June 2018

Gene therapy –a key technology thatsaves livesVontobel Gene Therapy Performance Index

Investment Banking

Financial Products

Contents

15 Gene therapy – a key technology that saves lives

19 Gene therapy in figures

25 Expert opinion

29 Why choose Bellevue Asset Management as index sponsor?

34 Index concept: Vontobel Gene Therapy Performance Index

Link

Link

Link

Link

Link

3

Gene therapy –a key technology thatsaves livesIs a decades-old dream now coming true?

4

SetbackIn autumn 1999, the US Food and Drug Administration

(FDA) temporarily halts all clinical trials in gene therapy after an unsuccessful treatment leads to the death of a patient.

Milestones in gene therapy2017 – the breakthrough year

BeginningsThe first approved gene therapy is

carried out on four-year-old Ashanti DeSilva.

1999 2015 20171990

SuccessA newly synthesized gene is

successfully implanted in a child suffering from a skin disease called

epidermolysis bullosa.

Breakthrough yearTwo new CAR T-cell therapies (Kymriah

& Yescarta) are approved in the US to treat cancer.

2012

Gene therapy 2.0In 2012, two scientists present

"genome editing" for the targeted alteration of specific genes.

Source: derinews magazine, June 2018

5

Gene therapy A cure, not a treatment

What does gene therapy entail?

Sources: derinews magazine, June 2018; 1: deutschlandfunkkultur.de, online, June 2018

GENETHERAPY

4. OBSTACLES

Besides the biological challenges

facing researchers, cost is also an

issue as one-time treatments are

still very expensive.

3. HEALING POTENTIAL

Gene therapy research is currently focused on

cancer and HIV, but the latest developments

could open up entirely new healing potential.

2. SOLUTION APPROACHES

Ground-breaking medical discoveries

in recent decades have led to new

treatment methods such as Glybera,

CAR T-cell therapies and "genome

editing".

1. INITIAL PROBLEM

Human beings need proteins to control

metabolic processes and build tissue.

Defective production of these proteins

can cause serious diseases.

INITIAL PROBLEMDefective proteins

HEALING

POTENTIALSOLUTION

APPROACHES

OBSTACLES

"Gene therapy is about introducing a normal gene into a patient's cells to replace an abnormal or

bad gene."1

6

"The big domain with the greatest effort is cancer treatment."Dr Christian Lach, Senior Portfolio Manager, Healthcare Funds and Mandates, Bellevue Asset Management

Source: expert interview in derinews magazine, June/July 2018

7

Two types of gene therapyCAR T-cell method and "genome editing"

Gene therapy success stories Human cell1

Source: derinews magazine, June 20181: Note that the cell nucleus, containing the cell's genetic material and chromosomes, is clearly visible.

– Focus on treating cancer cells

– White blood cells mutated to identify and attack the tumour

– Not just repairing a genetic defect but "kick-starting the body"

– Additional potential areas of application: blood diseases, hereditary muscular

dystrophy, neurological diseases (e.g. Parkinson's)

– Targeted alteration of specific genes: precise, fast and comparatively

inexpensive

– Not a conventional form of gene therapy: defective genes are cut out or

repaired

– A new step in the evolution of conventional gene therapy

Gene therapy 2.0: "genome editing"

CAR T-cell method: helping the immune system to help itself

INFOGRAPHICCAR T-cell method

INFOGRAPHICGene therapy 2.0

8

A new kind of cancer immunotherapy withgenetically modified T-cells

Basic principles of how the chimeric antigen receptor (CAR) T-cell method works

1

2

TRANSPORTING THE CELLS

The cells are taken to a lab.

3

TAKING BLOOD

A doctor removes white blood cells

from cancer patients.

4

RETURNING THE CELLS

The mutated cells are returned to the

patient.

MUTATING THE CELLS

The cells are mutated to identify and eliminate

cancer cells. They are then propagated.

5

ADMINISTERING THE CELLS

The patient is treated with the cells.

