REG - RTW Biotech Opp. - Half-year Report
11/09/2025 07:00
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RNS Number : 8659Y RTW Biotech Opportunities Ltd 11 September 2025
LEI: 549300Q7EXQQH6KF7Z84
11 September 2025
RTW Biotech Opportunities Ltd
Half-Yearly Report for the six months ended 30 June 2025
Following a resilient period of performance, the Company is well positioned to
capture value from a diversified portfolio of otherwise inaccessible
opportunities.
RTW Biotech Opportunities Ltd (the "Group", "RTW Bio" or the "Company"), the
London Stock Exchange-listed investment company focused on identifying
transformative assets with high growth potential across the life sciences
sector, is pleased to announce its Half Year Results for the six months ended
30 June 2025.
Roderick Wong, MD, Managing Partner and Chief Investment Officer of RTW
Investments, LP (the "Investment Manager") commented:
"The first half of 2025 saw one of the most volatile periods for the biotech
sector since the Company's launch. Despite the headwinds which led to the NAV
falling during the period, the Company continues to outperform its reference
benchmarks and the wider peer group over the long term. Following period end,
we were pleased to see that RTW Bio will be included in the FTSE All Share
from 22 September.
"With new FDA leadership and the launch of the 'Make American Biotech
Accelerate' initiative, the policy backdrop has turned increasingly supportive
for innovation. We see these changes as a tailwind that could meaningfully
accelerate the path from scientific breakthrough to patient benefit.
"While macro headlines around tariffs and drug pricing have stirred market
volatility, the practical impact on most biotech companies remains limited.
Tariff risks are muted given the sector's domestic focus, and the re-emergence
of the Most Favoured Nation drug pricing concept is primarily a large pharma
issue. In parallel, public market valuations remain at historically attractive
levels, with nearly half of U.S. biotech companies trading below their cash
balance. This dislocation - the fifth consecutive year of XBI underperformance
versus the S&P 500 - in our view, represents a compelling opportunity for
long term investors.
"Large pharma's looming patent cliffs are adding urgency to the M&A cycle,
with $49 billion in announced deals for the first half already surpassing the
full-year 2024 total. Cash-rich acquirors are actively seeking late-stage,
high-impact assets, and the current valuation environment is fertile ground
for strategic transactions. We expect deal activity to accelerate in the
second half as political uncertainty subsides and the need for pipeline
replenishment intensifies.
"In short, the biotech industry is navigating a complex but increasingly
constructive environment. Policy momentum is leaning pro-innovation,
valuations are at multi-year lows, and strategic buyers are stepping in with
unprecedented balance sheet firepower. For investors able to look through the
short-term noise, the combination of regulatory support, scientific progress,
and strategic demand points to a potentially powerful re-rating as we look
ahead to the second half and beyond."
Financial Highlights
As at 30 June 2025 Change over period As at 31 December 2024 As at 30 June 2024
Net asset value (Ordinary Shares) $561.0 million (6.0%) $606.9 million $655.4 million
Net asset value per Ordinary Share $1.70 (6.0%) $1.81 $1.95
Ordinary Share price $1.21 (13.6%) $1.40 $1.55
Share price discount to Net Asset Value (28.8%) (6.0%) (22.8%) (20.9%)
Number of Ordinary Shares in issue 330.1 million (1.7%) 335.7 million 335.7 million
Russell 2000 Biotech Index (11.4%)
Nasdaq Biotech Index (1.9%)
AIC Biotechnology & Healthcare Sector (0.2%)
Portfolio highlights
· 5 new private companies added in the period: These included American
Laboratories (1.4% of NAV) which specialises in the production of enzymes,
proteins, and flavours used across several industries, and Prolium Bioscience
(1.3% of NAV), a new RTW Investments created company focused on autoimmune
diseases.
· 2 significant capital markets events: The IPO of obesity-focused Metsera,
which has performed strongly since launch (+7.4% since IPO), bodes well for
RTW Bio's investments in the space. The reverse merger in April of Jade
Biosciences, merging with Aerovate Therapeutics, now trades on the NASDAQ
under ticker "JBIO".
· Portfolio skewed towards later-stage companies: The portfolio's NAV exposure
by development stage is 64% in clinical programs, 32% in commercial products,
and 4% in pre-clinical programs.
As of 30 June 2025, 70% of NAV was invested in public companies(1) (2024:
65%), 32% was invested in private holdings (2024: 30%) and 3% of NAV was
royalty exposure (2024: 3%).
(1. In prior periods exposure was presented as fair market value +/- accruals
as a percentage of NAV, summing to 100%. Beginning with this report, exposure
will be shown as economic exposure as a percentage of NAV, the result of which
could be more or less than 100%.)
(2. Development stage exposures apply to portfolio companies with 1% or
greater exposure. Exposures have been converted to sum to 100%. In prior
periods, development stage exposures were presented as the number of companies
vs % of NAV, and on what was previously referred to as the "core" portfolio.)
Public Investments
· As at 30 June 2025, 70% of NAV was invested in public portfolio companies. The
increase in exposure from 65% (as at 31 December 2024) reflects relative
outperformance over the period versus private investments in addition to two
privately-held positions going public. In January, Beta Bionics went public
and raised gross proceeds of $204 million, trading under the ticker "BBNX". In
April, Jade Biosciences completed a reverse merger with Aerovate Therapeutics
and now trades on the NASDAQ under the ticker "JBIO".
· Akero was the strongest public contributor, with its share price rising 91.8%
and adding 3.8% to NAV per Ordinary Share. The company reported positive
clinical data for its lead asset, efruxifermin (EFX), in MASH, a progressive
liver disease with limited treatment options. Shortly after, market
speculation emerged around a potential strategic acquisition, further boosting
investor sentiment.
· UroGen also performed well, contributing 1.5% to NAV. The company secured FDA
approval for ZUSDURITM, a non-surgical treatment for a common form of bladder
cancer, complementing its existing commercial product, Jelmyto®. This
regulatory milestone helped drive a 28.6% increase in the share price over the
period.
· Rocket was the largest public detractor, with its share price falling 80.5%
and reducing NAV per Ordinary Share by -4.4%. During Rocket's pivotal Phase 2
trial for RP-A501 in Danon disease, a patient tragically died and the process
was subject to a clinical hold. Rocket actively engaged with the FDA and the
clinical hold was subsequently released in August. Phase 2 trials were
restarted with a recalibrated dose and a revised immunomodulatory regimen.
Rocket continues to advance a broader pipeline targeting rare genetic
cardiomyopathies and haematologic disorders.
· Dyne shares fell in January after release of updated data from its Phase 1/2
ACHIEVE trial for DYNE-101, a treatment for myotonic dystrophy type 1
(DM1). While the data were positive, investors reacted negatively to the
magnitude of the improvements. Additionally in June, Dyne's revised
accelerated approval strategy for DM1 drove a delay in its regulatory
timeline, also contributing to negative sentiment, and reducing NAV per
Ordinary share during the period by -2.0%.
Private Investments
· As at 30 June 2025, private investments accounted for 32.4% of NAV across 36
investments. The increase in exposure from 30.3% (as at 31 December 2024)
reflects five new investments over the period. These included American
Laboratories (1.4% of NAV), which specialises in the production of enzymes,
proteins, and flavours used across several industries, and Prolium Bioscience
(1.3% of NAV), a new RTW company creation focused on autoimmune diseases.
· Among the Company's private investments, Corxel was the top contributor,
adding 1.1% to the NAV per Ordinary Share. Corxel is an RTW Investments
created company that is developing CX11, an oral, once-daily GLP-1 receptor
agonist for obesity. In June, it enrolled the first patient in its U.S. Phase
2 trial, following positive results from a China Phase 2 trial conducted by
partner Vincentage, where CX11 showed strong weight loss efficacy and a
favourable safety profile. Topline data from the U.S. trial is expected in H1
2026. During the period, Corxel also received a dividend distribution linked
to the sale of Aficamten to Sanofi.
· Artios was the largest detractor at -3.0%. In May, Artios announced
encouraging Phase 1/2a data from its lead clinical oncology candidate,
ART0380. Importantly, this data hits multiple indications, meaning that
development costs (and therefore capital requirements) will likely be higher
than expected. We remain positive on the promising clinical trial data from
ART0380, which offers the potential to transform outcomes for individuals with
hard-to-treat cancers, an area of high unmet need.
· Since admission, the Group has made 73 private investments. At 30 June 2025,
33 of these positions had experienced liquidity events (i.e., go-public or
acquisition). The average holding period as private was 17 months and the
average MOIC to the liquidity event was 1.7x. 23 of these positions have
either concurrently or subsequently been exited in full at an average MOIC of
2.3x.
Royalty Investments:
· The Group's royalty positions, representing 2.8% of NAV, added a modest amount
to the NAV per Ordinary Share. The underlying assets have performed well in
the first half of 2025. Sales of Lumryz, marketed by Avadel Pharmaceuticals,
have continued to perform well. The company raised its 2025 revenue guidance
to $255-$265M, from $240-260M.
· The Jelmyto royalty asset, marketed by UroGen Pharma, also continues to
perform well. UroGen maintained its 2025 sales growth guidance for Jelmyto at
8-12% growth. It reported long-term follow-up from the OLYMPUS trial that
showed Jelmyto's median duration of response to be 47.8 months, adding
positive long-term validation to Jelmyto's already strong clinical profile. On
12 June UroGen's UGN-102 asset received approval from the FDA and started
marketing the drug as "Zusduri" from 1 July. The royalty contract with UroGen
receives payments from the sale of both drugs.
· Looking forward, our royalties strategy has an exciting pipeline of
opportunities including with Milestone Pharmaceuticals, centred on future
royalty streams of its lead asset, Cardamyst, (a nasal spray medication to
treat paroxysmal supraventricular tachycardia, PSVT). Funding of the royalty
is contingent on FDA approval, which is expected in the second half of the
year.
Post Period-End Events
· July performance rebounded with a NAV return of +7.8%. The Company has
delivered an annualised NAV total return of +76.3% to end-July, outstripping
the Russell 2000 Biotech Index, the Nasdaq Biotech Index, and the AIC
Biotechnology and Healthcare Sector.
· On 3 September, FTSE Russell confirmed that RTW Bio's Ordinary Shares will be
included in the FTSE All Share Index from market open on 22 September.
· Merck entered into a definitive agreement to acquire UK-based public portfolio
company Verona Pharma Plc (NASDAQ: VRNA) for $107 cash per American Depositary
Share, for a total transaction value of approximately $10 billion, at a 23%
premium to Verona's closing price on 8 July, prior to the announcement. RTW
Bio's position in Verona added 0.9% to the NAV per Ordinary Share return over
July and the position has been sold. The transaction is subject to Verona
shareholder and regulatory approvals and is expected to close in the fourth
quarter of 2025.
· Private portfolio company Kailera Therapeutics and its partner Hengrui Pharma
announced positive topline data from the China Phase 3 clinical trial of
HRS9531 in individuals living with obesity or who are overweight. The trial
met both primary endpoints, demonstrating superior weight loss and a greater
percentage of participants achieving at least 5% body weight reduction
compared to placebo. The safety profile was favourable and consistent with
other GLP-1-based treatments, with most treatment-emergent adverse events
being mild to moderate and gastrointestinal-related.
· Rocket Pharmaceuticals announced a strategic corporate reorganisation and
pipeline prioritisation of its cardiovascular programs. It will implement a
reduction in workforce of approximately 30%. Rocket anticipates that its
existing cash resources will fund operations into 2027. It anticipates delays
associated with the Fanconi Anemia (RP-L102) and Pyruvate Kinase Deficiency
(RP-L301) programs. FDA approval of RP-L102 is no longer anticipated in 2026.
· After announcing after year end that it was halting work on its lead candidate
after a failed Phase 2 study and the discontinuation of its entire pipeline,
Cargo Therapeutics announced it had entered into a definitive agreement to be
acquired by Concentra Biosciences.
Company Updates
· Historically, the Group's public investments have been split into "core
public" and "other public" pools. Core public largely comprises of positions
originally held privately and represents the primary driver of long-term
performance, while other public originally served as a capital-efficient way
to deploy excess cash (typically reflecting the exposures of the Investment
Manager's private funds). As a matter of good corporate governance, we
regularly garner feedback on how we can improve aspects of our delivery to
shareholders. We understand that the distinction between core public and other
public has become less meaningful to investors and separating the pools can
obscure the fact that RTW Bio is predominantly publicly invested, particularly
in a market where the valuation of private assets is under scrutiny. Going
forward, listed holdings will be reported under a single public category,
alongside private and royalties. This presentational change does not impact
how the portfolio is constructed or managed.
· The Company repurchased 5,650,000 shares in the first half of 2025,
representing 15% of all shares traded during the period. Together with the
8,500,000 shares bought back in 2024, these repurchases have been accretive to
NAV per share and increased secondary market liquidity. Importantly, this also
demonstrates the Board's strong conviction in the Investment Manager's
capabilities, the portfolio valuation, and the exceptional opportunity to
invest in innovative biotech today.
Enquiries:
RTW Investments, LP - Investment Manager +44 (0)20 7959 6362
Oliver Kenyon biotechopportunities@rtwfunds.com
Woody Stileman
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
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 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
(https://www.rtwfunds.com/rtw-biotech-opportunities-ltd/) for more
information.
Highlights
30 June 2025 Financial Highlights
$1.70 NAV per Ordinary Share
$561.0 million Ordinary NAV 31 Dec 2024: $1.81
31 Dec 2024: $606.9 million
+63.4% Ordinary NAV per share growth since inception³ +16.4% total shareholder return since admission
31 Dec 2024: +73.8% 31 Dec 2024: +34.1%
-6.0% Ordinary NAV per share growth YTD -13.3% total shareholder return YTD
31 Dec 2024: -4.6% 31 Dec 2024: -0.6%
1.3x Leverage² $1.21 price per Ordinary Share ¹
31 Dec 2024: 1.2x 31 Dec 2024: $1.40
(1) The share price was $1.51 at 9 September 2025.
(2) Leverage is calculated per the Commitment Method of the AIFMD. Real
economic exposure at the fund and position level (1.0x) is ultimately what
impacts NAV as some positions are partially or fully hedged.
(3) The NAV per Ordinary Share at IPO was $1.04.
Portfolio Highlights in the period
5 new private companies added in the period
Significant capital markets activities in the private portfolio:
1 IPO and 1 reverse merger 30 June 2024: 14
30 June 2024: 2 significant capital markets activities: 1 IPO, 1 reverse
merger
32% NAV exposure to companies with commercial products²
Private exposure¹: 32%
Public exposure¹: 70% 4% NAV exposure to companies with pre-clinical programs²
Royalty exposure¹: 3%
64% NAV exposure to companies with clinical programs²
31 Dec 2024: Private 30%, Public 65%, Royalty 3%
Average historical multiple on invested capital (MOIC) of private investments
to liquidity event since inception: 1.7x
31 Dec 2024: 1.8x
Average historical holding period of private investments to liquidity event:
17 months
31 Dec 2024: 14 months
(1) In prior periods exposure was presented as fair market value +/- accruals
as a percentage of NAV, summing to 100%. Beginning with this report, exposure
will be shown as economic exposure as a percentage of NAV, the result of which
could be more or less than 100%.
(2) Development stage exposures apply to portfolio companies with 1% or
greater exposure. Exposures have been converted to sum to 100%. In prior
periods, development stage exposures were presented as the number of companies
vs % of NAV, and on what was previously referred to as the "core" portfolio.
RTW Bio's Purpose and Long-Term Strategy
Transforming the lives of millions
RTW Bio's long-term strategy is anchored in identifying sources of
transformational innovations with significant commercial potential by engaging
in deep scientific research and a rigorous idea generation process, which is
complemented by years of investment, company building, and both transactional
and legal expertise.
Why Invest?
RTW Bio offers shareholders the benefit of exposure to a wide swath of
investments in private and public companies in a sector requiring specialist
expertise that would typically be a barrier to entry for most. As a publicly
traded investment company, RTW Bio democratises investing beyond the private
fund universe. The following investment platforms (not a comprehensive list)
provide direct access to buying shares:
· AJ Bell (https://www.ajbell.co.uk/market-research/LSE:RTW)
· Hargreaves Lansdown
(https://www.hl.co.uk/shares/shares-search-results/r/rtw-biotech-opportunities-ltd-ord-npv)
· Interactive Investor
(https://www.ii.co.uk/investment-trusts/rtw-biotech-opportunities-ord/LSE:RTW)
· Barclays Smart Investor
(https://research-centre.barclays.co.uk/shares/rtw-biotech-opportunities-ltd/)
· Charles Stanley
(https://www.charles-stanley-direct.co.uk/ViewInvestment?InvestmentId=4v4cuY6JYbQ%3D)
Chair's Statement
Dear Shareholders
On behalf of the Board, I am pleased to provide the Group's Interim Report and
Accounts for the six-month period to 30 June 2025.
Performance
The first half of 2025 has been volatile for global markets and the biotech
sector was not immune from this. The Group's NAV per Ordinary Share continues
to outperform its reference indices and peer group over the long-term,
although the NAV per Ordinary Share fell during the period. Over the six
months to 30 June 2025, the Group delivered a NAV per Ordinary Share return of
-6.0%, ahead of the Russell 2000 Biotechnology Index (-11.4%) and behind the
Nasdaq Biotechnology Index (-1.9%). The Russell 2000 Biotechnology Index is
heavily tilted towards smaller market cap companies, which aligns closely with
RTW Bio's approach, while the Nasdaq Biotechnology Index provides broader
exposure and includes larger companies.
Since IPO in October 2019, the Group's NAV per Ordinary Share has grown by
63.4%, materially ahead of the Russell 2000 Biotechnology Index (-4.8%), the
Nasdaq Biotechnology Index (+25.2%), and the AIC Biotechnology &
Healthcare Sector (+8.8%). The Group's performance is also ahead of both
indices and the peer group over three-year (RTW Bio +35.9%, Russell 2000
Biotech -3.0%, Nasdaq Biotech +12.8%, AIC +3.6%) and five-year (RTW Bio
+27.2%, Russell 2000 Biotech
-31.3%, Nasdaq Biotech -1.6%, AIC +3.6%) time periods.
Public Investments
Over the first half of the year, public investments contributed -2.9% to the
NAV per Ordinary Share return. At the period end, 70.2% of the Group's
portfolio was in public securities.
The largest contributor was Akero, where the share price rose by 91.8% over
the period and delivered 3.8% to the NAV per Ordinary Share return. This
followed promising data from its drug to reverse liver cirrhosis with Akero
later rumoured to be exploring a potential sale. Rocket was the main detractor
over the period, contributing -4.4% to the NAV per Ordinary Share return,
after a young man treated with its gene therapy trial for Danon disease
tragically died. Rocket actively engaged with the FDA and the clinical hold
was subsequently released in August. Phase 2 trials were restarted with a
recalibrated dose and a revised immunomodulatory regimen. We remain hopeful
there is a path forward given the benefits seen in earlier patients.
Private Investments
The Company's private investments contributed -2.3% to the NAV per Ordinary
Share return. At the period end, 32.4% of the Group's portfolio was in private
assets.
Corxel announced major developments for its lead candidate, CX11, an oral
GLP-1 receptor agonist for obesity and overweight: Corxel began enrolling
patients in a U.S. Phase 2 trial following the release of positive results
from a China Phase 2 trial, where CX11 demonstrated significant weight
reduction across all doses. Corxel delivered a 1.1% contribution to
performance over the period. Artios contributed -3.0% to returns. Encouraging
clinical trial data from its lead oncology candidate hit multiple indications,
meaning that development costs were forecast to be higher than expected. We
remain positive on the company and its candidate, ART0380, which offers the
potential to transform outcomes for individuals with hard-to-treat cancers, an
area of high unmet need.
Royalties
Royalty financing, a growing non-dilutive capital source for life sciences
companies launching first- or best-in-class therapies, involves an upfront
payment in exchange for a percentage of future revenues, typically paid
quarterly. RTW Bio accesses this model through its investment in 4010
Royalty Fund, managed by RTW Investments, which leverages its full life cycle
platform to identify and structure deals with strong downside protection. RTW
Bio's royalty exposure contributed modestly to NAV over the first half, with
assets like Lumryz (Avadel) and Jelmyto (UroGen) performing well - both
showing strong sales and regulatory progress. Looking ahead, 4010 has a
promising pipeline with several term sheets in negotiation, supported by
favourable market conditions for non-dilutive funding.
Discount and capital allocation
Discounts across the investment companies sector remain wide on a historical
basis, driven by both structural and sentiment-related factors, particularly
for the biotech space, which is impacted by ongoing political volatility. The
Board recognises that the current share price discount to NAV remains wider
than shareholders would wish and remains committed to taking steps to narrow
it materially over time.
In response, the Company has actively repurchased 5,650,000 shares in the
first half of 2025, representing 15% of all shares traded during the period.
Together with the 8,500,000 shares bought back in 2024, these repurchases have
been accretive to NAV per share and increased secondary market liquidity.
Importantly, this also demonstrates the Board's strong conviction in the
Investment Manager's capabilities, the portfolio valuation, and the
exceptional opportunity to invest in innovative biotech today.
