Replicon Biotech Value Portfolio Outperforms NASDAQ Biotech Index Second Year in a Row
29-01-2005,

Replicon Biotech Value (RBV) beats Nasdaq Biotech Index return for the second year in a row. Absolute return of the RBV portfolio during the two years since inception has been 78 per cent. At the same time NASDAQ Biotech Index, the Benchmark, has yielded some 43% return. We are very happy that our carefully chosen biotech portfolio has been able to outperform Benchmark consistently in bull market and also in a stable environment, says Petteri Hirvonen, CEO of Replicon Group.

Replicon Biotech Value (RBV) consists of shares chosen from NASDAQ listed companies. Currently there are some 159 biotech companies in NASDAQ Biotech Index (NBI). Among those we choose some 20 companies in to RBV that fill specified criteria. Initial weights of the investments are equal, i.e. some 5% of the whole portfolio. This way no single investment target has a decisive role in the performance of the whole portfolio.

In the first selection phase there are some five economic variables that determine the acceptance or rejection of a potential company. All companies accepted to second phase have to qualify all seven criteria. In other words fulfilling those seven conditions is necessary for staying in the ërace' but not sufficient for final acceptance into RBV.

In the second phase we analyse so called 'Product-Cash -index' that is derived from some of the original variables combined with analyses of company's R&D portfolio. This Index is the most influential factor affecting the suitability of the company into RBV.

Chart

In simplified terms our strict selection process means that only those biotech companies that conduct very sound financing strategy and possess good quality R&D pipeline have a possibility of being accepted to RBV. There are also other important criteria that should facilitate the out performance of the share price development in RBV, but our policy is not to disclose them all. All in all a portfolio of selected biotech companies should yield superior returns in the long run compared to the Benchmark as has been the case during last 24 months (see chart and previous article on RBV published on 29th of Jan, 2004).

Replicon Group is an independent corporate finance and consulting house. Our strategy is in the longer run to expand in to asset management in our special focus areas, e.g. Life Science sector. "In order to be able to serve our customers, it is important to be able to identify value in our clients' business activities. That is why it is beneficial for all Replicon customers that we develop our skills in asset management. It is also important to follow, what is going on in the market place." says Petteri Hirvonen, CEO of Replicon Group.

For further information, please contact:
Petteri Hirvonen, CEO, Replicon Group
+358-(0)50-552 96 33 petteri.hirvonen@replicon.fi

Replicon Group is an independent corporate and consulting house based in Helsinki. Replicon provides strategic and financial solutions that facilitate business activities, efficiency, and increase profitability of corporations and other organizations. Our core competence is in the corporate solutions that facilitate and govern growth of businesses based on innovation. An important part of our activities is continuous learning. We want to find and develop most suitable solutions to our customer needs. Replicon Group's special focus areas are Life-Science and ICT/Mobile sectors. The main shareholders in Replicon Group are its key management, holding majority of the company's shares. Replicon's homepage is www.replicon.fi