Source: businessinsider.com, 11 June 2018Illustration: Vontobel

9

Gene therapy 2.0, or "genome editing"The CRISPR/Cas system

Source: Bellevue Asset Management with reference to transgen.de, 8 June 2018Illustration: Vontobel

FIND

CRISPR/Cas9 uses an integrated

guide RNA to locate its target: the

sequence in the gene to be

transcribed.

1

CUT

The editing enzyme (Cas9 protein)

cuts the DNA double helix

precisely at the target sequence.

Both elements –

Cas9 and the guide RNA – are

produced synthetically and

then introduced into a cell.

2

REPAIR

The cells' own repair systems now

put the cut DNA strand

back together. Depending on how

this happens,

individual DNA building-blocks can

be removed or modified.

It is also possible to integrate new,

short DNA sequences.

3REMOVE MODIFY INTEGRATE

Cas9

The main agent is the CRISPR/Cas9 system

(CRISPR = clustered regularly interspaced short palindromic

repeats).

10

Gene therapy in figuresGlobal marketplace

11

1Africa

460North America (54%)

World map of regenerative medicine companies

15South America (2%)

234Europe &

Israel (34%)

854+ regenerative medicine companies worldwide (including gene and cell therapy)

122Asia (14%)

22Oceania1 (3%)

Source: alliancerm.org, June 2018; 1: Australia, New Zealand, Marshall Islands

12

Regenerative medicine in figures

Capital raised by regenerative medicine

companies2 (in USD millions)

Global regenerative medicine market size1

In EUR billions

18 2023

2631

38

49

65

91

130

0

20

40

60

80

100

120

140

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

CAGR 15%

CAGR 33%

Sources: 1: Roland Berger Focus – Regenerative Medicine, June 2018; 2: Worldwide; total amount represents industry-wide figures; some companies operate in more than one technology group. Data do not include mergers and acquisitions, Statista dossier, Cell and gene therapy

4'200

7'500

1'766

4'500

1'800

4'000

425 446

0

1'000

2'000

3'000

4'000

5'000

6'000

7'000

8'000

2016 2017

Total

Gene and genetically manipulated cell therapy

Cell therapy

Tissue technology

13

Gene therapy in figuresNumber of approved trials and projected global market

Projected global gene therapy market in USD

millions2

Number of approved clinical trials in gene

therapy worldwide between 1989 and 20151

1 2

8

14

37 38

67

51

82

68

117

96

108

98

85

101

112117

90

120

81

9287

102

122

134

163

0

20

40

60

80

100

120

140

160

180

198

9

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

Sources: 1: Vector – Boston Children's Hospital, June 2018; 2: Statista dossier, Cell and gene therapyCAGR: compound annual growth rate

3'000

8'000

12'000

0

2'000

4'000

6'000

8'000

10'000

12'000

14'000

2012 2018 2020

CAGR 18%

CAGR 22%

CAGR 19%

14

Expert opinionDr Christian Lach"The great hope is of course that cancers currently regarded as

incurable can be cured."

15

Dr Christian LachSenior Portfolio Manager Healthcare, Bellevue Asset Management

Dr Christian Lach, biochemist, PhD

Bellevue Asset ManagementBB Adamant Team

Senior Portfolio Manager Healthcare Funds &

Mandates

Since October 2014

Adamant Biomedical InvestmentsSenior Portfolio Manager Biotechnology

2008-2014

Bellevue Asset ManagementBB BIOTECH AG, member of the management

team

2001-2008

Business administration – University of St.

