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The past  year on  the stock  market was  distinguished by  fears  of
recession and heavy losses on financial markets worldwide. The  Swiss
Market Index (SMI) retreated  -34.8% while Germany's benchmark  index
(DAX) plummeted
-40.4%. Investors were  so jittery  that even  medical technology,  a
sector known  for its  defensive qualities,  was unable  to hold  its
ground in the face  of the broad decline  in share prices.  Mirroring
the broad market decline, BB MEDTECH's Net Asset Value fell by -40.9%
to CHF 45.58. Much of the decline came in the first quarter, when NAV
slumped -21.9%. NAV performed better in the following quarters thanks
to the  reallocation of  portfolio  assets. Due  to the  upheaval  on
financial markets, the discount between BB MEDTECH's share price  and
its NAV widened from 5% to 12%;  the share price ended the year  down
-45.1% at  CHF  40.30  (including dividends).  The  company's  equity
(excluding treasury shares) amounted to CHF 518 mn as at December 31,
2008. The Board of Directors will propose a dividend of CHF 0.90  per
share at the general meeting of shareholders on March 30, 2009.

As part of  its efforts to  promote the continual  development of  BB
MEDTECH, the Board  of Directors  redefined the  cornerstones of  the
company's  investment  strategy.  Detailed  fundamental  market   and
company analysis and regular close contact with the management of our
portfolio holdings remain the  focal point of  our activities, as  in
the past. The expertise of the Board of Directors and the  management
team in the medtech  market and our  extensive industry network  will
likewise remain  the  key elements  of  the investment  process.  The
objective is to maintain a portfolio of
10  to  15  participations  in  mid-sized,  well  managed   companies
positioned in highly  attractive segments of  the medical  technology
market such as molecular diagnostics. The regional focus is on Europe
and  North  America  but  may   be  widened  to  include   individual
participations in  Asia.  Furthermore,  we intend  to  be  an  active
investor in one to three other companies, working together with their
management to achieve  a sustained, significant  increase in  company
value over the  long term. These  core participations should  account
for less than half of BB MEDTECH's equity.

We increased the  diversification of  our portfolio  during the  past
year in accordance with the aforementioned investment guidelines. The
greatest change concerned the reduction in our long-standing holdings
in Nobel Biocare and Sonova. After conducting a detailed analysis  of
the global market for dental implants and hearing instruments we took
a cautious stance regarding the  market's short and mid-term  outlook
and therefore reduced our exposure to  these two sectors to zero  for
the time being.  Some of  the resulting  cash was  reinvested in  new
participations. These include Masimo (7% of shareholders' equity),  a
company  offering  patient  monitoring  systems  in  intensive  care,
Mindray (5%),  a  Chinese  hospital  supplier,  and  the  US  company
Illumina  (5%).  Illumina's  innovative  genetic  analysis   products
enhance our investment  focus on molecular  diagnostics. Celera  (5%)
and Epigenomics (1%) are two other companies with substantial  growth
potential that  were  added to  our  portfolio in  early  2008.  They
enhance the  cluster of  holdings centered  around Qiagen,  our  core
holding in the  field of  molecular diagnostics.  New positions  were
also established  in Carl  Zeiss Meditec  (2%) and  Optos (1%),  both
specialists in the field of  ophthalmology, and in the  point-of-care
diagnostics company Axis-Shield  (1%). Qiagen  (20% of  shareholders'
equity) delivered a convincing performance in 2008, outperforming the
sector and prompting us to realize  some of our profits. We  slightly
increased the  weighting  of our  core  holding Fresenius  (16%)  and
reduced our exposure to Tecan (11%) and Galenica (4%). Millipore  was
divested. The participation in privately held Vascular Innovation was
written  off  due  to  the  company's  liquidity  situation  and  the
difficult financing conditions start-up companies are now  confronted
with.

As at December 31, 76% of BB MEDTECH's assets were invested. The high
cash allocation is a reflection of the portfolio realignment  process
as well as the general uncertainty in the market. Last year  revealed
that not every sub-sector of the  global medtech market is immune  to
macroeconomic cycles. Nevertheless, we are confident that the current
weakness on stock  markets also offers  opportunities to profit  from
historically low valuation  levels and selectively  add positions  in
attractive, fundamentally sound medtech companies to our portfolio in
the coming months.

We  remain  convinced  that  the  medical  technology  market  offers
investors  above-average  returns  over  the  long  term  driven   by
demographic developments  and innovation.  BB MEDTECH's  share  price
gained +104% (incl. dividends) between early 2000 and the end of 2008
and we  are  optimistic that  we  will  sustain this  trend  for  our
shareholders in 2009.









The composition of BB MEDTECH's portfolio as at December 31, 2008  is
the following (in % of shareholders' equity, rounded values):


Qiagen                                                 20.4%
Fresenius preferred shares                             12.8%
Fresenius common shares                                 2.8%
Tecan                                                  10.6%
Masimo                                                  6.6%
Celera                                                  4.8%
Mindray                                                 4.6%
Illumina                                                4.5%
Galenica                                                3.7%
Carl Zeiss Meditec                                      2.3%
Epigenomics                                             1.1%
Axis-Shield                                             0.9%
Optos                                                   0.7%
Vascular Innovation preferred shares1)                 <0.1%

SWAP agreement on treasury shares                      <0.1%

Total securities                        CHF 392.0 mn   75.7%

Liquid funds (net)                      CHF 199.2 mn   38.5%
Other assets                             CHF 10.7 mn    2.1%
Other payables                         CHF (84.1) mn (16.2%)

Total shareholders' equity              CHF 517.8 mn  100.0%
Own shares (in % of company)                           22.0%


1) unlisted company

The complete Annual Report  2008 will be available  on March 5,  2009
under www.bbmedtech.com


For further information please contact:
Bellevue  Asset  Management  AG,  Seestrasse  16/P.O.  Box,   CH-8700
Kusnacht/Zurich
Thomas Egger or Anja Stubenrauch, phone +41 44 267 67 00




Company profile
BB MEDTECH  acquires shares  in  companies in  the growth  market  of
medical technology. BB MEDTECH is listed on the Swiss Stock  Exchange
and in
Germany. The focus of the  shareholdings is on listed companies  that
are taking on a  market leadership role in  their area of  activities
and demonstrate  sustained turnover  and  income potential.  For  its
selection of holdings, BB MEDTECH  relies on fundamental analysis  by
industry experts. The Board of Directors has many years of industrial
and scientific experience behind it.


 
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BB MEDTECH AG
Vordergasse 3 Schaffhausen Switzerland

WKN: AONFN4; 
ISIN: CH0038390016; Index: IGSP;
Listed: Investment Companies in SIX Swiss Exchange;
http://hugin.info/130286/R/1285685/288372.pdf


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