Buybacks are evaluated through a capital allocation lens, always anchored in
our core objective: long-term capital growth. Given that our portfolio
companies typically consume capital to advance through clinical development or
early commercialisation, maintaining sufficient liquidity is critical to
protect and grow value over time. This is especially relevant in today's
market for small- and mid-cap biotech, where capital scarcity creates
opportunity for those able to act swiftly. We continue to believe this is a
once-in-a-generation moment to invest in public and private biotech.
Therefore, when allocating your capital, the Board carefully considers both
the prevailing level of discount in the Company's shares and the opportunity
to deploy capital at attractive valuations to deliver outsized long-term
capital growth, whether by supporting existing investments or funding new
opportunities. However, should the Group receive a significant cash inflow
(e.g. through a portfolio position being acquired), it remains the Board's
intention to consider the return of a portion of the realised gain to
shareholders through buybacks.
Following period end, the Board was pleased to note the 3 September
announcement from FTSE Russell that, following the quarterly review of the
FTSE Russell UK Index Series and the resulting decision to allow the inclusion
of non-GBP shares, RTW Bio's Ordinary Shares will be included in the FTSE All
Share Index with effect from market open on 22 September. Inclusion in the
FTSE All Share Index is likely to enhance our exposure to investors, develop
greater UK and international awareness of RTW Bio and provide increased
long-term access to capital. In due course, we expect index trackers and other
passive strategies to initiate and build positions within RTW Bio, which
should be positive for the Group's share price and its rating.
Simplification of portfolio breakdown
Historically, the Group's public investments have been split into "core
public" and "other public" pools. Core public largely comprises positions
originally held privately and represents the primary driver of long-term
performance, while other public originally served as a capital-efficient way
to deploy excess cash (typically reflecting RTW's private fund exposures).
As a matter of good corporate governance, we regularly garner feedback on how
we can improve aspects of our delivery to shareholders. We understand that the
distinction between core public and other public has become less meaningful to
investors and separating the pools can obscure the fact that RTW Bio is
predominantly publicly invested, particularly in a market where the valuation
of private assets is under scrutiny. Going forward, listed holdings will be
reported under a single public category, alongside private and royalties. This
presentational change does not impact how the portfolio is constructed or
managed.
Outlook
2025 began with renewed optimism for biotech, driven by a resurgence in
M&A activity. The acquisition of Intra-Cellular Therapies by Johnson &
Johnson in January served as a high-profile signal of strategic interest
returning to the space, helping to lift sentiment and catalyse a rally in
biotech indices. Innovation remained robust across key therapeutic areas,
including obesity, oncology, and rare diseases, while the FDA maintained a
strong pace of drug approvals. However, this early momentum was tempered by
macroeconomic and political uncertainty around "Liberation Day". These factors
contributed to persistent volatility, especially among small- and mid-cap
biotech names.
Despite these headwinds, companies with differentiated pipelines and near-term
catalysts have continued to attract capital, and the valuation reset of recent
years created compelling entry points for long-term investors. The combination
of scientific progress, strategic interest from large pharma, and a
stabilising macro backdrop laid the foundation for a more constructive second
quarter.
Looking ahead, the outlook for the remainder of 2025 is encouraging. Policy
clarity is improving, with new FDA leadership reaffirming its commitment to
innovation and regulatory flexibility. Initiatives such as "Make American
Biotech Accelerate" (MABA) underscore the strategic importance of biotech to
the U.S. economy. The risk of impact from tariffs is receding given the large
on-shoring commitments made by big pharma and we are also seeing a potential
resolution to the debate around drug pricing in the U.S. Further details on
policy evolution is contained in the Investment Manager's report. Capital
markets activity is beginning to reawaken, and a pipeline of upcoming clinical
readouts and potential M&A catalysts is expected to drive renewed investor
engagement. The sector is also benefiting from easing inflationary pressures
and a more stable interest rate environment, which should support risk
appetite and capital flows.
RTW Bio continues to provide investors with access to the most innovative and
high-growth areas of the healthcare sector through a diversified portfolio
spanning public, private, and royalty investments. Leveraging the access and
strategic approach of its Investment Manager, RTW Investments, the Company's
full life cycle strategy provides shareholders with exposure to often
otherwise inaccessible opportunities and the opportunity to capitalise on
emerging innovation, be that next-generation obesity therapies or the
groundbreaking use of psychedelic medicine for patients with severe forms of
depression. With a well-capitalised, liquid balance sheet and a
high-conviction investment strategy, the Company is well-positioned to capture
value as sentiment improves. The Board believes the second half of 2025
presents a compelling environment for biotech investing, defined by
innovation, strategic momentum, and the potential for meaningful long-term
returns.
William Simpson
Chair
10 September 2025
Report of the Investment Manager
Sector overview
The first half of 2025 has been marked by significant policy shifts and
regulatory recalibrations in the U.S. healthcare landscape. RTW's Policy and
Government Affairs team is actively engaging with policymakers on the
administration's priorities, and we are thinking about political and
regulatory risk within three buckets:
FDA
The appointment of Dr Marty Makary as FDA commissioner brought renewed support
for regulatory flexibility and a proactive stance on accelerating innovation.
Dr Vinay Prasad stepped down as head of CBER in July but rejoined the agency
in August. His return as head of CBER at the FDA has not triggered volatility
in rare disease or gene therapy stocks, suggesting that the market is now more
familiar with his views and less reactive to leadership changes. This momentum
extended to the Department of Health and Human Services, where RFK Jr launched
the "Make American Biotech Accelerate" (MABA) initiative, stating in a social
media post that 'We know the power of U.S. biotech. It's time to let it
flourish…we're clearing the path to transform great science into real cures,
at lower costs, and better health for the American people.' This is a signal
of the sector's strategic importance to the U.S. and aligns with the National
Security Commission on Emerging Biotechnology's push to position biotechnology
as a national security priority through six pillars:
· Pillar 1: Prioritize biotechnology at the national level
· Pillar 2: Mobilize the private sector to get U.S. products to scale
· Pillar 3: Maximize the benefits of biotechnology for defense
· Pillar 4: Out-innovate our strategic competitors
· Pillar 5: Build the biotechnology workforce of the future
· Pillar 6: Mobilize the collective strengths of our allies and partners
We are already seeing signs of increased responsiveness in regulatory
interactions and believe these reforms will accelerate the path to market for
high-impact therapies. Overall, we believe that changes at the FDA may become
a potential tailwind for biotech as the agency becomes more efficient and
transparent while maintaining its pro innovation leaning.
Tariffs
President Trump announced "Liberation Day" on 2 April, when a raft of tariffs
were imposed on imports into the U.S., although it is notable that pharma
companies were initially excluded. After an initial sell-off, the market has
recovered and the tariff risk for biotech appears to be largely behind us
given the pharma sector's swift response. Over half of multinational
pharmaceutical companies have already committed to 're-shore' nearly $300
billion in manufacturing in the US, including $55 billion by J&J, $50
billion by Roche, and $40 billion by Bristol Myers Squibb. We believe this
swift industry response will likely soften the eventual impact of any
manufacturing-related tariffs, potentially through exemptions or phased
implementations.
Importantly, even in a worst-case scenario, we believe that the financial
impact on biotech companies would be minimal. Unlike big pharma companies,
biotech firms are less exposed to global supply chain dynamics as most are
focused on or based in the U.S. and either out-licence or forgo ex-U.S.
commercialisation altogether. With policy momentum shifting toward innovation
and domestic investment, the tariff narrative has faded into the background,
replaced by a more constructive dialogue around biotech as a national
strategic asset.
Drug pricing
Most Favoured Nation (MFN) drug pricing is a policy concept aimed at aligning
U.S. drug prices with those in lower-cost countries, particularly those in
Europe. It re-emerged under the Trump administration as part of a broader
effort to address what the White House views as "free riding" by foreign
governments on American pharmaceutical innovation. The White House is
considering various approaches to lower U.S. drug prices and we are cautiously
optimistic that reasonable deals can get done. What's more, the Trump
administration has made it clear that it is also interested in
direct-to-consumer solutions to lower prices for U.S. patients, and we saw
validation of that approach shortly after the period end on 17 July when
Bristol Myers Squibb and Pfizer announced a "direct-to-patient" option for
their blood thinning drug, Eliquis. We are also hearing progress on the
European side that could mitigate MFN policies put in place in the U.S. In
the worst-case scenario where no deal is reached, MFN is largely a pharma
rather than a biotech problem, for similar reasons as outlined above with
regard to tariffs.
Market overview
Public market valuations in biotech continued to be challenged in the first
half, although with a notable divergence between the small-cap focused Russell
2000 Biotech Index (-11.4%) and the large-cap skewed Nasdaq Biotech Index
(-1.9%). Given the policy uncertainty that has dominated the year so far, it
is not surprising that the more defensive large-cap, commercial-stage names
have outperformed.
Figure 1. Annual XBI vs S&P Performance
The first half of 2025 continues the underperformance of the XBI (S&P
Biotech ETF) against the broader S&P 500. We are now in the fifth
consecutive year of underperformance, which is remarkable as the XBI has never
underperformed the S&P 500 for more than one consecutive year in the last
15 years. We believe this signals the compelling value potential of small- and
mid-cap biotech. A parallel can be drawn with the flourishing biotech
ecosystem in Hong Kong, where the Hang Seng Biotech Index fell 20% in 2024 yet
rebounded 59% in the year to June and is up 115% for the year to date.
At 30 June, almost half of publicly-traded US biotech companies had market
capitalisations lower than the level of cash on their balance sheets, an
increase on the prior two years. The Nasdaq Biotech Index continues to trade
at low EV/EBITDA and Price/Sales ratios. We believe that these levels
represent an attractive point to put new money to work, particularly in
late-stage biotech companies, and are favourable for M&A.
Figure 2: Percentage of US, small- and midcap biotech companies trading at
less than cash on their balance sheets at 30 June 2025
Patent cliffs and loss of exclusivity (LOE) remain a critical strategic
concern for large pharma companies, with significant revenue at risk over the
coming years as drugs 'go generic'. Ten blockbuster drugs (meaning those with
>$1 billion sales per annum) face LOE issues in the near term and together
these drugs generated a combined $164 billion in global sales in 2024. The
most acute revenue erosion is expected in 2028, when multiple high-revenue
products are set to lose exclusivity. This looming cliff is prompting large
pharma companies to intensify their pipeline replenishment efforts, often
through M&A and strategic collaborations; indeed, pharma and large-cap
biotech have c. $1 trillion in 'dry powder' (cash and moderate debt capacity)
to deploy in acquisitions. M&A accelerated in the first half of 2025, with
$49 billion of deals announced, already ahead of the $44 billion seen in the
whole of 2024. Marquee deals included J&J's $14.7 billion acquisition of
Intra-Cellular Therapies in January, Sanofi's $9.9 billion acquisition of
Blueprint Medicines in June, and Merck's $3.4 billion acquisition of
SpringWorks Therapeutics in April. Strategic collaborations are also on the
rise, such as the $11.1 billion deal between BioNTech and Bristol Myers Squibb
announced in June. We expect M&A to accelerate in the second half of the
year as volatility and political uncertainty subside, given the compelling
valuations at which public biotechs trade and the imperative for large pharma
to replace lost revenues.
Figure 3: US biotech M&A deal volumes and value
Biotech IPO activity remained subdued over the first half, constrained by
persistent macroeconomic headwinds. Although a few high-quality,
clinical-stage companies managed to go public, broader market conditions and
mixed aftermarket performance of early 2025 IPOs continued to dampen broader
issuance. Historically, the sector averaged around 50 IPOs annually from
2014-24, however, recent years have seen a sharp decline, with only 24 IPOs in
2024 and just 7 in 2025 so far. Notably, the 2025 IPO cohort has skewed toward
later-stage companies (Phase 2 and beyond), a shift from the preclinical-heavy
wave of 2020-21, reflecting investor preference for more de-risked assets in
the current environment. We note the January IPO of obesity-focused Metsera,
which has performed strongly since launch (+7.4%) which bodes well for RTW
Bio's investments in the space. Private placement activity continued, with
$10.4 billion raised across 148 deals, in-line with the $12.4 billion across
168 deals raised in the first half of 2024. The market remained bifurcated:
while megarounds (>$100 million) accounted for over half of the capital
raised, their frequency declined, and most were structured as tranched
financings. Series A and B rounds saw robust step-ups, while Series C
valuations remained volatile. Similar to the IPO market, investor appetite
within private fundraises shifted towards later-stage opportunities.
The follow-on financing environment for biotech remained highly selective,
with 37 secondary offerings raising approximately $7 billion, down sharply
from 83 offerings and $18 billion in proceeds during the same period in 2024.
Investor support was largely reserved for companies with clear value-driving
catalysts, such as positive clinical data. Nonetheless, companies
demonstrating fundamental success, particularly through clinical milestones,
have continued to access capital markets effectively.
Figure 4: US Biopharma Financing Market - IPOs and Follow-Ons
In the first half of 2025, the FDA approved 16 new drugs, reflecting a
measured but steady pace of regulatory activity. While the approval count is
lower than in recent years, it includes several first-in-class therapies and
drugs developed using novel modalities such as gene editing and RNA-based
platforms. Our sentiment toward the FDA remains cautiously optimistic: most
companies report no disruption in interactions, and many continue to benefit
from expedited pathways like Breakthrough Therapy and Priority Review. Indeed,
the FDA leadership continues to express support for innovation, especially in
rare diseases and cell and gene therapies.
From a therapeutic area perspective, rare disease, cardiovascular/metabolic,
and oncology remain core focuses. We have spoken previously about our
excitement around next-generation drugs to fight obesity, with consensus
estimates of over $100 billion per year in peak sales. We are also
increasingly excited about the opportunity within neuropsychology,
particularly addressing hard-to-treat conditions with psychedelic medicine -
more on that can be found in our "Strategy in Action" section later in this
report.
Financial Highlights, Performance Drivers and Significant Events
Table 1. Financial Highlights in the period
As at 30 June 2025 Change over period As at 31 December 2024 As at 30 June 2024
Net asset value (Ordinary Shares) $561.0 million (6.0%) $606.9 million $655.4 million
Net asset value per Ordinary Share $1.70 (6.0%) $1.81 $1.95
Ordinary Share price $1.21 (13.6%) $1.40 $1.55
Share price discount to Net Asset Value (28.8%) (6.0%) (22.8%) (20.9%)
Number of Ordinary Shares in issue 330.1 million (1.7%) 335.7 million 335.7 million
Russell 2000 Biotech Index (11.4%)
Nasdaq Biotech Index (1.9%)
AIC Biotechnology & Healthcare Sector (0.2%)
Figure 5. Historical performance characteristics
RTW Investments, LP, a leading global healthcare-focused investment firm with
a strong track record of supporting companies developing life-changing
therapies, created the Group as an investment fund focused on identifying
transformative assets with high growth potential across the biopharmaceutical
and medical technology sectors. Driven by deep scientific expertise and a
long-term approach to building and supporting innovative businesses, we invest
in companies developing transformative next-generation therapies and
technologies that can significantly improve patients' lives while creating
significant value for our shareholders.
RTW Bio delivered a NAV per Ordinary Share return of -6.0% during the period
under review, outperforming the -11.4% from the Russell 2000 Biotech Index and
underperforming the -1.9% for the Nasdaq Biotech Index. On a longer-term
basis, RTW Bio continues to deliver performance ahead of the indices and peer
group, with the NAV per Ordinary Share compounding at 8.8% per annum since
launch.
In the first half of the year, public investments contributed -2.9%, private
investments contributed -2.3%, and Royalties contributed 0.2%. Further
commentary on the performance of each part of the portfolio is provided below,
with specific commentary for the top contributors / detractors where the
impact on NAV per Ordinary Share was >1%.
Public Investments
The Group's public investments represent the largest portion of the portfolio
by design. Biotech companies typically require significant capital to fund
development through key clinical milestones, and accessing the public markets
is often the only viable route to secure funding at the necessary scale. While
RTW is a full life cycle investor, capable of investing at any stage of a
company's development, we believe that the majority of value creation in
biotech occurs in the public markets. Many of our public holdings started as
private positions, which we have retained in the public markets to capture as
much value as possible.
Akero and UroGen were the largest contributors amongst the public positions:
Akero was the strongest contributor, with its share price rising 91.8% and
adding 3.8% to NAV per Ordinary Share. The company reported positive clinical
data for its lead asset, efruxifermin (EFX), in MASH, a progressive liver
disease with limited treatment options. Shortly after, market speculation
emerged around a potential strategic acquisition, further boosting investor
sentiment.
UroGen also performed well, contributing 1.5% to NAV. The company secured FDA
approval for ZUSDURITM, a non-surgical treatment for a common form of bladder
cancer, complementing its existing commercial product, Jelmyto®. This
regulatory milestone helped drive a 28.6% increase in the share price over the
period.
Rocket and Dyne were the largest detractors amongst the public positions:
Rocket was the largest detractor, with its share price falling 80.5% and
reducing NAV per Ordinary Share by -4.4%. The decline followed a Serious
Adverse Event (SAE) and subsequent death of a patient in its pivotal Phase 2
trial for RP-A501 in Danon disease. Rocket actively engaged with the FDA and
the clinical hold was subsequently released in post period end. Phase 2 trials
were restarted with a recalibrated dose and a revised immunomodulatory
regimen. Rocket also continues to advance a broader pipeline targeting rare
genetic cardiomyopathies and haematologic disorders.
In January Dyne's shares fell after the release of updated data from its Phase
1/2 ACHIEVE trial for DYNE-101, a treatment for myotonic dystrophy type 1
(DM1). While the data were positive, investors reacted negatively to the
magnitude of the improvements. Additionally in June, Dyne's revised
accelerated approval strategy for DM1 drove a delay in its regulatory
timeline, also contributing to negative sentiment, and reducing NAV per
Ordinary Share during the period by -2.0%.
Private Investments
We primarily focus on mid-to-late-stage venture and crossover rounds, where we
anticipate a company will go public within 6 to 18 months of our initial
investment. As a leading crossover investor, RTW is frequently approached by
high-quality private biotech companies preparing for public market entry. A
smaller portion of the portfolio is allocated to early-stage ventures and
RTW-founded companies, where we expect a public listing within three to five
years. This balanced approach allows us to support innovation across the
development lifecycle while maintaining a clear path to liquidity and value
capture.
Among the Company's private investments, Corxel was the top contributor,
adding 1.1% to the NAV per Ordinary Share. Corxel is an RTW company creation
that is developing CX11, an oral, once-daily GLP-1 receptor agonist for
obesity. In June, it enrolled the first patient in its U.S. Phase 2 trial,
following positive results from a China Phase 2 trial conducted by partner
Vincentage, where CX11 showed strong weight loss efficacy and a favourable
safety profile. Topline data from the U.S. trial is expected in H1 2026.
During the period, Corxel also received a dividend distribution linked to the
sale of Aficamten to Sanofi, of which RTW Bio received its pro rata share.
Artios was the largest detractor at -3.0%. In May, Artios announced
encouraging Phase 1/2a data from its lead clinical oncology candidate,
ART0380. Importantly, this data hits multiple indications, meaning that
development costs (and therefore capital requirements) will likely be higher
than expected. We remain positive on the promising clinical trial data from
ART0380, which offers the potential to transform outcomes for individuals with
hard-to-treat cancers, an area of high unmet need.
Since admission, the Group has made 73 private investments. At 30 June 2025,
33 of these positions had had liquidity events (i.e., go-public or
acquisition). The average holding period as private was 17 months and the
average MOIC to the liquidity event was 1.7x. 23 of these positions have
either concurrently or subsequently been exited in full at an average MOIC of
2.3x.
Royalty Investments
Royalty financing is a growing source of capital for life sciences companies,
particularly those launching first-in-class or best-in-class therapies. It
involves providing an upfront payment in exchange for a pre-determined
percentage of future revenues from a specified product or asset, typically
paid out as quarterly cash flows. This structure offers companies a bespoke,
non-dilutive alternative to traditional debt, while aligning investor and
company interests through revenue participation. RTW Bio mostly gains exposure
to royalty financing through the RTW Investments-managed 4010 Royalty Fund
(4010). RTW Investments' full life cycle platform and in-house transactional
capabilities allow it to identify royalty opportunities early, underwrite with
deep insight, and structure deals that offer robust downside protection for
investors.
The Group's royalty positions, representing 2.8% of NAV, added a modest amount
to the NAV per Ordinary Share. These positions comprise direct royalty
investments and the Group's investment in 4010. The underlying assets have
performed well in the first half of 2025. Sales of Lumryz, marketed by Avadel
Pharmaceuticals, have continued to perform well and revenue guidance has been
increased. Avadel also reported that the United States Court of Appeals for
the Federal Circuit ruled in favor of Avadel, overturning important parts of a
prior injunction, allowing Lumryz to seek approval for the treatment of
indications beyond the narcolepsy model.
The Jelmyto royalty asset, marketed by UroGen Pharma, also continues to
perform well. UroGen maintained its 2025 sales growth guidance for Jelmyto at
8-12% growth. The company reported long-term follow-up from the OLYMPUS trial
that showed Jelmyto's median duration of response to be 48 months, adding
positive long-term validation to Jelmyto's already strong clinical profile. On
12 June UroGen's UGN-102 asset received approval from the FDA and began to be
marketed as Zusduri from 1 July. The RTW royalty contract with UroGen receives
payments from the sales of both drugs.
