Annual Report and Audited
Consolidated Financial Statements
For the year ended 31 December 2024
Registered number: 66847
Pioneering tomorrow's
most exciting science
  STRATEGIC REPORT
Highlights 
RTW Biotech Opportunities at a Glance 
The RTW Investments Difference 
Investment Objective
and Investment Policy 
Chair’s Statement 
Report of the Investment Manager 
RTW Bio’s Long-Term Strategy 
Strategy in Action 
Operational and Financial Review
for the Year 
Key Performance Indicators 
Risk Management 
Principal and Emerging Risks
andUncertainties 
Longer Term Viability Statement 
Engaging with Stakeholders
(Section ) 
Responsible Investment 
  GOVERNANCE REPORT
Biographies of Directors 
Report of the Directors 
Corporate Governance Report 
Statement of Directors’ Responsibilities 
Directors’ Remuneration Report 
Report of the Audit Committee 
  CONSOLIDATED FINANCIAL
STATEMENTS
Independent Auditor’s Report 
Consolidated Statement of Assets
andLiabilities 
Consolidated Condensed Schedule
ofInvestments 
Consolidated Statement of Operations 
Consolidated Statement of Changes
in Net Assets 
Consolidated Statement of Cash Flows 
Notes to the Consolidated Financial
Statements 
  ADDITIONAL INFORMATION
General Company Information 
Defined Terms 
Alternative Performance Measures 
AIFMD Disclosures 
Schedule of Key Service Providers 
Read more online
rtwfunds.com
21
New core portfolio companies added
inthe year
2
, 3 core portfolio
companies exited
(2023: 7 and 10, respectively)
US$606.9M
Ordinary NAV
(2023: US$399.3M)
+73.8%
Ordinary NAV growth
since inception
(2023: +82.3%)
-4.6%
Ordinary NAV per share growth YTD
(2023: +23.5%)
1.2x
Leverage
2
(2023: 1.2x)
US$1.81
NAV per Ordinary Share
(2023: US$1.90)
+34.1%
Total shareholder return
since admission
(2023: +34.9%)
-0.6%
Total shareholder return YTD
(2023: +16.0%)
US$1.40
Price per Ordinary Share
1
(2023: US$1.40)
31 December 2024 Financial Highlights
1 The share price at 27 March 2025 was US$1.22.
2 Leverage is calculated per the Commitment Method of the AIFMD as further detailed
onpages 110 and 112. Real economic exposure at the fund and position level is ultimately
what impacts NAV as some positions are partially or fully hedged.
1 Core portfolio consists of companies that were initially added to the portfolio as
private investments, reflecting the key focus of the Group’s strategy. As initially
private investments continue to be held beyond IPO, the core portfolio consists
ofboth privately-held and publicly-listed companies.
2 New core portfolio companies include ten new privates, one RTW Investments-
incubated company, six positions acquired from Arix Bioscience and four that were
previously classified “other public”.
3 For certain core companies, clinical programs are not applicable. One is a specialty
clinical laboratory offering testing services, one is a legacy CVR position acquired in
the Arix transaction, one is a life-science tools company.
67.1%
Of NAV invested in core
portfolio companies
(2023: 66.7%)
54
Core portfolio companies in total:
33 private, 2 royalty, 19 public
(2023: 36 total, 22 private, 2 royalty, 12 public)
1.8x
Average historical multiple on invested
capital (MOIC) to liquidity event
since inception
30
Core companies have
clinical programmes
3
(2023: 22)
14
Months average historical holding
period to liquidity event
8
Core companies
have commercial
products
(2023: 8)
13
Core companies
are pre-clinical
(2023: 5)
5
Significant capital markets activities
in the core portfolio¹: 3 IPOs,
1acquisition, 1 reverse merger
(2023: 2 take-outs, 4 IPOs, 1 SPAC merger,
1 reverse merger, and 2 strategic financings)
Portfolio Highlights
RTW Biotech Opportunities Ltd
(“RTW Bio” or, with its subsidiaries,
"the Group") is a life sciences and
investment innovation fund focused
on identifying transformative
assets with high growth potential
across the biopharma and medtech
sectors. With the Group’s capital
and the Investment Manager’s
expertise, we’re powering medical
breakthroughs that will transform
the wellbeing of people around
the world.
01
RTW Biotech Opportunities at a Glance
Germany, Spain, Switzerland and
the Nordic countries: Rocket
Pharmaceuticals, NumabNetherlands:
Merus, Alesta
Israel: Urogen
Pharma
China: Corxel,
Nuance, Oricell
Our global reach
US
EUROPE
CHINA
UK
ISRAEL
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.
RTW Investments headquarters RTW Investments global offices
UK:
Immunocore,
Artios
Ireland:
GH Research
Transforming the
lives of millions
OUR PURPOSE
02
THE UK & EUROPE
We have identified and invested in exceptional British
andEuropean scientific assets. We look to contribute
tothese biotech ecosystems by engaging in creation or
ongoing development of new companies around promising
early-stage assets by partnering with universities and
in-licensing academic programmes, and by providing
financial and human capital to entrepreneurs to advance
scientific programmes.
What this means for investors:
• access to cutting edge research labs and academic
knowledge
• access to greater breadth of science and opportunity
• participation in value creation in local biotech
ecosystems
The RTW Investments culture
Members of
the RTW team
77
2023: 70
Collaboration
Leveraging collective genius
Progress
From research, to innovation,
to reality
Humility
The hunger to learn and improve
Tenacity
Finding pathways to success while
overcoming obstacles
Rigour
Poring over the data
Leadership
The courage to shape a better future
Our Long-Term
Strategy,
page 28
Learn more
about us in our
Culture Video
Our global reach
RTW Investments’ priority is unlocking
value by advancing early-stage scientific
development to deliver innovative
therapies to patients in need.
At the core of our business is a set
ofguiding principles.
THE US
We have a core focus on the US, with deep coverage
ofopportunities from academia to mid-size public
companies. We apply a full range of deal execution
andcompany building capabilities.
CHINA
We are capturing commercialisation opportunities in
China by investing across the venture capital life cycle:
from new company formation to IPO, to bringing
successful, innovative drugs to patients in China
andacross the globe.
What this means for investors:
• access to a budding biotech market, innovation
andexpertise
• an opportunity to be established in a market with
thescope for significant growth
Learn more
about this in our
Purpose Video
What we do goes
beyond short term
financial gain
We invest for the long term, powering
thenext generation of breakthroughs in
science and medicine to help transform
lives. That’s what drives us – the greater
impact we can help create.
Strategic Report Governance Report Financial Statements Additional Information
03
The RTW Investments Difference
RTW Investments connects
data, experience, and talent to
bring opportunities into focus
We identify transformative assets with
growth potential across the life sciences
sector. Our approach is driven by deep
scientific expertise with a long-term
investment horizon.
RTW Investments’
competitive advantages
DEEP RESEARCH
We dive into the data to spot opportunities
that others miss.
Opportunities, potential, errors, and risks are all easily
overlooked, so we analyse and scrutinise, applying a
unique, repeatable research approach, fine-tuned over
years of successful life sciences investment. We
combine the best data, technology, and scientific
insight to unearth opportunity.
Healthcare innovation is hard work, and
easy wins are few and far between.
Those who succeed don’t lose sight of why it matters.
These are the people we love working with. We come
from many different backgrounds but are united in
amission to improve people’s lives.
We cast a wide net, but only assets with high
probability of becoming commercially viable
products and those with the greatest
potential to revolutionise treatment
outcomes for patients pass the test.
We choose partners who care less about quick wins
andmore about lasting change.
SELECTIVITY PEOPLE
Bringing new therapies to patients is a long
journey that comes with both thrilling
triumphs and inevitable setbacks.
We are hands-on and fully invested in the success
ofourpartners because their success is our success.
We choose partners who are as passionate about
revolutionising medicine as we are.
We are doctors, academics, and drug
developers; venture capitalists and
investment bankers; lawyers, data
scientists and company operators.
We work as a team, applying collective expertise to
spark ideas, solve problems, avoid pitfalls, and build
successful companies.
KNOWLEDGE LONGTERM PARTNERS
Drug development rarely follows a linear path.
Whatever the twists and turns, we have the skills in house
to solve problems and accelerate progress, from providing
capital and infrastructure to advance promising academic
programmes, to forming new companies and taking those
companies public. We carve new pathways, allowing
scientists and entrepreneurs to bring life-changing
therapies to patients.
FLEXIBLE SOLUTIONS
04
Private
20-40% of NAV
Core Public
30-60% of NAV
Royalties
5-15% of NAV
Cash Management
(“Other Public”)
0-30% of NAV
5-20 most compelling private
investment opportunities
peryear.
The main portfolio driver over
the medium and long term.
Uncorrelated, cash generative
life sciences exposure with
limited scientific risk.
Innovative biotechs are generally
cash flow negative, requiring
investment for clinical trials and
commercial launches. Therefore, a
portion of the portfolio is retained
in cash and liquid investments,
ready for future financing rounds.
Majority invested in mid-to-late-
stage venture or crossover
rounds where we expect a
go-public event within six to
eighteen months.
Biotech companies tend to IPO
at around $500m. As a result,
much of the valuation realisation
occurs in the public markets.
Tocapture as much value as
possible, it is expected that most
private portfolio companies will
be retained after going public.
Royalty-backed launch financing
for newly approved life sciences
products. In exchange for an
upfront payment, RTW Bio
receives quarterly cash payments
based on a negotiated percentage
of the products’ sales.
Excess cash is invested in the
“other public” portfolio, designed
to mitigate the drag of setting
aside cash for future deployment
into core positions.
As a leading US crossover firm,
RTW Investments is sought out by
the best private biotechs as they
look towards the public markets.
We expect to lead about half of
these rounds, setting the terms
and building the syndicates.
Retention and subsequent
investment decisions subject
to constant risk-reward
assessment.
Downside protection through
deal structuring
The “other public” assets have
been carefully selected, mostly
matching, on a pro-rata basis,
the long investments held in
RTW Investments’ private funds.
About one third is invested in
early-stage venture and RTW
Investments company creations
where we expect a go-public
event in three to five years.
Successful investments could
beheld for 3-5 years with
multiple value inflection points
along the way.
Expect to have principal repaid
within six years, then a harvest
period. Term/return can be
capped or uncapped.
Ability to hedge individual
positions and use modest
leverage.
Initial position size: <2%. Typical position size: 1-10% Typical position size: 1-2% Typical position size: 0.1-5%
RTW Biotech Opportunities’ Full Life Cycle portfolio has multiple,
differentiated return levers and horizons
Strategic Report Governance Report Financial Statements Additional Information
05
Investment Objective and Investment Policy
Learn about our
portfolio in the
Report of the
Investment
Manager
page 12
Applying
deep scientific
expertise with
a long-term
investment
horizon
Investment Objective
The Group seeks to achieve positive absolute performance
and superior long-term capital appreciation, with a focus on
forming, building, and supporting world-class life sciences,
biopharmaceutical and medical technology companies.
Itintends to create a diversified portfolio of investments
across a range of businesses, each pursuing the development
of superior pharmacological or medical therapeutic assets
toenhance the quality of life and/or extend patient life.
Investment Policy
The Group seeks to achieve its investment objective
byleveraging the Investment Manager’s data-driven
proprietary pipeline of innovative assets to invest in
lifesciences companies:
• across various geographies (globally);
• across various therapeutic categories and product
types(including but not limited to genetic medicines,
biologics, traditional modalities such as small molecule
pharmaceuticals and antibodies, and medical devices);
• in both a passive and active capacity and intends, from
time to time, to take a controlling or majority position
withactive involvement in a Portfolio Company to assist
and influence its management. In those situations, it is
expected that the Investment Manager’s senior executives
may serve in temporary executive capacities; and
• by participation in opportunities created by the
Investment Manager’s formation of companies de novo
when a significant unmet need has been identified and the
Group is able to build a differentiated, sustainable business
to address said unmet need.
The Group expects to invest approximately 80 per cent
ofitsgross assets in the biopharmaceutical sector and
approximately 20 per cent of its gross assets in the medical
technology sector.
The Group's portfolio will reflect its view of the most
compelling opportunities available to the Investment
Manager, with an initial investment in each privately held
Portfolio Company ("Private Portfolio Company") expected
to start in a low single digit per cent of the Group's gross
assets and grow over time, as the Group may, if applicable,
participate in follow-on investments and/or continue holding
the Portfolio Company as it becomes publicly-traded. It is
intended certain long-term holds will increase in size and
may represent between five and ten per cent or greater
ofthe Group's gross assets.
The Group anticipates deploying one-third of its capital
designated for core private investments toward early-stage
and de novo company formations (including newly formed
entities around early-stage academic licenses and commercial
stage corporate assets) and two-thirds of its capital in
mid- to late-stage ventures.
The Company may choose to invest in Portfolio Companies
listed on a public stock exchange ("Public Portfolio Companies")
depending on market conditions and the availability of
appropriate investment opportunities. Equally, as part of a
full-life cycle investment approach, it is expected that Private
Portfolio Companies may later become Public Portfolio
Companies. Monetisation events such as IPOs and reverse
mergers will not necessarily be taken as exit opportunities for
the Group. Rather, the Group may decide toretain all or some
of or add to its investment in such Portfolio Companies or the
acquiring Company where they meet the standard of diligence
set by the Investment Manager. The Group is not required to
allocate a specific percentage of itsassets to Private Portfolio
Companies or Public PortfolioCompanies.
The Group also intends, where appropriate, to invest further
in its Portfolio Companies, supporting existing investments
throughout their lifecycle. The Group may divest its interest
in Portfolio Companies in part or in full when the risk–reward
trade-off is deemed to be less favourable.
From time to time, the Group may seek opportunities
tooptimise investing conditions, and to allow for such
circumstances, the Group will have the ability to hedge
orenter into securities or derivative structures in order
toenhance the risk-reward position of the portfolio and
itsunderlying securities.
Superior long-term capital
appreciation, with a focus
on forming, building, and
supporting world-class life
sciences, biopharmaceutical
and medical technology
companies."
06
Investment restrictions
The Group will be subject to the following restrictions when
making investments in accordance with its investment policy:
• 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 (or, in the case of
RocketPharmaceuticals, Inc., 25 per cent) of the
Group'sgross assets at the time of each such investment;
• the Group may not make any direct investment in any
tobacco company and not knowingly make or continue to
hold any Public Portfolio Company investments that would
result in exposure to tobacco companies exceeding one
per cent of the aggregate value of the Public Portfolio
Companies from time to time.
Each of these investment restrictions will be calculated as
atthe time of investment. In the event that any of the above
limits are breached at any point after the relevant investment
has been made (for instance, upon successful realisation of
economic and/or scientific milestones or as a result of any
movements in the value of the Group's gross assets), there
will be no requirement to sell or otherwise dispose of any
investment (in whole or in part).
Leverage and borrowing limits
The Group may use conservative leverage in the future
inorder to enhance returns and maximise the growth of
itsportfolio, as well as for working capital purposes, up to
amaximum of 50 per cent of the Group's net asset value
atthe time of incurrence. Any other decision to incur
indebtedness may be taken by the Investment Manager
forreasons and within such parameters as are approved by
the Board. There are no limitations placed on indebtedness
incurred in the Group's underlying investments.
Capital deployment
The Group anticipates that it will, upon any subsequent
capital raises, invest up to 80% of available cash in Public
Portfolio Companies that have been diligenced by the
Investment Manager and represent holdings in other
portfolios managed by the Investment Manager, subsequently
rebalancing the portfolio between Public Portfolio Companies
and Private Portfolio Companies as opportunities to invest in
the latter become available.
Cash management
The Group's uninvested capital may be invested in cash
instruments or bank deposits pending investment in Portfolio
Companies or used for working capital purposes.
Hedging
As described above, the Group may seek opportunities
tooptimise investing conditions, and to allow for such
circumstances, there will be no limitations placed on the
Group's ability to hedge or enter into securities or derivative
structures in order to enhance the risk-reward position of the
portfolio and its underlying securities.
On an ongoing basis, 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 but may enter into hedging
transactions to hedge individual positions or reduce volatility
related to specific risks such as fluctuations in foreign
exchange rates, interest rates, and other market forces.
Strategic Report Governance Report Financial Statements Additional Information
07
08
We are delighted to have celebrated,
on 30 October, the passing of our fifth
anniversary since listing on the London
Stock Exchange. In that time, the Group's
NAV per share delivered a five-year return
of +86.3% marking it as the best
performing biotech-focused listed
investment company on a NAV per share
basis on the London Stock Exchange.
