REG - RTW Biotech Opp. - Monthly Valuation Update and Factsheet

RTW Biotech OpportunitiesAnnouncement

14/04/2025 07:00

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RNS Number : 7782E  RTW Biotech Opportunities Ltd  14 April 2025

LEI: 549300Q7EXQQH6KF7Z84

14 April 2025

 

RTW Biotech Opportunities Ltd

Monthly Valuation Update and Factsheet

RTW Biotech Opportunities Ltd (the "Company") announces that its monthly
factsheet as at 31 March 2025 is now available at
https://www.rtwfunds.com/rtw-biotech-opportunities-ltd/factsheets-letters/
(https://www.rtwfunds.com/rtw-biotech-opportunities-ltd/factsheets-letters/) .

 

The Company's unaudited net asset value attributable to its ordinary shares as
at 31 March 2025 was US$1.69 per ordinary share, a decrease of -5.5% from the
previous month. This outperformed the Russell 2000 Biotech Index (-10.2%) and
the Nasdaq Biotech Index (-6.1%). The Company has delivered +9.2% annualised
NAV performance since launch in October 2019.

 

Top Core Positions

 

 Holding      Public / Private  % NAV
 Corxel       Private           9.8%
 Avidity      Public "RNA"      9.7%
 Akero        Public "AKRO"     9.3%
 Tarsus       Public "TARS"     5.8%
 Artios       Private           5.3%
 Kailera      Private           3.7%
 Immunocore   Public "IMCR"     3.1%
 Rocket       Public "RCKT"     2.9%
 Ensoma       Private           2.8%
 RTW Royalty  Private           2.1%

 

Top YTD Core Contributors and Detractors

 

 Holding  % NAV  Return   Contribution
 Akero    9.3%   +45.5%   +2.3%
 Avidity  9.7%   +1.5%    +0.2%
 Urogen   0.5%   +3.8%    +0.1%
 Rocket   2.9%   (46.9%)  (2.5%)
 Cargo    0.4%   (71.8%)  (1.1%)
 Tarsus   5.8%   (7.2%)   (0.6%)

Note: % NAV as at period end.

 

Sector Quarterly Update

After quarter end, Trump's initiation of a global trade war precipitated a
further dramatic equity sell-off. Biotech and development stage companies in
particular were hit hard and valuations are setting new lows:

 

·    The Russell 2000 Biotech Index is now ~5% from bear market lows, a
level tested several times since it was first reached in 2017.

·    Small and mid-cap company EV/cash ratios are at the lowest point in
the past six years.

                 The proportion of companies trading below
cash has returned to 2023 highs.

·    The NBI price/sales ratio has returned to 5x, just above the levels
seen in the GFC.

 

Before "Liberation Day", the FDA's Biologics division head, Peter Marks,
resigned. He and RFK Jr were likely simply too far apart on their views on
vaccines. We think structural changes, e.g. consolidating teams, are also on
the table.  Despite that, we are cautiously optimistic drug review processes
will be relatively insulated and that the FDA will maintain a flexible,
pro-innovation stance; indeed, this flexibility could well increase in the
spirit of deregulation.

 

More broadly, we understand that Trump views lower drug prices in other
countries as free riding, doesn't like offshore patent boxes that avoid US
tax, and wants to reshore drug manufacturing.  Drug price changes have the
potential to be positive or negative depending on the solutions ultimately
pursued.

 

In response to the changing political environment, RTW has created a new
Government Affairs team. Comprising senior partners of RTW, it aims to gain a
better understanding of healthcare-related priorities and initiatives from the
Trump administration.

 

The biopharma ecosystem is evolving in other important ways. Technological
improvements are translating into a better functioning US commercial
marketplace. Vendors providing patient apps and outsourced reimbursement
management services are counteracting access barriers put in place by
insurance companies in the previous decade. Furthermore, the new FTC chair is
perceived as being more M&A friendly, which should lead to a greater
number of bigger transactions, benefiting the small and midcap biotechs RTW
Bio is invested in. Taken together, these represent a considerable
positive.

 

Pharma deals for early-stage Chinese assets continued in the first quarter.
While this pace is likely to slow, China is here to stay and the US will have
to adapt its regulatory and operational speed in translational development in
order to compete. We saw the beginnings of this on 8 April, when the US
National Security Commission on Emerging Biotechnology urged action
(https://www.biotech.senate.gov/press-releases/nsceb-publishes-final-report/)
to protect US national security, based on six pillars:

 

1.   Prioritise biotechnology at the national level

2.   Mobilise the private sector to get U.S. products to scale

3.   Maximise the benefits of biotechnology for defence

4.   Out-innovate our strategic competitors

5.   Build the biotechnology workforce of the future

6.   Mobilise the collective strengths of our allies and partners

 

While we are clearly in a period of high uncertainty, both for our sector and
policy overall, we think that valuations are unwarranted and think this
presents a significant opportunity to deploy capital.