Gallen (PhD)

Biochemistry – ETH Zurich (Master's degree)

Background

16

Expert opinion on gene therapyDr Christian Lach

– Revolutionary character: not just

treating symptoms but dealing with

the causes of diseases

– Full cures for the most severely ill

people with genetic defects

possible

– Two promising gene therapies

(CAT T-cell method and gene

therapy 2.0)

ChallengesMedical potential Fields of development

FIGHTING THE CAUSEINSTEAD OF TREATINGTHE SYMPTOMS

THERAPIESCOUNTRIESFUNDING

Source: derinews magazine, June 2018

– Scaling problem: good gene

therapies can cost more than CHF

1 million per patient

– Solution approach: new payment

models (e.g. annuities)

– Ethics: "designer babies" and "the

right tools in the wrong hands"

– Solution approach: know-how not

yet available, bans and regulation,

no social and ethical consensus

– Diseases in focus: cancers,

infectious diseases, neurological

diseases, monogenetic hereditary

diseases, blood diseases

– Countries: Europe and the US still

leading the way

– Funding: making gene therapies

accessible to a broader market

FUNDING ETHICS

17

Why choose Bellevue Asset Management as index sponsor?

Dependable expertise for more than 20 years –

healthcare investment pioneer

18

Healthcare investment pioneer BB Adamant:

Dependable expertise for more than 20 years2

Facts and figures:

Bellevue Asset Management1

Bellevue Asset ManagementDedicated to active asset management

1993Founded

100staff

CHF 12 billionTotal client assets

CHF 5.4 billionAssets under management in

healthcare strategies

Sources: 1: Bellevue Asset Management, data as at 31 December 2017Please note: 2: BB Adamant

"The best of two worlds"Bellevue Asset Management's investment philosophy 11

1

1

Boston1 employee

Zurich11 staff

Singapore1 employee

CHF 1.5 billion1

BB Adamant client assets

3,000 companiesGlobal research

Good track recordBB Adamant launched in 2007

19

Outperformance versus market in USD2Adamant Global Healthcare Index profile1

Bellevue Asset Management | BB Adamant Impressive profile and outperformance

0

50

100

150

200

250

300

350

400

450

500

Apr.07 Apr.09 Apr.11 Apr.13 Apr.15 Apr.17

Ind

ex

ed

pe

rfo

rma

nc

e

PERFORMANCE IN %(in USD)

Adamant Global Healthcare TR

MSCI World Health Care NTR

MSCI World NTR

Year to date 17.31% 2.36% 2.13%

1 month 1.29% 1.00% -0.27%

1 year 27.39% 5.86% 11.91%

3 years 37.65% 8.93% 26.15%

5 years 133.08% 69.55% 63.42%

30/04/2007-19/06/20183 357.06% 135.01% 68.90%

Goal – global healthcare marketThe index aims to track trends on the globalizing

healthcare market.

Long term – track recordThe index was developed and launched in April 2007.

ResearchThe BB Adamant Healthcare team evaluates around 600

of the 3,000 listed healthcare stocks worldwide on the

basis of eight criteria (four quantitative and four qualitative).

Mid-cap stocksGreater emphasis is placed on up-and-coming stocks. As

a result, mid caps have historically made up 60-80% of the

index.

Sources: 1: Bellevue Asset Management, online; 2: Bloomberg, 19 June 2018; 3: Since inception of the Adamant Global Healthcare TR Index; historical data do not provide any indication of future developments.Please note: Compared with the MSCI World Heath Care Index, pharmaceutical stocks are clearly underweighted.

PerformanceThe extremely successful strategy outperforms its

benchmark.

OutperformanceOver 220 percentage points

20

Vontobel Gene Therapy Performance IndexA rules-based index for efficient investing in current and future gene

therapy companies

21

Vontobel Gene Therapy Performance IndexDiversified, rules-based and transparent

Investing efficiently in gene therapy companies

– The gene therapy industry is still at a relatively early stage of development, which

could make a dynamic investment concept all the more important.

– The dynamic Vontobel Gene Therapy Performance Index ensures that the

theme is replicated in a diversified, transparent and rules-based manner at

all times.

– Bellevue Asset Management AG – a healthcare investment pioneer – acts as

index sponsor. It is an active manager with a good track record stretching back

more than 20 years.