This compared to a +37.7% return for the Nasdaq Biotech
Index and +16.3% for the Russell 2000 Biotech Index over the
same period. We are pleased to mark the fifth Anniversary
this year with market-beating and peer-leading performance,
despite most of the last three years experiencing the sector’s
second worst bear market in history. Encouragingly, the
backdrop is now improving and we believe that we are still
inthe early innings of a recovery for the sector.
William Simpson
Chair
Investing in
tomorrow’s
most promising
medicines
Chair’s Statement
2024 Overview and 2025 Outlook
The Group’s NAV returned -4.6% per Ordinary Share over the
twelve months to 31 December 2024, slightly underperforming
the Russell 2000 Biotechnology Index and the Nasdaq Biotech
Index (NBI) which returned +2.5% and -1.4%, respectively.
Thisis the first year that the Group’s NAV per share has
underperformed, but it remains markedly ahead of sector
indices over three years, five years and since admission.
Likemany listed investment companies, particularly those with
private exposure, the Company’s share price has lagged NAV
per share growth, although the discount narrowed modestly
in2024.
As always, there was plenty of activity in the portfolio to
report. One of the benefits of having a full life cycle approach
is that there are always opportunities and events including
private financing rounds, go-public events, take-outs, clinical
developments and royalty distributions.
There were four go-public events from core private positions
in the first half: Kyverna, Lenz, Artiva and BioAge. The average
step up from holding value to go-public in these four events
was +9.7% and the average multiple on invested capital was
1.3x. There was one M&A deal involving Numab, a core private
position, which sold its lead program to Johnson & Johnson
for US$1.25bn. Being a private position meant that the impact
on the Group was less than it might have been had it occurred
after the company became public when we normally take
bigger positions, but it led to a near 2.6x uplift from the
holding value as at 31 December 2024. Combined, these
transactions continue to underline the embedded value of
theportfolio’s private holdings and provide evidence of the
robustness of the Group’s valuation process. But despite
continued successes here, the market appears to discount
the private assets.
In the core public portfolio, two genetic medicine companies
had the biggest impacts on NAV. Avidity Biosciences announced
several positive clinical events for patients suffering from
severe muscular diseases which in many cases have no
approved drugs. Avidity’s share price increased by 221%
in2024, making it a very rewarding investment from a
shareholder perspective this year and from our original
investment in their 2019 crossover round, since when it has
returned a 4.5x multiple on invested capital. Should Avidity
succeed through subsequent trials and regulatory approval, it
will also be a very rewarding investment from a patient impact
perspective too. Rocket Pharmaceuticals’ share price
struggled in 2024. With no clinical readouts on the calendar,
theshares were buffeted by top-down factors whilst it also did
not deliver on clinical and regulatory timelines for its two lead
programs. Despite the volatility and setbacks, we continue to
see value and transformational potential for patients suffering
from horrendous diseases like Danon.
Since admission, the Group has made 69 private investments.
Thirty-one of these have since experienced liquidity events
(by going public or via acquisition). The average holding period
as a private investment was fourteen months and the average
MOIC to the liquidity event was 1.8x. This was despite a very
muted IPO market for most of the last three years. It is
important to note that, being a full life cycle investor, we view
the IPO as another funding round and a public mark, rather
than an exit opportunity, but the step up to the IPO is a nice
way to start a public investment especially when one
considers the other advantages of investing in the private
rounds, most particularly, getting closer to the science to
build conviction.
The Group’s royalty investments are performing well and
provide a differentiated income stream that is uncorrelated to
equity markets. The risk adjusted returns are very attractive
and highly complementary to the rest of the portfolio.
Theability to offer a full suite of financing solutions to
companies helps position RTW Investments as one of the
preferred capital providers in the space. Our exposure to
royalties is expected to increase in the years ahead as the
4010 Royalty Fund, in which we are invested, draws down
capital for new investments.
At the end of the period, the Group had fifty-four core
portfolio holdings, a material increase from the start of the
year as several new private and public positions were added
on top of the new private positions from Arix. Opportunities
are abundant and capital is valuable. The core portfolio
represents 67.1% of NAV at year end. The “other public”
portfolio (mostly matching the long listed names held in the
Investment Manager’s private funds, devised to mitigate the
performance drag of setting aside cash for future deployment
into core positions) makes up the remainder. It is important
to note that this portion of the portfolio is also expected to
generate solid returns through the cycle and is made up of
similarly innovative but slightly larger, later stage biotech
companies, many of which already have approved drugs.
The market environment for the biotech sector is improving
and the opportunity set for stock picking is encouraging albeit
the sector's recovery is still early. Changes in interest rate
expectations are adding periods of volatility, but good data
and good products are being rewarded. Medical science
innovation has never been better, financing activity is
robustand M&A looks set to rebound. President Trump’s
appointment for Secretary of Health and Human Services,
RFK Jr, has added a little uncertainty but that should lift as
itbecomes clear that innovation is part of the solution in his
pursuit of “making America healthy again”.
With a growing pipeline of interesting opportunities at
attractive valuations, our private investing activity has
returned to normal after a couple of years when it was more
optimal to focus on public market opportunities. All parts of
our full life cycle portfolio are well positioned and competition
for capital within the portfolio is intense.
RTW Bio continues to provide investors with exposure to the
most innovative and exciting parts of the healthcare sector via
a range of public, private and royalty investments. This full life
cycle approach gives our shareholders access to a wide range
of investment opportunities that would otherwise be hard to
exploit, thus making the Group an attractive holding alongside
passive, private equity fund or direct equity healthcare
exposures. This proposition is most stark in next-generation
obesity drugs, which are mostly still private at this point.
Withthe addition to the portfolio of Kailera and the acquisition
by Corxel (formerly known as JiXing) of CX11 (read more on
page 31, Strategy in Action), RTW Bio is uniqueamong listed
investment companies for shareholders looking for meaningful
exposure on the private side to this exciting area.
Private
investments
since admission
69
Learn more about
next-generation
obesity drugs in
Strategy in Action,
page 30
Strategic Report Governance Report Financial Statements Additional Information
09
Corporate Developments
We are delighted to have completed the acquisition of Arix
Bioscience Plc’s assets and welcome new shareholders to
ourregister. The combination added capital and scale to our
best-in-class platform. RTW Bio is now one of the largest
biotech investment companies quoted on the London Stock
Exchange and the increased scale, liquidity and awareness
hasattracted several new potential buyers.
The increased scale that the Arix transaction has brought us
has also allowed us to appoint a Senior Independent Director
with considerable life sciences experience. Baroness Nicola
Blackwood is a leader in science and entrepreneurship. She is a
member of the House of Lords, and Chair of Genomics England
and Oxford University Innovation. She is also Board Member of
the biotechnology company, BioNTech. Nicola is also a member
of the Oxford Harrington Rare Disease Centre Advisory Board
and the Royal Society Science Policy Expert Advisory
Committee. Nicola served as a Minister in the Department for
Health and Social Care under two Prime Ministers. As Minister
for Innovation, she led on Life Sciences, NHS Data and Digital
Transformation, and Global Health Security. She was the first
female Member of Parliament for Oxford and was elected by
MPs of all parties as the first female Chair of the House of
Commons Science and Technology Committee. She remains
one of the youngest committee chairs in British history. We are
delighted to welcome Nicola, believing that her contributions
will help us further our mission to harness innovation in biotech
to the advantage of patients and shareholders.
Capital Allocation
Around the time of the Arix closing, the Board increased the
previously announced share buyback capacity to help manage
any short-term changes in the shareholder base around the
deal. In total, the Group bought back 8,500,000 shares in
2024 for a total consideration of US$11,340,306. Buybacks are
considered through a capital allocation lens against multiple
factors, most importantly, our core objective to deliver
long-term capital growth. With this context it is important
torecognise that our investments generally consume cash
toprogress through clinical trials or early commercialisation,
soretaining capital and some liquidity is essential, especially
inchallenging market environments where opportunities are
available to those who can provide a quantum of capital
quickly. However, in recent times when the Group has received
a significant cash inflow (i.e. the sale of Prometheus to Merck
andthe acquisition of Arix and its substantial cash position),
wehave returned a portion through NAV-accretive buybacks.
Aswith Prometheus, in the event of cash realisations from
public M&A inour portfolio, aproportion of the profits may
beused to buy back shares. However, we strongly believe
thatnow is a once-in-a-generation time to be making private
and public investments in biotech, so we must balance short
term discount considerations that are impacting the whole
investment trust industry, and our healthcare peers within
it,against very significant medium to long term capital
growthpotential.
Manager Commitment and Alignment
I am pleased to note the expansion of the Investment
Manager’s wider team in the UK in recent years, focussing
amongst other things on servicing RTW Bio shareholders,
andam particularly pleased to note the continued alignment
of the Investment Manager with the Group. Since IPO, the
Investment Manager has not sold any of its shares in the
Company and key principals, including CIO Rod Wong,
continue to increase their personal holdings. Last year
RodWong bought 19,949,441 shares bringing his total
shareholding to 49,643,313 (14.8% of ordinary shares in issue
not held in treasury). Post period-end he bought additional
shares increasing his shareholding to 15.0%. Furthermore,
since admission the Investment Manager has only taken one
distribution, in shares, from thePerformance Allocation share
class, increasing its investment in the Group. This further
demonstrates both thevalue of the Group to the Investment
Manager and its long-term commitment.
Looking Forward
Whilst 2024 was a challenging year for the biotech sector
andUK investment companies, I am very pleased with the
compelling long-term performance of RTW Bio and look
forward with confidence to the next five years. We enter this
period with significant assets under management, increasing
public interest in what we do and the skilled support of our
manager and other stakeholders. We anticipate many more
opportunities to further medical innovations which improve the
lives of patients and provide attractive returns to our investors.
2025 AGM
The Company will hold its Annual General Meeting on
9June2025 to review the annual results and provide portfolio
updates. The meeting will take place at Royal Chambers,
StJulian’s Avenue, St Peter Port, Guernsey. We would like
todedicate a part of the meeting to address questions from
shareholders. We encourage shareholders to submit questions
at the following email, and we will endeavour to answer as
many as we can: biotechopportunities@rtwfunds.com.
On behalf of the Board, I would like to express my gratitude
for your continued support and wish you all the best for 2025.
William Simpson
Chair of the Board of Directors
RTW Biotech Opportunities Ltd
28 March 2025
RTW Bio is now one of the
largest biotech investment
companies quoted on the
London Stock Exchange
and the increased scale,
liquidity and awareness
has attracted several new
potential buyers."
10
Chair's Statement
continued
RTW Biotech
Opportunities’
5th Anniversary
RTW BIOTECH OPPORTUNITIES’
5TH ANNIVERSARY
On 30th October 2024, RTW Biotech
Opportunities Ltd celebrated its fifth
anniversary since listing on the London
Stock Exchange (LSE). From listing through
to its fifth year, the Group grew its NAV
from US$153.0m to US$650.6m and NAV
per share by +86.3%. Along the way, several
key milestones marked the journey:
• Market-beating and peer-leading performance:
theGroup’s NAV per share return of +86.3% over
thefive years marked RTW Bio as the best performing
biotech-focused listed investment company on a NAV
per share basis on the London Stock Exchange in that
time. This compared to a +37.7% return for the Nasdaq
Biotech Index and +16.3% for the Russell 2000 Biotech
Index over the same period.
• A London IPO and subsequent move to the LSE’s
premium listing: London was selected as the listing
destination because of the benefits of the listed
investment company structure. It gives both flexibility
and duration to invest opportunistically across the
fulllife cycle, avoiding the pitfalls and structural
constraints of venture-only or public-only vehicles.
InAugust 2021, RTW Bio migrated from the Specialist
Segment to thePremium Segment, which was
subsequently consolidated into the Main Market in 2024.
In 2022, theInvestment Manager set up an office in
London to becloser to the listing, shareholders and
investment opportunities in the UK.
• Prometheus Biosciences acquisition shows the value
of full life cycle approach: In April 2023, Prometheus,
aclinical-stage biotechnology company pioneering
treatment of immune-mediated diseases, was acquired
by Merck for US$10.8 billion. The investment was a great
example of the value of full life cycle investing. RTW Bio
co-led Prometheus’ crossover financing round in 2020,
supported it through its IPO in 2021 and ultimately its
sale, generating a more than 12x total multiple on
invested capital (MOIC) in just over three years.
• Arix transaction added scale and capital to a best-in-
class platform: In November 2023, RTW Bio announced
plans to acquire Arix Bioscience Plc (“Arix”), a venture
capital company focused on investing in breakthrough
biotechnology companies. Completed in February 2024,
the transaction made RTW Bio one of the largest biotech-
focused listed investment companies trading on the LSE
and provided additional capital at an opportune time in
the biotech market cycle.
Learn more about this in our
5th Anniversary Video
Strategic Report Governance Report Financial Statements Additional Information
11
Report of the Investment Manager
Roderick Wong, MD
Managing Partner
12
13
Since its listing on the London Stock
Exchange on 30 October 2019, the Group
has grown the NAV attributable to Ordinary
Shareholders from US$168.0 million to
US$606.9 million as of 31 December 2024.
The NAV per Ordinary Share has grown +73.8% from US$1.04
to US$1.81 as of 31 December 2024. Disappointingly, the share
price has not kept pace with the NAV, returning +34.1% in the
same period, as the shares fell to a discount in early 2022 (as
did many listed investment trusts) and have remained there
since, despite strong NAV per Ordinary Share performance.
In2024, the NAV per Ordinary Share returned -4.6% while
theshare price returned -0.6%. With continued NAV
outperformance versus the market and peers, in addition to
an improving outlook for the biotech sector, we would expect
the discount to narrow.
RTW Biotech Opportunities Ltd
Year end reporting
period
(01/01/2024-31/12/2024)
Previous year end
reporting period
(01/01/2023-31/12/2023)
Admission
(30/10/2019-
31/12/2024)
Ordinary NAV – start of period US$399.3 million US$326.1 million US$168.0 million
Ordinary NAV – end of period US$606.9 million US$399.3 million US$606.9 million
NAV per Ordinary Share – start of period US$1.90 US$1.54 US$1.04
NAV per Ordinary Share – end of period US$1.81 US$1.90 US$1.81
NAV movement per Ordinary Share -4.6% +23.5% +73.8%
Price per Ordinary Share – start of period US$1.40 US$1.21 US$1.04
Price per Ordinary Share – end of period US$1.40 US$1.40 US$1.40
Share price return
(i)
-0.6% +16.0% +34.1%
Benchmark returns
(ii)
Russell 2000 Biotech +2.5% +10.6% +7.4%
Nasdaq Biotech -1.4% +3.7% +27.6%
(i) Total shareholder return is an alternative performance measure. Share price at 31 Dec 2023 was $1.403 and at 31 Dec 2024 was $1.395.
(ii) Source: Capital IQ
Table 1. Financial Highlights
Financial Highlights, Performance Drivers and Significant Events
A full life cycle
approach to investing
in innovative healthcare
companies
Strategic Report Governance Report Financial Statements Additional Information
Report of the Investment Manager
continued
RTW Investments, LP, the “Investment Manager”, 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.
NAV performance in 2024 has been driven by the core public
positions. This is how the portfolio is designed to function.
Asfull life cycle investors, our belief is that the majority of
value creation in biotech happens in the public market,
however, it is valuable and important to position oneself and
build conviction before an IPO. Our core public position Avidity
is a case in point. We co-led the crossover round at the end of
2019 and supported the IPO in 2020. Since then, the company
experienced some challenges until reporting great data from
several of its programs in 2024. We had significantly increased
our position in February 2024 by co-leading an oversubscribed
US$400m private placement, proving the value of the
Investment Manager’s position as a preferred capital provider
in the sector. The shares returned +221% over the course of
2024 giving rise to a +12.4% contribution to NAV. The other
major contributor was Tarsus, which sits at the other end of
the development life cycle, being a commercial stage company.
Tarsus’ share price rose materially in 2024 as its treatment
for demodex infection, Xdemvy, continued to exceed
consensus revenue expectations.
Rocket, Immunocore and Cargo were the largest detractors
amongst the core public positions. After strong performance
in 2023, Rocket’s shares performed poorly in 2024. Rocket
raised US$165m in a follow-on offering in December after
ayear in which it did not deliver on clinical and regulatory
timelines for its two lead programs. Despite the setbacks, we
think both the Danon and Fanconi anaemia programs continue
to have transformative potential for patients. Immunocore
reported melanoma data at ASCO showing a disappointing
sub-20% response rate. It is important to note that both
Rocket and Immunocore are multi-pipeline companies, so
even if one asset disappoints there are other shots on goal.
