Good development of our holdings - further diversification of the portfolio

1/25/2007, 7:30 AM (Source: GlobeNewswire)



This year marks a significant and, we think, very positive change for
BB MEDTECH shareholders. At our annual strategy review, and for the
first time in five years, we determined to actively strive towards a
diversification of our portfolio. This decision was taken since we
saw the opportunity to target a more balanced portfolio without
sacrificing our goal for an annual accretion of 20%.

The main step in the diversification involved the reduction of the
holding in Nobel Biocare from 70% to 47% of the portfolio. This
adjustment was achieved not only through the sale of Nobel Biocare
shares, but also thanks to a strong performance of the other
holdings. The cash generated from the realization of gains were
reinvested into our existing holdings as well as into three new
holdings, namely Phonak (9% of the portfolio), Qiagen (4%), and
Millipore (3%). In addition, the strategic intention was set to
endeavor into investments outside of Europe albeit in a focused,
sound manner and given that a close relationship to management is
established and secured. Finally, we decided to deepen our know-how
of the diagnostics sector, a high growth market, in an explicit
effort to leverage the expertise and network of our new Board Member
Heino von Prondzynski - Qiagen and Millipore are the fruits of these
efforts.

Our conviction in Nobel Biocare remains unwavered and we continue to
hold 5.7% of the company's shares. Once again, the company delivered
thrilling sales growth rates and improved operating margins this year
- maintaining our "constant state of amazement" - and despite being
confronted with controversy around its product NobelDirect. A
highlight was the positive decision from the Swedish authorities that
the implant is safe and we were pleased to benefit from the strong
jump in the share price.

We have shifted our focus to Tecan where we believe our role as an
active investor has the potential to release additional value for our
shareholders. This has led us to significantly increase our holding
to 11% of the portfolio from 7%. We are now the largest shareholder
with a 14% stake in the company. This year Tecan provided a
convincing report card on restructuring measures implemented. Now the
focus will be on executing the company's new strategy to achieve
improved, sustainable growth rates.

Several other changes were made to our portfolio during the course of
the year. Synthes was further reinforced (13% of the securities
portfolio). We only slightly reduced our holding in Galenica (7%)
following a strong performance. Given the more attractive
fundamentals for Fresenius AG (7%), we completely shifted our
investment from Fresenius Medical Care into the former at the start
of the year.

Our new holding, Phonak, the hearing aid manufacturer, had a
phenomenal year and was our shining star with a year-to-date
performance of +71%. Besides posting higher-than-expected results,
management made a bold move to acquire GN Resound to become the new
market leader. In Qiagen, a provider of reagents for sample
preparation and molecular diagnostics solutions, we like the
excellent management and strong market position and believe these
criteria will allow the company to benefit from long-term molecular
diagnostic growth opportunities. In Millipore, a supplier of products
and services to improve productivity in biopharmaceutical
manufacturing and laboratories, we see the potential to double the
value of the company over four years through the leverage of core
competences into other life science markets.

Looking back and given the changes undertaken, we are pleased to have
concluded yet another successful year with a share price performance
of +25%. Furthermore, BB MEDTECH successfully beat all relevant
indices (SMI +15%, SPI +20%, DAX +22%). As at December 31, the Net
Asset Value of BB MEDTECH stood at CHF 79.50. The company's equity
(excluding own stocks) amounted to CHF 1 136 mn. The share price
increased +252% since January 1, 2000 (or +20% p.a.) to CHF 72.00.
The proposal for the dividends for the General Shareholders Meeting
on March 26, 2007 will be CHF 1.60 (approximately EUR 1.00) per
share.

We are convinced that we can deliver yet another successful year for
BB MEDTECH shareholders in 2007.


The composition of BB MEDTECH's securities portfolio as at December
31, 2006 is the following:


+-------------------------------------------------------------------+
| Nobel Biocare | 46.7% |
|---------------------------------------------------+---------------|
| Synthes | 12.6% |
|---------------------------------------------------+---------------|
| Tecan | 11.0% |
|---------------------------------------------------+---------------|
| Phonak | 8.8% |
|---------------------------------------------------+---------------|
| Galenica | 7.2% |
|---------------------------------------------------+---------------|
| Fresenius AG preferred shares | 5.0% |
|---------------------------------------------------+---------------|
| Fresenius AG common shares | 1.9% |
|---------------------------------------------------+---------------|
| Qiagen | 3.8% |
|---------------------------------------------------+---------------|
| Millipore | 2.8% |
|---------------------------------------------------+---------------|
| Vascular Innovation preferred shares1) | 0.2% |
|---------------------------------------------------+---------------|
| | |
|---------------------------------------------------+---------------|
| Call-Option Nobel Biocare (short) | (0.1%) |
|---------------------------------------------------+---------------|
| Put-Option Tecan (short) | <(0.1%) |
|---------------------------------------------------+---------------|
| Put-Option Tecan (short) | <(0.1%) |
|---------------------------------------------------+---------------|
| | |
|---------------------------------------------------+---------------|
| Total securities | CHF 1 156 mn |
|---------------------------------------------------+---------------|
| Own shares | 1.3% |
|---------------------------------------------------+---------------|
| Call-Option BB MEDTECH (short) | CHF (0.4) mn |
|---------------------------------------------------+---------------|
| 4.5% partially mandatory convertible bond BB | CHF 4.5 mn |
| MEDTECH | |
|---------------------------------------------------+---------------|
| Liquid funds (net) | CHF 71.1 mn |
|---------------------------------------------------+---------------|
| Other payables | CHF (91.8) mn |
+-------------------------------------------------------------------+


1) unlisted company


The annual report will be available on www.bbmedtech.com as of March
1, 2007.


For further information please contact:
Bellevue Asset Management AG, Seestrasse 16, CH-8700 Küsnacht/Zürich
Dr. Christian Lach, Alexandre Müller or Alexandra Avila, Tel. +41 44
267 67 00.


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