Media release of December 16, 2020

Market commentary

Moderna and its COVID-19 vaccine are representative of the innovative power of the entire biotech industry

Moderna, the US company about to launch an mRNA-based COVID-19 vaccine, is the latest shining example of the progress biotech companies are making for the good of society. In addition to the highly promising mRNA technology, molecule design and CRISPR technology were highlighted at BB Biotech's BioDay, a special event that casts a spotlight on some of the industry's most promising trends.

Less than 11 months after the SARS-CoV-2 genome was decoded, the first two vaccine candidates that could help to bring the global coronavirus pandemic under control had already been submitted to regulatory authorities for approval. "The mRNA technology used by Moderna is a good example of how innovative technologies developed and applied in the labs of biotech companies are driving medical progress," explains Dr. Daniel Koller, Head of BB Biotech's Investment Team.

mRNA technology - preferred method for future vaccine development
"Our vision is to develop a new generation of medicines," explained Stéphane Bancel, CEO of Moderna, in his presentation at BB Biotech's BioDay. Regulatory approval of Moderna's mRNA-1273 vaccine against COVID-19 will clear the way for other applications with mRNA vaccines. In clinical trials, Moderna's vaccine was 94.1% effective across all age groups.

An independent advisory board of the US FDA will convene on December 17. The FDA will decide whether to approve the vaccine 24 to 72 hours after the board's recommendation is announced. Moderna will market the product on its own. The company has set up a logistics infrastructure that will allow international dispatch to commence within 24 hours of approval. US approval is expected to be granted before the end of 2020. EU regulators are expected to announce their approval decision in the second week of January. The COVID-19 vaccine will be produced by the Swiss company Lonza. Up to 20 million doses could be produced in the final weeks of 2020 and one billion doses in 2021.

Given all the advantages mRNA offers, Bancel is sure it will establish itself as the technology of choice for vaccine development once the first product has been approved. The higher probability of response will be a crucial factor here, Bancel believes. Because human mRNA has the same chemical structure in all molecules, and mRNA-based drugs differ only in the coded genetic information they contain, mRNA platforms can be used to develop a variety of drugs in shorter periods of time. In the case of the SARS-CoV-2 virus, Moderna took just a few days to select the sequence for the vaccine from the virus's gene sequence. Another bonus of the mRNA mechanism is that all vaccines are packaged in the same molecular envelopes, which makes it easier to produce large volumes. Moreover, unlike the rival Biontech/Pfizer product, the vaccine can be stored for a period of up to six months at minus 20 degrees Celsius, 30 days at refrigerator temperatures of six to eight degrees, and six hours at room temperature.

Through its investment in robotics, IT and production processes, Moderna has, in the words of Bancel, created the conditions for scaling up all clinical products that the biotech company brings to the market in the future. Management had initially planned to reach this milestone in 2023 but that time frame was shortened by three years thanks to the development and government funding of its COVID-19 vaccine program. Moderna currently has 13 products in clinical testing, six of which are cancer vaccines and seven infectious disease vaccines. BB Biotech first invested in Moderna in 2018, before the company even went public.

On-screen molecule design
An alternative novel treatment approach emerging from biotech laboratories is called molecule design. Relay Therapeutics, which was floated on the stock exchange in July 2020, is a leader in rational drug design. The process involves studying the movement of protein molecules to understand the role of protein motion in causing disease. Relay uses a computational platform instead of conventional three-dimensional crystal structures. Machine learning is used for digital simulation and visualization of chemical and biophysical processes that occur on a timescale of milliseconds. This is a faster and cheaper way to identify molecules with potential to be developed as drugs. What's more, molecule design allows more customized mechanisms of action because properties like pharmacodynamics, effective dose, bioavailability and toxicity can all be tweaked much more precisely. Relay Therapeutics is using this technology to develop oral medications to treat cancer. The most advanced candidate, RLY-1971, is an SHP2 inhibitor mainly being tested for use in combination with other drugs. RLY-1971 is currently in the Phase I clinical trial stage. Relay intends to present topline data for two products in 2021.

CRISPR fixes genetic defects for good
The awarding of the Nobel Prize in Chemistry to Emmanuelle Charpentier and Jennifer A. Doudna in October 2020 underlines the importance of genome editing as a disruptive technology for future drug development. This molecular biological tool is used to make targeted changes in the human genome to cure diseases permanently. Genome editing is already being used with success in cell-based cancer therapies. In contrast, CRISPR Therapeutics is a leading exponent of ex-vivo applications of the CRISPR/Cas9 approach. This involves taking cells from a patient, modifying them in a lab and re-administering them to the patient. The novelty of the approach is that fragments of human DNA identified as genetic triggers of disease are cut out and repaired using genetic replacement parts. The CRISPR/Cas9 enzyme activates the genetic repair mechanism which every somatic cell possesses.

BB Biotech has been invested in CRISPR Therapeutics since the first quarter of 2019. The company is pursuing two clinical trials in beta thalassemia and sickle cell anemia in cooperation with Vertex Pharma, a core position in BB Biotech's portfolio. Both diseases are inherited genetic disorders that result in the defective formation of blood cells with severe progression. The genetically modified stem cells that were administered back to the patients led to a complete cure. In addition to these two clinical trials, CRISPR Therapeutics is pursuing three cell-based projects in immuno-oncology on its own.

For further information:

Media Relations
Bellevue Asset Management AG, Seestrasse 16, 8700 Küsnacht, Switzerland, tel. +41 44 267 67 00
Tanja Chicherio, [email protected]

www.bbbiotech.com

Company profile
BB Biotech AG is an investment company domiciled in Schaffhausen/Switzerland and listed on the stock exchanges in Switzerland, Germany and Italy. Since 1993, the company has invested in innovative drug development companies that are mainly located in the US and Western Europe. BB Biotech is one of the leading investors in this sector. BB Biotech builds on the long-standing experience of its distinguished Board of Directors and on the fundamental analysis of the experienced Investment Management Team of Bellevue Asset Management AG when making its investment decisions.

Disclaimer
This release contains forward-looking statements and expectations as well as assessments, beliefs and assumptions. Such statements are based on the current expectations of BB Biotech, its directors and officers, and are, therefore, subject to risks and uncertainties that may change over time. As actual developments may significantly differ, BB Biotech and its directors and officers accept no responsibility in that regard. All forward-looking statements included in this release are made only as of the date of this release and BB Biotech and its directors and officers assume no obligation to update any forward-looking statements as a result of new information, future events or other factors.