There was no material fundamental news during the year on
Cargo, but with the next catalyst not forecast until 2025, the
share price gave back much of the gains it made since its IPO
in November 2023. Following period end, Cargo announced it
was halting work on its lead candidate after a failed Phase 2
study, followed a couple months later by the discontinuation
of its entire pipeline, and the announcement that it would lay
off most of its staff and seek a reverse merger or other
business combination.
The core private positions made a small contribution led
byNumab. Kyverna, Artiva and BioAge Labs completed
successful IPOs while Lenz went public through a reverse
merger. Theaverage gross multiple on invested capital (MOIC)
on ourinitial investments in these four companies to the
go-public event was approximately 1.3x. Numab sold its lead
drug candidate to J&J for US$1.25bn. The company’s holding
value was increased by approximately 2.6x to reflect the deal,
which closed in July.
2024 was an auspicious year for RTW Investments-founded
Corxel, which changed its name from Ji Xing Pharmaceuticals
during the year to reflect an expanding portfolio of global
assets. Firstly, Ji Xing (as it was then called) announced that
Bayer AG had invested in its Series D financing, whilst
concurrently announcing a new strategic collaboration
between the two companies focused on cardiovascular
diseases in China. Later in the year, Corxel announced two
significant transactions in December. First, after successfully
completing its Phase 3 trial, Corxel sold its China Aficamten
rights to Sanofi. The asset sale recognised the value created
by the team and made it possible to in-license ex-China rights
to CX11, an oral small molecule GLP-1 for obesity. In a China
Phase 2 trial, CX11 showed competitive weight loss with Lilly’s
Orforglipron, the leading small molecule in development. We
believe orals are one of the largest unmet needs in obesity
and are excited for Corxel’s transformation into a global
cardiometabolic company.
As full life cycle investors,
our belief is that the majority
of value creation in biotech
happens in the public market,
however, it is valuable and
important to position oneself
and build conviction before
anIPO."
14
Table 2. Performance breakdown for the year ending 31 December 2024
Portfolio segment
NAV per share
contribution %
Core private +0.7%
Core public +2.1%
Avidity Biosciences +12.4%
Tarsus Pharmaceuticals +3.8%
Rocket Pharmaceuticals -7.0%
Immunocore -3.1%
Cargo Therapeutics -1.5%
Royalties +2.4%
“Other public” -3.8%
Fees and other MTD P&L -1.1%
Arix transaction and share buybacks -5.0%
YTD return -4.6%
Following the Board’s increase to the share buyback program in January, there followed several intra-month share buybacks in
the first half of the year. In addition, the intra-month acquisition of Arix Bioscience significantly increased shares outstanding in
mid-February. Due to these fluctuations in weighted average shares outstanding during the period, and because the Group’s
NAV is calculated on a monthly basis, the above breakdown of NAV contributions by portfolio segment is an estimate for the
period 1 January to 31 December 2024.
The Group’s royalty positions, representing approximately
3%of NAV, made a solid contribution this year, underlining
theattractiveness of their uncorrelated, income-oriented
returns. The Group’s investment in the Investment Manager’s
4010 Royalty Fund performed well. 4010 currently holds two
investments with Avadel Pharmaceuticals and Urogen Pharma
(which is also the underlying asset of RTW Royalty 2). The
royalty agreement with Avadel is associated with the sales
ofLumryz, which is an extended-release sodium oxybate
medication approved by the FDA on 1st May 2023 as the
firstand only once-at-bedtime treatment for cataplexy or
excessive daytime sleepiness (EDS) in adults with narcolepsy.
Lumryz’s sales ramp is significantly outperforming 4010’s
underwriting target. The Urogen royalty is connected to
twooncology franchises: Jelmyto and UGN-102. The products
are topical therapies in the urinary tract for urothelial and
bladder cancers, which are typically treated by surgical
intervention. Most of the royalty returns are derived from
Jelmyto, which is an established and growing product.
UGN-102 is nearing FDA approval with Phase 3 data,
andweexpect it to be approved in early 2025. In the
thirdquarter,4010 sold its Allurion royalty asset at a
smallprofitincluding royalties received to date. A sale
withintheinvestment period allows us to redeploy the capital
intothe more attractive risk-reward opportunities we see.
4010 will start distributing on a quarterly basis soon after
thefinal close, which is expected to be in the first half of 2025.
At the outset, the Arix transaction was expected to be
accretive, as the cancellation of shares previously owned by
Acacia would offset the transaction costs, while the share
conversion ratio was set on a NAV-for-NAV basis. However,
the Group’s NAV appreciated materially versus Arix’s between
the deal announcement and closure, leading to a small NAV
per share dilution on closing, including the revaluation of Arix’s
private positions. Artios, Evommune and Ensoma increased in
value, while we wrote down the values of Depixus, Sorriso and
Amplyx. We believe the long-term benefits of the increase in
scale and potential future accretion of the acquired positions
will far outweigh the short-term costs. The increased cash
position at an opportune time allowed us to make
investments in a handful of core public positions like Akero
that have subsequently been highly accretive to NAV.
Since admission, the Group has made sixty-nine core private
investments. At 31 December 2024, thirty-one of these
positions had had liquidity events (i.e., go-public or
acquisition). The average holding period as private was
fourteen months and the average MOIC to the liquidity event
was 1.8x. Nineteen of these positions have either concurrently
or subsequently been exited in full at an average MOIC of 2.8x.
New core
portfolio
companies
21
(2023: 7)
Strategic Report Governance Report Financial Statements Additional Information
15
Key updates for Core Portfolio Companies during 2024:
JAN FEB MAR APR MAY JUN
Avidity Biosciences
the Group’s largest
portfolio holding at the
time, announced positive
long-term data showing
reversal of disease
progression in people living
with myotonic dystrophy
type 1 (DM1), across
multiple endpoints. Having
been impressed by Avidity’s
initial patient data, the FDA
supported using hand
opening time, a sensitive
and early marker of change,
as the primary endpoint for
a Phase 3 trial.
Apogee Therapeutics
reported interim Phase 1
data supportive of
best-in-class convenience
for its long-acting IL-13
antibody, a target that Eli
Lilly has validated for
atopic dermatitis (AD).
Tarsus Pharmaceuticals
reported in their results
announcement that they
saw sales from Xdemvy
(the first and only
FDA-approved treatment
to directly target demodex
mites, the root cause of
demodex blepharitis) more
than double consensus
expectations in its first full
quarter since launch.
Lenz Therapeutics
went public through the
completion of a merger
with Graphite Bio and now
trades on the Nasdaq
Global Market under
theticker “LENZ”.
Mirador Therapeutics
The Group participated in
the Series A financing
round of Mirador
Therapeutics, raising over
US$400 million for its
launch. The Group has
worked with Mirador’s
team previously, when
they led Prometheus
Biosciences to its
acquisition by Merck for
US$10.8 billion in 2023.
Kyverna Therapeutics
priced its US$319 million
IPO and began trading on
Nasdaq Global Select
Market under the ticker
“KYTX”.
BioAge Labs
The Group participated
inthe US$170 million
Series D financing round of
BioAge Labs. The capital
will be used to fund Phase
2 trials for Azelaprag,
anoral drug with the
potential to increase
weight loss and prevent
muscle loss when used
together with a GLP.
Ji Xing
Bayer AG and RTW
Investments announced
the US$162 million initial
closing of a Series D
financing in Ji Xing. Bayer
and Ji Xing concurrently
announced a new
strategiccollaboration
focused on cardiovascular
diseases in China.
Lenz Therapeutics
announced positive topline
data from its Phase 3
presbyopia trial, following
which the FDA accepted
its New Drug Application
in October.
Obsidian Therapeutics
The Group participated
inthe US$160.5 million
Series C financing round
of Obsidian Therapeutics,
a clinical stage biotech
pioneering engineered
celland gene therapies.
Santa Ana Bio’s
The Group participated in
Santa Ana Bio’s Series A
financing round that
raised $US168 million.
Santa Ana is a biotech
company developing a
pipeline of innovative
therapeutics and
leveraging its multi-omics
platform to unlock the full
potential of precision
medicines.
Avidity Biosciences
announced “unprecedented”
AOC 1020 data from its Phase
1/2 clinical trial. AOC 1020 is an
investigational therapy that
targets DUX4, the root cause
of facioscapulohumeral
muscular dystrophy (FSHD).
Avidity plans to accelerate
initiation of registrational
cohorts in its Phase 1/2 trial.
Rocket Pharmaceuticals’
progress toward its first
approval for Kresladi, for the
treatment of LAD-1, was
delayed after the FDA issued
aComplete Response Letter
requesting additional
manufacturing information.
Inour view, the delay should
bemodest and we are hopeful
they will receive the FDA’s
approval in 2025.
Immunocore’s
melanoma data showed
asub-20% response rate
atASCO.
Merus
(also at ASCO) reported
stunning proof-of-concept
data in combination with PD1
therapies for the treatment
ofhead and neck cancer. The
data demonstrated a 60+%
response rate, further
evidencing the drug’s potential
to redefine front-line standard
of care.
Numab Therapeutics
announced that Johnson
&Johnson would acquire
itswholly owned subsidiary,
Yellow Jersey Therapeutics,
for $US1.25 billion in cash.
Yellow Jersey Therapeutics
holds the rights to Numab's
NM26, a first-in-class,
bi-specific antibody
targeting two clinically
proven pathways in
atopicdermatitis, the most
common inflammatory skin
disease. The transaction
completed in July.
Key updates for Core Portfolio Companies during 2024:
FINANCIAL MILESTONES
CLINICAL & COMMERCIAL MILESTONES
16
Report of the Investment Manager
continued
Key updates for Core Portfolio Companies during 2024:
JUL AUG SEP OCT NOV DEC
BioAge Labs, Inc.
("BioAge") completed a
US$198 million IPO and
now trades on Nasdaq
Global Select Market
under the ticker "BIOA".
Aktis Oncology’s
The Company co-led Aktis
Oncology’s Series B round,
raising US$175 million in
financing to further
advance its proprietary
pipeline ofnovel targeted
alpha radiopharmaceuticals
totreat a broad range
of solid tumours.
Jade Biosciences, Inc.
The Company made a new
investment in the seed
round of Jade Biosciences,
Inc. that raised US$80
million for its launch. The
funding will be used to
support Jade's plans
todevelop targeted
therapies for indications
with high unmet need
across inflammation and
immunology.
Artiva Biotherapeutics
priced its IPO at
US$167million and
begantrading on
NasdaqGlobal Market
under the ticker "ARTV".
Kailera Therapeutics
The Company announced
the launch of new portfolio
company, Kailera
Therapeutics. The US$400
million Series A financing
round was co-led by RTW
Investments alongside
Atlas Venture and Bain
Capital Life Sciences,
withparticipation
fromLyra Capital.
Kaileraisdeveloping a
broad, advanced, and
differentiated portfolio
ofclinical-stage injectable
and oral therapies that
have demonstrated
potential as best-in-class
treatments for the
treatment of chronic
weight management.
Evommune, Inc
The Company invested
inthe US$115 million
SeriesC financing round
of Evommune, Inc. The
Company received alegacy
position in Evommune
earlier in 2024 when it
acquired the assets of Arix
Bioscience. Evommune isa
clinical-stage biotechnology
company discovering and
developing new ways to
treat immune-mediated
inflammatory diseases.
Corxel Pharmaceuticals
announced the acceptance
by China's National Medical
Products Administration
(NMPA) of the New Drug
Application (NDA) for
Aficamten, an
investigational, next-in-
class selective small
molecule cardiac myosin
inhibitor for the treatment
of obstructive hypertrophic
cardiomyopathy (HCM).
Mantle Therapeutics
The Company made a
new investment in the
seed round of Mantle
Therapeutics. Mantle
s a biotech company
targeting the treatment
of rare, fatal diseases
across multiple modalities.
Ottimo Pharma
The Company made a new
investment in Ottimo Pharma, a
company pioneering bifunctional
medicines to extend the lives of
people living with cancer. The
Series A financing round of over
US$140 million will accelerate
the lead asset, Jankistomig,
afirst-in-class PD1/VEGFR2
bifunctional antibody for
multiple solid tumour
indications, and a pipeline of
follow-on bifunctional assets.
Alesta Therapeutics
The Company made a new
investment in the Series A
round of Dutch biotech,
AlestaTherapeutics, a
companyfocused on developing
transformative small molecule
therapies for rare diseases. Its
lead asset is an orally active
therapeutic candidate for
hypophosphatasia (HPP), a rare
genetic disorder caused by
mutations in the ALPL gene.
City Therapeutics
The Company made a new
investment in the Series A
round of City Therapeutics,
abiopharmaceutical company
developing a pipeline of
next-generation RNAi-based
medicines to make a significant
impact for patients across
multiple therapeutic areas.
Corxel Pharmaceuticals
announced that it had entered
into a definitive agreement
whereby Sanofi would acquire
its exclusive rights to develop
and commercialise Aficamten
inGreater China for an
undisclosed amount. The
transaction has since closed.
Key updates for Core Portfolio Companies during 2024:
FINANCIAL MILESTONES
CLINICAL & COMMERCIAL MILESTONES
Strategic Report Governance Report Financial Statements Additional Information
17
Report of the Investment Manager
continued
Portfolio breakdown and new investments
Core public positions are typically investments that were
added to the portfolio as private investments, reflecting the
key focus of the Group’s strategy. Our investment approach
isdefined as full life cycle and, therefore, involves retaining
private investments beyond their IPOs; hence the core
portfolio consists of both privately-held and publicly-listed
companies and royalty investments.
As of 31 December 2024, the Group’s core positions
accounted for 67% of NAV (2023: 67%) and included fifty-four
companies (2023: 36) in private and public biotech and
medtech companies and royalty investments. We selected
these investments based upon our rigorous assessment of
the science, commercial potential and valuations. Table 3
shows the top ten portfolio investments at the end of the
reporting period.
Core private investments accounted for 30% of NAV
at31December 2024 (2023: 18%) across thirty-three
investments (2023: 22). The increase in exposure and number
of investments in the reporting period reflects the addition of
several new private positions (see Table 4 alongside the new
private investments from Arix (Ensoma, Evommune, Depixus,
Sorriso and Amplyx) less Kyverna, BioAge and Artiva which
went public via IPOs and Lenz, which went public via a
reversemerger.
Core public investments accounted for 34% of NAV (2023:
39%) across nineteen positions (2023: 12). The change in
exposure and number of investments mostly reflects
underlying performance, the graduation of Kyverna and Lenz
to the public markets and the addition of Akero, Urogen,
89Bio and Merus.
Royalties accounted for 3% of NAV (2023: 10%) across two
investments (2023: 2): RTW Investments’ 4010 Royalty Fund
(4010) and RTW Royalty 2. These investments are cash
generative, providing life sciences exposure that is
uncorrelated to the volatility of the equity markets, and have
limited scientific risk due to their being typically constructed
around commercial products. The reduction in exposure
reflects a rebalanced exposure to 4010 after new investors
came into the fund and the sale and transfer of a portion of
RTW Royalty 2’s underlying assets.
“Other public” listed companies make up 31% of the Group’s
NAV at 31 December 2024 (2023: 20%). The “other public”
portfolio segment is designed as a cash management strategy
to mitigate the drag of setting aside cash for future deployment
into core positions and to provide ready cash as needed for
those purchases. The 50 “other public” holdings are carefully
selected, mostly matching, on a pro-rata basis, the long
investments held in our private funds and generally rebalanced
on a monthly basis. The investments represented in this
portfolio are similarly categorised as innovative biotechnology
and medical technology companies developingand
commercialising potentially disruptive and transformational
products but are generally later stage (both in terms of clinical
development and duration as a public company), have larger
market capitalisations and have greater trading liquidity than
our core public positions. The average market capitalisation
ofthe “other public” holdings is $8.8b at 31 December 2024.
Available cash at 31 December 2024 was 2%, significantly lower
than at the same point last year (13%). The elevated cash
position at 31 December 2023 was in preparation for the
purchase of a stake in Arix Bioscience, which closed in January
2024. From time to time, we may make use of derivatives and
other instruments to manage individual position sizing for the
purpose of efficient portfolio management. In 2024, the use of
derivative and hedging shorts increased for this reason.
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.
While the portfolio is still majority invested in US-based
companies, we are committed to adding UK and EU
investments in an effort to support the best assets across
the globe and help foster local biotech ecosystems. When we
first came to market in October 2019, we had zero exposure
to the UK, now two of our top ten positions are based in the
UK: Immunocore (public: “IMCR”) and Artios (private).
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.
Core portfolio
companies
54
(2023: 36)
18
Table 3. Top ten core portfolio positions as of 31 December 2024
1
Portfolio Company Description Ticker Therapeutic Area Clinical stage
Expected upcoming
catalyst % NAV
Corxel RTW Investments incubated biotech
committed to bringing innovative
therapiesto underserved patients
withcardiometabolic diseases.