– The index contains both established and innovative companies. The

established companies already have positive operating cash flow and thus offer

stability (value stocks). The innovative companies still have negative operating

cash flow (growth stocks).

– The gene therapy theme certificate could represent an efficient means of

investing in the theme of current and future gene therapy.

→ The index comprises up to 16 gene and cell therapy companies.

Human cell

Sources: Vontobel, 1: Bellevue Asset Management AG, June 2018

Index Guidelines

22

HA

LF

-YE

AR

LY

AD

JU

ST

ME

NT

S

Index conceptVontobel Gene Therapy Performance Index

Half-yearly review of index composition with subsequent rebalancing

1 After deduction of country-specific withholding taxesSource: Vontobel Index Guidelines; illustration: Vontobel

UNIVERSE

FILTER

QUALITATIVECRITERIA

QUANTITATIVECRITERIA

INDEX

LIQUIDITY FILTER

− Market capitalization ≥ USD 500 million

− Average daily trading volume ≥ USD 2 million (over past three months, including selection date)

Managementassessment

Operationalrisks

Countryrisks

Productpipeline

PEGvaluation

Sales growthover at least 3 years

EBITDAmargin

Price/salesratio

P/Eratio

P/S Price/salesratio (t+4)

Productprogress

Cashreach

Price/cash flowratio

P/ST+4

Managementassessment

Operationalrisks

Countryrisks

Productpipeline

E5 E6 E7 E8

E1 E2 E3 E4

I5 I6 I7 I8

I1 I2 I3 I4

UNIVERSE

− Index sponsor’s equity research universe in the fields of gene and cell therapy

SEGMENTATION

INNOVATIVESEGMENT

NEGATIVEoperating cash flow

ESTABLISHEDSEGMENT

POSITIVEoperating cash flow

Index Guidelines

23

Indicative initial composition Vontobel Gene Therapy Performance Index

Sources: Solactive & Bloomberg, 20 June 2018

COMPANY SEGMENT SECTOR CURRENCY COUNTRY WEIGHTING

BioMarin Pharmaceutical Inc Established Biotechnology USD US6.25%

Celgene Corp Established Biotechnology USD US6.25%

Gilead Sciences Inc Established Biotechnology USD US6.25%

Illumina Inc Established Biotechnology USD US6.25%

Lonza Group Ltd Established Biotechnology CHF Switzerland6.25%

Novartis AG Established Pharmaceuticals CHF Switzerland6.25%

Shire PLC Established Pharmaceuticals GBp US6.25%

Thermo Fisher Scientific Inc Established Medical devices USD US6.25%

Abeona Therapeutics Inc Innovative Pharmaceuticals USD US6.25%

Adaptimmune Therapeutics plc Innovative Biotechnology USD UK6.25%

Bluebird Bio Inc Innovative Biotechnology USD US6.25%

Cellectis SA Innovative Biotechnology EUR France6.25%

Intellia Therapeutics Inc Innovative Biotechnology USD US6.25%

Spark Therapeutics Inc Innovative Biotechnology USD US6.25%

Ultragenyx Pharmaceutical Inc Innovative Biotechnology USD US

6.25%

uniQure NV Innovative Biotechnology USD Netherlands6.25%

24

Indicative initial compositionVontobel Gene Therapy Performance Index

BRIEF DESCRIPTION

Abeona Therapeutics Inc. is a

leading clinical-stage

biopharmaceutical company.

It develops novel gene therapies for

rare and life-threatening diseases.

BRIEF DESCRIPTION

Adaptimmune Therapeutics plc is a

clinical-stage biopharmaceutical

company.

It develops novel products for cancer

immunotherapy based on a

proprietary T-cell receptor platform

that helps to identify cancer targets.

Adaptimmune Therapeutics serves

customers all over the world.

BRIEF DESCRIPTION

Bluebird Bio, Inc. offers

biotechnology products and services.

These include gene therapies for

severe genetic diseases such as

cerebral adrenoleukodystrophy in

children, neurodegenerative diseases

and beta thalassemia. Bluebird Bio

operates in the United States.

