Bellevue Biotech (CH)

Global equities rose modestly in November 2025 (MSCI World Index; +0.3%), with healthcare significantly outperforming (MSCI World Health Care Index; +8.1%) as policy visibility continued to improve and the sector benefited from strong earnings momentum. The Nasdaq Biotechnology Index (NBI) had another very strong month (+8.5% in USD; +8.4% in CHF). The Bellevue Biotech (CH) Fund (AA shares; +8.4% in CHF) performed in line with its benchmark.

In early November, Eli Lilly and Novo Nordisk became the latest major pharma companies to reach agreements with the US Administration on drug-pricing and manufacturing commitments. These agreements build on the initial framework set by Pfizer, AstraZeneca, and Merck KGaA. These developments helped shift sentiment from maximum uncertainty toward increasing confidence, representing a de-risking catalyst for investors.

Along with an improving operating and interest rate environment (probability of a Fed cut in December rose through November), we have also seen an improvement in biotechnology funding (secondary offerings, etc.) in recent months.

M&A activity remained strong in November in biotechnology. After a bidding war with Novo Nordisk, Pfizer completed the acquisition of obesity drug company Metsera for up to USD 10 bn. Metsera’s pipeline, led by the monthly injectable GLP-1 agonist MET-097i, appears differentiated from current market leaders by focusing on less frequent dosing and improved tolerability.

On the innovation front, Roche reported a unexpectedly positive Phase III study with oral SERD giredestrant in early breast cancer. This has a positive read-across for Olema Pharmaceuticals, which also has an oral SERD in development.

Among portfolio holdings, Scholar Rock Holdings (+48.8% in CHF; progress with FDA approval in SMA), Madrigal Pharmaceuticals (+42.6; strong MASH sales launch), and Revolution Medicine (+32.2%; daraxonrasib updates in 1L PDAC), PTC Therapeutics (+26.0%; Sephience strong launch reported at Q3 results) were the best performing stocks in November.

We see the potential for the biotechnology sector to enter a new and more durable phase of growth after several years of structural, regulatory, and capital-market headwinds. The sector is transitioning from a speculative and capital-intensive model to one that is becoming defined by sustainable, cash-generative growth, driven by premium drug pricing, leaner cost structures, and disciplined capital allocation. After years of pricing uncertainty and policy overhang, fundamentals are stabilizing, and investor confidence is returning as the industry demonstrates consistent profitability and operational efficiency.

Long-term structural drivers continue to reinforce the sector’s trajectory. Aging populations, increased access to healthcare in emerging markets, and accelerating innovation in areas such as AI-enabled drug discovery, precision medicine, and advanced biologics are expanding the opportunity set. Biotech innovation is increasingly central to healthcare system efficiency – reducing chronic-care burdens, extending quality of life, and containing long-term costs through curative or one-time interventions.

Against this backdrop, the fund maintains a selective, high-conviction strategy focused on biotechnology. The portfolio is oriented toward companies with de-risked late-stage assets, proven pricing power, and scalable platforms capable of generating durable free cash flow. This approach aims to capture both the structural rerating underway in biotechnology and the sector’s cyclical outperformance potential within a normalizing policy and macroeconomic environment.