BioVentures concentrates most of its investment in private companies, some of which have already achieved a stock market listing. In geographical terms the portfolio is about equally split between European and North American companies, though increasingly money is being invested in emerging markets. Most portfolio companies are active in the field of pharmaceutical development. The medical technology and diagnostics sectors are also strongly represented. Several companies are operating profitably, while others are already selling their products on the market (see also detailed portfolio structure). Most companies in the portfolio have compounds still in clinical development (drug development phases I, II and III).
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How is the portfolio of private companies structured?
How are investments in private companies valued?
The private portfolio has some 30 holdings. In general the more mature the company, the larger the holding. Most new investment goes into private portfolio companies with pharmaceutical compounds in clinical development phases I, II or III. In line with the HBM BioVentures investment strategy, a carefully considered initial investment is built up over several years – as long as the profit potential of the company concerned is intact (see also detailed portfolio structure). Experience has shown that this development and investment cycle takes an average of five to seven years, from the initial investment to the harvest phase.
In strict compliance with the IFRS accounting standards and the valuation guidelines of the EVCA (European Venture Capital Association), investments in private companies are valued at acquisition cost unless (i) the company has been valued differently in a more recent financing round, or (ii) the company is evidently performing less well than expected, or (iii) the company is generating sustained profits (see also more detailed information on the valuation guidelines). These valuation guidelines lead to undervaluations and thus hidden reserves in mature portfolios of private companies.
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How is the portfolio of public companies structured?
How are investments in public companies valued?
Most holdings in listed companies were originally in the HBM BioVentures portfolio of private companies. Having performed well, they obtained a listing – and in some cases HBM BioVentures then added to its holdings. These investments are very closely monitored. They are only retained in the portfolio as long as their growth potential is intact. At present several of the larger holdings are in European companies (see also detailed portfolio structure). Experience has shown that this development and investment cycle takes an average of five to seven years, from the initial investment to the harvest phase.
Holdings in listed shares are valued at their market prices.
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How is HBM BioVentures positioned geographically?
In which currencies is the portfolio invested?
HBM BioVentures invests globally, though the bulk of its holdings is equally split between Europe and North America. See also detailed portfolio structure.
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Share buyback programme
What are the details on the share buyback programme?
Up to 20% of the company's own shares will be repurchased via a second trading line on the SIX Swiss Exchange. The Board of Directors intends to recommend the cancellation of the repurchased share to future Annual General Meetings. The share buyback began on 7 September 2009 and lasts until 31 August 2012 at the latest.
HBM BioVentures will not make any further investments in private companies (except follow-on financings) until the average discount of the share price compared with the average net asset value (NAV) per share is less than 15% for a continuous three-month period. Until then, any disposable liquid funds shall be used to repurchase own shares.
Where can I find information about HBM BioVentures?
Go to the website – www.hbmbioventures.com – for comprehensive information on the company, and to register to be sent information by e-mail.
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Who are the investors in HBM BioVentures?
HBM BioVentures has a broad shareholder base. About 1,200 shareholders are registered, some of them large institutions. Private investors range from large to small. Regarding the reporting of shareholders' holdings, refer to the information of SIX Swiss Exchange.
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With which indices and investment products should HBM BioVentures be compared?
HBM BioVentures invests exclusively in the human medicine sector, with the main focus on biotechnology. Its performance must therefore be compared with indices or investment products that also represent or invest in these same fields. Indices that reflect the price of biotechnology shares are relevant for comparative purposes – like the Nasdaq Biotechnology Index (NBI), which includes all the biotech companies listed on NASDAQ. HBM BioVentures' performance must also be able to stand comparison with indices of pharmaceutical shares (see also performance).
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What is the minimum capital investment in HBM BioVentures?
The minimum investment is the price of one share. The shares are listed on the SIX Swiss Exchange.
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What fees or costs does an investment in HBM BioVentures involve?
The HBM BioVentures “total expense ratio” has been less than 2% per annum since inception (excl. performance fee). The management fee is CHF 13 million in 2009/2010 and CHF 10 million in 2010/2011, but not more than 1.5 % of the gross assets per annum. As of 1 April 2011 the fixed management fee of 1.5% will be calculated to 80% on the basis of the gross assets and to 20% on the basis of the market capitalisation of the Company.
The performance fee is set at 15% of the growth in net asset value. It is payable only on new growth in net asset value (NAV) over and above the “high water mark” (currently CHF 107.71 per share). It is paid out annually on the basis of the audited annual financial statements. See also details of HBM BioVentures fees in the Corporate Governance document.
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Do I have to pay issue commission when I buy HBM BioVentures shares?
Will I be charged redemption commission when I sell the shares?
No issue or redemption commission is charged on the purchase or sale of HBM BioVentures shares.
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How did HBM BioVentures' investment sector fare during the financial crisis?
HBM BioVentures holds participations in several smaller companies that are suitable candidates for acquisition by major pharma and biotech firms. The investment sector in which HBM BioVentures operates enjoys a healthy level of activity and is largely non-cyclical in nature. Many major pharma and biotech companies are being forced to expand their product pipelines by buying in additional compounds or acquiring other companies. This keeps the number of acquisitions and cooperation agreements at a consistently high level. Ample liquidity means that financing these transactions poses no problem. Despite the crisis, there has been little change so far in the terms on which these deals are done and the long-term trend has been upward.
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How is the human medicine sector defined?
HBM BioVentures divides the human medicine sector into three parts: biotechnology, medical technology and diagnostics, the company’s three main investment segments.
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What is biotechnology?
Biotechnology refers to the use of knowledge gained in the fields of biology and chemistry to devise technical processes or products. Biotechnology is principally concerned with the development and manufacture of enzymes, proteins, antibodies and other biological agents for medical and other purposes. Biopharmaceutical products, which are usually manufactured in a bioreactor with the help of micro-organisms, today make a vital contribution to the treatment of many different diseases.
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What is medical technology?
Medical technology applies the principles and rules of engineering science in the field of medicine. It combines expertise in the field of technology with specialist medical knowledge in order to identify, prevent, monitor, treat or relieve wounds and disabilities.
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What is diagnostics?
Diagnostics denotes the various methods of medical and therapeutic diagnosis. Companies that are active in diagnostics develop new diagnostic techniques or improve existing ones.
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What is the “clinical development” of products? How are phases I, II and III defined?
“Clinical development” is an important, capital-intensive stage in the development of new drugs. It follows the stage known as pre-clinical development, i.e. the search for a suitable active compound. Once an compound has successfully completed a series of comprehensive pre-clinical tests, it generally embarks on the clinical research stage. Phase I studies investigate how the compound functions in the human organism, using volunteers, and whether it has any side effects. The most suitable form of administration is developed on the basis of these results. In phase II of clinical development the compound is used on patients as a drug for the first time. This phase concentrates mainly on investigating the nature and gravity of any side effects and on establishing the dose. Phase III consists of final studies to generate information on the mechanism of action of the compound. This is crucial for its approval by the authorities. Randomised double-blind studies are conducted to establish whether the compound is superior to a placebo, and whether it has effects comparable with those of other drugs. Once the first three phases of clinical development have been completed, the drug generally embarks on the process of obtaining official approval.
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