BRIEF DESCRIPTION

BioMarin Pharmaceutical Inc. develops

and markets therapeutic enzyme

products. It has its own enzyme

technology for developing products to

combat lysosomal storage disorders

and for treating severe burns.

BioMarin Pharmaceutical offers

analytical and diagnostic products and

services in the field of carbohydrate

biology via subsidiaries.

Adaptimmune

Therapeutics plc

Abeona Therapeutics

Inc

Bluebird Bio IncBioMarin

Pharmaceutical Inc

Sources: Bloomberg, 5 June 2018, company websites

INNOVATIVESEGMENT

ESTABLISHEDSEGMENT

INNOVATIVESEGMENT

INNOVATIVESEGMENT

WEBSITE WEBSITE WEBSITE WEBSITE

25

Indicative initial compositionVontobel Gene Therapy Performance Index

BRIEF DESCRIPTION

Celgene Corporation is a global

biopharmaceutical company.

It focuses on discovering, developing

and marketing therapies to treat

cancer and immune-mediated

inflammatory conditions.

BRIEF DESCRIPTION

Cellectis SA is a biopharmaceutical

company that focuses on

immunotherapies based on gene-

edited CAR T-cells (UCARTs).

The company's mission is to develop

a new generation of T-cell-based

cancer therapies.

BRIEF DESCRIPTION

Illumina, Inc. develops, produces and

markets integrated systems for large-

scale analysis of genetic variation and

biological function.

It offers a comprehensive range of

products and services for sequencing,

genotyping and gene expression for

genomic research centres,

pharmaceutical companies, academic

institutions and biotechnology firms.

BRIEF DESCRIPTION

Gilead Sciences, Inc. is a research-

based biopharmaceutical company

that discovers, develops and markets

therapies aimed at advancing the

treatment of patients with life-

threatening diseases.

Its focus is on HIV, AIDS, liver

diseases and severe cardiovascular

and respiratory diseases.

Cellectis SACelgene Corp Illumina IncGilead Sciences Inc

Sources: Bloomberg, 5 June 2018, company websites

ESTABLISHEDSEGMENT

INNOVATIVESEGMENT

WEBSITE WEBSITE WEBSITE WEBSITE

ESTABLISHEDSEGMENT

ESTABLISHEDSEGMENT

26

Indicative initial composition Vontobel Gene Therapy Performance Index

BRIEF DESCRIPTION

Intellia Therapeutics, Inc. is a

biotechnology company. It focuses

on research into and clinical

development of gene therapies for

patients with genetic diseases.

BRIEF DESCRIPTION

Lonza Group Ltd produces

specialized organic chemicals,

biocides, active ingredients and

biotechnology products.

It offers customer-specific chemical

production and fermentation

processing and manufactures

products for the life science,

pharmaceutical, food and agricultural

industries. Lonza has production

sites in Europe, the US and China.

BRIEF DESCRIPTION

SHIRE PLC is a global biotechnology

group focused on people with rare

diseases and other special disorders.

It develops products in the key

therapeutic areas of haematology,

immunology, neuroscience,

ophthalmics, lysosomal storage

disorders, gastrointestinal, endocrine

and hereditary angioedema as well as

oncology.

BRIEF DESCRIPTION

Novartis AG manufactures

pharmaceutical and consumer

healthcare products. It produces

drugs for cardiovascular, respiratory

and infectious diseases, oncology,

neuroscience, transplantation,

dermatology, gastrointestinal and

urinary tract diseases and arthritis,

together with vaccines and

diagnostic, ophthalmology and

animal health products.

Lonza Group LtdIntellia Therapeutics

Inc

Shire PLCNovartis AG

Sources: Bloomberg, 5 June 2018, company websites

ESTABLISHEDSEGMENT

INNOVATIVESEGMENT

WEBSITE WEBSITE WEBSITE WEBSITE

ESTABLISHEDSEGMENT

ESTABLISHEDSEGMENT

27

Indicative initial composition Vontobel Gene Therapy Performance Index

BRIEF DESCRIPTION

Spark Therapeutics, Inc. focuses on

developing gene therapy products.