 

Portfolio Quarterly Update

We are in the process of quantifying the impact of potential tariff risk and
"most favoured nation" drug pricing risk across our investments. We believe
our portfolio companies are relatively well-insulated from tariff and policy
uncertainties. Longer term structural trends have led us to favour companies
that serve their local markets, particularly those focused on the US.

 

Over 90% of our development stage companies are focused on high unmet need
diseases and, within this, we favour areas that have the greatest FDA and
patient support (e.g. rare, CNS, genetic).  We have been in close contact
with all these companies following the announcement of FDA layoffs and none
has indicated any issues with their FDA review teams.

 

Key contributors and detractors included:

 

·    Akero was the key material contributor after a positive Phase 2 trial
in the most severe subset of MASH patients, who have no approved therapies and
therefore represent an urgent unmet need.

·    On the other side of the ledger, Cargo stopped its cell therapy
pivotal trial early due to failure to replicate Phase 1 efficacy and
life-threatening safety events.

·    There was no material news specific to Rocket or Tarsus.

 

Existing portfolio investments reported several noteworthy events in the
quarter:

 

·    Corxel Pharmaceuticals, a global cardiometabolic company, received a
dividend distribution related to the proceeds of the sale of Aficamten to
Sanofi.

·    Another of our obesity companies, Kailera, announced positive topline
data from its licensing partner for HRS953, a potentially best-in-class
treatment for obesity and related conditions.

·    Beta Bionics completed an upsized IPO.

·    GH Research reported unprecedented data from a Phase 2b clinical
trial with GH001, a product for treatment-resistant depression ("TRD"). GH
subsequently completed an IPO raising $140 million. Our latest podcast,
Changing Minds: Psychedelics as Legitimate Medicine
(https://podcasts.apple.com/us/podcast/the-rtw-podcast/id1762098852) , focuses
on the psychedelic space.

 

RTW Bio announced several new investments, including:

 

·    Alesta Therapeutics
(https://polaris.brighterir.com/public/rtw_investments/news/rns/story/w3lypjw)
(Series A) is a Netherlands-based biotech committed to developing novel oral
small molecule therapies for underserved rare diseases.

·    Numab Therapeutics
(https://polaris.brighterir.com/public/rtw_investments/news/rns/story/xe380yr)
(Series C) is a Swiss-based clinical stage biotech advancing a pipeline of
multi-specific antibodies in immunology and oncology.

·    Umoja Biopharma
(https://polaris.brighterir.com/public/rtw_investments/news/rns/story/w970e4x)
(Series C) is a clinical-stage biotech aiming to develop in vivo cell
therapies that improve certain CAR T cell therapies.

·    Windward Bio
(https://polaris.brighterir.com/public/rtw_investments/news/rns/story/rnjekkx)
(Series A) is a Swiss-based clinical-stage drug development company focused on
people living with advanced immunological diseases.

 

Enquiries:

 RTW Investments, LP - Investment Manager               +44 (0)20 7959 6361

 Woody Stileman (Business Development)                  biotechopportunities@rtwfunds.com

 Oliver Kenyon (Business & Corporate Development)

 Krisha McCune (Investor Relations)

 Cadarn Capital - PR & IR Partner

 Lucy Clark (PR)                                        +44 (0)7984 184 461 / lucy@cadarncapital.com

 David Harris (Distribution)                            +44 (0)7368 883 211 / david@cadarncapital.com

 Deutsche Numis - Joint Corporate Broker                +44 (0)20 7260 1000

 Freddie Barnfield

 Nathan Brown

 Euan Brown

 BofA Securities - Joint Corporate Broker               +44 (0)20 7628 1000

 Edward Peel

 Alex Penney

 Altum (Guernsey) Limited                               +44 (0)1481 703 100

 Joanna Duquemin Nicolle

 Sadie Morrison

 

About RTW Biotech Opportunities Ltd:

RTW Biotech Opportunities Ltd (LSE: RTW) is an investment fund focused on
identifying transformative assets with high growth potential across the
biopharmaceutical and medical technology sectors. Driven by a long-term
approach to support innovative businesses, RTW Biotech Opportunities Ltd
invests in companies developing next-generation therapies and technologies
that can significantly improve patients' lives. RTW Biotech Opportunities Ltd
is managed by RTW Investments, LP, a leading healthcare-focused
entrepreneurial investment firm with deep scientific expertise and a strong
track record of supporting companies developing life-changing therapies.

Visit the website at www.rtwfunds.com/rtw-biotech-opportunities-ltd
(http://www.rtwfunds.com/rtw-biotech-opportunities-ltd)  for more
information.

 

***********

The information in this announcement may include forward-looking statements,
which are based on the current expectations and projections about future
events, and in certain cases can be identified by the use of terms such as
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risks, uncertainties and assumptions about the Company and/or its underlying
investments, including, among other things, the development of the applicable
entity's business, trends in its operating industry, expected use of financing
proceeds and future capital expenditures and acquisitions. In light of these
risks, uncertainties and assumptions, the events in the forward-looking
statements may not occur.

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publication (unless otherwise marked). No reliance may be placed for any
purpose whatsoever on the information or opinions contained in this
announcement or on its completeness, accuracy or fairness.

***********

 

 

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