Looking forward, RTW Bio is exposed to an exciting pipeline of opportunities
including with Milestone Pharmaceuticals, centred on future royalty streams of
its lead asset, Cardamyst, a nasal spray medication to treat a type of
arrhythmia (paroxysmal supraventricular tachycardia, PSVT). Funding of the
royalty is contingent on FDA approval, which is expected in the second half of
the year. At the top of the sourcing funnel, we have been actively building
out our pipeline by leveraging our strong network. We have several term sheets
outstanding and are active in negotiations with a number of promising
opportunities. We believe the current complex macro environment and elevated
volatility provide an additional tailwind for the royalty value proposition as
companies seek new non-dilutive capital to fund their commercial launch
activities.
Figure 6. Performance breakdown in H1 2025
Portfolio Breakdown and New Investments
Our investment approach is defined as full life cycle and, therefore, involves
retaining private investments beyond their IPOs; hence the portfolio consists
of both privately-held and publicly-listed companies and royalty investments.
As discussed in the Chair's statement, going forward, all listed holdings will
be reported under a single public category, alongside private and royalties.
As of 30 June 2025, the number of holdings in each of the Group's portfolio
buckets was as follows:
Figure 7. NAV capital breakdown as of 30 June 2025 compared to 30 June 2024
In prior periods exposures were presented as fair market value as a % of NAV
and summed to 100%. In the current period they are presented as exposure as a
% of NAV.
Private investments accounted for 32.4% of NAV across 36 investments. The
increase in exposure from 30.3% (as at 31 December 2024) reflects five new
investments over the period. These included American Laboratories (1.4% of
NAV), which specialises in the production of enzymes, proteins, and flavours
used across several industries, and Prolium Bioscience (1.3% of NAV), a new
RTW company creation focused on autoimmune diseases.
Public investments accounted for 70.2% of NAV. The increase in exposure from
64.6% (as at 31 December 2024) reflects two privately-held positions going
public. In January, Beta Bionics went public and raised gross proceeds of $204
million, trading under the ticker "BBNX". In April, Jade Biosciences completed
a reverse merger with Aerovate Therapeutics and now trades on the NASDAQ under
ticker "JBIO".
Royalties accounted for 2.8% of NAV across 2 investments: 4010 Royalty Fund
(an RTW-managed private fund) and RTW Royalty 2 (a royalty based on the
revenues of UroGen's Jelmyto and ZUSDURI).
Our "full life cycle" portfolio is diversified across clinical stages, capital
position (i.e., equity and royalty), treatment modalities, and therapeutic
focus giving it multiple, differentiated return levers and horizons. By
constructing the portfolio in such a way, investors get exposure to the most
innovative parts of a highly specialised sector with the explosive potential
of companies that successfully navigate clinical, regulatory or commercial
inflection points.
Looking forward, we expect the total portfolio sector allocation to remain
close to 80% biopharmaceutical assets and 20% medical technology assets. In
line with prospectus guidance, we anticipate two-thirds of new private
investments will be made in mid- to later-stage venture companies and
one-third focused on active company building around the discovery and
development or licensing and distribution of promising assets. Royalty
investments will be limited to approximately 15% of NAV.
Table 2. Top ten positions as of 30 June 2025
Portfolio Company Description Ticker Therapeutic Area Clinical Stage Expected upcoming catalyst % NAV¹
Corxel RTW-incubated biotech company committed to bringing innovative therapies to Private Metabolic Phase 3 CX11 P2 data H1 2026 9.4%
underserved patients with cardiometabolic diseases.
Avidity Antibody conjugated RNA medicines company. Lead program for myotonic RNA Rare Disease Phase 3 FSHD BLA H2 2026 8.8%
dystrophy.
Akero Clinical-stage company developing treatments for patients with serious AKRO Metabolic Phase 3 P3 data H1 2026 5.2%
metabolic diseases, including non-alcoholic steatohepatitis.
Kailera RTW co-incubated biopharma developing broad pipeline to treat obesity and Private Metabolic Phase 3 FDA response on KAI9531 Q3 2025 5.0%
related metabolic conditions.
PTC Developing medicines for people living with rare neurologic and metabolic PTCT Rare disease Commercial Translarna FDA decision 5.0%
conditions disorders.
UroGen Biotech company developing innovative solutions to treat urothelial and URGN Oncology Commercial UGN-103 P3 data in 2026 4.6%
specialty cancers.
Zai Lab Commercial stage biopharma developing medicines for oncology, immunology, ZLAB Inflammation & Immunology Commercial Bema P3 H2 2026 3.7%
neuroscience, and infectious diseases.
Uniqure Advancing a pipeline of gene therapies for the treatment of QURE Neurology Registrational 3 yr AMT-130 data in Q3 3.4%
Huntington's disease, refractory temporal lobe epilepsy, ALS, Fabry disease,
and other severe disease.
Taysha Developing gene therapies for the treatment of monogenic diseases of the TSHA Neurology Phase 1 P1/2 data in Q4 3.1%
central nervous system.
Madrigal Developed the first FDA approved treatment for metabolic MDGL Metabolic Commercial Q3 Rezdiffra earnings 3.1%
dysfunction-associated steatohepatitis (MASH)
(1) Positions are shown on a net basis. Any differences with the Schedule of
Investments are due to short holdings and warrants.
Table 3. Private investments greater than 1% exposure added to the portfolio
in the first half of 2025
Company name Description % NAV
American Laboratories Inc Produce and supply enzymes, protein extracts, and flavours/palatants for use 1.4%
across a variety of industries.
Prolium Bioscience Biotech company developing bispecific antibody programs for autoimmune 1.3%
diseases.
Figure 8. Breakdown of portfolio positions greater than 1% exposure as a
percentage of NAV, adjusted to be out of 100%, by (A) Therapeutic Focus, (B)
Modality, (C) Clinical Stage and (D) Geography as of 30 June 2025. Therapeutic
Focus, Modality and Geography do not include royalty vehicles.
Table 4. Private positions greater than 1% exposure as of 30 June 2025 and 31
December 2024
Portfolio Company Description Therapeutic Area Location $ Position Size % NAV 30/06/2025 % NAV¹ 31/12/2024
Corxel RTW-incubated biotech company committed to bringing innovative therapies to Metabolic China $54,732,832 9.4% 8.5%
underserved patients with cardiometabolic diseases.
Kailera RTW co-incubated biopharma developing broad pipeline to treat obesity and Metabolic US/CAN $29,133,393 5.0% 3.4%
related metabolic conditions.
Ensoma Genomic medicines company developing in vivo treatments that engineer any Rare Disease US/CAN $14,726,779 2.5% 2.6%
cell of the hematopoietic system for immuno-oncology and genetic diseases.
Artios Developing breakthrough cancer treatments that target DNA Damage Response Oncology UK/EUR $13,734,375 2.3% 4.9%
pathways.
American Laboratories Produce and supply enzymes, protein extracts, and flavours/palatants for use Other US/CAN $8,250,000 1.4% -
across a variety of industries.
Prolium Biotech company developing bispecific antibody programs for autoimmune Inflammation & Immunology US/CAN $7,733,529 1.3% -
diseases.
Evommune Biotech company developing therapies to treat immune-mediated chronic Inflammation & Immunology US/CAN $7,647,401 1.3% 1.0%
inflammatory diseases.
Lycia Developing LYTAC degraders, a platform that can selectively reduce the levels Inflammation & Immunology US/CAN $5,856,069 1.0% 1.0%
of dysregulated proteins in blood or on cell surfaces.
Total > 1% 24.2%
Total < 1% 8.2%
Total Private 32.4%
(1) Positions are shown on a net basis. Any differences with the Schedule of
Investments are due to short holdings and warrants.
Table 5. Public positions greater than 1% exposure as of 30 June 2025 and 31
December 2024
Portfolio Company Ticker Description Therapeutic Area Location $Position Size % NAV 30/06/2025 % NAV ¹
31/12/2024
Avidity(2) RNA Antibody conjugated RNA medicines company. Lead program for myotonic Rare Disease US/CAN $51,195,466 8.7% 7.3%
dystrophy.
Akero AKRO Clinical-stage company developing treatments for patients with serious Metabolic US/CAN $30,167,656 5.2% 5.2%
metabolic diseases, including non-alcoholic steatohepatitis.
PTC PTCT Developing oral small molecule drugs and gene therapy which regulate gene Neurology US/CAN $28,983,365 5.0% 2.0%
expression by targeting post-transcriptional control mechanisms in orphan
diseases.
UroGen URGN Biotech company developing innovative solutions to treat urothelial and Oncology Israel $27,172,625 4.6% 0.4%
specialty cancers.
Zai Lab ZLAB Commercial stage biopharma developing medicines for oncology, immunology, Inflammation & Immunology China $21,409,263 3.7% 0.3%
neuroscience, and infectious diseases.
Uniqure QURE Gene therapy company advancing therapies for patients with severe medical Gene therapy US/CAN $19,878,942 3.4% 0.1%
needs.
Madrigal MDGL Developed the first FDA approved treatment for metabolic Metabolic US/CAN $17,882,695 3.1% 5.9%
dysfunction-associated steatohepatitis (MASH)
Taysha TSHA Focused on advancing adeno-associated virus (AAV)-based gene therapies for Neurology US/CAN $18,220,092 3.1% 0.1%
severe monogenic diseases of the central nervous system.
Stoke STOK Restoring protein expression by harnessing the body's potential with RNA Oligo US/CAN $16,014,525 2.7% 2.3%
medicine.
Tarsus TARS Biotech developing therapeutics for ophthalmic conditions. Ophthalmology US/CAN $13,889,163 2.4% 6.0%
Protagonist PTGX Biopharma with a proprietary platform developing peptide-based new chemical Inflammation & Immunology US/CAN $13,872,051 2.4% 1.3%
entities (NCEs) that can potentially transform existing treatment paradigms in
disease areas with significant unmet medical need.
GH Research GHRS Clinical-stage pharmaceutical company developing a potentially Neurology UK/EUR $10,859,925 1.9% 0.4%
practice-changing treatment in depression.
Milestone MIST Developing a chemical entity calcium channel blocker delivered as a nasal Cardiovascular US/CAN $10,234,590 1.7% 1.7%
spray, for the acute at-home treatment of patients living with the heart
rhythm disturbances of PSVT and AFib-RV.
Verona VRNA Developing medicines for chronic lung conditions such as COPD, asthma, and Pulmonary US/CAN $9,358,124 1.6% 0.4%
cystic fibrosis.
Beta Bionics BBNX Develops and sells the iLet Bionic Pancreas, a fully automated insulin Type 1 Diabetes US/CAN $8,258,665 1.4% 1.5%
delivery system for people with type 1 diabetes
Acadia ACAD Developing therapies for central nervous system disorders. Neurology US/CAN $8,248,864 1.4% 1.1%
Verastem VSTM Biotech developing drugs to treat certain cancers. It has one approved Oncology US/CAN $7,979,912 1.4% 0.0%
product, duvelisib, for blood cancers.
Merus MRUS Using its Multiclonics platform to create antibody-based therapies for various Oncology UK/EUR $6,392,478 1.1% 0.8%
cancers.
Rocket RCKT Gene therapy platform company for rare paediatric diseases. Four clinical Rare Disease US/CAN $6,272,692 1.1% 5.1%
programs for Fanconi anaemia, Danon, LAD, and PKD
Apogee APGE Developing novel antibody therapeutics for atopic dermatitis, asthma, Inflammation & Immunology US/CAN $6,076,335 1.0% 1.0%
eosinophilic esophagitis and other I&I conditions.
Total>1% 56.9%
Total <1% 13.3%
Total Public 70.2%
( )
(1) Positions are shown on a net basis. Any differences with the Schedule of
Investments are due to short holdings and warrants.
(2) Consists primarily of common stock and pre-funded warrants.
Table 6. Royalty positions greater than 1% exposure as of 30 June 2025 and 31
December 2024
Portfolio Company Description Therapeutic Area Location $Position Size % NAV 30/06/2025 % NAV 31/12/2024
4010 Royalty Private RTW-managed fund aiming to generate returns from rights to royalty Various US/CAN $23,892,852 2.0% 2.0%
stream distributions from biopharma and medtech life sciences companies.
Total > 1% 2.0%
Total < 1% 0.8%
Total Royalty 2.8%
Private Portfolio Valuations and Cash Runway Analysis
Private investments remain a core component of the Group's strategy, built on
our disciplined, bottom-up approach to identifying high-quality opportunities.
While we continue to maintain a selective and well-funded private portfolio,
the recent dislocation in public markets has shifted the relative
attractiveness of deploying new capital, as depressed public valuations create
a compelling entry point for new investments. This dynamic is informing our
capital allocation decisions, even as we remain committed to supporting our
private companies through clinical development and strategic growth.
As of 30 June 2025, the average cash runway across our private companies was
slightly over 18 months, providing sufficient time to advance clinical
development plans. Around one-fifth of the portfolio had less than six months
of runway; three of these are RTW Investments company creations, where the
Investment Manager has the flexibility to inject capital when needed. The
remainder are actively pursuing capital raising solutions.
We value our private investments at 'fair value' in accordance with US GAAP,
using techniques aligned with the International Private Equity and Venture
Capital ("IPEV") Guidelines. RTW Investments' Valuation Committee updates
valuations on a monthly basis and in response to trigger events, aiming to
ensure both timeliness and accuracy. At least twice per annum, the Valuation
Committee receives the advice of an independent third-party valuation firm.
Oversight is provided by the Board's Audit Committee, which reviews the
Investment Manager's valuation policies and procedures semi-annually and as
needed.
As at 30 June, RTW Bio held 38 private investments and royalty positions.
During the first half of 2025, 30 private or royalty positions saw a total of
42 valuation adjustments, with an average of one adjustment per position:
· 13 positions were marked up by an average of 7.8%
· 17 positions were marked lower by an average of 21.7%
· The balance remained unchanged
The average valuation change was -6.4%. 53% of the mark-downs were primarily
driven by changes to relative comparables or market-based inputs. 15% of the
mark-ups were primarily driven by comparables, and 85% were primarily driven
by idiosyncratic company performance, a financing round or transaction. At
period end, the average time since the last third-party valuation was four
weeks and an average of 14 months had elapsed since the last financing round.
Figure 9. Average Multiple of Invested Capital (MOIC) by vintage on 1)
privates to liquidity event, 2) fully exited positions and 3) privates with no
liquidity event
Summary of Vintages 2019-2025
Number of Investments³ 71
Average MOIC² 1.6x
Average IRR 15.8%
Average Hold Period to Liquidity Event¹ 1.4 years
(1) Liquidity event = IPO, SPAC merger, reverse merger, acquisition from
private
(2) Multiple of Invested Capital ("MOIC") represents the ratio of total value
to the corresponding amount of total capital invested, expressed
as a multiple. Gross MOIC is utilised, which is calculated before giving
effect to management fees, carried interest, taxes and other
expenses, which would reduce performance and the rate of return.
(3) Certain legacy investments acquired in the 2024 Arix transaction are not
included in the MOIC and IRR statistics above.
Figure 10. Private portfolio cash runway as of 30 June 2025
Table 7. Private Valuation Statistics for H1 2025
Statistic H1 2025
Number of revaluations 42
Average time since last third-party valuation 4 weeks
Average time since last financing round 1.2 years
Average valuation change -6.4%
Average write-up +8.4%
Average write-down -21.1%
Average MOIC to go-public event(1) 1.0x
(1) Includes one reverse merger and one IPO.
Post period-end updates and other key portfolio company events
· Merck entered into a definitive agreement to acquire UK-based public
portfolio company Verona Pharma Plc (NASDAQ: VRNA) for $107 cash per
American Depositary Share, for a total transaction value of approximately $10
billion, at a 23% premium to Verona's closing price on 8 July, prior to the
announcement. The transaction is subject to Verona shareholder and regulatory
approvals and is expected to close in the fourth quarter of 2025.
· Private portfolio company Kailera Therapeutics and its partner Hengrui Pharma
announced positive topline data from the China Phase 3 clinical trial of
HRS9531 in individuals living with obesity or overweight. The trial met both
primary endpoints, demonstrating superior weight loss and a greater percentage
of participants achieving at least 5% body weight reduction compared to
placebo. The safety profile was favourable and consistent with other
GLP-1-based treatments, with most treatment-emergent adverse events being mild
to moderate and gastrointestinal-related.
· Rocket Pharmaceuticals announced a strategic corporate reorganisation and
pipeline prioritisation of its cardiovascular programs The company will
implement a reduction in workforce of approximately 30%. Rocket anticipates
that its existing cash resources will fund operations into 2027. It
anticipates delays associated with the Fanconi Anemia (RP-L102) and Pyruvate
Kinase Deficiency (RP-L301) programs. FDA approval of RP-L102 is no longer
anticipated in 2026.
RTW Investments, LP
10 September 2025
Strategy in Action
Impact Focus: The emergence of psychedelics as a transformative therapy for
treatment-resistant depression.
Three million patients in the U.S. alone suffer from treatment-resistant
depression (TRD). TRD refers to when a patient either doesn't respond to
selective serotonin reuptake inhibitors (SSRIs, the primary approach to
depression treatment) or experiences adverse events on them. If you fail two
adequate lines of antidepressants, you are said to be treatment-resistant, and
your odds of getting better go down significantly.
The interest in psychedelics as a potential treatment for TRD began as the war
on drugs of the 1980s started to die down, and certain academics in the U.S.,
UK and elsewhere started studying magic mushrooms. They found in these early
studies that the effects on depression (particularly of psilocybin) were
profound. Academic research increased and the idea that previously "scheduled"
drugs (controlled substances) could become approved medicines became more
widespread. From this sprouted new biotech companies founded around new
psychedelic compounds. With the emergence of more and more positive data from
clinical trials, psychedelics continue to become destigmatised.
The current standard of care for TRD is Johnson & Johnson's drug,
Spravato, which is esketamine in a nasal spray form that is delivered to
patients in a clinic. Spravato's regimen is first given twice a week for four
weeks and then once a week for four more weeks, with a maintenance dose of
typically once a week. Spravato is trending to be a multi-billion dollar
product, indicating a huge potential market. Psychedelics currently being
studied look significantly more promising - they can be dosed less frequently
(potentially once-a-month or even less frequently), and the response rates
appear to be more durable.
The new White House administration has demonstrated its support for
psychedelics. RFK Jr, FDA Commissioner Marty Makary and Trump's pick for
Surgeon General, Casey Means have all made positive statements. The FDA is
really leaning in, and they've even produced guidance documents for biotech
companies to help them design a development program that the FDA is more
likely to approve.
RTW Bio's portfolio has 2.7% exposure to psychedelics as of period end. GH
Research, based in Dublin, is aiming to transform the treatment of psychiatric
and neurological disorders and is pursuing therapies that have the potential
to be highly effective, rapid acting, durable, well-tolerated, and
conveniently administered for their target indications. Its lead product
candidate is an inhaled version of mebufotenin for Treatment-Resistant
Depression. Compass Pathways is a biotechnology company dedicated to
accelerating patient access to evidence-based innovation in mental health. Its
first major initiative is developing an investigational psilocybin treatment
through a global phase 3 program for people living with treatment-resistant
depression.
Impact Focus: Obesity developments in 2025 from Kailera Therapeutics and
Corxel Pharmaceuticals
Kailera Therapeutics
5.0% of NAV (31 December 2024: 3.4%)
After launching in 2024, Kailera Therapeutics announced positive topline data
from Hengrui Pharmaceutical's Phase 2 clinical trial of HRS9531, a GLP-1/GIP
receptor dual agonist, in individuals with obesity or overweight. The clinical
trial results showed that a once-weekly subcutaneous injection of the 8 mg
dose of HRS9531 demonstrated a statistically significant 21.1% (p<0.0001)
placebo-adjusted mean weight loss at week 36, with no plateau in weight loss.
Additionally, 59% of HRS9531-treated participants achieved a weight loss of
≥20%. The trial results also demonstrated a favourable safety profile. Most
adverse events were mild and consistent with the profile reported for the
injectable GLP-1/GIP receptor dual agonist class.
Shortly after period-end, Kailera and Hengrui announced positive topline data
from the China Phase 3 clinical trial of HRS9531 in individuals living with
obesity or overweight. The trial met both primary endpoints, demonstrating
superior weight loss and a greater percentage of participants achieving at
least 5% body weight reduction compared to placebo. The safety profile was
favourable and consistent with other GLP-1-based treatments, with most
treatment-emergent adverse events being mild to moderate and
gastrointestinal-related. Hengrui plans to submit a New Drug Application (NDA)
for chronic weight management in China. Kailera is advancing KAI-9531 to
global clinical trials.
Corxel Pharmaceuticals
9.4% of NAV (31 December 2024: 8.5%)
At the end of 2024 Corxel announced its acquisition of worldwide rights
(excluding greater China) to CX11, an oral small molecule for obesity and
diabetes. In June, Corxel announced the enrolment of the first patient in
its U.S. Phase 2 trial of CX11, which will evaluate the efficacy and safety
of CX11 in a U.S. population with a high proportion of obesity and diabetes.