It offers therapy products to change

patients' lives and reinvent the

treatment of crippling diseases.

BRIEF DESCRIPTION

Thermo Fisher Scientific, Inc.

manufactures scientific instruments,

consumables and chemicals.

It offers analysis and laboratory

equipment, software, services,

consumables, reagents, chemicals and

peripherals for pharmaceutical and

biotechnology companies, hospitals,

clinical diagnostic labs, universities,

research institutes and public authorities.

BRIEF DESCRIPTION

uniQure N.V. delivers gene therapy

with single treatments for curative

results. It develops a modular

platform to bring new disease

modifying therapies to patients with

severe genetic diseases and offers

ongoing clinical programmes in

haemophilia B and pre-clinical proof-

of-concept in Huntington's disease.

BRIEF DESCRIPTION

Ultragenyx Pharmaceutical Inc.

provides biotechnology services. It

develops therapeutics and sialic acid

for treating metabolic, body

myopathy, glucuronidase and rare

genetic diseases. Ultragenyx

Pharmaceutical conducts its business

in the United States.

Thermo Fisher

Scientific Inc

Spark Therapeutics

Inc

uniQure NVUltragenyx

Pharmaceutical Inc

Sources: Bloomberg, 5 June 2018, company websites

INNOVATIVESEGMENT

WEBSITE WEBSITE WEBSITE WEBSITE

ESTABLISHEDSEGMENT

INNOVATIVESEGMENT

INNOVATIVESEGMENT

28

Initial categories and index weightingsVontobel Gene Therapy Performance Index

Weightings by sectorWeightings by country

68.75%6.25%

6.25%

12.50%

6.25%

US UK France Switzerland Netherlands

Sources: Vontobel; Bloomberg, June 2018

75.00%

18.75%

6.25%

Biotechnology Pharmaceuticals Medical devices

29

Product details

Term sheets with the legally binding information and other details can be downloaded at any time from www.derinet.ch. All information is indicative and subject to change.Please note: The Vontobel Gene Therapy Performance Index is an index provided and calculated by Bank Vontobel AG, Zurich. The index sponsor is Bellevue Asset Management Asset Management AG, Zurich.

Term sheetDetails page

Vontobel Gene Therapy Performance Index

Index currency USD

SSPA product type Tracker Certificate (1300)

Underlying Vontobel Gene Therapy Performance Index

Initial fixing / payment date 13/07/2018 / 20/07/2018

Term Open end

Management fee 1.20% p.a.

Index sponsor Bellevue Asset Management AG, Zurich

Index calculation agent Bank Vontobel AG, Zurich

Issuer Vontobel Financial Products Ltd., DIFC Dubai

(is not subject to any prudential supervision and has no rating)

Guarantor Vontobel Holding AG, Zurich (Moody’s A3)

PRODUCT DETAILS

Currency CHF USD EUR

ISIN / symbol CH0418845977 / ZGENCV CH0418846041 / ZGENUV CH0418846033 / ZGENEV

Issue price CHF 101.50 USD 101.50 EUR 101.50

Spot reference price (index level) USD 100.00 USD 100.00 USD 100.00

Term sheetDetails page Term sheetDetails page

In subscription until4pm CET on 13/07/2018

Index Guidelines

30

Legal information

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This publication was drawn up by our Financial Products & Distribution organizational unit and is not the result of financial analysis. The Directives on theIndependence of Financial Research issued by the Swiss Bankers Association do not apply to this publication. Any content in this publication originating from

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A VONCERT [SSPA product type: tracker certificate (1300)] essentially tracks the performance of the underlying. When investing in a VONCERT, the samerisks must largely be taken into account as for a direct investment in the underlying, in particular the related foreign currency, market and price risks.

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