Private Cardiovascular Phase 3 CX11 global Ph2
trial begins Q2
2025
8.5%
Avidity Antibody conjugated RNA medicines
company. Lead program for myotonic
dystrophy.
RNA Rare Disease Phase 3 FSHD trial
update in H1
2025
7.3%
Tarsus Biotech developing first-in-class
therapeuticsfor ophthalmic conditions.
TARS Ophthalmology Commercial Q1 earnings in
April
6.0%
Akero Clinical-stage company developing
treatments for patients with serious
metabolic diseases, including non-alcoholic
steatohepatitis.
AKRO Metabolic Phase 3 Ph3
SYNCHRONY
data H1 2026
5.2%
Rocket Gene therapy platform company for rare
paediatric diseases. Four clinical programs
for Fanconi anaemia, Danon, LAD, and PKD
RCKT Rare Disease Phase 3 Danon patient
dosing and PKP2
data H1 2025
5.1%
Artios Developing breakthrough cancer treatments
that target DNA Damage Response
pathways. RTW Bio position increased
aspart of Arix transaction.
Private Oncology Phase 2 ART0380 Ph1
data Q2 2025
4.9%
Kailera RTW Investments new company creation
based on a pipeline of injectable GLP-GIP
and oral GLP drugs in-licensed from Jiangsu
Hengrui Pharmaceuticals, one of China's
leading biopharma companies.
Private Metabolic Phase 3 June 2025 – high
dose KAI7535
China data
3.4%
Ensoma Genomic medicines company developing
one-time, in vivo treatments that precisely
engineer any cell of the hematopoietic
system for immuno-oncology, genetic disease
and other therapeutic applications.
Private Rare Disease Preclinical Chronic
granulomatous
disease Phase 1
Q2 2025
2.6%
Immunocore T-cell receptor therapy company focused
ononcology and infectious disease.
IMCR Oncology Commercial HIV MAD H125 2.3%
RTW Royalty
Fund
RTW Investments-created private fund
aimed at generating returns from rights to
royalty stream distributions from biopharma
& medtech life sciences companies.
Private Neurology Commercial Quarterly
earnings for
underlying
companies
2.0%
1 Positions are shown on a net basis. Any differences with the Schedule of Investments are due to short holdings.
Strategic Report Governance Report Financial Statements Additional Information
19
Company name Public/Private Description % NAV
Kailera Private
RTW Investments new company creation based on a pipeline of injectable GLP-GIP and oral GLP
drugs in-licensed from Jiangsu Hengrui Pharmaceuticals, one of China's leading biopharma companies.
3.4%
Ensoma² Private
Genomic medicines company developing one-time, in vivo treatments that precisely engineer any cell
of the hematopoietic system for immuno-oncology, genetic disease and other therapeutic applications.
2.6%
Evommune² Private
Clinical stage biotechnology company developing novel therapies to treat immune-mediated chronic
inflammatory diseases.
1.1%
Aktis Private
Developing a proprietary pipeline of novel targeted alpha radiopharmaceuticals to treat a broad
range of solid tumours.
0.8%
Jade Private
Developing a pipeline of therapies aimed at transforming the standard of care for patients living with
autoimmune diseases.
0.6%
Ottimo Private Biotech company focused on the development of cancer therapies for solid tumours. 0.5%
Akero Public
Clinical-stage company developing treatments for patients with serious metabolic diseases, including
metabolic dysfunction-associated steatohepatitis (MASH).
5.2%
89Bio Public
Clinical-stage biopharmaceutical company developing innovative therapies to treat patients with liver
and cardiometabolic diseases.
1.2%
Merus Public
Public, clinical-stage oncology company developing full-length human bispecific and trispecific antibody
therapeutics with a broad application for human disease, with a focus on head and neck cancer.
0.8%
1 Includes new privates, re-designations from “other public” to core public and Arix acquisition positions.
2 Arix-acquired position
Table 4. New core portfolio investments greater than 50bps in 2024¹
What is royalty financing?
Financing based on royalty payments. In
exchange for an upfront payment, investors
receive quarterly cash payments based on
a pre-determined percentage of the future
revenues of a specified product or asset.
Within healthcare, royalty financing is a
growing source of funding for small and
medium-sized companies launching new
drugs. A bespoke solution that aligns the
interest of the provider/investor with the
company through revenue participation,
while avoiding some of the negatives of debt
(i.e. covenants, refinancing, warrant coverage
etc.) is an increasingly popular one.
How does RTW Bio gain exposure to
royalty financing?
Historically, RTW Bio has made royalty investments directly
alongside other RTW Investments funds through individual
vehicles such at RTW Royalty 1, which held the Mavacamten
royalty that was subsequently sold to Bristol Myers Squibb.
Since 2023, RTW Bio has gained exposure to royalties through
the RTW Investments-managed 4010 Royalty Fund ("4010") on
ano fee basis. It is expected that RTW Bio will continue to gain
exposure to royalties through successor vintages of 4010.
Investing through a co-mingled drawdown fund has several
benefits from a cost and administration perspective.
The 4010 Royalty Fund
The 4010 Royalty Fund is looking to generate uncorrelated,
income-oriented returns for investors by targeting a gap in
financing available to small and medium-sized companies
launching first-in-class or best-in-class products with high
unmet needs. RTW Investments’ full life cycle investment
platform provides 4010 with several advantages by seeing more
royalty opportunities earlier and with greater underwriting
insight. These advantages combined with RTW Investments’
in-house transactional capabilities allow it to offer holistic
financing solutions to companies and to structure innovative
deals to protect downside for investors.
Royalty Financing
20
Report of the Investment Manager
continued
Small Molecule
Genetic Molecule
Proteins
Antibody
Medtech
Cell therapy
Radiotherapy
20.9%
42.8%
35.6%
35.6%
0.0%
10.0%
18.2%
9.3%
10.2%
5.9%
10.4%
3.7%
0.0
1.5%
0.4%
1.5%
4.3%
0.4%
Spec Pharma
Targeted Protein
Degredation
2023
2024
45
30
15
0
Preclinical
Phase 1
Phase 2
Phase 3/Pivotal
Commercial
6.8%
10.3%
8.0%
4.8%
41.1%
13.5%
28.9%
52.7%
15.2%
18.7%
2023
2024
45
30
15
0
60
US &Canada
UK & EU
Rest of World
69.7%
14.8%
21.2%
15.6%
14.5%
64.3%
2023
2024
75
50
25
0
Rare Disease
Oncology
Cardiovascular
Metabolic
Ophthalmology
Inflammation
20.9% 33.9%
24.8%
26.5%
20.4%
23.5%
18.5%
0.0%
15.8%
4.1%
9.4%
5.6%
7.7%
3.0%
2.3%
2.3%
0.7%
0.7%
0.4%
Neurology
Pulmonary
T1 Diabetes
2023
2024
45
30
15
0
Portfolio grouping % of NAV at 31 Dec 2024 % of NAV at 31 Dec 2023
Core private 30.3% 17.6%
Core public 34.1% 39.3%
Royalties 2.7% 9.8%
Other public 30.5% 20.4%
Available Cash¹ 2.3% 12.9%
Total 100% 100%
1 As defined in Alternative Performance Measures.
Table 5. NAV capital breakdown as of 31 December 2024 and 31 December 2023
Core portfolio breakdown
Figure 1. Core portfolio breakdown, by (A) Modality, (B) Therapeutic focus, (C) Clinical stage and (D)
Geography as of 31 December 2024.
A) Modality B) Therapeutic Focus
D) GeographyC) Clinical Stage
Except for clinical stage, these breakdowns do not include royalty vehicles.
Strategic Report Governance Report Financial Statements Additional Information
21
Report of the Investment Manager
continued
Table 6. Core portfolio positions greater than 50 bps, as of 31 December 2024 and 31 December 2023
1,5
Portfolio Company Private or Public²
% of Group’s net
assets at
31/12/2024
% of Group’s net
assets at
31/12/2023
Corxel Private 8.5% 7.9%
Avidity
3
Public 7.3% 1.4%
Tarsus Public 6.0% 1.5%
Akero Public 5.2% 0.0%
Rocket Public 5.1% 17.9%
Artios Private 4.9% 0.2%
Kailera Private 3.4% 0.0%
Ensoma Private 2.6% 0.0%
Immunocore Public 2.3% 7.4%
RTW Royalty Fund Private 2.0% 6.1%
Milestone
3
Public 1.7% 2.0%
Beta Bionics Private 1.5% 1.7%
Cargo Public 1.4% 4.0%
89Bio Inc Public 1.2% 0.0%
Evommune Private 1.1% 0.0%
Lycia Private 1.0% 0.2%
Apogee Therapeutics Public 1.0% 1.8%
Ancora Private 0.9% 1.1%
Aktis Private 0.8% 0.0%
Merus Public 0.8% 0.0%
RTW Royalty 2 Private 0.7% 3.7%
NiKang Private 0.7% 1.4%
Magnolia Private 0.6% 0.7%
Orchestra Public 0.6% 2.1%
Jade Private 0.6% 0.0%
Ottimo Private 0.5% 0.0%
1 The aggregate exposure of names below 50 bps, consisting of 26 positions, is 4.8% of the Group’s NAV.
2 Names in which the fund owns both private and public securities of a public company are categorised as public.
3 Includes pre-funded warrants.
4 Includes shares held in the initial SPAC vehicle (HSAC2) that merged with Orchestra in January 2023.
5 Positions are shown on a net basis. Any differences with the Schedule of Investments are due to short holdings.
Table 7. RTW Investments representation on portfolio company boards as of 31 December 2024
Portfolio company¹ RTW representative on the board
Corxel Rod Wong, Peter Fong, Gotham Makker
Magnolia Ovid Amadi
Nikang Chris Liu
Rocket Rod Wong, Gotham Makker, Naveen Yalamanchi
Yarrow Rod Wong, Peter Fong, Gotham Makker
RTW Royalty 2 Matthew Bieret
Kailera Gotham Makker
Ensoma Piratip Pratumsuwan
Artios Chris Liu
1 In aggregate these represented 26.7% of the Group’s NAV at 31 December 2024.
Table 8. Top 5 “Other Public” portfolio segment holdings as of 31 December 2024
1
Position Ticker % of NAV Description
Madrigal Pharmaceuticals Inc. MDGL 5.9%
Commercial-stage biopharmaceutical company focused on improving care for
patients with non-alcoholic steatohepatitis (NASH) and metabolic dysfunction
associated steatohepatitis (MASH).
Dyne Therapeutics Inc. DYNE 4.1%
Biotechnology company developing oligonucleotide therapies for rare diseases
that affect muscle tissue.
Stoke Therapeutics Inc. STOK 2.3% Clinical stage biotech developing RNA treatments for severe genetic diseases.
PTC Therapeutics Inc. PTCT 2.0%
Commercial-stage global biopharma developing therapies for people living with
rare neurological and metabolic diseases.
Argenx SE ARGX 2.0%
Commercial-stage global immunology company developing treatments for
severe autoimmune diseases.
Total 16.3%
1 Positions are shown on a net basis. Any differences with the Schedule of Investments are due to short holdings.
22
21%
14%
7%
24%
34%
21%
14%
7%
24%
34%
RTW Bio Funded NewCos
Between 0 and 6 months
Between 7 months and 1 year
Between 1 year to 2 years
More than 2 years
Table 9. Private Valuation Statistics for 2024
Statistic 2024
Number of revaluations in 2024 71
Average revaluations per investment 2
Average time since last third-party valuation (weeks) 7
Average time since last financing round (years) 1.0
Average valuation change¹ +10.9%
Average mark-up¹ +38.3%
Average mark-down¹ -20.1%
Average step-up to realisation event +7.9%
Average MOIC to realisation event 1.7x
1 Does not include positions acquired in the Arix transaction
Private Portfolio Valuations and Cash
RunwayAnalysis
The core private positions are the foundation of the Group’s
strategy. They are built on our rigorous assessment of the
best investment opportunities we can find. We have always
been highly selective in this area, focusing only on companies
with both well-founded science and attractive commercial
opportunities. We have benefited from this discipline as
wecontinue to emerge from a challenging capital markets
environment. We have a private portfolio that is well-sized
andwell-funded.
As of 31 December 2024, the average cash runway of our core
private companies was slightly over two years, which provides
them with sufficient time to focus on clinical development
plans. About a fifth have less than six months of runway, one
of which is an RTW Investments company creation, which is by
design, as the Investment Manager’s funds have the flexibility
to inject cash when necessary. The remainder are working on
various capital raising solutions.
We hold our private company investments at ‘fair value’ i.e.,
the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market
participants. This is assessed in accordance with US GAAP,
utilising valuation techniques consistent with the International
Private Equity and Venture Capital Guidelines including, but
not limited to, the income approach and the market approach.
Valuations are adjusted both during regular valuation cycles
and on an ad hoc basis in response to ‘trigger events’, which
may include changes in fundamentals, an intention to carry
out an IPO, or changes to the valuations of comparable public
companies. Our valuation process ensures that private
companies are valued in both a fair and timely manner.
The Board delegates valuation of the private investments to
the Investment Manager while the Board’s Audit Committee
oversees the integrity of the valuation process and conducts
an independent review of the Investment Manager’s valuation
policies and procedures twice a year when the interim and
annual statements are produced and also on an ad hoc basis
when appropriate.
The process is overseen at the Investment Manager by the
RTW Investments Valuation Committee. The Committee
issupported by RTW Investments’ valuation team that is
independent from the investment team and receives advice
from two independent third-party valuation firms. The
Valuation Committee approves valuations of private company
investments on a monthly basis and utilises the analysis of an
independent third-party valuation firm no less frequently than
twice a year in helping to determine the fair value of each
material private investment.
Thirty core private and royalty positions saw a total of
seventy-one valuation adjustments in 2024 with an average of
two adjustments per position. Fourteen positions (not including
the Arix positions) were marked up by an average of 38.3%
(excluding Numab, which was marked up by 264% to reflect
thedeal with Johnson & Johnson, the average was 21.0%);
11positions (not including Arix positions) were marked lower
byan average of -20.1%. The balance remained unchanged. 29%
ofthe markdowns were primarily driven by changes to relative
comparables or market-based inputs. 38% of the markups
were primarily driven by comparables, and 62% were primarily
driven by idiosyncratic company performance, a financing
round or transaction. At year end, the average time since the
last third-party valuation was seven weeks and an average of
twelve months had elapsed since the last financing round.
Of the positions acquired from Arix, we wrote up the values of
Artios, Evommune and Ensoma and we look forward to seeing
them develop further in the future. We wrote down the values
of Depixus, Sorriso and Amplyx which are immaterial in the
context of the whole portfolio.
We believe that the value of the private portfolio is best
demonstrated by go-public events or transactions. The five
such go-public events in 2024 (including the Numab
acquisition) saw an average step up from our holding value
tothe event of 8%. The average MOIC to the event was 1.7x.
This is consistent with our historical averages (Figure 2).
2022
1.3 x
1.9 x
2.0 x
1.9 x
2.2 x
1.7 x
2023 202420202019 2021
25
New private investment
Liquidity event
Average private MOIC
to liquidity event
15
20
10
5
0
Figure 2. New private investments, private
liquidity events¹ and private MOIC²
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.
Figure 3. Core private portfolio – approximate cash runway
as of 31 December 2024
Read more in the
Report of the
Audit Committee
page 60
Strategic Report Governance Report Financial Statements Additional Information
23
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-23
Dec-24
Dec-98
Dec-96
Dec-97
Dec-99
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Mar ‘00 – Mar ‘03
-85% peak to trough
Aug ‘08 – Mar ‘09
-46% peak to trough
Jul ‘15 – Feb ‘16
-52% peak to trough
Feb – Mar 2020
-38% peak to trough
Aug – Dec 2018
-33% peak to trough
Feb ‘21 – Oct ‘23
-70% peak to trough
Sector review and outlook
The Russell 2000 Biotech Index and the Nasdaq Biotech
Index(NBI) returned +2.5% and -1.4%, respectively, in 2024.
The Russell 2000 Biotech Index remains below levels first
reached in 2018. Interest rate worries dominated for much
ofthe year and continued to after the US Federal Reserve’s
latest shift in December. While the results of the first round
ofInflation Reduction Act (IRA) drug negotiations were on the
better end of expectations, the uncertainty surrounding RFK
Jr’s nomination and subsequent appointment as Trump’s
Secretary of Health and Human Services became a new
reason for some to stay on the sidelines. Coming into 2024,
the biotech sector had already underperformed the S&P 500
by a record amount and this continued through the year with
-26% and -22% relative performance for the NBI and the
Russell 2000 Biotech Index, respectively. Eli Lilly basically
carried biopharma, generating ~US$200B in market cap
whilethe rest of pharma (-US$180B) and biotech (+US$20B)
combined, lost value. The total market cap of small and midcap
biotech is only US$700bn, less than Lilly alone and about the
same value as the market cap that Nvidia lost on “DeepSeek
Monday” (i.e. 27th January 2025). If some flows are diverted
from AI-tech to biotech, the impact on biotech could be
significant given the relative market caps we see these days.