In a previous China Phase 2 trial conducted by its partner, Vincentage, CX11
had demonstrated competitive weight loss with favourable safety and
tolerability in Chinese patients. The U.S. Phase 2 trial aims to minimise
gastrointestinal side effects and will also evaluate a higher dose to achieve
better weight reduction results. Topline data from this trial is expected in
H1 2026.
Also in June, Corxel announced the positive China Phase 2 clinical results for
CX11. In the China Phase 2 trial, weight reduction was significantly greater
at all doses compared to the placebo. A weight reduction of at least 5% by
week 16 occurred in 55% to 90% of the participants who received CX11, as
compared to the 13% who received the placebo. Treatment with CX11 was
associated with improvement in all weight-related and cardiometabolic metrics
that were measured. Of reported adverse events, most were gastrointestinal and
mild to moderate in severity. No liver toxicity safety signal was identified,
nor were any drug-related serious adverse events reported.
Responsible Investment
The Group aims to achieve superior long-term capital appreciation, focusing on
forming, building, and supporting world-class life sciences,
biopharmaceutical, and medical technology companies. The Group's primary
consideration is to support companies that promote health and well-being by
bringing drugs and devices to market that are expected to save or extend life,
improve quality of life, or revolutionise the course of treatment for diseases
and conditions that afflict people.
The Group (via the Investment Manager) seeks to meet regularly with the
management teams of portfolio companies to foster long-term relationships.
This ongoing dialogue enables open discussions on issues that could affect
long-term returns. The decision to engage with a portfolio company depends on
both the materiality of the issue and the size of the holding.
The Group is committed to investing in and building companies that adopt and
integrate sound practices that are proportionate to the scale of the business,
including established industry best practices related to clinical trials and
animal testing, contract research organization (CRO) oversight, anti-bribery
and corruption and the development of a governance framework. On an ongoing
basis, the Investment Manager's IR team engages with portfolio companies to
collect information on sustainability data and policies where they exist.
The Group's Board of Directors has established a Sustainability Committee
which meets with the Investment Manager bi-annually where they are briefed on
updates to process, policy, and portfolio engagement. The Sustainability
Committee provides oversight on behalf of and advice to the Board in relation
to the Company's Responsible Investment strategy and ensures that all
stakeholders receive appropriate related information. The Committee assists
the Board in overseeing the development of the Responsible Investment Policy
and reviews relevant matters to be presented in this half-yearly financial
report, maintaining oversight of and making recommendations.
Statement of Principal Risks and Uncertainties for the Remaining Six Months of
the year to 31 December 2025
As described in the Group's annual consolidated financial statements for the
year ended 31 December 2024, the Group's principal and emerging risks and
uncertainties include the following:
- Failure to achieve investment objective;
- Unfavourable tax exposure;
- Counterparty risk;
- The Investment Manager relies on key personnel;
- Portfolio companies may be subject to litigation;
- Exposure to global political and economic risks;
- Clinical development and regulatory risks;
- Imposition of pricing controls for clinical products and services;
- Inflation;
- Availability of capital; and
- Sustainability reporting.
The Board believes that these risks are unchanged in respect of the remaining
six months of the year to 31 December 2025.
Further information in relation to these principal risks and uncertainties may
be found on pages 38 to 40 of the Group's annual report and audited
consolidated financial statements for the year ended 31 December 2024.
These inherent risks associated with investments in the biotech and
pharmaceutical sector could result in a material adverse effect on the Group's
performance and value of the Ordinary Shares.
Risks are mitigated and managed by the Board through continual review, policy
setting and regular reviews of the Group's risk matrix by the Audit Committee
to ensure that procedures are in place with the intention of minimising the
impact of the above-mentioned risks. The Board carried out a formal review of
the risk matrix at the Audit Committee meeting held on 31 July 2025. The Board
relies on periodic reports provided by the Investment Manager and
Administrator regarding risks that the Group faces. When required, experts
will be employed to gather information and/or provide expert advice, including
tax and legal advisers.
Statement of Directors' Responsibilities
The Directors confirm to the best of their knowledge that:
- the unaudited interim consolidated financial statements have been
prepared in conformity with US generally accepted accounting principles and
give a true and fair view of the assets, liabilities, financial position and
profit or loss of the Group; and
- the interim management report (which includes the Chair's Statement,
Report of the Investment Manager and Statement of Principal Risks and
Uncertainties) together with the unaudited interim consolidated financial
statements include a fair review of the information required by:
a. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the unaudited interim consolidated
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
b. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place during the first six months
of the financial year and that have materially affected the financial position
or performance of the Group during that period; and any changes in the related
party transactions described in the last annual report that could do so.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group's website
(https://www.rtwbio.com
(https://www.rtwfunds.com/rtw-biotech-opportunities-ltd) ). Legislation in
Guernsey governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
By order of the Board
William Simpson Paul Le Page
Chair Director
10 September 2025 10 September 2025
Independent Review Report to RTW Biotech Opportunities Ltd
Conclusion
We have been engaged by RTW Biotech Opportunities Ltd (the "Company") to
review the consolidated financial statements in the half-yearly financial
report for the six months ended 30 June 2025 of the Company and its
subsidiaries (together, the "Group"), which comprises the unaudited interim
consolidated statement of assets and liabilities including the unaudited
interim consolidated condensed schedule of investments, the unaudited interim
consolidated statements of operations, changes in net assets and cash flows
and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the consolidated financial statements in the half-yearly
financial report for the period ended 30 June 2025 do not give a true and
fair view of the financial position of the Group as at 30 June 2025 and of its
financial performance and its cash flows for the six month period then ended,
in accordance with U.S. generally accepted accounting principles and the
Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial
Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued by the Financial
Reporting Council for use in the UK. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. We read the other information contained in the half-yearly
financial report and consider whether it contains any apparent misstatements
or material inconsistencies with the information in the consolidated financial
statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Scope of review section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However future events or conditions may cause the Group and
the Company to cease to continue as a going concern, and the above conclusions
are not a guarantee that the Group and the Company will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
interim financial report in accordance with the DTR of the UK FCA.
The consolidated financial statements included in this interim report have
been prepared in accordance with U.S. generally accepted accounting
principles.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group and the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless liquidation is imminent.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the consolidated financial statements in the half-yearly financial report
based on our review. Our conclusion, including our conclusions relating to
going concern, are based on procedures that are less extensive than audit
procedures, as described in the scope of review paragraph of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement letter to assist the Company in meeting the requirements of the DTR
of the UK FCA. Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work,
for this report, or for the conclusions we have reached.
Andrew J. Salisbury
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants
Guernsey
10 September 2025
Unaudited Interim Consolidated Statement of Assets and Liabilities
as at 30 June 2025 and 31 December 2024
(Expressed in United States Dollars)
30 June 2025 (unaudited) 31 December 2024 (audited)
ASSETS:
Investments in securities, at fair value (cost at 30 June 2025: $576,162,841;
31 December 2024:
$529,516,651) 603,470,074 611,011,096
Derivative contracts, at fair value (cost at 30 June 2025: $81,373,854; 31
December 2024: $60,427,785)
118,770,502 110,177,172
Cash and cash equivalents 2,661,257 5,360,022
Due from brokers 39,645,459 27,990,478
Receivable from unsettled trades 367,454 4,237,674
Other assets 1,206,126 1,239,967
TOTAL ASSETS 766,120,872 760,016,409
LIABILITIES:
Securities sold short, at fair value (proceeds at
30 June 2025: $135,080,555; 31 December 2024: $102,512,585) 126,303,780 95,151,493
Derivative contracts, at fair value (proceeds at
30 June 2025: $nil; 31 December 2024: $nil) 4,875,333 7,799,422
Due to brokers 48,557,180 23,570,906
Payable for unsettled trades 210,465 -
Accrued expenses 975,177 850,903
TOTAL LIABILITIES 180,921,935 127,372,724
TOTAL NET ASSETS 585,198,937 632,643,685
NET ASSETS attributable to Ordinary Shares (shares at 561,014,995 606,921,161
30 June 2025: 330,063,649; 31 December 2024: 335,713,649)
NET ASSETS attributable to Non-Controlling Interest 24,183,942 25,722,524
1.6997 1.8079
NAV per Ordinary Share
The unaudited interim consolidated financial statements of the Group were
approved and authorised for issue by the Board of Directors on 10 September
2025 and signed on its behalf by:
William Simpson
Paul Le Page
Chair
Director
See accompanying notes to the unaudited interim consolidated financial
statements.
Unaudited Interim Consolidated Condensed Schedule of Investments
as at 30 June 2025
(Expressed in United States Dollars)
Descriptions Number of Shares Cost Fair Value Percentage of Net Assets
Investments in securities, at fair value
Common stocks
United States
Healthcare
Madrigal Pharmaceuticals, Inc. 218,276 50,398,109 66,059,049 11.29
Akero Therapeutics, Inc. 565,588 17,819,262 30,179,776 5.16
Avidity Biosciences, Inc. 369,865 6,102,773 10,504,166 1.79
Others* 182,793,480 178,653,037 30.53
Total United States 257,113,624 285,396,028 48.77
Netherlands
Healthcare* 27,499,147 30,017,895 5.13
Ireland
Healthcare 11,870,496 11,666,875 1.99
Switzerland
Healthcare 1,019,250 1,072,344 0.18
British Virgin Islands
Healthcare 479,464 616,903 0.11
China
Healthcare
Corxel Pharmaceuticals Ltd. 541,205 216,482 372,115 0.06
Others* 31,835 38,401 0.01
Total China 248,317 410,516 0.07
Canada
Healthcare 2,752,161 379,625 0.06
Cayman Islands
Healthcare 175,045 213,613 0.04
Singapore
Healthcare 191,496 155,592 0.03
France
Healthcare 3,930,888 107,084 0.02
Japan
Healthcare 64,326 57,105 0.01
United Kingdom
Healthcare 4,887 0 0.00
Total common stocks 305,349,101 330,093,580 56.41
* No individual investment security or contract constitutes greater than 5 per
cent. of net assets.
See accompanying notes to the unaudited interim consolidated financial
statements.
Descriptions Number of Shares Cost Fair Value Percentage of Net Assets
Investments in securities, at fair value (continued)
Convertible preferred stocks
United States
Healthcare* 88,597,376 94,043,697 16.07
China
Healthcare
Corxel Pharmaceuticals Ltd. 14,177,776 25,664,114 14,997,530 2.56
Others* 4,110,583 3,661,332 0.62
Total China 29,774,697 18,658,862 3.18
United Kingdom
Healthcare 16,347,749 16,946,928 2.90
Switzerland
Healthcare 567,048 1,416,497 0.24
Netherlands
Healthcare 1,166,079 1,326,043 0.23
Belgium
Healthcare 0 0 0.00
Total convertible preferred stocks 136,452,949 132,392,027 22.62
American depository receipts
United Kingdom
Healthcare 23,785,683 28,729,660 4.91
China
Healthcare 18,162,417 21,409,263 3.66
Netherlands
Healthcare 12,797,852 13,435,988 2.29
Belgium
Healthcare 3,070,856 3,368,317 0.57
Total American depository receipts 57,816,808 66,943,228 11.43
* No individual investment security or contract constitutes greater than 5 per
cent. of net assets.
See accompanying notes to the unaudited interim consolidated financial
statements.
Descriptions Number of Shares Cost Fair Value Percentage of Net Assets
Investments in securities, at fair value (continued)
Convertible Notes
China
Healthcare
Corxel Pharmaceuticals Ltd. 3,766,269 37,662,686 39,363,186 6.73
United States
Healthcare 13,325,758 8,726,138 1.50
Canada
Healthcare 7,512,664 7,978,607 1.36
British Virgin Islands
Healthcare 161,610 162,149 0.03
Total convertible notes 58,662,718 56,230,080 9.62
Investment in private investment companies
Cayman Islands
Healthcare 10,427,832 11,556,676 1.97
Ireland
Healthcare 3,221,986 4,704,360 0.80
United Kingdom
Healthcare 4,064,686 1,363,213 0.24
Total investment in private investment companies 17,714,504 17,624,249
3.01
Revenue based financing agreement
United States
Healthcare 160,731 186,910 0.03
Corporate bonds
Bermuda
Healthcare 6,030 0 0.00
Total investments in securities, at fair value 576,162,841 603,470,074 103.12
See accompanying notes to the unaudited interim consolidated financial
statements.
Descriptions Number of contracts Cost Fair Value Percentage of Net Assets
Derivative contracts - assets, at fair value
Warrants
United States
Healthcare
Avidity Biosciences, Inc. 2,208,114 36,431,673 62,708,229 10.72
Akero Therapeutics, Inc. 68,710 3,298,073 3,666,359 0.63
Others* 36,439,696 25,363,749 4.33
Total United States 76,169,442 91,738,337 15.68
Canada
Healthcare 3,121,272 1,876,358 0.32
British Virgin Islands
Healthcare 1,349,970 1,261,368 0.22
United Kingdom
Healthcare 101,902 83,181 0.01
Total warrants 80,742,586 94,959,244 16.23
Equity swaps
United States
Healthcare
Avidity Biosciences, Inc. 15,207 3,036 0.00
Others* 21,968,139 3.75
Total United States 21,971,175 3.75
Netherlands
Healthcare 58,926 0.01
British Virgin Islands
Healthcare 51,131 0.01
Japan
Healthcare 32,301 0.01
Total equity swaps 22,113,533 3.78
* No individual investment security or contract constitutes greater than 5 per
cent. of net assets.
See accompanying notes to the unaudited interim consolidated financial
statements.
Descriptions Number of contracts Cost Fair Value Percentage of Net Assets
Derivative contracts - assets, at fair value (continued)
Contingent value rights
United States
Healthcare 466,420 973,334 0.17
Switzerland
Healthcare 164,848 724,391 0.12
Denmark
Healthcare 0 0 0.00
Total contingent value rights 631,268 1,697,725 0.29
Total derivative contracts - assets, at fair value 81,373,854 118,770,502 20.30
See accompanying notes to the unaudited interim consolidated financial
statements.
Descriptions Proceeds Fair Value Percentage of Net Assets
Securities sold short, at fair value
Common stocks
United States
Healthcare
Madrigal Pharmaceuticals, Inc. 159,187 43,184,890 48,176,354 8.23
Others* 80,976,946 67,364,850 11.51
Total United States 124,161,836 115,541,204 19.74
Singapore
Healthcare 200,738 155,590 0.03
Total common stocks 124,362,574 115,696,794 19.77
American depository receipts
Netherlands
Healthcare 7,401,056 6,993,328 1.20
United Kingdom
Healthcare 3,316,925 3,613,658 0.61
Total American depository receipts 10,717,981 10,606,986 1.81
Total securities sold short, at fair value 135,080,555 126,303,780 21.58
Descriptions Fair Value Percentage of Net Assets
Derivative contracts - liabilities, at fair value
Equity swaps
United States
Healthcare 2,711,672 0.46
Ireland
Healthcare 1,686,193 0.29
United Kingdom
Healthcare 396,479 0.07
British Virgin Islands
Healthcare 80,989 0.01
Total derivative contracts - liabilities, at fair value 4,875,333 0.83
* No individual investment security or contract constitutes greater than 5 per
cent. of net assets.
See accompanying notes to the unaudited interim consolidated financial
statements.
Audited Consolidated Condensed Schedule of Investments
as at 31 December 2024
(Expressed in United States Dollars)
Descriptions Number of Shares Cost Fair Value Percentage of Net Assets
Investments in securities, at fair value
Common stocks
United States
Healthcare
Madrigal Pharmaceuticals, Inc. 214,826 49,317,124 66,288,859 10.48
Akero Pharmaceuticals, Inc. 1,191,010 26,909,569 33,133,898 5.24
Rocket Pharmaceuticals, Inc. 2,400,755 8,188,796 30,177,490 4.77
Tarsus Pharmaceuticals, Inc. 401,308 8,874,464 22,220,424 3.51
Avidity Biosciences, Inc. 369,865 6,102,773 10,755,674 1.70
Others* 190,069,145 174,522,722 27.58
Total United States 289,461,871 337,099,067 53.28
Netherlands
Healthcare 12,693,165 16,077,163 2.55
Ireland
Healthcare 10,013,472 8,557,542 1.36
China
Healthcare
Corxel Pharmaceuticals Ltd. (formerly Ji Xing Pharmaceuticals Ltd.) 541,205 216,482 835,037 0.13
Canada
Healthcare 2,879,914 518,365 0.08
Denmark
Healthcare 301,757 305,536 0.05
Singapore
Healthcare 191,496 296,101 0.05
France
Healthcare 3,930,888 79,772 0.01
Cayman Islands
Healthcare 77,953 73,384 0.01
Japan
Healthcare 64,326 70,334 0.01
Switzerland
Healthcare 2,496 17,811 0.00
United Kingdom
Healthcare 4,992 17,413 0.00
Total common stocks 319,838,812 363,947,525 57.53
* No individual investment security or contract constitutes greater than 5 per
cent. of net assets.
See accompanying notes to the unaudited interim consolidated financial
statements.
Descriptions Number of Shares Cost Fair Value Percentage of Net Assets
Investments in securities, at fair value (continued)
Convertible preferred stocks
United States
Healthcare* 81,802,284 89,628,561 14.17
China
Healthcare
Corxel Pharmaceuticals Ltd. (formerly Ji Xing Pharmaceuticals Ltd.) 14,177,776 25,664,114 34,445,874 5.44
Others* 4,110,584 3,952,898 0.63
Total China 29,774,698 38,398,772 6.07
United Kingdom
Healthcare* 16,347,749 34,368,669 5.44
Netherlands
Healthcare 1,166,079 1,165,404 0.18
Switzerland
Healthcare 90,748 763,629 0.12
Belgium
Healthcare 0 0 0.00
Total convertible preferred stocks 129,181,558 164,325,035 25.98
Convertible Notes
China
Healthcare
Corxel Pharmaceuticals Ltd. (formerly Ji Xing Pharmaceuticals Ltd.) 1,803,339 18,033,384 18,381,736 2.91
Canada
Healthcare 7,512,664 8,050,255 1.27
United States
Healthcare 8,679,051 6,312,757 1.00
Total convertible notes 34,225,099 32,744,748 5.18
* No individual investment security or contract constitutes greater than 5 per
cent. of net assets.
See accompanying notes to the unaudited interim consolidated financial
statements.
Descriptions Number of Shares Cost Fair Value Percentage of Net Assets
Investments in securities, at fair value (continued)
American depository receipts
United Kingdom
Healthcare 16,687,163 17,163,590 2.72
Netherlands
Healthcare 9,685,018 11,905,170 1.88
China
Healthcare 1,616,703 1,602,514 0.25
Cayman Islands
Healthcare 102,795 53,101 0.01
Total American depository receipts 28,091,679 30,724,375 4.86
Investment in private investment companies
Cayman Islands
Healthcare 10,348,706 12,571,857 1.99
Ireland
Healthcare 3,221,986 4,602,256 0.73
United Kingdom
Healthcare 4,444,220 1,920,687 0.30
Total investment in private investment companies 18,014,912 19,094,800
3.02
Revenue based financing agreement
United States
Healthcare 160,732 174,613 0.01
Corporate bonds
Bermuda
Healthcare 3,859 0.00 0.00
Total investments in securities, at fair value 529,516,651 611,011,096 96.58
See accompanying notes to the unaudited interim consolidated financial
statements.
Descriptions Number of contracts Cost Fair Value Percentage of Net Assets
Derivative contracts - assets, at fair value
Warrants
United States
Healthcare
Avidity Biosciences, Inc. 2,208,114 36,431,673 64,209,747 10.15
Tarsus Pharmaceuticals, Inc. 150,000 4,799,985 8,305,485 1.31
Rocket Pharmaceuticals, Inc. 170,764 2,565,561 2,010,658 0.32
Others* 11,528,056 9,877,117 1.56
Total United States 55,325,275 84,403,007 13.34
Canada
Healthcare 3,121,272 2,283,707 0.36
British Virgin Islands
Healthcare 1,349,970 1,360,602 0.22
Total warrants 59,796,517 88,047,316 13.92
Equity swaps
United States
Healthcare
Tarsus Pharmaceuticals, Inc. 215,335 7,603,492 1.20
Others* 12,594,491 1.99
Total United States 20,197,983 3.19
British Virgin Islands
Healthcare 328,499 0.05
Total equity swaps 20,526,482 3.24
Contingent value rights
United States
Healthcare 466,420 1,023,626 0.17
Switzerland
Healthcare 164,848 579,748 0.09
Total contingent value rights 631,268 1,603,374 0.26
Total derivative contracts - assets, at fair value 60,427,785 110,177,172 17.42
* No individual investment security or contract constitutes greater than 5 per
cent. of net assets.
See accompanying notes to the unaudited interim consolidated financial
statements.
