BB Biotech AG (OTC:BBAGF, SWX:BION, ETR:BBZA) head portfolio manager Dr Daniel Koller outlines the company's investment strategy and performance in an interview with Proactive London.
BB Biotech, a Swiss investment firm with a 30-year track record, focuses on constructing a concentrated portfolio of 20-35 biotechnology stocks. The company aims for double-digit returns, targeting a 15% return on invested capital over a cycle.
Koller detailed the firm's "S curve" investment strategy, which involves identifying companies at the proof of concept stage, primarily in the small to mid-cap range, and investing in them for the medium to long term. This approach allows BB Biotech to support companies through their growth phases, from clinical to commercial stages, and divest when growth slows or targets are no longer achievable.
The fund focuses on therapeutic areas like cancer, autoimmune diseases, and rare genetic disorders. It also pays close attention to evolving technologies in drug development, including RNA medicines, gene therapies, and cell-based treatments.
Koller also highlighted the integration of artificial intelligence in their operations, employing data scientists to enhance due diligence and identify optimal investment opportunities in a field that has grown from a few hundred to thousands of companies.
Despite recent market challenges, Koller remains optimistic about the fund's performance. He acknowledges a downturn in the biotech sector over the last two years but points to the substantial progress made by portfolio companies. He cites factors such as changing interest rate environments, increased mergers and acquisitions, and clinical advancements as drivers for a positive turnaround in the fourth quarter and early 2024.