Figure 4. Russell 2000 Biotechnology index value
M&A was too small to get things going. While five-hundred-
million-dollar-plus acquisition volumes remain near record
highs (27 vs last year’s record 26), dollar value dropped to
US$44 billion vs US$140 billion in 2023. This was the first year
in twenty that we did not see an M&A deal over US$5 billion
invalue as there was a shift towards earlier stage assets as
some buyers (namely Lilly, Novo, AbbVie, and AstraZeneca)
are focused on revenues beyond 2030. To compound matters,
China’s bear market has increased the supply of early-stage
assets looking for capital, giving buyers more options. Despite
this dynamic, we don’t think this spells the end for larger
late-stage deals. Merck, Bristol, Roche, Novartis, and Sanofi
are still on the hunt for revenues this decade and Lilly
andNovo are sure to get more aggressive as their obesity
revenues grow. Several large pharma companies face losses
ofexclusivity patent cliffs totalling approximately US$500bn
over the next decade and currently have approximate
US$1trillion of dry powder (cash plus debt capacity) to
makeacquisitions. Only western biotech companies have
thelate-stage assets needed to fill their needs and a more
friendly Federal Trade Commission (FTC) in the US should
lower the barriers that have discouraged bigger deals in
recent times.
Report of the Investment Manager
continued
24
2014
2015
2016
2024
2023
2022
2013
2012
2019
2020
2021
2018
2017
2011
2010
2008
2009
$250
$200
Deal Value ($B)
Number of Deals
$150
$50
$110
$26
$17
$7
$14
$60 $59
$66
$51
$43
$195
$102
$48
$69
$44
$140
$100
$50
$0
Number of deals
30
25
20
15
10
5
0
Deal Value ($B)
Figure 5. US biotech M&A deal volumes and value
2014
2015
2016 2022 1H 20242023
2013
2012
2019 2020 20212018
2017
2011
2006 2007 2008 2009 2010
400
IPOs
Follow Ons
300
200
100
0
Figure 6. US Biopharma Financing Market – IPOs and Follow-Ons
Source: Jefferies Biotech M&A Report 2008-2004 as of 31 December 2024
Source: Bloomberg and Lazard 2024 Life Sciences US Equity Issuance Recap report as of 31 December 2024.
IPOs made incremental progress towards normalisation.
17companies made it out this year versus 12 last year. This
isconsistent with a slow transition from a bear market (less
than 10) to a healthy one (more than 30). Consolidation also
continued. After peaking in 2021 at 590 publicly traded small
and mid-caps, the number is now 547. Most small and mid-cap
companies have been disciplined around spending, with cash
The FDA approved 56 novel drugs this year, shy of last
year’srecord-setting 61, but still one of the highest in history.
Novel modalities made up 10 vs 14 last year, including two
gene therapies, four cell therapies, one RNA medicine, and
three bispecifics. 2024 saw notable breakthroughs across
therapeutic areas with the first approval for NASH (the most
severe form of nonalcoholic fatty liver disease), the first cell
therapy approved for solid tumours, bispecific data that could
potentially challenge Keytruda’s dominance in solid tumours
burn trending lower to extend runways. Public follow-on
financing activity returned to near record levels as companies
with good data were able to raise the capital they needed.
Venture financing is extremely robust. Every category from
Series A to D surged in 2024 supported by many “mega-
rounds” (i.e. more than US$250m) in the As and Bs, the fuel
for future waves of innovation.
and compelling CD19 CAR-T data demonstrating the
possibility of drug-free remission in autoimmunity, not to
mention the significant advances in obesity (more below).
It’sworth noting that 56% of last year’s approvals came from
biotech companies under $5bn in market capitalisation. This
is where the innovation is. 2025 holds the potential to be on
par with record-setting 2023 with many highly probably
PDUFA dates set.
17
companies went
public in 2024
(2023: 12)
Strategic Report Governance Report Financial Statements Additional Information
25
2014
2015
2016
2022
2024
2023
2013
2012
2019
2020
2021
2018
2017
2011
2010
2008
2005
2003
2001
1999
1997
1995
1993
1994
1996
1998
2000
2002
2004
2006
2007
2009
70
NME Approvals
Cell&GTx
60
50
40
30
20
10
0
NME Filings/Approvals
Figure 7. The FDA approved 56 novel drugs in 2024
FDA approved
novel drugs
56
(2023: 61)
We are tracking how the Department of Human and
HealthServices (HHS) could look under RFK Jr’s leadership.
Considering the scope of the job, guardrails, and players
surrounding him, we currently don’t expect a change in
direction when it comes to FDA’s pro-innovation trend.
Innovation momentum could go either way, depending
moreon Dr Marty Makary and other staff. Separately, we are
optimistic we could see pharmacy benefit manager (PBM) and
insurance reform. If and when RFK Jr uncertainty declines, we
would note that the sector outperformed the S&P 500 in two
of the past three Republican first terms, and we would expect
no different an outcome today, given the promising science
our team is evaluating daily.
From a modality or therapeutic area perspective, oncology,
immunology, rare disease and obesity remain a focus with
next generation obesity drugs probably offering the most
exciting opportunities. We call it “the $1 trillion GLP-1
revolution” because it is the first innovation in healthcare –
not just drugs, all of healthcare – to create about US$1 trillion
in value. Obesity is the most common disease in Western
society with over 100m obese people in America alone.
Itishighly linked to three of the top ten causes of death:
cardiovascular, stroke and diabetes. It is also strongly
associated with other diseases like cancer, kidney disease and
maybe even dementia. Recent outcome studies from some of
the GLP-1s are showing 20-30% improvements in these other
associated diseases and conditions. It is probably the most
significant medical advance in terms of the sheer impact that
we have seen in recent history (more below in the Impact
section). If you want to learn more about the science, impact,
evolving competitive landscape, and the opportunities we see,
please check out The RTW Podcast: “The $1 Trillion GLP-1
Revolution”. You can find it on all the main podcast platforms.
In the here and now of policy speculation and public share
prices, it is easy to lose sight of the drastic longer-term need
for a healthy, innovative healthcare system. Globally, senior
populations (i.e. over 65 years old) are expected to double
from 800m in 2024 to 1.6bn in 2050. In the US, people over
65represent 18% of the current population but 36% of the
health spending. Innovation is part of the solution.
Source: FDA.gov website (CDERS and CBER)
NME = new molecular entity
GtX = gene therapy
Read more in
Strategy in action
page 30
26
Report of the Investment Manager
continued
Figure 8: Percentage of US small- and midcap biotech companies trading at less than cash
on their balance sheets at 31 December 2024
2014
2015
2016
2022
2024
2023
2013
2012
2019
2020
2021
2018
2017
2011
2010
2008
2005
2003
2001
1999
1997
1995
1993
1992
1991
1994
1996
1998
2000
2002
2004
2006
2007
2009
50%
40%
30%
20%
10%
Percentage of companies trading MC <1 x cash
0
% of companies
32% of 547 <US$10b market cap
US biotech companies trading
below cash as of year end 2024
Post period-end updates and other key portfolio
company events
The following events all occurred in January 2025:
Kailera announced positive topline data from the 8mg dose of
Hengrui Pharmaceuticals’ Phase 2 clinical trial (HRS9531-203)
of HRS9531, a GLP-1/GIP receptor dual agonist, in individuals
living with obesity or who are overweight. The clinical trial
results showed that a once-weekly subcutaneous injection
ofthe 8 mg dose demonstrated a statistically significant
placebo-adjusted mean weight loss, with no plateau.
Additionally, 59% of treated participants achieved a weight
loss greater than 20%. The trial results also demonstrated
afavourable safety profile. These results increase our
confidence that Kailera is one of the leading players in
next-generation obesity management and bode well for
Kailera’s planned global Phase3 trial.
Akero (Nasdaq: AKRO) released preliminary topline results
from its Phase 2b study evaluating the efficacy and safety
ofits lead product candidate efruxifermin (EFX) in patients
with compensated cirrhosis due to metabolic dysfunction-
associated steatohepatitis MASH. Treated patients
demonstrated a statistically significant improvement in
fibrosis with no worsening of MASH, representing a 24%
effect size over placebo at 15%. Upon the news, shares in
Akero, a 5.2% position at year end, rose 100%.
Cargo Therapeutics announced it was halting work on its lead
candidate after a failed Phase 2 study, followed a couple
months later by the discontinuation of its entire pipeline, and
the announcement that it would lay off most of its staff and
seek a reverse merger or other business combination.
Beta Bionics went public on 30 January, issuing 12 million
shares of common stock at US$17.00 each, raising proceeds
of US$204 million. The shares now trade on the Nasdaq
Global Market under the ticker symbol "BBNX".
RTW Investments, LP
28 March 2025
Privately-held
portfolio
companies
33
(2023: 24)
Strategic Report Governance Report Financial Statements Additional Information
27
Transforming the
lives of millions
1.
Identify
transformational
innovations
2.
Engage in deep
research to unlock
value
The Investment Manager has developed expertise
through a comprehensive study of industry and
academic efforts in targeted areas of significant
innovation. Thanks to the decoding of the human
genome, there is more clarity around the causes of
disease. Coupled with exciting new modalities that
canaddress genetic diseases in a targeted way, drug
innovation is accelerating.
The Investment Manager has developed repeatable
internal processes, combining technology and
manpower to comprehensively cover critical drivers
ofinnovation across the globe. We seek to identify,
through rigorous scientific analysis, biopharmaceutical
and medical technology assets that have a high
probability of becoming commercially viable products,
dramatically changing the course of treatment, and
bringing effective, or in some cases, even fully curative
outcomes to patients.
IDENTIFY ENGAGE
28
RTW Bio’s Long-Term Strategy
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,
complemented by years of investment, company building,
and both transactional and legal expertise.
3.
Build new companies
around promising
academic licences
4.
Support investments
through the full
life cycle
The Investment Manager has capabilities to partner
withuniversities and in-license academic programmes,
byproviding capital and infrastructure to entrepreneurs
to advance scientific programmes. Particularly in rare
disease, there is often little existing research and few
treatment options, so forming a rare disease-focused
company is a way of shining a light on this space and
creating a roadmap to developing potentially
curativetreatments.
A key part of the Investment Manager’s competitive
advantage is the ability to determine at which point in a
company’s life cycle we should support the target asset
orpipeline. As a full life cycle investor, RTW Investments
provides growth capital, creative financing solutions,
capital markets expertise, and guidance. Taking a
long-term, full life cycle approach and having an evergreen
structure enables us to avoid the pitfalls and structural
constraints of venture-only or public-only vehicles. RTW
Investments’ focus is on becoming the best investors and
company builders we can be, delivering exceptional
resultsto shareholders and making a positive impact
onpatients’ lives.
BUILD SUPPORT
Strategic Report Governance Report Financial Statements Additional Information
29
<10.0
Obesity prevalence (%)
10.0-19.9
20.0-29.9
>30.0
Not applicable
IMPACT FOCUS
Obesity is the most common disease
in Western society
Obesity affects more than 100 million US adults, more than
764 million people globally and is the most common disease
inWestern society.
What are GLP-1 drugs?
GLP-1 drugs, also known as GLP-1 receptor agonists or incretin
mimetics, mimic the action of a naturally occurring hormone
called glucagon-like peptide-1 (GLP-1), which is produced in the
intestines. GLP-1 plays a crucial role in regulating blood sugar
levels by stimulating insulin release, slowing stomach emptying
and reducing appetite. GLP-1 drugs work by binding to the
same receptors as the natural GLP-1 hormone, triggering
these same actions. This can help improve blood sugar
controlin people with type 2 diabetes and promote weight
lossin people with obesity or who are overweight. The term
“GLP-1 drugs” has become shorthand for a broader category
of(incretin mimetics) drugs that are used to treat obesity,
soare informally known as “obesity drugs”.
Treating obesity
and related conditions
Obesity Drugs: the most significant medical
advance in terms of the sheer impact that we
have seen in recent history
GLP-1 drugs like Wegovy and Mounjaro have gained significant
popularity for weight loss since 2021 when the FDA approved
semaglutide (Wegovy) for chronic weight management in
adults with obesity or who are overweight with weight-related
conditions. GLP-1 drugs were initially developed to treat type
2 diabetes. In fact, Wegovy is a higher-dose formulation of
Ozempic, a drug that was already marketed for diabetes. The
first GLP-1 agonist, exenatide (Byetta), was approved by the
FDA in 2005 and iterative innovation over the subsequent
twenty years has brought us to where we are today.
Obesity is a major risk factor for a number of chronic
diseaseslike diabetes, hypertension and liver disease, as well
ascardiovascular diseases such as heart disease and stroke,
which are the leading causes of death worldwide. So, the health
impacts of the obesity drugs go well beyond diabetes and weight
loss. In fact, recent outcome studies from some ofthe GLP-1s
are showing 20-30% improvements in some ofthese diseases.
RTW Bio and obesity drugs / GLP-1s
Currently, Eli Lilly and Novo Nordisk are leading the way with
their GLP-1 drugs with the only currently approved drugs.
However, their rates of adverse side effects are not optimal,
and there are a lot of ways in which these drugs can be
improved. We are still early in the current cycle of obesity
drug development and the next generation of drugs are
targeting many of the shortcomings of the incumbents.
Obesity (and its related conditions) is a large and growing
focus for RTW Bio, and we are at forefront of the second wave
of the obesity revolution, leveraging cutting-edge science and
strategic partnerships to invest in exciting assets. With a
portfolio of private obesity investments, RTW Bio is unique
among listed investment companies for shareholders looking
for exposure on the private side to the area.
Obesity affects >100m US adults and >764m people globally
Groundbreaking data from SELECT trial:
GLP-1s shown to improve MACE
1
outcome in overweight
or obese adults
0
Months since Randomization
Primary Cardiovascular Composite End Point
Cumulative Incidence (%)
4842363024
Placebo
Hazard ratio, 0.80 (95% Cl, 0.72-0.90)
P<0.001 for superiority
Semaglutide
18126
2
0
4
6
8
10
Note: * BMI ≥30kg/m
2
; ** BMI ≥40kg/m
2
Source: World Obesity Atlas, March 2023
report; Stierman 2021 National Health
Statistics Report; Prospective Studies
Collaboration 2009 Lancet
Source: Lincoff AM, Brown-Frandsen K, Colhoun HM, et al. Semaglutide
and cardiovascular outcomes in obesity without diabetes. N Engl J Med
2023;389:2221-32. DOI: 10.1056/NEJMoa2307563
1 MACE, or major adverse cardiovascular events, refers to
cardiovascular death, myocardial infarction (heart attack),
stent thrombosis (blood clot in a coronary artery stent), repeat
revascularisation (bypass surgery), ischemic stroke.
30
Strategy in Action
NAV
8.5%
(2023: 7.9%)
Corxel Pharmaceuticals
www.corxelbio.com
Corxel is a leading biotech company
headquartered in the US and China, focused
on developing innovative cardiometabolic
therapies globally. Backed by RTW
Investments, LP, Corxel (formerly Ji Xing) was
founded in 2019 and has been committed to
bringing innovative science and medicines to
underserved patients around the world. With
a strong and further developing asset pipeline,
industry leading talent, and patient-centric
focus, Corxel is dedicated to delivering
meaningful and lasting impact on patients.
In December, Corxel announced the acquisition of CX11,
anoral small molecule glucagon-like peptide-1 receptor
agonist (GLP-1 RA), for worldwide (excluding Greater
China) development and commercialisation, from
Vincentage. CX11 is an investigational, oral small molecule
GLP-1 RA for the treatment of cardiometabolic diseases,
including obesity and type 2 diabetes. GLP-1 RAs have been
shown to lower body weight, improve insulin sensitivity,
and reduce glucose and overall appetite. CX11, in a once
Kailera is a clinical-stage biopharmaceutical
company developing a broad and advanced
therapeutic pipeline that is poised to deliver
differentiated treatment options for obesity
and related conditions. Kailera is committed
to developing therapies that give people the
power to transform their lives and elevate
their overall health. The company was
founded in 2024 and backed by RTW
Investments along with Atlas Venture and
Bain Capital Life Sciences with participation
from Lyra Capital.
daily, orally available formulation, could offer convenience
and accessibility to patients, and lower the cost of
manufacturing compared to injectables. In a Phase 2
clinical trial conducted in China, CX11 demonstrated
competitive weight loss with Lilly’s Orforglipron, the
leading small molecule in development. The registrational
Phase 3 study in obese and overweight patients in China
was initiated in November 2024. Corxel plans to initiate
aglobal (excluding Greater China) Phase 2 study in 2025.