Descriptions Proceeds Fair Value Percentage of Net Assets
Securities sold short, at fair value
Common stocks
United States
Healthcare* 100,739,418 93,400,032 14.76
British Virgin Islands
Healthcare 1,164,515 1,141,154 0.18
Singapore
Healthcare 200,738 296,101 0.05
Total common stocks 102,104,671 94,837,287 14.99
American depository receipts
United Kingdom
Healthcare 304,734 261,105 0.04
Cayman Islands
Healthcare 103,180 53,101 0.01
Total American depository receipts 407,914 314,206 0.05
Total securities sold short, at fair value 102,512,585 95,151,493 15.04
Descriptions Fair Value Percentage of Net Assets
Derivative contracts - liabilities, at fair value
Equity swaps
United States
Healthcare 7,799,422 1.23
Total derivative contracts - liabilities, at fair value 7,799,422 1.23
* No individual investment security or contract constitutes greater than 5 per
cent. of net assets.
See accompanying notes to the unaudited interim consolidated financial
statements.
Unaudited Interim Consolidated Statement of Operations
For the six month periods ended 30 June 2025 and 30 June 2024
(Expressed in United States Dollars)
1 January 2025 to 30 June 2025 (unaudited) 1 January 2024 to 30 June 2024 (unaudited)
Investment income
Dividends (net of withholding tax rebate of $64,343;
30 June 2024: charge of $4,258) 25,018,901 108,997
Interest
(net of withholding taxes of $nil; 30 June 2024: $nil) 2,882,320 1,926,737
Other 1,887,044 837,160
Total investment income 29,788,265 2,872,894
Expenses
Management fees 3,668,870 3,436,352
Interest 3,625,918 1,679,406
Professional fees 1,028,876 411,615
Research costs 669,362 341,711
Administrative fees 374,785 356,696
Audit fees 232,975 186,995
Directors' fees 151,927 117,976
Dividends 174 -
Other expenses 694,125 654,822
Total expenses 10,447,012 7,185,573
Net investment income/(loss) 19,341,253 (4,312,679)
Realised and change in unrealised gain/(loss) on investments, derivatives and
foreign currency transactions
Net realised gain/(loss) on securities and foreign currency transactions
(1,016,201) 10,237,597
Net change in unrealised gain/(loss) on securities and foreign currency
translation
(53,826,207) 11,361,132
Net realised gain/(loss) on derivative contracts 4,193,445 5,155,442
Net change in unrealised gain/(loss) on derivative contracts
(9,428,650) 63,383,452
Net realised and unrealised gain/(loss) on investments, derivatives and (60,077,613) 90,137,623
foreign currency transactions
Net increase/(decrease) in net assets resulting from operations (40,736,360) 85,824,944
See accompanying notes to the unaudited interim consolidated financial statements.
Unaudited Interim Consolidated Statement of Changes in Net Assets
For the six month period ended 30 June 2025
(Expressed in United States Dollars)
Ordinary Non-Controlling Interest
Share Class
Net assets, beginning of period 606,921,161 25,722,524
Operations
Net investment income/(loss) 19,341,253 -
Net realised gain/(loss) on securities and foreign currency transactions (1,016,201) -
Net change in unrealised gain/(loss) on securities and foreign currency (53,826,207) -
translation
Net realised gain/(loss) on derivative contracts 4,193,445 -
Net change in unrealised gain/(loss) on derivative contracts (9,428,650) -
Income/(loss) attributable to Non-Controlling Interest 1,538,582 (1,538,582)
Net change in net assets resulting from operations (39,197,778) (1,538,582)
Capital transactions
Share buyback (Gross of $10,147 transaction costs; 30 June 2024: $22,681) (6,708,388) -
(Note 9)
Net change in net assets resulting from capital transactions (6,708,388) -
Net assets, end of period 561,014,995 24,183,942
See accompanying notes to the unaudited interim consolidated financial
statements.
Unaudited Interim Consolidated Statement of Changes in Net Assets
For the six month period ended 30 June 2024
(Expressed in United States Dollars)
Ordinary Non-Controlling Interest
Share Class
Net assets, beginning of period 399,283,811 29,739,146
Operations
Net investment income/(loss) (4,312,679) -
Net realised gain/(loss) on securities and foreign currency transactions 10,237,597 -
Net change in unrealised gain/(loss) on securities and foreign currency 11,361,132 -
translation
Net realised gain/(loss) on derivative contracts 5,155,442 -
Net change in unrealised gain/(loss) on derivative contracts 63,383,452 -
Income/(loss) attributable to Non-Controlling Interest 843,756 (843,756)
Net change in net assets resulting from operations 86,668,700 (843,756)
Capital transactions
Issuance of Ordinary Shares (net of issuance cost of $6,473,897) 180,781,065 -
Share buyback (Gross of $22,681 transaction costs; 30 June 2023: $nil) (Note (11,340,306) -
9)
Net change in net assets resulting from capital transactions 169,440,759 -
Net assets, end of period 655,393,270 28,895,390
See accompanying notes to the unaudited interim consolidated financial
statements.
Unaudited Interim Consolidated Statement of Cash Flows
For the six month periods ended 30 June 2025 and 30 June 2024
(Expressed in United States Dollars)
1 January 2025 to 1 January 2024 to
30 June 2025 30 June 2024
(unaudited) (unaudited)
Cash flows from operating activities
Net increase/(decrease) in net assets resulting from operations (40,736,360) 85,824,944
Adjustments to reconcile net change in net assets resulting from operations to
net cash provided by/(used in) operating activities:
Net realised (gain)/loss on securities and foreign currency transactions 1,016,201 (10,237,597)
Net change in unrealised (gain)/loss on securities and foreign currency
translation
53,826,207 (11,361,132)
Net realised (gain)/loss on derivative contracts (4,193,445) (5,155,442)
Net change in unrealised (gain)/loss on derivative contracts 9,428,650 (63,383,452)
Effect of exchange rate changes on cash and cash equivalents (1,113,758) (109,564)
Purchases of investments in securities (199,936,589) (350,475,670)
Proceeds from sales of investments in securities 142,741,710 220,618,160
Proceeds from securities sold short 58,927,403 38,323,325
Payments for securities sold short (16,765,694) (12,818,107)
Proceeds from derivative contracts 8,701,968 16,122,019
Payments for derivative contracts (25,454,592) (60,925,651)
Accretion of bond discount (2,171) (1,628)
Changes in operating assets and liabilities:
Other assets 33,841 1,655,862
(Receivable from)/payable for unsettled trades 4,080,685 (6,786,057)
Due to brokers 24,986,274 62,103,787
Accrued expenses 124,274 (1,489,677)
Net cash provided by/(used in) operating activities 15,664,604 (98,095,880)
Cash flows from financing activities
Net proceeds from issuance of shares * - 108,419,956
Share buyback (6,708,388) (11,340,306)
Net cash provided by/(used in) financing activities (6,708,388) 97,079,650
Net change in cash and cash equivalents 8,956,216 (1,016,230)
Cash, cash equivalents, and restricted cash, beginning of the period 33,350,500 60,608,767
Cash, cash equivalents, and restricted cash, end of the period 42,306,716 59,592,537
At 30 June 2025, the amounts categorised in cash, cash equivalents, and
restricted cash include the following:
Cash and cash equivalents 2,661,257 6,757,859
Due from brokers 39,645,459 52,834,678
Total 42,306,716 59,592,537
Supplemental disclosure of cash flow information
Cash paid during the period for interest 3,543,147 1,406,135
Cancellation of shares in RTW Biotech Opportunities Ltd received in Arix - 59,221,117
acquisition
* In kind financing activities:
Non-cash assets received from Arix acquisition, comprised of:
Investments in securities - 129,409,264
Derivative contracts - 1,799,515
Other assets - 373,447
Refer to notes 1 and 9 for further details regarding the Arix acquisition.
See accompanying notes to the unaudited interim consolidated financial
statements.
Notes to the Unaudited Interim Consolidated Financial Statements
For the six month period ended 30 June 2025
(Expressed in United States Dollars)
1. Nature of operations and summary of significant accounting policies
RTW Biotech Opportunities Ltd (the "Company") is a publicly listed Guernsey
non-cellular company limited by shares. The Company was originally
incorporated in the State of Delaware, United States of America, and
re-domiciled into Guernsey under the Companies Law on 2 October 2019 with
registration number 66847 on the Guernsey Register of Companies. On 30 October
2019, all of the issued Ordinary Shares of the Company were listed and
admitted to trading on the Specialist Fund Segment of the London Stock
Exchange under the ticker symbol: RTW. Subsequently, on 6 August 2021, the
Company's Ordinary Shares were admitted to trading on the Premium Segment of
the London Stock Exchange (the former standard and premium listing segments of
the London Stock Exchange Main Market were consolidated into a single segment
on 29 July 2024) with the additional ticker symbol: RTWG denoting the Sterling
price. The RTWG ticker was consolidated into the USD line effective October
2024 and the Company ceased trading the GBP quote. The original ticker, RTW,
continues to denote the US Dollar price.
In 2022, the Company transferred its right to the profits and losses
attributable to the Group's portfolio of assets to its wholly owned
subsidiary, RTW Biotech Opportunities Operating Ltd (the "Subsidiary"). All
the income and expenses of the Subsidiary are consolidated with the income and
expenses of the Group.
On 13 February 2024, the Group completed the acquisition of the assets of Arix
Bioscience plc. To facilitate the acquisition, the Subsidiary formed RTW
Biotech UK Limited (the "UK Subsidiary") as a wholly owned subsidiary of the
Subsidiary to manage and integrate the Arix Bioscience plc acquired entities
and assets, based on the regulatory and operational landscape in the UK. The
transaction was announced on 1 November 2023 and was effected through a scheme
of reconstruction and the voluntary winding‐up of Arix under section 110 of
the Insolvency Act 1986. The details around this transaction are further
disclosed within the unaudited interim consolidated statement of cash flows
and within Note 9.
In April 2025, the Subsidiary formed RTW Biotech ALI LLC (the "SPV"), a
Delaware limited liability company, to serve as an intermediate blocker to
manage tax exposure through which the Subsidiary holds an investment. The
Subsidiary is the sole member of the SPV. All the income and gains/losses will
be allocated or distributed to the SPV. All the income and expenses of the SPV
are consolidated with the income and expenses of the Company.
The Group seeks to use equity capital (from the net proceeds of any share
issuance or, where appropriate, from the net proceeds of investment
divestments or other related profits) to provide seed and additional growth
capital to the private investments. To mitigate cash-drag, the uninvested
portion is invested across public stocks largely replicating the public stock
portfolios of RTW's existing US-based funds. The Group focuses on creating,
building, and supporting world-class life sciences, biopharmaceutical and
medical technology companies. The Group's investment objective is to generate
attractive risk-adjusted returns through investments in securities, both
equity and debt, long and short, of companies with a focus on the
pharmaceutical sector.
Pursuant to an investment management agreement, the Group is managed by RTW
Investments, LP, a Delaware limited partnership, to provide the Group with
discretionary portfolio management, risk management services and certain other
services. The Investment Manager is an investment adviser registered with the
U.S. Securities and Exchange Commission under the Investment Advisers Act of
1940.
Basis of presentation
The unaudited interim consolidated financial statements are expressed in
United States Dollars. The unaudited interim consolidated financial statements
which give a true and fair view and have been prepared in accordance with US
generally accepted accounting principles ("US GAAP") and are in compliance
with the Companies (Guernsey) Law, 2008. The entities comprised within the
Group are investment companies and follow the accounting and reporting
guidance in Financial Accounting Standards Board's ("FASB") Accounting
Standards Codification Topic 946, Financial Services - Investment Companies.
The Directors consider that it is appropriate to adopt a going concern basis
of accounting in preparing the unaudited interim consolidated financial
statements. In reaching this assessment, the Directors have considered a wide
range of information relating to present and future conditions including the
balance sheets, future projections, cash flows and the longer-term strategy of
the business.
Principles of consolidation
The unaudited interim consolidated financial statements include the accounts
of the Company consolidated with the accounts of the Subsidiary, the UK
Subsidiary, and the SPV. All inter-group balances have been eliminated upon
consolidation. The Subsidiary is incorporated in Guernsey, the UK Subsidiary
is incorporated in the United Kingdom, and the SPV is incorporated in
Delaware.
Non-Controlling Interest
An affiliate of the Investment Manager, RTW Venture Performance LLC, holds an
interest in the Subsidiary. The Non-Controlling Interest captures both
Performance Allocation and mark to market movements on the New Performance
Allocation Share held by RTW Venture Performance LLC in the Subsidiary. For
the period ended 30 June 2025, $1,538,582 of the loss attributable to the
Non-Controlling Interest was comprised of mark to market movements of Notional
Ordinary Shares (31 December 2024: $1,259,780), with $nil of the loss related
to a reversal of uncrystallized performance allocation from Ordinary
Shareholders to the Performance Allocation Share Class (31 December 2024:
$2,756,842).
Cash, cash equivalents, and restricted cash
Cash represents cash deposits held at financial institutions. Cash equivalents
include short-term highly liquid investments of sufficient credit quality that
are readily convertible to known amounts of cash and have original maturities
of three months or less. Cash equivalents are carried at cost plus accrued
interest, which approximates fair value. Cash equivalents are held for the
purpose of meeting short-term liquidity requirements, rather than for
investment purposes. As at 30 June 2025 and 31 December 2024, the Group had no
cash equivalents.
Restricted cash is subject to a legal or contractual restriction by third
parties as well as a restriction as to withdrawal or use, including
restrictions that require the funds to be used for a specified purpose and
restrictions that limit the purpose for which the funds can be used. The Group
considers cash pledged as collateral for securities sold short, cash
collateral posted with counterparties for derivative contracts and further
amounts due from brokers to be restricted cash, as outlined in Note 3.
Fair value - definition and hierarchy
Fair value is defined as the price that would be received to sell an asset or
paid to transfer a liability (i.e. the 'exit price') in an orderly transaction
between market participants at the measurement date.
In determining fair value, the Group uses various valuation techniques. A fair
value hierarchy for inputs is used in measuring fair value that maximizes the
use of observable inputs and minimizes the use of unobservable inputs by
requiring that the most observable inputs are to be used when available.
Observable inputs are those that market participants would use in pricing the
asset or liability based on market data obtained from sources independent of
the Group.
Unobservable inputs reflect the Group's assumptions about the inputs market
participants would use in pricing the asset or liability based on the best
information available in the circumstances. The fair value hierarchy is
categorised into three levels based on the inputs as follows:
Level 1 - Valuations based on unadjusted quoted prices in active markets for
identical assets or liabilities that the Group has the ability to access.
Valuation adjustments are not applied to Level 1 investments. Since valuations
are based on quoted prices that are readily and regularly available in an
active market, valuation of these investments does not entail a significant
degree of judgement.
Level 2 - Valuations based on inputs, other than quoted prices included in
Level 1, that are observable, either directly or indirectly.
Level 3 - Valuations based on inputs that are unobservable and significant to
the overall fair value measurement.
Investments in private investment companies measured using net asset value as
a practical expedient are not categorised in the fair value hierarchy.
The availability of valuation techniques and observable inputs can vary from
investment to investment and is affected by a wide variety of factors,
including the type of investment, whether the investment is new and not yet
established in the marketplace, and other characteristics particular to the
transaction. To the extent that valuation is based on models or inputs that
are less observable or unobservable in the market, the determination of fair
value requires more judgement. Those estimated values do not necessarily
represent the amounts that may be ultimately realised due to the occurrence of
future circumstances that cannot be reasonably determined. Because of the
inherent uncertainty of valuation, those estimated values may be materially
higher or lower than the values that would have been used had a ready market
for the investments existed. Accordingly, the degree of judgement exercised by
the Group in determining fair value is greatest for investments categorised in
Level 3. In certain cases, the inputs used to measure fair value may fall into
different levels of the fair value hierarchy. In such cases, for disclosure
purposes, the level in the fair value hierarchy within which the fair value
measurement falls in its entirety is determined based on the lowest level
input that is significant to the fair value measurement.
Fair value is a market-based measure considered from the perspective of a
market participant rather than an entity-specific measure. Therefore, even
when market assumptions are not readily available, the Group's own assumptions
are set to reflect those that market participants would use in pricing the
asset or liability at the measurement date. The Group uses prices and inputs
that are current as of the measurement date, including periods of market
dislocation. In periods of market dislocation, the observability of prices and
inputs may be reduced for many investments. This condition could cause an
investment to be reclassified to a lower level within the fair value
hierarchy.
Fair value - valuation techniques and inputs
Investments in securities and securities sold short
Listed investments
The Group values investments in securities including exchange traded funds and
securities sold short that are freely tradable and are listed on a national
securities exchange or reported on the NASDAQ national market at their closing
sales price as of the valuation date. To the extent these securities are
actively traded and valuation adjustments are not applied, they are
categorised in Level 1 of the fair value hierarchy. Securities traded on
inactive markets or valued by reference to similar instruments or where a
discount may be applied are categorised in Level 2 or 3 of the fair value
hierarchy.
Unlisted investments
Unlisted investments are valued at fair value by the Directors following a
detailed review and appropriate challenge of the valuations proposed by the
Investment Manager. As part of their valuation process, the Investment Manager
engages Independent Valuers to challenge their assessed fair value on certain
unlisted investments. The Investment Manager's unlisted investment valuation
policy applies techniques consistent with the IPEV Guidelines.
The valuation techniques applied are either a market-based approach, an income
approach such as discounted cash flows, or where available, a net asset value
practical expedient approach. A combination of the valuation techniques
mentioned may also be utilised. The IPEV Guidelines recognise that the price
of a recent transaction, if resulting from an orderly transaction, generally
represents fair value as at the transaction date and may be an appropriate
starting point for estimating fair value at subsequent measurement dates.
Consideration is given to the facts and circumstances as at the subsequent
measurement date including changes in the market and/or performance of the
investee company. Milestone analysis is used where appropriate to incorporate
operational progress at the investee company level. In addition, a trigger
event such as a subsequent round of financing by the investee company would
influence the market technique used to calibrate fair value at the measurement
date. Where appropriate, a probability-weighted expected return method
("PWERM") may be employed when different potential outcomes (e.g. IPO, round
of financing, stay private, dissolution, etc.) are utilised to derive the
value of investments held.
The market approach utilises guideline public companies relying on projected
revenues and/or earnings metrics to derive an indicative enterprise value. Due
to the nature of the investments, being in the early stages of development,
the projected revenues are typically used as a proxy for stable state revenue.
A selected multiple is then applied based on the observed market multiples of
the guideline public companies. To reflect the risk associated with the
achievement of the projected financial metrics and the early development stage
of each of the investments, the indicative enterprise value is discounted at
an appropriate rate.
The income approach utilises the discounted cash flow method. Projected cash
flows for each investment are discounted to determine the enterprise value.
Where applicable, the indicative enterprise value has been determined using a
back-solve model based on the pricing of the most recent round of financing.
The internal rate of return for each investment is compared to the selected
venture capital rate applied in the market approach to assess the
reasonableness of the indicated value implied by each financing round. The
derived enterprise value is allocated to the equity class on either a fully
diluted basis or using an option pricing model. The resulting indicative value
on a per share basis is then multiplied by the number of shares to derive the
fair market value.
American depository receipts
The Group values investments in American depositary receipts that are freely
tradable and are listed on a national securities exchange or reported on the
NASDAQ national market at their last reported sales price as of the valuation
date. These investments are categorised in Level 1 of the fair value
hierarchy.
Convertible notes
The Group values investments in convertible notes in accordance with the
unlisted investments section above. As of 30 June 2025, these investments are
all categorised in Level 3 of the fair value hierarchy.
Convertible preferred stock
The Group values Level 1 investments in convertible preferred stock that are
listed on a national securities exchange at their closing sales price as of
the valuation date. Level 2 investments in convertible preferred stock are
valued with certain adjustments to the underlying public stocks closing sales
price that is listed on a national securities exchange. Level 3 investments in
convertible preferred stock are valued in accordance with the unlisted
investments section above. As of 30 June 2025, these investments are
categorised in Level 3 of the fair value hierarchy.
Corporate bonds
The fair value of corporate bonds is estimated using recently executed
transactions, market price quotations (where observable), bond spreads, or
credit default swap spreads. The spread data used is for the same maturity as
the bond. If the spread data does not reference the issuer, then data that
references a comparable issuer is used. When observable price quotations are
not available, fair value is determined based on cash flow models using yield
curves, bond or single name credit default swap spreads, and recovery rates
based on collateral values as key inputs. As of 30 June 2025, these
investments are categorised in Level 3 of the fair value hierarchy.
Investment in private investment companies
The Group values investment in private investment companies using the net
asset values provided by the underlying private investment companies as a
practical expedient. The Group applies the practical expedient to its private
investment companies on an investment-by-investment basis and consistently
with the Group's entire position in a particular investment, unless it is
probable that the Group will sell a portion of an investment at an amount
different from the net asset value of the investment.
Private investment in public equity
Private investment in public equity ("PIPE") cannot be offered for sale to the
public until the issuer complies with certain statutory or contractual
requirements. Such securities traded on inactive markets or valued by
reference to similar instruments or where a discount may be applied are
generally categorised in Level 2. However, to the extent that significant
inputs used to determine liquidity discounts are unobservable, PIPE may be
categorized in Level 3 of the fair value hierarchy. As of 30 June 2025, these
investments are categorised in Level 2 of the fair value hierarchy and are
recognised as warrants within the Schedule of Investments.
