BB Biotech Surges On News Paul Singer Is Upping Stake

BB Biotech Surges On News Paul Singer Is Upping Stake
By World Economic Forum (Flickr: The Global Financial Context: Paul Singer) [CC BY-SA 2.0], via Wikimedia Commons

Switzerland’s BB Biotech shares surged the most in over two years, following news that billionaire Paul Singer increased his stake in the fund to 5.47%.

In November of last year, Singer disclosed that his firm owned 3.1% of BB Biotech shares.

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Singer ups stake in BB Biotech

BB Biotech AG is a Swiss health-industry investment fund. Paul Singer, who runs hedge-fund firm Elliot Management, enhanced his stake in the Kuesnacht, Switzerland-based company to 5.47% as of December 23, up from 3.11% previously, according to a filing at Swiss Six Exchange.

In the filing, it was disclosed that: “Pursuant to Art. 9 and Art. 21 SESTO-FINMA, Paul E. Singer, New York, USA, has announced to BB Biotech AG, Schaffhausen, Switzerland on December 30, 2014, that its holding in registered shares BB Biotech AG (ISIN CH0038389992) increased to more than 5% of the proportion of voting rights on December 19, 2014”.

It was also disclosed that Paul Singer held 648,547 voting rights representing 5.47% of the proportion of voting rights as per December 19, 2014, indirectly by several companies, including Elliott Capital Advisors, L.P., New York, USA.

Singer earlier owned 3.1%

In November, the activist investor Elliot Management became the second largest shareholder in BB Biotech. In a filing by the Swiss exchange revealed a Luxembourg-based subsidiary of the U.S. hedge fund, founded by billionaire Paul Singer, owned 3.1% of BB Biotech shares. According to Switzerland’s mandatory disclosure, the threshold limit is 3%.

Until now, only Biotech Target N.V. owned the most shares in the Zurich-based fund with 3.9%, according to a July 28 filing.

Switzerland’s BB Biotech is an investment firm with holdings in about 30 biotech companies. Its holdings were worth 2.88 billion Swiss francs ($3 billion) at the end of September. BB Biotech’s biggest holdings were in larger firms including Celgene, Gilead and Actelion.

Paul Singer is known in Switzerland for his attempt to replace Actelion Ltd’s board and seek a buyer for the company in 2011. However, his attempts were rebuffed by other shareholders.

BB Biotech was one of the best-performing funds in Europe last year. Its shares are up about nine-fold since Switzerland’s Bank am Bellevue listed the biotechnology fund on the stock exchange in 1993. Its shares rose 68% last year, marking it the seventh best-performer in the Stoxx 60 index. Following the latest announcement, BB Biotech’s shares traded up much as 7.2% today and were 4.1% higher as of 12:31 p.m. in Zurich.

Navid Malik, an analyst at Cenkos Securities, considers Paul Singer’s increase in stake as a positive signal to the market. He said: “We expect a spectacular year for small and midcap biotechs, and BB Biotech will have exposure to this.”

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