We are excited about the potential of CX11, which has
shown impressive efficacy in weight reduction, making
itapotential best-in-class oral small molecule GLP-1 RA.
There are currently no oral small molecule GLP1’s
available. The oral peptide Rybelsus has limited efficacy
and is cumbersome to take, requiring 30 minutes of
fasting, no drinking, and no other medications taken at
thesame time. Lilly is likely to be the first to bring one to
market and we would expect CX11 to be second or third.
We believe this is not a “winner takes all” market, and
there is room for several players given the very large
market potential.
In January 2025, Kailera’s injected GLP-1/GIP dual agonist
KAI-9531 demonstrated potentially best-in-class obesity
data in a Phase 2 trial in China conducted by Jiangsu
Hengrui Pharmaceuticals. KAI-9531 was one of three assets
Kailera licensed from Hengrui at its launch, acquiring the
worldwide rights (excluding Greater China) to develop the
drugs. With 22.8% additional weight loss compared to
placebo treatments at 36 weeks, it beats the 21% shown by
Eli Lilly’s Retatrutide. Kailera is preparing for its upcoming
global Phase 3 study of the same asset. These data increase
our confidence that Kailera is one of the leading players in
next-generation obesity management.
Kailera’s KAI-9531 is competing for best-in-class
injectable efficacy with a favourable gastro-intestinal
adverse effects profile.
Weight loss in non-diabetic obesity at week 36
1
Kailera Therapeutics
www.kailera.com
NAV
3.4%
(2023: N/A)
1 With placebo adjustment.
Amycretin and Semaglutide are Novo Nordisk drugs; Retatrutide and Tirzepatide are Eli Lilly drugs.
Sources: KAI9531 and Amycretin data from company press releases; Retratrutide data from ADA 2023 meeting; Tirzepatide
andSemaglutide data from DOI: 10.1056/NEJMoa2206038 and DOI: 10.1056/NEJMoa2032183.
-22.80%
KAI9531 8mg Amycretin 20mg Retatrutide 12mg Tirzepatide 15mg Semaglutide 2.4mg
-22.00%
-21.50%
-18.40%
-13.90%
0%
-10%
-5%
-15%
-20%
-25%
Strategic Report Governance Report Financial Statements Additional Information
31
$470M
2024
$295M
2023
$399M
2023
$257M
2022
$326M
2022
$607M
2024
Understand
our Key
Performance
Indicators
page 34
Highlights
Market Capitalisation as of 31 Dec 2024 Ordinary NAV as of 31 Dec 2024
Innovative
asset growth
Market capitalisation
The Company’s market capitalisation increased from
U$295 million at 31 December 2023 to US$470 million
at31 December 2024. The Company issued 181,901,165
shares in 2024 in conjunction with the Arix acquisition
and repurchased 8,500,000 shares, so the 59% increase
in market capitalisation was due to the increase in the
shares outstanding since the share price was marginally
down from 2023 to 2024.
Ordinary NAV
The Ordinary NAV increased from US$399 million to
US$607million during the year, which was due largely
totheacquisition of the assets of Arix Bioscience.
NAV per Ordinary Share
The NAV per share decreased from US$1.90 per share to
US$1.81 per share. The main driver of this decrease was the
share price performance of Rocket Pharmaceuticals (-7.0%),
Immunocore (-3.1%) and Cargo (-1.5%) as well as the other
publicportfolio (-3.4%) and the dilution from the Arix
transaction(-5.0%).
Operational and Financial Review for the Year
32
-26.0%
2023
1.9%
2023
-21.2%
2022
1.9%
2022
-22.8%
2024
1.8%
2024
Highlights
Discount/premium to NAV as of 31 Dec 2024 Ongoing charges as of 31 Dec 2024
Premium / discount
The Company’s shares traded on average at a c.24%
discount to NAV due to reduced market demand for
growth and venture capital assets during the reporting
period. At year end, the Company’s Ordinary Shares were
trading at a 23% discount to NAV (2023: 26% discount to
NAV). The modest reduction in US and UK interest rates
during the period was offset by rising US treasury and gilt
yields resulting in only a modest improvement in the
rating of the company’s shares.
Total return to shareholders
based on ordinary NAV
As the Company has not paid dividends, the total return
for the year of -4.6% (2023: +23.5%) equates to the
decrease in NAV per Ordinary Share.
Total return to shareholders
based on share price
The share price return of -0.6% was the result of the
decline in the company’s NAV per share being offset by
amodest re-rating of its discount. The shares remained
at a discount during the year although the discount
modestly narrowed.
Ongoing charges
The Group’s ongoing charges ratio is 1.75% (2023: 1.87%),
calculated in accordance with the AIC recommended
methodology, which excludes non-recurring costs and
uses the average NAV in its calculation.
Strategic Report Governance Report Financial Statements Additional Information
33
Key Performance Indicators
Measuring our performance
NAV Growth Total shareholder return Premium/discount to NAV
Performance Performance of the portfolio companies
and cash management strategy net of
all fees and costs
Delivering value to the shareholders The level of supply and demand for
the Company’s shares
Key factors • Portfolio performance and
progression through clinical trials
• Cash management
• Capital pool and deployment
• Scientific and financial risks
• Market context including interest
rates and bond yields
• Portfolio performance
• Liquidity of RTW Bio shares
• General market sentiment
(in order of impact at year end)
• The percentage of private growth
assets within the Group’s portfolio
• Portfolio performance
• Liquidity of the Company’s shares
• Increased visibility with key UK
shareholder audience (London
office, UK distribution partner)
Progress Ordinary NAV
-4.6%
(2023: +23.5%)
During the reporting period this was
largely driven by public companies’
shareprice performance. After strong
performance in 2023, Rocket’s shares
performed poorly in 2024. The company
did not deliver on clinical and regulatory
timelines for its two lead programs, but
despite the setbacks, we think both the
Danon and Fanconi anaemia programs
continue to have transformative potential
for patients. Immunocore reported
melanoma data at ASCO showing a
disappointing sub-20% response rate.
There was no material fundamental news
on Cargo during the financial year, but with
the next catalyst not forecast until 2025,
the share price gave back much of the
gains it made since its IPO in November
2023. After period end, Cargo announced
it would discontinue its entire pipeline, lay
off most of its staff and seek a reverse
merger or other business combination.
Share Price Return
-0.6%
(2023: +16%)
The company’s share price recorded
asmaller decline than its NAV as falling
interest rates led to an increase in
demand for early stage and venture
capital investments despite muted
returns from the Biotech sector.
Premium/discount to NAV
-24%
(2023: -25%)
(Average during the year)
The discount moderately narrowed
during the year. US and UK interest
rates moved in the right direction,
butunfortunately this was offset by
rising US treasury and gilt yields.
Future intent Achieve superior long-term capital
appreciation; target an annualised total
return of 20% over the medium term
Achieve superior long-term capital
appreciation; target an annualised total
return of 20% over the medium term.
Return to a premium to NAV such
that total shareholder returns match
or exceed NAV performance
Link to
strategy
1
Identifying
2
Engaging
3
Building
4
Supporting
1
Identifying
2
Engaging
3
Building
4
Supporting
1
Identifying
2
Engaging
3
Building
4
Supporting
Link to
principal risks
1
Failure to achieve
investment objective
6
Exposure to global political
and economic risks
7
Clinical Development & Regulatory
Risks
1
Failure to achieve
investment objective
6
Exposure to global political
and economic risks
7
Clinical Development
& Regulatory Risks
1
Failure to achieve
investment objective
6
Exposure to global political
and economic risks
FINANCIAL
34
The Board has identified the following
indicators for assessing the Group’s annual
performance in meeting its objectives:
Per cent of NAV invested in
core portfolio companies
Geographic & therapeutically
diversified portfolio
Active and robust pipeline
Level of capital deployment into core
portfolio companies
Performance
Measures the Group’s commitment to
invest in best-in-class science and
innovative assets worldwide
Delivers transformational new
treatments to patients in need.
• Level of capital deployment and
investment pace, as well as
availability of funds to be deployed
into new portfolio companies and
follow-on investments
Key factors
• Continue to diversify within the life
sciences sector and support local
biotech ecosystems across the
globe
• Balance and breadth of the pipeline
across all clinical stages
• Data readouts and progress
through multiple clinical stages
• Commercial opportunity and
competitive landscape
NAV invested in core portfolio
67%
(2023: 67%)
Deployed into core portfolio
companies
Progress
Therapeutic areas addressed
11
(2023: 10)
Core portfolio companies’ focus
spansmultiple therapeutic areas,
treatment modalities and
geographies. In 2024, metabolic
diseases were added as a core
therapeutic area, as the Group
pivoted toward a strong focus
onobesity.
Core portfolio companies that have
leading programs in a clinical stage
30 of 54
(2023: 22 of 36)
Capturing a spectrum of early-stage
Phase 1 to late stage Pivotal
Identify transformative assets with
high growth potential across the
biopharmaceutical and medical
technology sectors
Future intent
Continue investing in and supporting
companies developing next generation
therapies and technologies that can
significantly improve patients’ lives
Progress towards delivering
transformational treatments to
patients in areas of high unmet need.
1
Identifying
2
Engaging
3
Building
4
Supporting
Link to
strategy
1
Identifying
2
Engaging
3
Building
4
Supporting
1
Identifying
2
Engaging
3
Building
4
Supporting
7
Clinical Development
& Regulatory Risks
4
The Investment Manager
relies on key personnel
6
Exposure to global political
and economic risks
Link to
principal risks
7
Clinical Development
& Regulatory Risks
6
Exposure to global political
and economic risks
7
Clinical Development
& Regulatory Risks
6
Exposure to global political
and economic risks
8
Imposition of pricing controls
NONFINANCIAL
Strategic Report Governance Report Financial Statements Additional Information
35
Risk Management
RTW Bio’s long-term strategy is anchored
in identifying transformative assets
with high growth potential across the
biopharmaceutical and medical
technology sectors.
Driven by a deep scientific understanding and a long-term
approach to supporting innovative businesses, we invest
incompanies developing next-generation therapies and
technologies that have the potential to significantly improve
patients’ lives. With this significant opportunity also comes risk.
RTW Bio’s risk framework is overseen by the Audit Committee
under delegation from the Board. Multiple parties contribute to
managing risk, including the Board, the RTW Investments team,
and the Group’s advisers.
Risk framework
The risk framework begins with the Board who oversee the
process to ensure a robust assessment of principal risks,
consider current and potential risks, and receive an update
from the Investment Manager at each Board meeting. A risk
register is maintained that sets out principal risks, their
probabilities and an impact assessment. The RTW Investments
team is responsible for day-to-day operations and oversight of
the risk framework. The Investment Manager has a culture of
transparency, ensuring that developments are shared and
addressed timely, with the benefit of input from multiple
teammembers, and reported to the Board as appropriate.
The Group relies on having highly experienced personnel at
theInvestment Manager to support and manage issues as
theyarise.
The Audit Committee oversees and monitors the risk
framework, including reviewing the risk register regularly
toensure it properly captures principal risks, continuously
identifying potential risks, reviewing the ongoing operation
and effectiveness of the control environment, and ensuring
that proposed actions are implemented by the RTW
Investments team. This process drives continuous
improvement in risk identification and monitoring.
Identifying principal and emerging risks
The Board uses both top-down and bottom-up inputs to
evaluate principal risks. Over the past year, the Board and
theInvestment Manager had ongoing discussions to consider
the Group’s risks. The discussions generated insights into
potential emerging risks and have helped to focus attention
on additional areas for monitoring.
The RTW Investments team carries out a bottom-up review,
considering each portfolio company, as well as internal
operations, both as a specific exercise and on an ongoing
basis. The team also draws on assessments made by
management teams of portfolio companies. These inputs are
brought together in the risk register, which is reviewed by the
Audit Committee in detail each quarter The principal risks
identified by the Board are set out on pages 38 to 40 of this
annual report. These have not substantially changed in the
last year. The Board also monitors future risks that may arise,
including the longer-term risks of changes to US
pharmaceutical drug pricing and US FDA productivity.
Applying deep scientific
expertise with a long-term
investment horizon
36
Risk management structure
Board of Directors
Risk management leadership; risk appetite
RTW Investments Team
Risk management is integral to the investment process and financial management
Implementing and monitoring risk controls; risk reporting
Audit Committee
Reviews and monitors the risk framework
Other advisors
Risk identification; risk reporting
Portfolio companies’ management teams
Risk identification and mitigation
Risk appetite
The Board is willing to accept a certain level of risk in order to achieve strategic goals. Where a risk
is approaching or moves beyond its target, the Board will consider the actions being taken to manage
it. This year the Audit Committee carried out a detailed review of the defined risk types, to ensure
that they continue to reflect the understanding of the Board and accurately reflect relevant risks.
Following that review, the Audit Committee advised the Board that the risk appetite remained
appropriate, and the Board has accepted that assessment.
Principal and
Emerging Risks
andUncertainties
page 38
Strategic Report Governance Report Financial Statements Additional Information
37
 2
Unfavourable tax exposure
With the prior year acquisition of Arix Bioscience, the
Group’s structure became more complex, and along with
this complexity came the potential for new tax-related
risk. As of year-end, subsidiaries acquired or created for
the transaction were either in liquidation or in the process
of winding up.
The Group consulted throughout the planning and execution
of the acquisition with legal counsel having expertise in
corporate structure and tax matters. The Investment
Manager’s team dedicated to the transaction, along with the
Board, received advice and evaluated structural options at
every step, and continues to do so as the structure evolves.
Stable
Principal and Emerging Risks and Uncertainties
Principal risks and
how we mitigate them
Risk description Risk control measure Profile
 1
Failure to achieve investment objective
Counterparty risk
The Group’s target return on net assets is not guaranteed
and may not be achieved.
The Group has the potential to be exposed to the
creditworthiness of trading counterparties in OTC
derivatives contracts, its prime broker in the event of
re-hypothecation of its investments, and any counterparty
where collateral or cash margin is provided or where cash
is deposited in the normal course of business.
The Board will monitor and supervise the Group’s performance
compared to the target return, similar investment funds and
broader market conditions. Where performance is
unsatisfactory, the Board will discuss the appropriate response
with the Investment Manager.
Strategic link
1
Identify
2
Engage
4
Support
The Group uses Goldman Sachs, Morgan Stanley, Bank of
America Merrill Lynch, JP Morgan and Jefferies as prime
brokers and Cowen, UBS, Bank of America Merrill Lynch,
Goldman Sachs, Jefferies, and Morgan Stanley as ISDA
counterparties. To monitor counterparty risk, the Investment
Manager monitors fluctuations in share prices, percentage
changes in daily, monthly, and annual 5-year CDS spreads and
S&P credit ratings. If a counterparty group share price moves
up or down in excess of 20%, the trader at the Investment
Manager is alerted immediately. In case of an alert, the trader
notifies RTW Investments’ Chief Compliance Officer. There
has been no disruption in operations with the Group’s
counterparties to date. The Group’s bankers are an offshore
branch of Barclays Bank PLC and are also included in the
Investment Manager’s CDS monitoring program.
Operational Risks
Investment Risks
Strategic link
1
Identify
2
Engage
3
Build
4
Support
The Investment Manager relies on key personnel
The Investment Manager relies on its founder, Roderick
Wong M.D. Roderick Wong is a key figure at the Investment
Manager and is extensively involved in investment
decisions.
In the event that Roderick Wong was to no longer work for
the Investment Manager or was incapacitated, the Board is
able to terminate the Investment Management Agreement
within 180 days if a suitable replacement has not been found
and would consider whether it would be appropriate to wind
up the Group and return capital to shareholders, or to
appoint a new Investment Manager.
Governance/Reputational risks
Strategic link
1
Identify
2
Engage
3
Build
4
Support
Stable
Stable
Stable
Strategic link
1
Identify
2
Engage
38
Profile Profile
Clinical development & regulatory risks
Portfolio companies and Investment Manager may be subject to litigation
Portfolio Companies may be subject to product liability
claims. Such liability claims would have a direct financial
impact and may impact market acceptance even if
ultimately rebutted. The Investment Manager may be
swept up in class action suits against companies that
include major shareholders.
The Investment Manager’s due diligence process includes
considering the risk that innovative therapies may have
unforeseen side effects, based on the Investment Manager’s
extensive sector knowledge and experience, published
research, and publicly available information. The Investment
Manager maintains Directors & Officers as well as Errors &
Omissions insurance policies.