Revenue Based Financing Agreement
These represent structured, non-dilutive financing alternatives for businesses
seeking to raise capital in lieu typically of issuing equity. The Group may
enter into a contract with an undertaking that owns the revenue interest in
one or more healthcare products and such undertaking also typically plays the
principal role in commercialization, marketing and sales of such product or
products. This contract entitles the Group to receive a share of revenue from
a stream of cash flow payments based on the sales of such product or products.
The valuation is based on an income approach utilizing management's internal
projections or sell-side equity research analysts' consensus estimates in the
absence of adequate brokerage analyst coverage. The projections take into
account contractual terms specific to each revenue based financing investment
and are present valued based on a discount rate based on the prime rate
adjusted for additional investment-specific risk that aligns to the debt-like
nature of the projected cash flows specific to the Group. As of 30 June 2025,
these investments are categorised in Level 3 of the fair value hierarchy.
Derivative contracts
Equity swaps
Equity swaps may be centrally cleared or traded on the over-the-counter
market. The fair value of equity swaps is calculated based on the terms of the
contract and current market data, such as changes in fair value of the
reference asset. The fair value of equity swaps is generally categorised in
Level 2 of the fair value hierarchy.
Warrants
Warrants that are listed on major securities exchanges are valued at their
last reported sales price as of the valuation date. The fair value of
over-the-counter ("OTC") warrants is determined using the Black-Scholes option
pricing model, a valuation technique that follows the income approach. This
pricing model takes into account the contract terms (including maturity) as
well as multiple inputs, including time value, implied volatility, equity
prices, interest rates and currency rates. Warrants are categorised in all
levels of the fair value hierarchy.
Contingent value rights
Contingent value rights that are not traded on an organized facility are
valued using a market approach or such other analysis and information as the
Group may determine. As of 30 June 2025, these investments are categorised in
Level 3 of the fair value hierarchy.
Fair value - valuation processes
The Group establishes valuation processes and procedures to ensure that the
valuation techniques are fair and consistent, and valuation inputs are
supportable. The Group designates the Investment Manager's Valuation Committee
to oversee the entire valuation process of the Group's investments. The
Valuation Committee comprises various members of the Investment Manager,
including those separate from the Group's portfolio management and trading
functions, and reports to the Board.
The Valuation Committee is responsible for developing the Group's written
valuation processes and procedures, conducting periodic reviews of the
valuation policies, and evaluating the overall fairness and consistent
application of the valuation policies.
The Investment Manager's Valuation Committee meets on a monthly basis or more
frequently, as needed, to determine the valuations of the Group's Level 3
investments. Valuations determined by the Valuation Committee are required to
be supported by market data, third-party pricing sources, industry-accepted
pricing models, counterparty prices or other methods they deem to be
appropriate, including the use of internal proprietary pricing models.
The Group periodically tests its valuations of Level 3 investments by
performing back-testing. Back-testing involves the comparison of sales
proceeds of those investments to the most recent fair values reported and, if
necessary, uses the findings to recalibrate its valuation procedures.
On a regular basis, the Group engages the services of third-party valuation
firms, the Independent Valuers, to perform an independent review of the
valuation of the Group's Level 3 investments and the Group may adjust its
valuations based on the recommendations from the Investment Manager's
Valuation Committee.
Translation of foreign currency
Assets and liabilities denominated in foreign currencies are translated into
United States Dollar amounts at the year end exchange rates. Transactions
denominated in foreign currencies, including purchases and sales of
investments, and income and expenses, are translated into United States Dollar
amounts on the transaction date. Adjustments arising from foreign currency
transactions are reflected in the unaudited interim consolidated statement of
operations.
The Group does not isolate that portion of the results of operations arising
from the effect of changes in foreign exchange rates on investments from
fluctuations arising from changes in market prices of investments held. Such
fluctuations are included in net realised and change in unrealised gain/(loss)
on securities, derivatives and foreign currency transactions in the
consolidated statement of operations.
Reported net realised gain/(loss) from foreign currency transactions arise
from sales of foreign currencies; currency gains or losses realised between
the trade and settlement dates on securities transactions; and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Group's books and the United States Dollar equivalent of the
amounts actually received or paid.
Net change in unrealised gain/(loss) from foreign currency translation of
assets and liabilities arises from changes in the fair values of assets and
liabilities, other than investments in securities at the end of the period,
resulting from changes in exchange rates.
Investment transactions and related investment income
Investment transactions are accounted for on a trade date basis. Realised
gains and losses on investment transactions have been calculated on a specific
identification method.
Dividends are recorded on the ex-dividend date and interest is recognised on
the accrual basis.
Withholding taxes on foreign dividends have been provided for in accordance
with the Group's understanding of the applicable country's rules and rates.
Offsetting of amounts related to certain contracts
Amounts due from and to brokers are presented on a net basis, by counterparty,
to the extent the Group has the legal right to offset the recognised amounts
and intends to settle on a net basis.
The Group has elected not to offset fair value amounts recognised for cash
collateral receivables and payables against fair value amounts recognised for
derivative positions executed with the same counterparty under the same master
netting arrangement. At 30 June 2025, the Group had cash collateral
receivables of $39,415,944 (31 December 2024: $23,390,565) (see Note 3) with
derivative counterparties under the same master netting arrangement.
Income taxes
The Company and Subsidiary are exempt from taxation in Guernsey and were each
charged an annual exemption fee of GBP 1,600 (2024: GBP 1,600). The Group will
only be liable to tax in Guernsey in respect of income arising or accruing
from a Guernsey source, other than from a relevant bank deposit. It is not
anticipated that such Guernsey source taxable income will arise. The Group is
managed so as not to be resident in the UK for UK tax purposes.
The Group recognises tax benefits of uncertain tax positions only where the
position is more likely than not to be sustained assuming examination by a tax
authority based on the technical merits of the position. In evaluating whether
a tax position has met the recognition threshold, the Group must presume the
position will be examined by the appropriate taxing authority and that taxing
authority has full knowledge of all relevant information. A tax position
meeting the more likely than not recognition threshold is measured to
determine the amount of benefit to recognise in the Group's unaudited interim
consolidated financial statements. Income tax and related interest and
penalties would be recognised as a tax expense in the unaudited interim
consolidated statement of operations if the tax position was deemed to meet
the more likely than not threshold.
The Investment Manager has analysed the Group's tax positions and has
concluded no liability for unrecognised tax benefits should be recorded
related to uncertain tax positions. Further, management is not aware of any
tax positions for which it is reasonably possible the total amounts of
unrecognised tax benefits will significantly change in the next twelve months.
The Company, UK Subsidiary, Subsidiary, and SPV each file income tax returns
in the US federal jurisdiction and, as applicable, in US state or local
jurisdictions, or non-US jurisdictions. Generally, the Group was subject to
income tax examinations by major taxing authorities for each tax period since
inception. Based on its analysis, the Group determined that it had not
incurred any liability for unrecognised tax benefits as of 30 June 2025 or 31
December 2024.
Use of estimates
Preparing unaudited interim consolidated financial statements in accordance
with US GAAP requires management to make estimates and assumptions in
determining the reported amounts of assets and liabilities, including the fair
value of investments, and disclosure of contingent assets and liabilities as
of the date of the unaudited interim consolidated financial statements and the
reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
2. Fair value measurements
The Group's assets and liabilities recorded at fair value have been
categorised based upon a fair value hierarchy as described in the Group's
significant accounting policies in Note 1.
The following table presents information about the Group's assets and
liabilities measured at fair value as of 30 June 2025:
Level 1 Level 2 Level 3 Investments measured at net asset value* Total
Assets (at fair value)
Investments in securities
Common stocks 320,947,683 109,967 9,035,930 - 330,093,580
Convertible preferred stocks - - 132,392,027 - 132,392,027
American depository receipts 66,943,228 - - - 66,943,228
Convertible notes - - 56,230,080 - 56,230,080
Investment in private
investment companies - - - 17,624,249 17,624,249
Revenue based financing
agreement - - 186,910 - 186,910
Corporate bonds - - - - -
Total investments in securities 387,890,911 109,967 197,844,947 17,624,249 603,470,074
Derivative contracts
Warrants 308 94,938,244 20,692 - 94,959,244
Equity swaps - 22,113,533 - - 22,113,533
Contingent value rights - - 1,697,725 - 1,697,725
Total derivative contracts 308 117,051,777 1,718,417 - 118,770,502
387,891,219 117,161,744 199,563,364 17,624,249 722,240,576
Liabilities (at fair value)
Securities sold short
Common stocks 115,696,794 - - - 115,696,794
American depository receipts 10,606,986 - - - 10,606,986
Total securities sold short 126,303,780 - - - 126,303,780
Derivative contracts
Equity swaps - 4,875,333 - - 4,875,333
Total derivative contracts - 4,875,333 - - 4,875,333
126,303,780 4,875,333 - - 131,179,113
* The Group's investment in private investment companies that are valued at
their net asset value are not categorised within the fair value hierarchy.
The following table presents information about the Group's assets and
liabilities measured at fair value as of 31 December 2024:
Level 1 Level 2 Level 3 Investments measured at net asset value* Total
Assets (at fair value)
Investments in securities
Common stocks 362,223,884 266,171 1,457,470 - 363,947,525
Convertible preferred stocks - - 164,325,035 - 164,325,035
Convertible notes - - 32,744,748 - 32,744,748
American depository receipts 30,724,375 - - - 30,724,375
Investment in private
investment companies - - - 19,094,800 19,094,800
Revenue based financing
agreement - - 174,613 - 174,613
Corporate bonds - - - - -
Total investments in securities 392,948,259 266,171 198,701,866 19,094,800
611,011,096
Derivative contracts
Warrants 367 87,127,278 919,671 - 88,047,316
Equity swaps - 20,526,482 - - 20,526,482
Contingent value rights - - 1,603,374 - 1,603,374
Total derivative contracts 367 107,653,760 2,523,045 - 110,177,172
392,948,626 107,919,931 201,224,911 19,094,800 721,188,268
Liabilities (at fair value)
Securities sold short
Common stocks 94,837,287 - - - 94,837,287
American depository receipts 314,206 - - - 314,206
Total securities sold short 95,151,493 - - - 95,151,493
Derivative contracts
Equity swaps - 7,799,422 - - 7,799,422
Total derivative contracts - 7,799,422 - - 7,799,422
95,151,493 7,799,422 - - 102,950,915
* The Group's investment in private investment companies that are valued at
their net asset value are not categorised within the fair value hierarchy.
The following tables summarise the valuation techniques and significant
unobservable inputs used for the Group's investments that are categorised
within Level 3 of the fair value hierarchy as of 30 June 2025 and 31 December
2024:
Fair value at 30 June 2025 Valuation techniques Significant unobservable inputs Range of inputs
Assets (at fair value)
Investments in securities
Convertible preferred stocks 72,030,588 Recent transaction price n/a n/a
41,189,623 Probability-weighted expected return method ("PWERM") WACC 30%
Revenue multiples 4.0x
Market step-up multiple 0.5x - 1.3x
Market rate of returns (20%) - 0%
19,162,793 Discounted cash flow WACC 15% - 31%
and/or market approach Revenue multiples 3.3x - 4.0x
Market rate of returns (13%) - 10%
9,023 Liquidation value n/a n/a
Convertible notes 48,213,825 PWERM Discount rate 6% - 9%
Market step-up multiple 0.5x - 0.7x
Market rate of returns 0%
Expected volatility 60%
8,016,255 Recent transaction price Interest rate 7% - 12%
Common stocks 8,501,327 Market approach EBITDA multiples 3.0x - 6.5x
Revenue multiples 0.5x - 1.7x
Market rate of returns (30%)
372,115 Probability-weighted expected return method ("PWERM") Market step-up multiple 0.5x - 0.7x
162,488 Liquidation value n/a n/a
Revenue interest financing 186,910 Discounted cash flow WACC 27%
and/or market approach
Total investments in securities 197,844,947
Derivative contracts
Contingent value rights 1,697,725 Recent transaction price n/a n/a
Warrants 20,692 Option pricing model Expected volatility 40%
Total derivative contracts 1,718,417
Fair value at 31 December 2024 Valuation techniques Significant unobservable inputs Range of inputs
Assets (at fair value)
Investments in securities
Convertible preferred stocks 56,837,402 Recent transaction price n/a n/a
37,870,153 Discounted cash flow WACC 10% - 31%
and/or market approach Revenue multiples 2.0x - 4.0x
Market rate of returns (13%) - 15%
69,559,998 Probability-weighted expected return method ("PWERM") WACC 10% - 20%
Revenue multiples 4.0x
Market step-up multiple 0.8x - 2.1x
Market rate of returns (5%) - 5%
57,482 Liquidation value n/a n/a
Convertible notes 32,156,487 PWERM Discount rate 6% -12%
Market step-up multiple 0.9x - 1.2x
Market rate of returns (5%) - 5%
Expected volatility 60%
588,261 Recent transaction price n/a n/a
Common stocks 246,828 Recent transaction price n/a n/a
375,605 Liquidation value n/a n/a
835,037 Probability-weighted expected return method ("PWERM") Market step-up multiple Market Rate of Returns 0.9x - 1.2x
5% - 5%
Revenue interest financing 174,613 Discounted cash flow WACC 28% - 28%
and/or market approach
Total investments in securities 198,701,866
Derivative contracts
Contingent value rights 1,603,374 Recent transaction price n/a n/a
Warrants 919,671 Discounted cash flow Expected volatility 40%
and/or market approach
and option pricing model
Total derivative contracts 2,523,045
The significant unobservable inputs used in the fair value measurements of
Level 3 common stock, convertible preferred stocks, convertible notes, and
warrants include, but are not limited to, WACC, revenue and/or earnings
multiple, market rate of return, and expected volatility. Increases in the
WACC in isolation would result in a lower fair value for the security, and
vice versa. Increases in multiples and/or market rate of returns in isolation
would result in a higher fair value of the security, and vice versa. A change
in volatility in isolation could result in a higher or lower fair value for
the security.
The below table presents additional information about Level 3 assets and
liabilities measured at fair value. Both observable and unobservable inputs
may be used to determine the fair value of positions that the Group has
classified within the Level 3 category. As a result, the unrealised gains and
losses for assets and liabilities within the Level 3 category may include
changes in fair value that were attributable to both observable and
unobservable inputs.
Changes in Level 3 assets and liabilities measured at fair value for the
period ended 30 June 2025 were as follows:
Balance beginning 1 January 2025 Realised gains/ (losses)((a)) (unaudited) Change in Unrealised gains/ (losses)((a)) Purchases Sales Transfers into/(from) Level 3((b)) Ending balance 30 June 2025
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Assets (at fair value)
Investments in securities
Common stocks 1,457,470 (2,084,260) 2,762,723 6,899,997 - - 9,035,930
Convertible preferred stocks
164,325,035 - (39,204,397) 14,697,022 - (7,425,633) 132,392,027
Convertible notes 32,744,748 - (952,286) 28,501,294 - (4,063,676) 56,230,080
Revenue based financing agreement
174,613 - 12,297 - - - 186,910
Total investments in securities
198,701,866 (2,084,260) (37,381,663) 50,098,313 - (11,489,309) 197,844,947
Derivative contracts
Warrants 919,671 - (272,312) - - (626,667) 20,692
Contingent value rights
1,603,374 - 94,351 - - - 1,697,725
Total derivative contracts
2,523,045 - (177,961) - - (626,667) 1,718,417
Changes in Level 3 assets and liabilities measured at fair value for the year
ended 31 December 2024 were as follows:
Balance beginning 1 January 2024 Realised gains/ (losses)((a)) (audited) Change in Unrealised gains/ (losses)((a)) (audited) Purchases Sales Transfers into/(from) Level 3((c)) Ending balance 31 December 2024
(audited) (audited) (audited) (audited) (audited)
Assets (at fair value)
Investments in securities
Common stocks 904,339 3,423,828 (8,477,436) 9,030,018 (4,897,750) 1,474,471 1,457,470
Convertible preferred stocks
73,189,264 - 32,032,300 67,196,769 - (8,093,298) 164,325,035
Convertible notes 7,983,390 83,537 (570,999) 27,016,689 (1,768,682) 813 32,744,748
Revenue based financing agreement
- - 13,882 160,731 - - 174,613
Total investments in securities
82,076,993 3,507,365 22,997,747 103,404,207 (6,666,432) (6,618,014) 198,701,866
Derivative contracts
Warrants 697,472 - 221,386 - - 813 919,671
Contingent value rights
541,706 812,225 430,401 466,419 (812,225) 164,848 1,603,374
Total derivative contracts
1,239,178 812,225 651,787 466,419 (812,225) 165,661 2,523,045
((a)) Realised and unrealised gains and losses are included in net realised
and change in unrealised gain/(loss) on investments, derivatives and foreign
currency transactions in the unaudited interim consolidated statement of
operations.
((b)) Conversions of convertible preferred stock, convertible notes and
warrants into common stock.
((c)) Includes conversions of preferred stock into common stock.
Changes in Level 3 unrealised gains and losses during the period for assets
still held at period end were as follows:
30 June 2025 31 December 2024
(unaudited) (audited)
Common stocks (83,822) (8,477,436)
Convertible notes (150,741) (570,999)
Convertible preferred stocks (39,504,173) 32,081,173
Revenue Based Financing Agreement 12,297 13,882
Contingent value rights 94,351 430,401
Warrants 441 221,386
Change in unrealised gains and losses during the period for assets still held (39,631,647) 23,698,407
at period end
Total realised gains and losses and unrealised gains and losses in the Group's
investment in securities, derivative contracts and securities sold short are
made up of the following gain and loss elements:
30 June 2025 31 December 2024
(unaudited) (audited)
Realised gains 44,711,130 96,931,839
Realised losses (41,533,886) (60,671,005)
Net realised gain on securities, derivative contracts and securities sold 3,177,244 36,260,834
short
30 June 2025 31 December 2024
(unaudited) (audited)
Change in unrealised gains 89,952,235 190,826,387
Change in unrealised losses (153,207,092) (184,163,957)
Net change in unrealised gain/(loss) on securities, derivative contracts and (63,254,857) 6,662,430
securities sold short
As at 30 June 2025, the Group had commitments (subject to completion of
certain parameters) to certain investments totalling $64,519,029 (31 December
2024: $22,390,694), which was mainly comprised of a $28,866,620 commitment to
Corxel (31 December 2024: $14,651,294 commitment to the 4010 Royalty Fund).
3. Due to/from brokers
Due to/from brokers includes cash balances held with brokers and collateral on
derivative transactions. Amounts due from brokers may be restricted to the
extent that they serve as deposits for securities sold short or cash posted as
collateral for derivative contracts.
As at 30 June 2025, due from brokers totalled $39,645,459 (31 December 2024:
$27,990,478). Included within due from brokers is $229,515 (31 December 2024:
$4,599,913) which can be used for investment. The Group pledged cash
collateral to counterparties to over-the-counter derivative contracts of
$39,415,944 (31 December 2024: $23,390,565) which is included in due from
brokers.
In the normal course of business, substantially all of the Group's securities
transactions, money balances, and security positions are transacted with the
Group's prime brokers and counterparties, Goldman Sachs & Co. LLC, Cowen
Financial Products, LLC, UBS AG, Bank of America Merrill Lynch, Morgan Stanley
& Co. LLC, Jefferies & Co. and J.P. Morgan Securities, LLC. The Group
is subject to credit risk to the extent any broker with which it conducts
business is unable to fulfil contractual obligations on its behalf. The
Group's management monitors the financial condition of such brokers and does
not anticipate any losses from these counterparties.
4. Derivative contracts
In the normal course of business, the Group utilises derivative contracts in
connection with its proprietary trading activities. Investments in derivative
contracts are subject to additional risks that can result in a loss of all or
part of an investment. The Group's derivative activities and exposure to
derivative contracts are classified by the primary underlying risk, equity
price risk and foreign currency exchange rate risk. In addition to its primary
underlying risk, the Group is also subject to additional counterparty risk due
to the inability of its counterparties to meet the terms of their contracts.
Warrants
The Group may receive warrants from its portfolio companies upon an investment
in the debt or equity of a portfolio company. The warrants provide the Group
with exposure and potential gains upon equity appreciation of the portfolio
company's share price.
The value of a warrant has two components: time value and intrinsic value. A
warrant has a limited life and expires on a certain date. As time to the
expiration date of a warrant approaches, the time value of a warrant will
decline. In addition, if the stock underlying the warrant declines in price,
the intrinsic value of an "in the money" warrant will decline. Further, if the
price of the stock underlying the warrant does not exceed the strike price of
the warrant on the expiration date, the warrant will expire worthless. As a
result, there is the potential for the Group to lose its entire investment in
a warrant.
The Group is exposed to counterparty risk from the potential failure of an
issuer of warrants to settle its exercised warrants. The maximum risk of loss
from counterparty risk to the Group is the fair value of the contracts and the
purchase price of the warrants. The Group considers the effects of
counterparty risk when determining the fair value of its investments in
warrants.
Equity swap contracts
The Group is subject to equity price risk in the normal course of pursuing its
investment objectives. The Group may enter into equity swap contracts either
to manage its exposure to the market or certain sectors of the market, or to
create exposure to certain equities to which it is otherwise not exposed.
