Investment cases

Here we summarise some of the investment cases that have contributed to the fund’s performance. The examples clearly reflect our unique and successful investment methods, which include active collaboration between the Investment Team and the Scientific Advisory Board.



Algeta was a Norwegian biotech company focused on prostate cancer and breast cancer and was acquired by Bayer in 2014. Thanks to the cooperation with our Scientific Advisory Board we became aware of the company’s potential even before our Fund’s inception in 2009. Since the company at that time was in its infancy we chose to wait to invest in it until 2010.

After that, and until the delisting of the company, we bought and sold Algeta shares on several occasions, but gradually invested more during the time period.

The portfolio manager traded actively in the share, taking into account both the valuation and continuous assessments of future risk scenarios. The Algeta holding contributed approximately +3% to the fund’s net asset value (NAV) for the period between 2010 and 2014.



CVS is a well-established US pharmacy chain. In the autumn 2009, the company successfully bid for Caremark, a pharmaceutical mail order company. The integration was much questioned by practically all the stakeholders: shareholders, customers, suppliers and competitors. The share was weak over the subsequent 12 months, before the financial market began to realize that the deal had not damaged the share’s value. The share price rose strongly over the next three years and its value more than doubled.

Our portfolio management team has acquired in-depth, long-standing knowledge of the specific handling and distribution of drugs (pharmaceutical benefit manager, PBM), since the sub-sector was created in the US in the early 1990s. The acquisition of Caremark proved very successful and the fund owned shares from its inception, which contributed approximately +3% to the net asset value (NAV) between 2010 and 2014.



Roche’s share price fell in 2010 due to sharply reduced sales and worsening sales prospects for the following years. This was mainly due to the strong Swiss franc, but also to concerns that generics were to be introduced on Roche’s main markets. Because of our fund’s global orientation, our portfolio management team did not see any concrete evidence that such a scenario would occur.

Through our continuous monitoring of the biotech sector, it was also clear to us that the prospects for improvement of the clinical outcome in the breast cancer segment HER-2, which Roche dominates, would probably lead to great commercial success and bring about an upgrade of the long-term earnings forecasts for the company.

Roche has been one of the fund’s favourites among the major pharmaceutical companies and has been part of our fund almost all the time since inception. When this was written, the share had contributed approximately +3% to the increase in NAV since 2009, despite a weak performance in 2010 in connection with a cautious approach from the market regarding generics and the growth potential of the HER-2 market.


Pfizer is the world’s largest pharmaceutical company by sales. The company was not growing and had no drugs of its own under development and so they have systematically acquired other companies, products and development projects. The Investment Team believed that the company, because of its size and the extensive integration work associated with the acquisitions, had fallen behind in product development, speed and business acumen.

The company had clearly made a lot of progress, but had also suffered through expired patents, which had resulted in less growth and incentives for the future. During the period 2012-2014, the fund shortened the shares to free up capital for the benefit of long-term companies with better future prospects, such as Roche. This then subsequently made it possible for us to buy more shares in Roche than would otherwise have been the case. We did not earn anything on our short positions in Pfizer, but the short position was a tool with which to lower our total net exposure on the stock market.



Gilead is the world’s largest biotech company by market value, being significantly larger than the second-largest, Amgen. The company has been successful in the HIV and hepatitis C segment, but is also active in other areas, such as cardiovascular diseases and oncology. Gilead is the fastest growing company among all the major biotech and pharmaceutical companies, with sales exceeding USD100bn.

Our fund has invested in Gilead for the greater part of its existence. The investment is based partly on the company’s growth, partly on recommendations from our Scientific Advisory Board and their view that the Hepatitis C market would probably increase more than the market expected. Through our network of sell side analysts, we concluded that an unexpectedly positive result was highly likely.

When the values of the biotech companies were corrected in March and April 2014, this possibility was missed due to the general level of uncertainty that prevailed in the market, and the fund took the opportunity to further strengthen its positions at attractive prices. The fund’s NAV has increased by approximately +5% thanks to our holdings in Gilead.