Strategic link
1
Identify
2
Engage
3
Build
4
Support
Exposure to global political and economic risks
It is anticipated that approximately 75% on average of
investments will be in US companies or licensing
agreements with US institutions, and 25% of investments
will be made outside of the US. The Group’s investments
will be exposed to foreign exchange, and global political,
economic, and regulatory risks, including those associated
with current conflicts in Ukraine, Israel/Palestine, and the
Middle East more broadly. The core portfolio currently has
approximately 64% exposure to the US and Canada, 21%
to the UK and Europe, and 15% to the rest of the world,
including 3.7% to Israel and none to other Middle Eastern
countries, Ukraine or Russia. Israel exposure derives from
Urogen Pharma, which has R&D in Israel but is
headquartered and maintains its broader team in
Princeton, New Jersey.
Strategic link
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The Investment Manager has extensive experience
transacting across the global healthcare marketplace and will
be responsible for identifying relevant events and updating
investment plans appropriately.
Stable
Risk description Risk control measure
External Risks
New drugs, medical devices and procedures are subject to
extensive regulatory scrutiny before approval, and
approvals can be revoked.
The Investment Manager’s due diligence process includes a
rigorous process of assessing preclinical and clinical assets
and their probabilities of success, utilising scientific, clinical,
commercial and regulatory benchmarks. Additionally, the
Investment Manager’s process includes assessing the likely
attitudes of regulators towards a potential new therapy. The
due diligence will also consider the unmet need of the disease
and whether the therapy offers advantages over the current
standard of care.
Strategic link
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Strategic lin
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Stable
Under the FCA’s Disclosure Guidance and
Transparency Rules, the Directors are
required to identify the material risks to
which the Group is exposed and the steps
taken to mitigate those risks.
The Group has five categories of risks
in its risk register namely:
• Investment Risks
• Operational Risks
• Governance/Reputational Risks
• External Risks
• Emerging Risks
Portfolio company products may be subject to price
controls, price gouging claims, and other pricing regulation
in the US and other major markets. Government healthcare
systems may be major purchasers of the products.
While future political developments cannot be reliably
forecast, the Investment Manager’s due diligence process
includes an assessment of political risk and the likely
acceptability of the investee’s pricing intentions.
Imposition of pricing controls for clinical products and services
Stable
Increasing
Strategic Report Governance Report Financial Statements Additional Information
39
External Risks (continued)
Inflation
Global inflation is generally trending downwards; however,
it remains a complex and somewhat volatile situation with
differing regional experiences. While headline inflation
(which includes volatile food and energy prices) is
moderating, core inflation (which excludes them) is proving
more stubborn in some regions, particularly due to service
sector inflation and wage growth. Uncertainty about the
inflation outlook and central bank actions is likely to
contribute to market volatility.
The creation of value through innovation in the biotechnology
sector outweighs the singular and/or short-term adjustment
to valuation levels arising from changes in discount rates as a
result of rising inflation. The Investment Manager holds
investments that have current earnings and cash-flows and
has significant exposure to Phase 3 products which have a
high probability of achieving cash-flows in the near-term.
Whilst interest rates have been reduced in the US and UK in
reaction to reductions in inflation, it is not possible to say that
this risk is reducing yet, as inflationary risks such as tariffs
and restrictions on global trade are beginning to emerge
following the election of a new administration in the US.
Principal and Emerging Risks and Uncertainties
continued
Availability of capital
IPOs made incremental progress towards normalisation
this year (17 in 2024 vs 12 last year). This is consistent with
a slow transition from a bear market (less than 10) to a
healthy one (more than 30). Public follow-on financing
activity returned to near record levels as companies with
good data were able to raise the capital they needed.
The Investment Manager is experienced in identifying
potential in companies that have strong fundamentals at
attractive valuations that create an asymmetric and
attractive risk/reward profile. The Board reviews the
financing status of the Group’s private portfolio with the
Investment Manager at least twice each year. Approximately
10% of the Group’s NAV is exposed to companies that will
need refinancing within the next 12 months. Most of these
companies have re-financing plans in place.
Strategic link
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Reducing
Emerging Risks
Sustainability reporting
Sustainability reporting standards are evolving rapidly and
investors may require more detailed sustainability
disclosures to maintain or add new positions in our shares.
The Board monitors sustainability reporting standards and is
advised by the Group’s service providers, including an
external sustainability consultant. The Group has adopted a
responsible investment policy also appointed a Sustainability
Committee to provide oversight and advice in relation to the
Company’s responsible investment strategy.
Strategic link
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Stable
Stable
Risk description Risk control measure Profile
40
Longer Term Viability Statement
Realising a robust
and resilient company
Assessing the prospects of the Group
The corporate planning process is underpinned by scenarios
that encompass a wide spectrum of potential outcomes.
These scenarios are designed to explore the resilience of
theGroup to the potential impact of significant risks set
outbelow.
The scenarios are designed to be severe but plausible and
take full account of the availability and likely effectiveness of
the mitigating actions that could be taken to avoid or reduce
the impact or occurrence of the underlying risks and which
would realistically be open to management in the
circumstances. In considering the likely effectiveness of such
actions, the conclusions of the Board’s regular monitoring and
review of risk and the Investment Manager’s internal control
systems, as discussed on page 37 is taken into account.
The Board reviewed the impact of stress testing the
quantifiable risks to the Group’s cash flows as detailed in
riskfactors 1-5 in the previous pages and concluded that
theGroup, would have sufficient working capital to fund
itsoperations in the following extreme scenario:
(1) The Group incurred NAV losses of 39% of NAV over
athree-year period ending 28 February 2028.
(2) No new capital was raised.
(3) US$152 million of private investments were funded from
cash and by selling public portfolio investments over the
three-year period ending 28 February 2028.
To provide some context for this scenario the worst-case
annual losses for the NASDAQ Biotech Index (NBI) in the last
10 years were 10.9% in 2022 and 21.4% in 2016 respectively.
The Group’s three-year loss scenario exceeds the cumulative
impact of both of these worst-case years of 32.3% spread
over three years. The annualised volatility of the NBI Index
forthe last 10 years is 24.5% and the index has an annualised
return of 3.7% for this period, so an annual loss of 40% or
more is only likely to occur every twenty years if the index
returns are normally distributed. Considering this context,
acumulative loss of between 32.3% and 40% is therefore
assumed to be a reasonable stress test.
The Board considers that this stress testing-based
assessment of the Group’s prospects is reasonable in
thecircumstances of the inherent uncertainty involved.
The period over which we
confirm longer term viability
Within the context of the corporate planning framework
discussed above, the Board has assessed the prospects of
theGroup over a three-year period ending 28 February 2028.
Whilst the Board has no reason to believe the Group will not
be viable over a longer period, given the inherent uncertainty
involved, the period over which the Board considers it
possible to form a reasonable expectation as to the Group’s
longer-term viability, based on the stress testing scenario
planning discussed above, is the three-year period to March
2028. This period is used for the Investment Manager’s
business plans and has been selected because it presents
theBoard and therefore readers of the Annual Report with
areasonable degree of confidence whilst still providing an
appropriate longer-term outlook.
Confirmation of longer term viability
The Board confirms that it has carried out a robust
assessment of the emerging and principal risks facing the
Group, including those that would threaten its business
model, future performance, solvency or liquidity. Based upon
the robust assessment of the principal and emerging risks
facing the Group and its stress testing-based assessment
ofthe Group’s prospects, the Board confirms that it has
areasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall
dueover the period to February 2028.
On behalf of the Board
William Simpson
Chair
28 March 2025
Profile
Strategic Report Governance Report Financial Statements Additional Information
41
Shareholders Service
providers
Continued access to capital is vital to the
Group’s longer term growth objectives, and
therefore, in line with its objectives, the
Group seeks to maintain shareholder
satisfaction through:
• Positive risk-adjusted returns
• Continuous communication of portfolio
updates
• Regular access to Investment Manager
commentary on portfolio decisions and
outlook
METHODS OF ENGAGEMENT
The Group engages with its shareholders
through the issuance of regular portfolio
updates and monthly NAV and factsheet
releases in the form of RNS announcements.
The Investment Manager hosts mid-year and
year end webinars and Q&A sessions and in
2024 hosted its second Investor Day in London.
The Group provides in-depth commentary on
the investment portfolio, corporate governance
and corporate outlook in its Annual and Interim
Reports and financial statements.
The Board receives quarterly feedback
fromits brokers and distribution partner
inrespect of investor engagement and
investor sentiment.
In 2024 the Group’s distribution and investor
relations partner, Cadarn Capital, was also
engaged as its PR and Communications
partner to improve the flow of information
tocurrent and potential shareholders.
BENEFITS OF ENGAGEMENT
The Group enjoys a supportive shareholder
base that understands the investment
strategy as a result of our active programme
of events and meetings.
The Group has built a large pool of potential
investors to support its future growth.
The Group works closely with a number of
service providers (the Investment Manager,
Administrator, Sub-Administrator, Corporate
Secretary, auditor, third party valuation
agents, corporate brokers, distribution
partner, and other professional advisers).
The independence, quality and timeliness
oftheir service provision is critical to the
success of the Group.
METHODS OF ENGAGEMENT
The Group has identified its key service
providers and on an annual basis undertakes
a review of performance based on a
questionnaire through which it also
seeksfeedback.
Furthermore, the Board and its sub-
committees engage regularly with service
providers on a formal and informal basis.
The Group regularly reviews all material
contracts for service quality and value.
BENEFITS OF ENGAGEMENT
Feedback given by service providers is
usedto review the Group’s policies and
procedures, to ensure open lines of
communication, and operational efficiency.
Performance reviews ensure the Board’s
confidence that the Group is being serviced
and advised by high quality service providers.
Engaging with Stakeholders (Section 172)
Close collaborators
and committed partners
The AIC Code requires that
the matters set out in
Section 172 of the Companies
Act 2006 are reported on by
all companies, irrespective of
domicile, provided this does
not conflict with local
company law.
Section 172 recognises that directors are
responsible for acting in a way that they
consider, in good faith, to be most likely to
promote the success of the Group for the
benefit of all shareholders. In doing so,
they are also required to consider the
broader implications of their decisions
and the Group’s operations on key
stakeholders, the wider community, and
the environment. Key decisions are those
that are either material to the Group or
are significant to any of the Group’s key
stakeholders. The Group’s engagement
with key stakeholders and the key
decisions that were made or approved
bythe Directors during the year are
described below.
42
Portfolio
Companies
HM Government
The Group is currently invested in 54 Core
Portfolio Companies.
METHODS OF ENGAGEMENT
The Investment Manager engages on a
regular basis with its portfolio companies
inorder to conduct on-going due diligence
and to meet obligations if the Investment
Manager holds a board seat.
BENEFITS OF ENGAGEMENT
Honesty, fairness and integrity of the
management teams of the portfolio
companies are vital to the long-term
successof the Group’s investments.
METHODS OF ENGAGEMENT
The Group funds assets developed in UK
academic and private sector laboratories,
from conception to commercialisation.
BENEFITS OF ENGAGEMENT
By supporting the local biotech ecosystem
inthe country where the Group is listed, UK
government policy initiatives are supported
and promoted.
Community
& environment
The Group does not have direct employees
and does not anticipate any material impact
to its business model from climate change
but aims to be a good steward, in line with
itssocially-aligned investment objective.
RTW Charitable Foundation was created
bythe Investment Manager with the vision
towork towards a world free of ultra-rare
disease. The foundation funds research
ofrare conditions that do not attract
significantoutside investment due to
limitedcommercial opportunity.
METHODS OF ENGAGEMENT
RTW Charitable Foundation represents
anextension of the Investment Manager’s
mission. Its research process helps the
Investment Manager identify important
causes of human suffering and introduces
thefirm to individuals and organisations
trying to make a difference.
BENEFITS OF ENGAGEMENT
The Group and the Directors minimise
airtravel by making maximum use of video
conferencing for Company related matters.
Acting and investing responsibly provides
thenecessary foundation for the long-term
sustainability of investment success.
To research grant recipients, RTW Charitable
Foundation offers financial support and
guidance gleaned from the Investment
Manager’s experience in drug development
and company building. The Foundation
alsooffers support to humanitarian causes,
initiatives that raise disease awareness,
andprograms with direct local community
impact, including days of action and
youthmentorship.
Strategic Report Governance Report Financial Statements Additional Information
43
RTW
headquarters
UN SDG goal 3
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 Investment Manager’s team of scientists and
researchers work tirelessly to evaluate the science behind
thousands of treatments and potential cures for diseases and
conditions in order to improve quality of life across the globe.
As a guiding principle, they prioritise overall positive impact
on patients and long-term meaningful outcomes to society
and believe this is the foundation of the Group’s success.
As a long-term investor, the Group (via the Investment
Manager) seeks to meet regularly with the management
teams of portfolio companies. This approach fosters
long-term relationships with company management teams.
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.
Pre-investment, the Group adopts a positive screening
methodology. Potential investments are screened to ensure
alignment with investment objectives.
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 annual report, maintaining oversight of and
making recommendations to the Board regarding upcoming
reporting requirements.
The Investment Manager espouses a strong culture of
compliance, risk management and ethical behaviour. It aims
always to act in the best interests of shareholders, employees
and stakeholders. Its corporate code of ethics addresses the
largest areas of risk pertaining to the alternative asset
management industry, including but not limited to conflicts of
interest, anti-bribery, employee investing, insider trading and
political contributions. Furthermore, it seeks to ensure that
investments do not lead to negative impacts on public health
or well-being or contribute to human or labour rights
violations, corruption, serious environmental harm or other
actions which may be perceived to be unethical. It seeks
long-term investment partners that evidence equivalent
professional and ethical rigour.
Supporting health and well being
44
  GOVERNANCE REPORT
46 Biographies of Directors
48 Report of the Directors
51 Corporate Governance Report
56 Statement of Directors’ Responsibilities
57 Directors’ Remuneration Report
60 Report of the Audit Committee
Governance
Report
The Board has overall responsibility for
maximising the Group’s success by directing
and supervising the affairs of the business
and meeting the appropriate interests of
shareholders and relevant stakeholders,
while enhancing the value of the Group and
also ensuring the protection of investors.
Strategic Report Governance Report Financial Statements Additional Information
4545
Biographies of Directors
William Simpson
Chair and Independent
Non-Executive Director
Nicola Blackwood
Non-Executive Director, Senior
Independent Non-Executive Director
*
Resident Guernsey, British Isles
Resident UK resident
Appointed 2 October 2019
Appointed 11 July 2024
Committees
Chair of the Management Engagement Committee
Chair of the Sustainability Committee,
Member of the Audit Committee
Member of the Nomination and Remuneration Committee
Committees
Member of the Nomination and Remuneration Committee
Member of the Audit Committee
Member of the Management Engagement Committee
Member of the Sustainability Committee
Board meetings attended 9/9
Board meetings attended 4/4
Roles and responsibilities
William Simpson is the Chair and an independent director
based in Guernsey providing services to investment and
other financial services companies. William has over 35
years’ experience within the financial services industry.
He previously practiced law in the course of which he
advised on the establishment of a wide range of
investment funds and related matters. William graduated
in law from Leeds University and first qualified as an
English barrister. William is a member of the Guernsey
Bar. William also holds directorships at Ninety One
Premier Funds PCC Limited, AHL Strategies PCC
Limited and Man AHL Diversified PCC Limited.
Roles and responsibilities
Baroness Nicola Blackwood is a leader in science and
entrepreneurship. She is a member of the House of Lords,
and Chair of Genomics England and Oxford University
Innovation. She is also Board Member of the biotechnology
company, BioNTech. Nicola is also a member of the Oxford
Harrington Rare Disease Centre Advisory Board and the
Royal Society Science Policy Expert Advisory Committee.
Nicola served as a Minister in the Department for Health
and Social Care under two Prime Ministers. As Minister for
Innovation, she led on Life Sciences, NHS Data and Digital
Transformation, and Global Health Security. She was the
first female Member of Parliament for Oxford and was
elected by MPs of all parties as the first female Chair of the
House of Commons Science and Technology Committee.
She remains one of the youngest committee chairs in
British history.
* Baroness Blackwood was appointed as the Company’s Senior
Independent Non-Executive Director on 9 December 2024.