Equity swap contracts involve the exchange by the Group and a counterparty of
their respective commitments to pay or receive a net amount based on the
change in the fair value of a particular security or index and a specified
notional amount.
Contingent value rights
The Group may receive contingent value rights during mergers, acquisitions, or
divestitures. Contingent value rights are designed to provide the Group with
additional compensation or benefits contingent upon the occurrence of specific
future events, such as regulatory approvals, milestones related to product
development or commercialization, or the achievement of certain financial
targets. Contingent value rights are subject to the uncertainty of payout, as
their value hinges on the occurrence of specific events. The Group considers
the uncertainty when determining the fair value of its investments in
contingent value rights.
Volume of derivative activities
The Group considers the average month-end notional amounts during the period,
categorised by primary underlying risk, to be representative of the volume of
its derivative activities during the period ended 30 June 2025:
30 June 2025 (unaudited) 31 December 2024 (audited)
Long exposure Short exposure Long exposure Short exposure
Primary underlying risk Notional amounts Notional amounts Notional amounts Notional amounts
Equity price
Warrants((a)) 97,082,186 - 60,394,443 30,266,515
Equity swaps 63,468,850 41,794,079 92,282,619 -
Contingent value rights 2,031,649 - 2,070,315 -
162,582,685 41,794,079 154,747,377 30,266,515
((a)) Notional amounts presented for warrants are based on the fair value of
the underlying shares as if the warrants were exercised at each respective
month end date.
Impact of derivatives on the unaudited interim consolidated statement of
assets and liabilities and unaudited interim consolidated statement of
operations
The following tables identify the fair value amounts of derivative instruments
included in the unaudited interim consolidated statement of assets and
liabilities as derivative contracts, categorised by primary underlying risk,
at 30 June 2025 and 31 December 2024. The following table also identifies the
gain and loss amounts included in the unaudited interim consolidated statement
of operations as net realised gain/(loss) on derivative contracts and net
change in unrealised gain/(loss) on derivative contracts, categorised by
primary underlying risk, for the periods ended 30 June 2025 and 30 June 2024.
30 June 2025 (unaudited)
Primary underlying risk Derivative assets Derivative liabilities Realised gain/(loss) Change in unrealised gain/(loss)
Equity price
Warrants 94,959,244 - (3,171) (14,034,141)
Equity swaps 22,113,533 4,875,333 4,196,616 4,511,140
Contingent value rights 1,697,725 - - 94,351
118,770,502 4,875,333 4,193,445 (9,428,650)
31 December 2024 (audited) 30 June 2024 (unaudited)
Primary underlying risk Derivative assets Derivative liabilities Realised gain/(loss) Change in unrealised gain/(loss)
Equity price
Warrants 88,047,316 - (19,848) 51,901,210
Equity swaps 20,526,482 7,799,422 5,175,290 11,672,409
Contingent value rights 1,603,374 - - (190,167)
110,177,172 7,799,422 5,155,442 63,383,452
5. Securities lending agreements
The Group has entered into securities lending agreements with its prime
brokers. From time to time, the prime brokers lend securities on the Group's
behalf. As of 30 June 2025 and 31 December 2024, no securities were loaned and
no collateral was received.
6. Offsetting assets and liabilities
The Group is required to disclose the impact of offsetting assets and
liabilities represented in the unaudited interim consolidated statement of
assets and liabilities to enable users of the unaudited interim consolidated
financial statements to evaluate the effect or potential effect of netting
arrangements on its financial position for recognised assets and liabilities.
These recognised assets and liabilities are financial instruments and
derivative instruments that are either subject to an enforceable master
netting arrangement or similar agreement or meet the following right of setoff
criteria: the amounts owed by the Group to another party are determinable, the
Group has the right to offset the amounts owed with the amounts owed by the
other party, the Group intends to offset and the Group's right of setoff is
enforceable by law.
As of 30 June 2025 and 31 December 2024, the Group held financial instruments
and derivative instruments that were eligible for offset in the unaudited
interim consolidated statement of assets and liabilities and are subject to a
master netting arrangement. The master netting arrangement allows the
counterparty to net applicable collateral held on behalf of the Group against
applicable liabilities or payment obligations of the Group to the
counterparty. These arrangements also allow the counterparty to net any of its
applicable liabilities or payment obligations they have to the Group against
any collateral sent to the Group.
As discussed in Note 1, the Group has elected not to offset assets and
liabilities in the unaudited interim consolidated statement of assets and
liabilities. The following table presents the potential effect of netting
arrangements for asset derivative contracts presented in the unaudited interim
consolidated statement of assets and liabilities:
Gross amounts of recognised assets Gross amounts offset in the unaudited interim consolidated statement of assets Gross amounts of recognised assets 30 June 2025 (unaudited)
and liabilities
Gross amounts not offset in the unaudited interim consolidated statement of
assets and liabilities
Description
Financial instruments((a)) Cash collateral received((b)) Net amount
Equity swaps
Cowen Financial Products, LLC - -
9,179,525 9,179,525 (1,822,632) 7,356,893
Morgan Stanley & Co. LLC 6,687,430 - 6,687,430 (2,196,362) - 4,491,068
Bank of America Merrill Lynch - - 5,083,818
5,084,820 5,084,820 (1,002)
Jefferies & Co. 1,093,123 - 1,093,123 (845,554) - 247,569
J.P. Morgan Securities, LLC 68,635 - 68,635 - - 68,635
22,113,533 - 22,113,533 (4,865,550) - 17,247,983
Gross amounts of recognised assets Gross amounts offset in the consolidated statement of assets and liabilities Gross amounts of recognised assets 31 December 2024 (audited)
Gross amounts not offset in the consolidated statement of
assets and liabilities
Description
Financial instruments((a)) Cash collateral received((b)) Net amount
Equity swaps
Cowen Financial Products, LLC - - 7,337,474
11,004,397 11,004,397 (3,666,923)
Morgan Stanley & Co. LLC 5,639,240 - 5,639,240 (2,056,637) - 3,582,603
Bank of America Merrill Lynch - - 3,411,296
3,411,345 3,411,345 (49)
Jefferies & Co. 471,500 - 471,500 (471,500) - -
20,526,482 - 20,526,482 (6,195,109) - 14,331,373
((a)) Amounts related to master netting agreements (e.g. ISDA), determined by
the Group to be legally enforceable in the event of default and if certain
other criteria are met in accordance with applicable offsetting accounting
guidance but were not offset due to management's accounting policy election.
( )
((b)) Amounts related to master netting agreements and collateral agreements
determined by the Group to be legally enforceable in the event of default, but
certain other criteria are not met in accordance with applicable offsetting
accounting guidance. The collateral amounts may exceed the related net amounts
of financial assets and liabilities presented in the unaudited interim
consolidated statement of assets and liabilities. If this is the case, the
total amount reported is limited to the net amounts of financial assets and
liabilities with that counterparty.
The following tables present the potential effect of netting arrangements for
liability derivative contracts presented in the unaudited interim consolidated
statement of assets and liabilities as of 30 June 2025 and audited
consolidated statement of assets and liabilities 31 December 2024:
Gross amounts of recognised liabilities Gross amounts offset in the consolidated statement of assets and liabilities Gross amounts of recognised liabilities 30 June 2025 (unaudited) Net amount
Gross amounts not offset in the unaudited interim consolidated statement of
assets and liabilities
Description
Financial instruments((a)) Cash collateral pledged((b))
Equity swaps
Morgan Stanley & Co. LLC 2,196,362 - 2,196,362 (2,196,362) - -
Cowen Financial Products, LLC - - -
1,822,632 1,822,632 (1,822,632)
Jefferies & Co. 845,554 - 845,554 (845,554) - -
Goldman Sachs 9,783 - 9,783 - - 9,783
Bank of America Merrill Lynch - - -
1,002 1,002 (1,002)
4,875,333 - 4,875,333 (4,865,550) - 9,783
Gross amounts of recognised liabilities Gross amounts offset in the consolidated statement of assets and liabilities Gross amounts of recognised liabilities 31 December 2024 Net amount
Gross amounts not offset in the consolidated statement of
assets and liabilities
Description
Financial instruments((a)) Cash collateral pledged((b))
Equity swaps
Cowen Financial Products, LLC - - -
3,666,923 3,666,923 (3,666,923)
Jefferies & Co. 2,069,804 - 2,069,804 (471,500) (1,598,304) -
Morgan Stanley & Co. LLC 2,056,637 - 2,056,637 (2,056,637) - -
J.P. Morgan Securities, LLC - - 6,009
6,009 6,009 -
Bank of America Merrill Lynch - - -
49 49 (49)
7,799,422 - 7,799,422 (6,195,109) (1,598,304) 6,009
((a)) Amounts related to master netting agreements (e.g. ISDA), determined by
the Group to be legally enforceable in the event of default and if certain
other criteria are met in accordance with applicable offsetting accounting
guidance but were not offset due to management's accounting policy election.
((b)) Amounts related to master netting agreements and collateral agreements
determined by the Group to be legally enforceable in the event of default, but
certain other criteria are not met in accordance with applicable offsetting
accounting guidance. The collateral amounts may exceed the related net amounts
of financial assets and liabilities presented in the unaudited interim
consolidated statement of assets and liabilities. If this is the case, the
total amount reported is limited to the net amounts of financial assets and
liabilities with that counterparty.
7. Securities sold short
The Group is subject to certain inherent risks arising from its investing
activities of selling securities short. The ultimate cost to the Group to
acquire these securities may exceed the liability reflected in these unaudited
interim consolidated financial statements.
8. Risk factors
Some underlying investments may be deemed to be highly speculative investments
and are not intended as a complete investment program. The Company is designed
only for sophisticated persons who are able to bear the economic risk of the
loss of their entire investment in the Company and who have a limited need for
liquidity in their investment. The following risks are applicable to the
Company:
Market risk
Certain events particular to each market in which Portfolio Companies conduct
operations, as well as general economic and political conditions, may have a
significant negative impact on the operations and profitability of the Group's
investments and/or on the fair value of the Group's investments. Such events
are beyond the Group's control, and the likelihood they may occur and the
effect on the Group cannot be predicted. The Group intends to mitigate market
risk generally by investing in Medtech and Biotech Companies in various
geographies.
Portfolio Company products are subject to regulatory approvals and actions
with new drugs, medical devices and procedures being subject to extensive
regulatory scrutiny before approval, and approvals can be revoked.
The market value of the Group's holdings in public Portfolio Companies could
be affected by a number of factors, including, but not limited to: a change in
sentiment in the market regarding the public Portfolio Companies, the market's
appetite for specific asset classes; and the financial or operational
performance of the public Portfolio Companies.
The size of investments in public Portfolio Companies or involvement in
management may trigger restrictions on buying or selling securities. Laws and
regulations relating to takeovers and inside information may restrict the
ability of the Group to carry out transactions, or there may be delays or
disclosure requirements before transactions can be completed.
Equity prices and returns from investing in equity markets are sensitive to
various factors, including but not limited to: expectations of future
dividends and profits; economic growth; exchange rates; interest rates; and
inflation.
Biotech/healthcare companies
The Portfolio Companies are biotechnology and medical technology companies,
which are generally subject to greater governmental regulation than other
industries at both the state and federal levels. Changes in governmental
policies may have a material effect on the demand for or costs of certain
products and services.
Any failure by a Portfolio Company to develop new technologies or to
accurately evaluate the technical or commercial prospects of new technologies
could result in it failing to achieve a growth in value and this could have a
material adverse effect on the Group's financial condition.
Portfolio Companies may not successfully translate promising scientific theory
into a commercially viable business opportunity. Further, the Portfolio
Companies' therapies in development may fail clinical trials and therefore no
longer be viable.
Portfolio Company products are subject to intense competition and there are
many factors that will affect whether the new therapies released by the
Portfolio Companies gain market share against competitors and existing
therapies.
Portfolio Companies may be newer small and mid-size Medtech and Biotech
Companies. These companies may be more volatile and have less experience and
fewer resources than more established companies.
Concentration risk
The Group may not make an investment or a series of investments in a Portfolio
Company that result in the Group's aggregate investment in such Portfolio
Company exceeding 15 per cent. of the Group's gross assets, save for Rocket
for which the limit is 25 per cent. as stated in the Company's Prospectus.
Each of these investment restrictions will be calculated as at the time of
investment. As such, it is possible that the Group's portfolio may be
concentrated at any given point in time, potentially with more than 15 per
cent. of gross assets held in one Portfolio Company as Portfolio Companies
increase or decrease in value following such initial investment. The Group's
portfolio of investments may also lack diversification among Medtech and
Biotech Companies and related investments.
Concentration of credit risk
In the normal course of business, the Group maintains its cash balances in
financial institutions, which at times may exceed US federal, Guernsey or UK
insured limits, as applicable. The Group is subject to credit risk to the
extent any financial institution with which it conducts business is unable to
fulfil contractual obligations on its behalf. Management monitors the
financial condition of such financial institutions and does not anticipate any
losses from these counterparties.
Counterparty risk
The Group invests in equity swaps and takes the risk of non-performance by the
other party to the contract. This risk may include credit risk of the
counterparty, the risk of settlement default, and generally, the risk of the
inability of counterparties to perform with respect to transactions, whether
due to insolvency, bankruptcy or other causes.
In an effort to mitigate such risks, the Group will attempt to limit its
transactions to counterparties which are established, well capitalised and
creditworthy.
Liquidity risk
Liquidity risk is the risk that the Group cannot meet its financial
commitments as they fall due. The Group's unquoted investments may have
limited or no secondary market liquidity so the Investment Manager maintains a
sufficient balance of cash and market quoted securities which can be sold if
needed to meet its commitments.
The Group's investments in quoted securities may also be subject to sale
restrictions on listing and when the Investment Manager is subject to close
periods or privy to confidential information by virtue of their active
involvement in the management of portfolio companies.
Derivative transactions may not be liquid in all circumstances, such that in
volatile markets it may not be possible to close out a position without
incurring a loss. The illiquidity of the derivatives markets may be due to
various factors, including congestion, disorderly markets, limitations on
deliverable supplies, the participation of speculators, government regulation
and intervention, and technical and operational or system failures.
Foreign exchange risk
The Group will make investments in various jurisdictions in a number of
currencies and will be exposed to the risk of currency fluctuations that may
materially adversely affect, amongst other things, the value of the Portfolio
Company or the Group's investment in such Portfolio Company, or any
distributions received from the Portfolio Company. Under its investment
policy, the Group does not intend to enter into any securities or financially
engineered products designed to hedge portfolio exposure or mitigate portfolio
risk as a core part of its investment strategy.
9. Share capital
During the period ended 30 June 2025, the Company share activity was as
follows:
30 June 2025 30 June 2025 31 December 2024 31 December 2024
(unaudited) (unaudited) (audited) (audited)
Number of Number of
Number of Number of Ordinary Shares Treasury Shares
Ordinary Shares Treasury Shares
As at 1 January 335,713,649 10,253,791 210,635,347 1,753,791
Share issuance - - 133,578,302 -
Share buyback (5,650,000) 5,650,000 (8,500,000) 8,500,000
As at 30 June/31 December 330,063,649 15,903,791 335,713,649 10,253,791
During the period ended 30 June 2025, the Company bought back 5,650,000 (31
December 2024: 8,500,000) Ordinary Shares at an average price of $1.19 (31
December 2024: $1.33) for a total cost of $6,708,388 (31 December 2024:
$11,340,306), including transaction costs of $10,147 (31 December 2024:
$22,861). At the date of approval of these consolidated financial statements,
all 15,903,791 of repurchased Ordinary Shares were held as treasury shares (31
December 2024: 10,253,791).
During the year ended 31 December 2024, the Company issued 181,901,165 new
shares to facilitate the acquisition of Arix Bioscience plc in an all‐share
transaction for $246,476,079 with associated issuance costs of $6,473,897. Of
the 181,901,165 new shares, 48,322,863, with a value of $59,221,117, were
issued to the Group as existing shareholders of Arix Bioscience plc, and were
subsequently cancelled. The details around this transaction are further
disclosed within the unaudited interim consolidated statement of cash flows
and within Note 1. No new shares were issued during the period ended 30 June
2025.
Ordinary Shares carry the right to receive all income of the Company
attributable to the Ordinary Shares and to participate in any distribution of
such income made by the Company. Such income shall be divided pari passu among
the holders of Ordinary Shares in proportion to the number of Ordinary Shares
held by them.
Ordinary Shares shall carry the right to receive notice of and attend and vote
at any general meeting of the Company, and at any such meeting on a show of
hands, every holder of Ordinary Shares present in person (includes present by
attorney or by proxy or, in the case of a corporate member, by duly authorised
corporate representative) and entitled to vote shall have one vote, and on a
poll, subject to any special voting powers or restrictions, every holder of
Ordinary Shares present in person or by proxy shall be entitled to one vote
for each Ordinary Share, or fraction of an Ordinary Share, held.
On 1 December 2022, the Performance Allocation Share held by RTW Venture
Performance LLC was surrendered in exchange for a New Performance Allocation
Share issued by the Subsidiary. The New Performance Allocation Share issued by
the Subsidiary has identical terms to the original Performance Allocation
Share issued by the Company. From 1 December 2022, the Performance Allocation
Amount is now allocated at the Subsidiary level, and is presented in the
Group's financial statements as part of the Non-Controlling Interest. The sole
New Performance Allocation Share is held by RTW Venture Performance LLC. As at
30 June 2025, there were no Performance Allocation Shares of the Company in
issue (31 December 2024: nil) and one New Performance Allocation Share of the
Subsidiary in issue (31 December 2024: one).
New Performance Allocation Shares of the Subsidiary carry the right to
receive, and participate in, any dividends or other distributions of the
Subsidiary available for dividend or distribution. New Performance Allocation
Shares are not entitled to receive notice of, to attend or to vote at general
meetings of the Company or the Subsidiary.
For all share classes, subject to compliance with the solvency test set out in
the Companies Law, the Board may declare and pay such annual or interim
dividends and distributions as appear to be justified by the position of the
Group. The Board may, in relation to any dividend or distribution, direct that
the dividend or distribution shall be satisfied wholly or partly by the
distribution of assets, and in particular of paid-up shares or reserves of any
nature as approved by the Group.
10. Related party transactions
Management Fee
The Investment Manager receives a monthly management fee, in advance, as of
the beginning of each month in an amount equal to 0.104% (1.25% per annum) of
the net assets of the Group (the "Management Fee"). For purposes of
determining the Management Fee, private investments will be valued at the fair
value. The Management Fee will be prorated for any period that is less than a
full month.
The Management Fees charged for the period ended 30 June 2025 amounted to
$3,668,870 (period ended 30 June 2024: $3,436,352) of which $nil (31 December
2024: $nil) was outstanding at the period end.
Performance Allocation
The Performance Allocation Share held by RTW Venture Performance LLC was
surrendered in exchange for a New Performance Allocation Share issued by the
Subsidiary. The New Performance Allocation Share issued by the Subsidiary has
identical terms to the original Performance Allocation Share issued by the
Company.
In respect of each Performance Allocation Period, the Performance Allocation
Amount shall be allocated at the Subsidiary level and disclosed on the Group's
financial statements within the Non-Controlling Interest, subject to the
satisfaction of a hurdle condition.
The Performance Allocation Amount relating to the Performance Allocation
Period, which is calculated solely at the Subsidiary, is an amount equal to:
((A-B) x C) x 20 per cent.
where:
A is the Adjusted Net Asset Value per Ordinary Share on the Calculation Date,
adjusted by:
adding back (i) the total net Distributions (if any) per Ordinary Share
(whether paid, or declared but not yet paid) during the Performance Allocation
Period; and (ii) any accrual for the Performance Allocation for the current
Performance Allocation Period reflected in the Net Asset Value per Ordinary
Share; and deducting any accretion in the Net Asset Value per Ordinary Share
resulting from either the issuance of Ordinary Shares at a premium or the
repurchase or redemption of Ordinary Shares at a discount during the
Performance Allocation Period;
B is the Adjusted Net Asset Value per Ordinary Share at the start of the
Performance Allocation Period; and
C is the time weighted average number of Ordinary Shares in issue during the
Performance Allocation Period.
The Hurdle Amount represents an 8 per cent. annualised compounded rate of
return in respect of the Adjusted Net Asset Value per Ordinary Share from the
start of the initial Performance Allocation Period through the then current
Performance Allocation Period.
The Performance Allocation Share Class can elect to receive the Performance
Allocation Amount in Ordinary Shares, cash, or a mixture of the two, subject
to a minimum 50% as Ordinary Shares. The Performance Allocation Share Class
entered into a letter agreement dated 21 April 2020, pursuant to which the
Performance Allocation Share Class agreed to defer distributions of Ordinary
Shares that would otherwise be distributed to the Performance Allocation Share
Class no later than 30 business days after the publication of the Group's
audited annual consolidated financial statements. Under that letter agreement,
such Ordinary Shares shall be distributed to the Performance Allocation Share
Class at such time or times as determined by the Boards of Directors of the
Group.
The Group will increase or decrease the amount owed to the Performance
Allocation Share Class based on its investment exposure to the Group's
performance had such Performance Ordinary Shares been so issued. The
Performance Allocation Amount for the period ended 30 June 2024 includes the
residual, undistributed Performance Allocation Amounts from prior years that
were previously converted into a total of 14,228,208 Notional Ordinary Shares.
These Notional Ordinary Shares are subject to market risk alongside the
Ordinary Shares and incurred a mark to market loss of $1,538,582 in 2025 (31
December 2024: mark to market loss of $1,259,780), which is included in
Performance Allocation within the unaudited interim consolidated statement of
changes in net assets. There was no reallocation of uncrystallized performance
allocation from Ordinary Shareholders to the Performance Allocation Share
Class related to the Group's performance in the period (31 December 2024:
reversal of $2,756,842).
Until the Group makes a distribution of Ordinary Shares to the Performance
Allocation Share Class, the Group will have an unsecured discretionary
obligation to make such distribution at such time or times as the Board of
Directors of the Group determines. RTW Venture Performance LLC has agreed to
the deferral of the distributions of the Subsidiary's Ordinary Shares in
connection with its own tax planning. The Group does not believe that the
deferral of such distributions to the Performance Allocation Share Class will
have any negative effects on holders of Ordinary Shares.
RTW Venture Performance LLC, an affiliate of the Investment Manager is a
member of the Performance Allocation Share Class and will therefore receive a
proportion of the Performance Allocation Amount. For the period ended 30 June
2025, the Board did not approve a cash distribution to the Performance
Allocation Share Class (period ended 30 June 2024: $nil). At the period end,
the Performance Allocation Share Class of the Subsidiary is reflected within
the Non-Controlling Interest balance of $24,183,942 (31 December 2024:
$25,722,524).
Other related party transactions
The Investment Manager is also refunded any research costs incurred on behalf
of the Group.
On 6 July 2023, the Group signed a capital commitment to 4010 Royalty Fund, a
private fund created and managed by RTW Investments, LP. At 30 June 2025,
$21,057,168 of the Group's $31,485,000 capital commitment remained unfunded
(31 December 2024: $14,651,294 of $25,000,000). No management or performance
fees are charged to the Group at the 4010 Royalty Fund.
Director fees and interests
One of the Directors of the Group, Stephanie Sirota, is also a partner and the
Chief Business Officer of the Investment Manager.
As at 30 June 2025, the number of Ordinary Shares held by each Director was as
follows:
30 June 2025 31 December 2024
(unaudited) (audited)
Number of Ordinary Shares Number of Ordinary Shares
William Simpson 255,000 200,000
Paul Le Page 178,000 128,000
William Scott 400,000 400,000
Nicola Blackwood - -
Stephanie Sirota 1,010,000 1,010,000
Roderick Wong is a major shareholder and a member of the Investment Manager.
Roderick Wong serves on the boards of the following investments: Rocket,
Corxel Pharmaceuticals, HSA2 Holdings, LLC and Yarrow Biotechnology. As at 30
June 2025, he held 50,356,880 Ordinary Shares in the Group (15.26% of the
Ordinary Shares in issue) (31 December 2024: 49,643,313, 14.79% of the
Ordinary Shares in issue).
The total Directors' fees expense for the period amounted to $151,927 (30 June
2024: $117,976) of which $80,101 was outstanding at 30 June 2025 (31 December
2024: $71,029) and is included within accrued expenses.
All of the Directors of the Company are also directors of the Subsidiary. Each
has served since the Subsidiary's incorporation on 23 November 2022, except
Baroness Blackwood, who was appointed a director of the Subsidiary alongside
her appointment as director of the Company on 11 July 2024. Stephanie Sirota
is also a director of the UK Subsidiary.
Incubated Companies
The Group invests in RTW incubated companies. Incubated companies are those
portfolio companies that are formed and supported by RTW ("Incubated
Companies"). Incubated Companies generally are small, emerging companies that
are unseasoned, unprofitable and/or have no established operating history or
earnings. These companies may also lack technical, marketing, financial and
other resources or may be dependent upon the success of one product or service
or the effectiveness of RTW and its management team.
Employees of RTW and employees of certain RTW affiliates are expected to serve
as executives, officers, directors, members, consultants or employees of such
companies. These individuals are eligible for compensation in the Incubated
Companies in the form of founder shares or other forms of company securities.
Certain RTW employees who perform specific executive functions for such
Incubated Companies may also receive cash compensation directly or indirectly
from those companies. For the avoidance of doubt, these employees do not
receive such compensation from both RTW and the Incubated Company. These
employees receive 100% of their compensation from RTW and RTW charges back to
the Incubated Company for the applicable percentage of their time spent on
executive functions at the Incubated Company. Employees of RTW and employees
of certain RTW affiliates may also receive compensation in the form of stock
options or other securities from certain Incubated Companies in connection
with their delivery of specified products, research and consulting services.
RTW believes this is an effective way to align incentives and motivate
employees, while reducing the financial burden on the newly Incubated
Companies by minimizing the need to hire external employees.
During the period ended 30 June 2025, the Group entered into a purchase
transaction with affiliated entities also managed by the Investment Manager. A
total purchase of $6,900,000 was made at fair value with these related
parties.
11. Administrative services
Altum (Guernsey) Limited (previously named Elysium Fund Management Limited
("Altum")) serves as Administrator to the Group, providing administration,
corporate secretarial, corporate governance and compliance services. Morgan
Stanley Fund Services USA LLC ("MSFS") serves as the Group's
Sub-Administrator.
During the period ended 30 June 2025, Altum and MSFS charged administration
fees of $197,160 and $177,625 respectively (period ended 30 June 2024: Altum
charged $185,359 and MSFS charged $171,337), of which a prepayment of $7,605
and an accrual of $97,079 (31 December 2024: Altum prepayment of $5,693, MSFS
accrual of $105,860) were outstanding at 30 June 2025, and were included
within accrued expenses.
12. Financial highlights
Financial highlights for the six month period ended 30 June 2025, six month
period ended 30 June 2024 and year ended 31 December 2024 are as follows:
30 June 2025 30 June 2024 31 December 2024
(unaudited) (unaudited) (audited)
Per Ordinary Share operating performance
Net Asset Value, beginning of period/year $ 1.81 $ 1.90 $ 1.90
Cost of issuance of Ordinary Shares - (0.23) (0.23)
Share buybacks 0.01 0.03 0.03
Income from investments
Net investment income/(loss) 0.06 (0.01) (0.03)
Net realised and unrealised gain/(loss) on securities, derivatives and foreign (0.18) 0.26
currency transactions
0.13
Income/(loss) attributable to Non-Controlling Interest 0.00 0.00
0.01
Total from investment operations (0.12) 0.25 0.11
Net Asset Value, end of period/year $1.70 $1.95 $1.81
Total return
Total return before Performance Allocation (5.98) % 2.49 % (5.25) %
Performance Allocation (excluding mark to market) 0.00 % 0.50 % 0.62 %
Total return after Performance Allocation (5.98)% 2.99 % (4.63) %
Ratios to average net assets*
Expenses 1.78 % 1.28 % 2.78 %
Performance Allocation (including mark to market) (0.26) % (0.15) % (0.66) %
Expenses and Performance Allocation 1.52 % 1.13 % 2.12 %
Net investment income/(loss) 3.29 % (0.76) % (1.44) %
NAV total return for the period/year (5.98) % 2.99 % (4.63) %
* Ratios are not annualised.
Financial highlights are calculated for Ordinary Shares. An individual
shareholder's financial highlights may vary based on the timing of capital
share transactions. Net investment income/loss does not reflect the effects of
the Performance Allocation.
13. Subsequent events
These unaudited interim consolidated financial statements were approved by the
Board of Directors on 10 September 2025. Subsequent events have been evaluated
through this date.
General Company Information
Structure Closed-end Investment Fund
Domicile Guernsey
Listing London Stock Exchange Main Market
Launch date 30 October 2019
Dividend policy To be reinvested
Management fee 1.25%
Performance fee 20% with an 8.0%, annualised and compounded- since-inception, hurdle
ISIN GG00BKTRRM22
SEDOL BKTRRM2
Ticker RTW
LEI 549300Q7EXQQH6KF7Z84
Website www.rtwbio.com
Defined Terms
"Adjusted Net Asset Value" the Net Asset Value adjusted by deducting the unrealised gains and unrealised
losses in respect of private Portfolio Companies;
"AIC" the Association of Investment Companies;
"AIC Code" the AIC Code of Corporate Governance dated February 2019;
"AIFMD" the Alternative Investment Fund Managers Directive;
"Antibody" a large Y-shaped blood protein that can stick to the surface of a virus,
bacteria, or receptor on a cell;
"Antibody-Oligonucleotide Conjugates" or "AOC" molecules that combine structures of an antibody and an oligo;
"Arix" Arix Biosciences plc, the company whose assets the Company acquired in
February 2024;
"ASCO" American Society of Clinical Oncology, also the name of the Society's annual
oncology conference;
"Autoimmune diseases" conditions, where the immune system mistakenly attacks a body tissue;
"BLA" Biologics License Application, a request for permission to introduce, or
deliver for introduction, a biologic product into interstate commerce (in the
U.S.):
"Calculation Date" 30 June or, if such date is not a business day, the previous business day;
"Cardiovascular disease" conditions affecting heart and vascular system;
"CNS" Central Nervous System;
"Companies Law" the Companies (Guernsey) Law, 2008 (as amended);
"the Company" RTW Biotech Opportunities Ltd (or RTW Bio) is a company incorporated in
Guernsey as a closed-ended Investment Company;
"CRS" Common Reporting Standard;
"Danon Disease" a rare genetic heart condition in children, predominantly boys;
"DTR" Disclosure Guidance and Transparency Rules of the UK's FCA;
"Fanconi Anaemia" a rare genetic blood condition in young children;
"FATCA" the Foreign Account Tax Compliance Act;
"FCA" the Financial Conduct Authority;
"FDA" the United States Food and Drug Administration;
"FRC" the Financial Reporting Council;
"FTC" the Federal Trade Commission;
"Gene therapy" a biotechnology that uses gene delivery systems to treat or prevent a disease;
"Genetic Medicine" an approach to treat or prevent a disease using gene therapy or RNA medicines;
"GFSC" the Guernsey Financial Services Commission;
"GFSC Code" the GFSC Finance Sector Code of Corporate Governance as amended in June 2021;
"Greater China" encompasses mainland China, Macau, Hong Kong and Taiwan;
"the Group" the Company and its subsidiaries, RTW Biotech Opportunities Operating Ltd and
RTW Biotech UK Ltd;
"HCM" or "Hypertrophic cardiomyopathy" a cardiovascular disease characterised by an abnormally thick heart muscle;
"Investigational New Drug" or the FDA's investigational New Drug program is the means by which a
pharmaceutical company obtains permission to start human clinical trials;
"IND"
"Investment Manager" RTW Investments, LP, also called RTW Investments or RTW;
"IPEV" the International Private Equity and Venture Capital Valuation
(IPEV) Guidelines set out recommendations, intended to represent current
best practice, on the valuation of Private Capital Investments;
"IRA" Inflation Reduction Act of 2022;
"Lentiviral vector or "LVV" based gene therapy - a type of viral vector used to deliver a gene;
"Leukocyte adhesion deficiency" or "LAD-I" a rare genetic disorder of immunodeficiency in young children;
"Multi-omics" a biological analysis approach in which the data sets are multiple "omes",
such as the genome, proteome, transcriptome, epigenome, metabolome, and
microbiome;
"Myotonic Dystrophy" a genetic condition that affects muscle function;
"Nasdaq Biotech" or "NBI" a stock market index made up of securities of NASDAQ-listed companies
classified according to the Industry Classification Benchmark as either the
Biotechnology or the Pharmaceutical industry;
"New Performance Allocation Shares" performance allocation shares of no-par value in the capital of the
Subsidiary;
"NewCo" a company conceived and incubated by RTW Investments, LP;
"Notional Ordinary Shares" Performance Ordinary Shares, in which receipt of such shares has been
deferred;
"Oligonucleotides" or "Oligos" short DNA or RNA molecules that have a wide range of applications in genetic
testing and research;
"Omics" any of several areas of biological study defined by the investigation of the
entire complement of a specific type of biomolecule or the totality of a
molecular process within an organism. In biology the word omics refers to
the sum of constituents within a cell. The omics sciences share the
overarching aim of identifying, describing, and quantifying the biomolecules
and molecular processes that contribute to the form and function of cells
and tissues;
"Oncology" a therapeutic area focused on diagnosis, prevention, and treatment of cancer;
"Performance Allocation Shares" performance allocation shares of no-par value in the capital of the Company
(prior to the 1 December 2022 reorganisation), or performance allocation
shares of no-par value in the capital of the Subsidiary (with effect from the
1 December 2022 reorganisation);
"Performance Allocation Period" each period ending on a Calculation Date and beginning on the business day
immediately following the last Performance Allocation Period in respect of
which a Performance Allocation has been allocated;
"PRAME" a cancer-testis antigen (CTA) that is highly expressed in a broad range of
solid and hematologic malignancies;
"Pyruvate Kinase Deficiency" or "PKD" a rare genetic disorder affecting red blood cells;
"Radiopharmaceuticals" pharmaceutical consisting of a radioactive compound used in radiation therapy;
"RTW" RTW Investments, LP, also referred to as the Investment Manager;
"Russell 2000 Biotechnology Index" or "RGUSHSBT" a stock index of small cap biotechnology and pharmaceutical companies;
"Small molecule" a compound that can regulate a biologic activity;
"SPV" RTW Biotech ALI LLC;
"the Subsidiary" or "OpCo" RTW Biotech Opportunities Operating Ltd;
"the UK Subsidiary" RTW Biotech UK Limited;
"Tachycardia" a heart rhythm disorder;
refers to a domestic regime of laws regulating the management and marketing of
alternative investment funds and fund managers in the UK, which generally
"UK AIFMD" maintains the rules set out in the European Union's AIFMD as implemented at
the end of the transition period following Brexit;
"UK Code" the UK Corporate Governance Code 2018 published by the Financial Reporting
Council in July 2018;
"UK-Guernsey IGA" The UK-Guernsey Intergovernmental Agreement for the Automatic Exchange of
Information;
"Ulcerative Colitis" an inflammatory bowel disease that causes sores in the digestive tract;
"Uveal melanoma" a type of eye cancer;
"WACC" weighted average cost of capital;
"XBI" the SPDR S&P Biotech ETF;
"XIRR" an internal rate of return calculated using irregular time intervals.
Listing of portfolio company abbreviations used throughout this report
Shorthand Company Name Legal Company Name
Acadia Acadia Pharmaceuticals, Inc.
Akero Akero Therapeutics, Inc.
ALI American Laboratories, Inc.
Apogee Apogee Therapeutics, Inc.
Argenx argenx SE
Artios Artios Pharma, Inc.
Avidity Avidity Biosciences, Inc.
Beta Bionics Beta Bionics, Inc.
Compass Compass Pathways plc
Corxel Corxel Pharmaceuticals
Dyne Dyne Therapeutics, Inc.
Ensoma Ensoma, Inc.
Evommune Evommune, Inc.
GH Research GH Research PLC
Jade Jade Biosciences
Kailera Kailera Therapeutics, Inc.
Lycia Lycia Therapeutics, Inc.
Madrigal Madrigal Pharmaceuticals, Inc.
Merus Merus N.V.
Milestone Milestone Pharmaceuticals, Inc.
Prolium Prolium Bioscience, Inc.
Protagonist Protagonist Therapeutics, Inc.
PTC PTC Therapeutics, Inc.
Rocket Rocket Pharmaceuticals, Inc.
RTW Royalty 2 RTW Fund 2 (royalty deal for Jelmyto)
RTW Royalty Fund 4010 Royalty Fund
Stoke Stoke Therapeutics, Inc.
Tarsus Tarsus, Pharmaceuticals, Inc.
Taysha Taysha Gene Therapies, Inc.
UniQure uniQure biopharma B.V.
UroGen UroGen Pharma
Verastem Verastem, Inc.
Verona Verona Pharma plc
Zai Lab Zai Lab Limited
Alternative Performance Measures (unaudited)
( )
APM Definition Purpose Calculation
Available Cash Cash held by the Group's Bankers, Prime Broker and an ISDA counterparty. A measure of the Group's liquidity, working capital and investment level. Cash and cash equivalents, Due from brokers, Receivable from unsettled trades
and other miscellaneous current assets, less Due to brokers, Payable for
unsettled trades and other miscellaneous current liabilities on the Statement
of Assets & Liabilities.
NAV per Ordinary Share The Group's NAV divided by the number of Ordinary Shares. A measure of the value of one Ordinary Share. The net assets attributable to Ordinary Shares on the statement of financial
position divided by the number of Ordinary Shares in issue as at the
calculation date.
Price per share The Company's closing share price on the London Stock Exchange for a specified A measure of the supply and demand for the Company's shares. Extracted from the official list of the London Stock Exchange.
date.
NAV Growth The percentage increase/decrease in the NAV per Ordinary share during the A key measure of the success of the Investment Manager's investment strategy. The quotient of the NAV per share at the end of the period and the NAV per
reporting period. share at the beginning of the period minus one expressed as a percentage.
Share price growth/Total Shareholder Return The percentage increase(decrease) in the price per share during the reporting A measure of the return that could have been obtained by holding a share over The quotient of the price per share at the end of the period and the price per
period. the reporting period. share at the beginning of the period minus one expressed as a percentage. The
measure excludes transaction costs.
Share Price Premium/ (Discount) The amount by which the Ordinary Share price is higher/lower than the NAV per A key measure of supply and demand for the Company's shares. A premium implies The quotient of the price per share at the end of the period and the NAV per
Ordinary Share, expressed as a percentage of the NAV per ordinary share. excess demand versus supply and vice versa. share at the end of the period minus one expressed as a percentage.
Multiple on Invested Capital (MOIC or MOC) The multiple that measures value that an investment has generated. A measure to evaluate performance of the realised and unrealised investments. The ratio between initial capital invested in a portfolio company and current
value of the investment. It is a gross metric and calculation is performed
before fees and incentive.
Extended Internal Rate of Return (XIRR) The percentage or single rate of return when applied to all transactions in a A measure of return which is used when multiple investments have been made The rate also expressed as a percentage that calculates the returns on the
portfolio company. over time into a portfolio company. total investment made with increments through a given period (from initial
investment date to 30 June 2023).
Ongoing Charges Ratio The recurring costs that the Group has incurred during the period excluding A measure of the minimum gross profit that the Group needs to produce to make Calculated in accordance with the AIC methodology detailed at the web link
performance fees and one-off legal and professional fees, expressed as a a positive return for shareholders. below:
percentage of the Group's average NAV for the period. https://www.theaic.co.uk/sites/default/files/documents/AICOngoingChargesCalculationMay12.pdf
(https://www.theaic.co.uk/sites/default/files/documents/AICOngoingChargesCalculationMay12.pdf)
Leverage As defined by the AIFMD, any method by which the AIFM increases the exposure A measure of the excess of the Group's investments exposure over its total net Calculated in accordance with the AIFMD's gross and commitment methodologies
of an AIF it manages, whether through borrowing of cash securities, or assets. as outlined in Articles 7 and 8 of the Delegated Regulation 231/2013:
leverage embedded in derivative positions or by any other means. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32013R0231
(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32013R0231)
Schedule of Key Service Providers
Board of Directors Guernsey Advocates Distribution/IR and Public Relations Partner
Mr William Simpson (Chair, Carey Olsen (Guernsey) LLP Cadarn Capital
Chair of Management Engagement Committee, Chair of Sustainability Committee) Carey House c/o WeWork
Mr Paul Le Page Les Banques 1 Fore Street Avenue
(Chair of Audit Committee) St Peter Port London
Mr William Scott Guernsey EC2Y 9DT
(Chair of Nomination & Remuneration Committee) GY1 4BZ
Baroness Nicola Blackwood (Senior Independent Non-Executive Director) Auditor
Ms Stephanie Sirota UK Legal Advisers KPMG Channel Islands Limited
Herbert Smith Freehills Kramer LLP Glategny Court
Investment Manager and AIFM Exchange House Glategny Esplanade
RTW Investments, LP Primrose Street St Peter Port
40 10(t)(h) Avenue London Guernsey
New York EC2A 2EG GY1 1WR
NY 10014
USA Corporate Brokers Principal Bankers
BofA Securities Barclays Bank PLC, Guernsey Branch
Registered Office 2 King Edward Street Le Marchant House
1(st) Floor, Royal Chambers London Le Truchot
St Julian's Avenue EC1A 1HQ St Peter Port
St Peter Port Guernsey
Guernsey Deutsche Numis Securities GY1 3BE
GY1 3JX 45 Gresham Street
London
Administrator and Company Secretary EC2V 7BF
Altum (Guernsey) Limited
1(st) Floor, Royal Chambers Registrar
St Julian's Avenue MUFG Corporate Markets (Guernsey) Limited
St Peter Port Mont Crevelt House
Guernsey Bulwer Avenue
GY1 3JX St Sampson
Guernsey
Sub-Administrator GY2 4LH
Morgan Stanley Fund Services USA LLC
2000 Westchester Avenue, 1(st) Floor Sustainability Consultant
Purchase Terra Instinct
NY 10577 40-41 Pall Mall
United States of America London
SW1Y 5JQ
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