Our collective
power builds
success around
brilliant ideas
46
Stephanie Sirota
Non-Executive Director
William Scott
Independent
Non-Executive Director
Resident US resident
Resident Guernsey, British Isles
Appointed 2 October 2019
Appointed 3 October 2019
Committees
Member of the Sustainability Committee
Committees
Chair of the Nomination and Remuneration Committee
Member of the Audit Committee
Member of the Management Engagement Committee
Member of the Sustainability Committee
Board meetings attended 7/9
Board meetings attended 9/9
Roles and responsibilities
Stephanie A. Sirota, serves as a Partner and Chief Business
Officer at RTW Investments, LP. Ms. Sirota leads RTW’s
Strategic Partnerships Division and is responsible for strategy
and oversight of the firm’s business and capital development,
communications, and government relations. Her background
ininvestment banking and expertise in financial markets has
helped position the firm as both a leading partner to life
sciences companies and a steward of investor capital globally.
She fosters key strategic relationships for the firm across
investors, bank partners, and governments, domestically and
abroad, having led the firm’s entry into the UK and European
markets and the Middle East. Prior to joining the Investment
Manager, she served as a director of Investor Relations at
Valhalla Capital Advisors, a macro and commodity investment
manager. Prior to that, Ms. Sirota worked in the New York and
London offices of Lehman Brothers, where she advised on
various mergers & acquisitions, IPOs, and capital market
financing transactions and began her career on the derivatives
structuring desk. Ms. Sirota graduated with honours from
Columbia University and also received a Master’s Degree from
the Columbia Graduate School of Journalism. She is a member
of YPO and the New York Philharmonic and serves as a
director of RTW Charitable Foundation.
Roles and responsibilities
William Scott has served continuously as an independent
non-executive director of a number of London-listed
investment companies and funds for over 20 years and has
been involved in the sector more widely for four decades.
From 2003 to 2004, Mr. Scott worked as Senior Vice
President with FRM Investment Management Limited,
subsequently part of Man Group. Previously (from 1989-
2002), Mr. Scott was a portfolio manager and latterly a
director at Rea Brothers (which became part of the Close
Brothers group in 1999 and where he was a director of Close
Bank Guernsey Limited) and before that was an Assistant
Investment Manager with the London Residuary Body
Superannuation Scheme (1987-1989). Mr. Scott graduated
inphysics from the University of Edinburgh in 1982 and is
aChartered Accountant having qualified with Arthur Young
(now EY) in 1987. Mr. Scott also holds the Securities Institute
Diploma and is a Chartered Fellow of the Chartered Institute
for Securities & Investment. He is also a Chartered Wealth
Manager. His other directorships include Worsley Investors
Limited, which is listed on the Main Market of the London
Stock Exchange.
Paul Le Page
Independent
Non-Executive Director
Resident Guernsey, British Isles
Appointed 2 October 2019
Committees
Chair of the Audit Committee
Member of the Nomination and Remuneration Committee
Member of the Management Engagement Committee
Member of the Sustainability Committee
Board meetings attended 9/9
Roles and responsibilities
Paul Le Page is a former executive Director and Senior
Portfolio Manager of FRM Investment Management Limited,
a subsidiary of Man Group, and holds non-executive
directorships at a number of London Stock Exchange
listedinvestment funds. Mr. Le Page was formerly Audit
Committee Chair of Bluefield Solar Income Fund Limited,
UK Mortgages Limited, Thames River Multi Hedge PCC
Limited and Cazenove Absolute Equity Limited. Mr. Le Page
has 20 years’ Audit Committee chair experience within the
closed-end investment fund sector and has a broad-based
knowledge of the global investment industry and product
structures. Mr Le Page graduated from University College
London and later received an MBA from Heriot Watt
University. He originally qualified as a Chartered Engineer
and led the development of clinical diagnostic instrumentation
and software and robotic sample preparation equipment
prior to commencing a career in finance. Mr Le Page is
adirector of three other LSE Main Market companies
NextEnergy Solar Fund Limited, TwentyFour Income Fund
Limited and Sequoia Economic Infrastructure Limited.
Strategic Report Governance Report Financial Statements Additional Information
47
Report of the Directors
Report of the Directors
Principal activities
Further information on the principal activities of the Group
can be found on pages 06 to 07.
Business review
On 1 November 2023, the Company announced it had made
abid to acquire Arix Bioscience plc’s assets. On 29 January
2024, the shareholders of Arix voted to accept the offer,
with92.22% of votes cast voting in favour, and the acquisition
completed on 13 February 2024. Further details are provided
on pages 10 to 11.
A review of the Group’s business and its likely future
development is provided in the Chair’s Statement on pages 09
to 10. The underlying investments of the Group are reviewed
in the Investment Manager’s Report on pages 12 to 27.
Results and distributions
The results of the Group for the year are shown in the
audited consolidated statement of operations on page 80.
The Net Asset Value of the Group as at 31 December 2024
was US$632.6 million (2023: US$429.0 million).
For the year ended 31 December 2024, the Group recorded a
net total return based on NAV per Ordinary Share of -4.6 per
cent (2023: +23.5 per cent).
No dividends were paid during the years ended 31 December
2024 and 31 December 2023. The Company does not
anticipate paying any dividends on its Ordinary Shares,
asitintends generally to re-invest proceeds received from
Portfolio Company sales or distributions. There have been
nochanges in the Company’s dividend policy from that
disclosed in the Prospectus published by the Company
on14October 2019.
During the year ended 31 December 2024, the Company
bought back 8,500,000 Ordinary Shares at an average
priceof US$1.33 for a total cost of US$11,340,306, including
transaction costs of $22,681. In 2023, the Company bought
back 1,753,791 Ordinary Shares at an average price of US$1.19
for a total cost of US$2,093,411, including transaction costs of
$4,178. At the date of approval of these consolidated financial
statements, all 8,500,000 of the Ordinary Shares bought
back in 2024 were held as treasury shares (31 December
2023: 1,753,791 shares held as treasury). The total Ordinary
Shares held as treasury shares as at 31 December 2024
was10,253,791.
Capital structure
The Company is an authorised closed-ended Guernsey
investment company with registered number 66847. The
Company’s Ordinary Shares are listed on the Official List of
the FCA and to trading on the London Stock Exchange plc’s
Main Market under the ticker symbol RTW.
The Board believes the London Stock Exchange plc's Main
Market is the most appropriate platform for the continued
growth of the Group by increasing the Group’s profile,
broadening its shareholder register, adding Sterling
denomination, and facilitating the Group’s eligibility for
inclusion in the FTSE UK Index Series.
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 audited consolidated statement of cash flows
andwithin Note 1.
As at 31 December 2024, the Company’s issued share capital
was 345,967,440 Ordinary Shares (2023: 212,389,138 Ordinary
Shares), of which 10,253,791 Ordinary Shares were held in
treasury (2023: 1,753,791 shares held in treasury). Therefore,
the total number of voting rights in the Company as at
31December 2024 was 335,713,649 (2023: 210,635,347).
In addition, the Company bought back 950,000 Ordinary
Shares from 1 January 2025 to 27 March 2025. 345,967,440
Ordinary Shares were in issue, of which 11,203,791 were held
intreasury, at the time of signing this Annual Report.
Further issues of shares will only be made if the Directors
determine such issues to be in the best interests of
shareholders and the Group as a whole. Relevant factors in
making such determination include net asset performance,
share price rating, perceived investor demand and any
regulatory restrictions. In the case of further issues of
Ordinary Shares (or sales of Ordinary Shares from treasury),
such Ordinary Shares will only be issued at prices that are not
less than the prevailing NAV per Ordinary Share announced as
of the end of the immediately preceding month in which such
Ordinary Shares are being issued.
Authority to issue shares
Subject to the Company’s Articles of Incorporation, the
Directors have the power to issue an unlimited number
ofshares.
Authority to buy back shares
The current authority of the Company to make market
purchases of up to 57,844,388 Ordinary Shares (being 14.99
per cent of the issued share capital) as authorised at the AGM
of the Company on 16 May 2024. At the AGM scheduled to
take place on 9 June 2025, the Board will seek to renew such
authority. Any buy back of Ordinary Shares will be made
subject to the Companies Law and within any guidelines
established from time to time by the Board and the making
and timing of any buy backs will be at the absolute discretion
of the Board and not at the option of the shareholders.
Ordinary Shares will only be repurchased at a price which,
after repurchase costs, represents a discount to the Net
Asset Value per Ordinary Share and where the Directors
believe such purchases will enhance shareholder value. Such
purchases will also only be made in accordance with the
Listing Rules of the UK Listing Authority which provide that
the price to be paid must not be more than 5 per cent above
the average of the middle market quotations for the Ordinary
Shares for the five business days before the shares are
purchased unless previously advised to shareholders.
More on results
for the year
page 69
Section 172
page 42
Chair’s
Statement
page 08
Investment
Manager’s Report
page 12
The Directors hereby submit the annual report and audited consolidated financial statements
for the Group for the year ended 31 December 2024.
48
TheInvestment Manager also seeks outreach through
itsteam based in London and New York. In addition, the
Company maintains a website which contains comprehensive
information (https://www.rtwfunds.com/rtw-biotech-
opportunities-ltd), including company notifications, share
information, financial reports, monthly NAVs, investment
objectives and policy, investor contacts and information
onthe Board and corporate governance.
Further information on relations with shareholders and other
stakeholders can be found in Engaging with Stakeholders
(Section 172) on pages 42 to 43.
Annual General Meeting
The Annual General Meeting (“AGM”) of the Company will be
held on 9 June 2025 at 1st Floor, Royal Chambers, St Julian’s
Avenue, St Peter Port, Guernsey GY1 3JX. Details of the
resolutions to be proposed at the AGM, together with
explanations, appear in the Notices of Meetings which
arebeing sent to shareholders in due course.
Members of the Board, including the Chair and the Audit
Committee Chair, will be in attendance at the AGM and will
beavailable to answer shareholder questions.
Major shareholders
As at 31 December 2024 and 27 March 2025, insofar as is
known to the Company, the following parties were interested,
directly or indirectly, in 5 per cent or more of the Ordinary
Shares in issue:
Shareholdings of the Directors
Directors’ shareholdings in the Company are disclosed in the
Directors’ Remuneration Report.
Directors’ appointment, tenure and re-
election, and Directors’ remuneration
Directors’ appointment, tenure and re-election and
Directors’ remuneration are disclosed in the Directors’
Remuneration Report.
Articles of Incorporation
The Company’s Articles may only be amended by special
resolution of the shareholders.
Key service providers
Independent auditor
KPMG Channel Islands Limited (“KPMG”) has been appointed
to serve as the Company’s auditor. In such capacity, the
auditor is responsible for auditing and expressing an opinion
on the consolidated financial statements of the Group in
accordance with applicable law and auditing standards.
Investment Manager
The Directors are responsible for the determination of the
Group’s investment policy and have overall responsibility for
the Group’s business activities. The Group and the Investment
Manager have entered into the Investment Management
Agreement (as amended, supplemented or modified from time
to time), pursuant to which the Investment Manager has been
appointed as the Group’s Investment Manager and has been
delegated the authority and responsibility to manage the
Group’s investment portfolio. The fees payable to the
Investment Manager and the impact of the Group’s
restructuring on the Investment Management Agreement are
disclosed in Note 10 of the consolidated financial statements.
In accordance with the Company’s Articles and Companies
Law, up to 10 per cent of the Company’s Ordinary Shares may
be held as treasury shares. At 31 December 2024, 10,253,791
Ordinary Shares were held in treasury, representing 2.96 per
cent of the issued share capital (2023: 1,753,791 shares held in
treasury, representing 0.83% of the issued share capital).
Directors’ dealings in shares
The Company has adopted a share dealing code for the Board
and will seek to ensure compliance by the Board with the
terms of the share dealing code. The share dealing code is
compliant with the UK Market Abuse Regulation.
Relations with shareholders
The Board welcomes shareholders’ views and places great
importance on communication with its shareholders. The
Company’s Annual General Meeting provides a forum for
shareholders to meet and discuss issues with the Directors
ofthe Company. The Board is represented at an annual
capital markets day held in London and hosted by the
Investment Manager. The Directors are available to meet
andanswer questions posed by shareholders at these and
similar events held by the Investment Manager and Corporate
Brokers. The Chair and other Directors are also available
tomeet with shareholders at other times, if required.
Furthermore, the Board has appointed Cadarn Capital, a
specialist investment engagement firm which conducts an
extensive programme of meetings throughout the year.
31 December 2024 27 March 2025
Shareholder
Shareholding
(Ordinary Shares) % Holding
Nature of
Holding
Shareholding
(Ordinary Shares) % Holding
Nature of
Holding
Roderick Wong 49,643,313 14.79% Indirect 50,356,880 15.04% Indirect
Bluestem Partners, LP 34,093,156 10.16% Direct 34,093,156 10.18% Direct
Tang Capital Partners 17,019,313 5.07% Direct 17,214,615 5.14% Direct
Details of the voting rights can be found in Note 9 of the consolidated financial statements.
Details of voting
rights
page 99
Principal and
Emerging Risks
and Uncertainties
page 38
Longer Term
Viability
Statement
page 41
Strategic Report Governance Report Financial Statements Additional Information
49
Report of the Directors
continued
Administrator and Sub-Administrator
The Group has appointed Altum (Guernsey) Limited
(previously named Elysium Fund Management Limited)
toundertake the administration, corporate secretarial,
corporate governance and compliance services. Morgan
Stanley Fund Services USA LLC has been appointed to
serveas the Group's Sub-Administrator.
Corporate Brokers
BofA Securities and Deutsche Numis Securities have been
appointed as joint corporate brokers and financial advisers to
the Group on 11 February 2022 and 5 April 2023 respectively.
Distribution Partner
In order to increase the liquidity of the Company’s Ordinary
Shares and to improve communication with shareholders, on
17April 2023, Cadarn Capital was appointed as distribution
partner for the Group. Furthermore, effective from 1 November
2024, Cadarn Capital was appointed as press and media
relations partner for the Group.
Change of control
There are no agreements that the Group considers
significant and to which the Company is party that would take
effect, alter or terminate upon change of control of the Group
following a takeover bid.
Principal and emerging risks and
uncertainties
The Group’s assets consist of investments in promising
therapies and technologies in the pharmaceutical industry.
There is inherent uncertainty in the long-term viability of
developing biopharmaceutical technologies and whether these
technologies can translate scientific theory into commercially
viable business opportunities. Its principal and emerging risks
are therefore related to the particular circumstances of the
businesses in which it is invested. The Group seeks to
mitigate these risks through active asset management
initiatives and carrying out due diligence work on potential
targets before entering into any investments.
Each Director is aware of the risks inherent in the Group’s
business and understands the importance of identifying,
evaluating and monitoring these risks. The Board has adopted
procedures and controls that enable it to manage these risks
within acceptable limits and to meet all of its legal and
regulatory obligations.
The Board considers the process for identifying, evaluating
and managing any significant risks faced by the Group on an
on-going basis and these risks are reported and discussed at
Board meetings. It ensures that effective controls are in place
to mitigate these risks and that a satisfactory compliance
regime exists to ensure all applicable local and international
laws and regulations are upheld. Particular attention has been
given to the effectiveness of controls to monitor liquidity risk,
asset values and counterparty exposure.
For each material risk, the likelihood and consequences are
identified, management controls and frequency of monitoring
are confirmed and results reported and discussed at the
quarterly Board meetings and through updating of the
Group’s risk matrix. An extraction of the highest-rated
post-mitigation risks forms the basis of the Principal and
Emerging Risks and Uncertainties disclosure in the Strategic
Report on pages 38 to 40.
The financial risks of the Group are discussed in Note 8 of the
consolidated financial statements.
The Group’s other risk factors are fully discussed in the
Company’s Prospectus, available on the Group’s website
(https://www.rtwfunds.com/rtw-biotech-opportunities-ltd)
and should be reviewed by shareholders.
Going concern
In forming a view on whether the Company is a going concern,
the Directors have considered the following factors:
• A three-year stressed cash-flow forecast prepared by the
Investment Manager for the purposes of assessing viability;
• A viability and going concern memorandum from the
Investment Manager on the Group’s business model
andoperations (please see the Longer Term Viability
Statement on page 41);
• The Group’s ability to access liquidity from liquid
investments and to raise additional capital.
After making enquiries and given the nature of the Group
andits investments, the Directors are satisfied that it is
appropriate to continue to adopt the going concern basis in
preparing the consolidated financial statements, and, after
due consideration, the Directors consider that the Company
is able to continue for the foreseeable future.
On behalf of the Board
William Simpson
Chair
28 March 2025
50
Corporate Governance
Report
The Board recognises the value of sound corporate governance
and, in particular, has regard to the requirements of the UK
Code (available from the FRC’s website, www.frc.org.uk).
The Company is a registered closed-ended investment
scheme pursuant to the Protection of Investors (Bailiwick
ofGuernsey) Law, 2020 ("POI Law") and the Registered
Collective Investment Schemes Rules 2021 issued by the
GFSC. The GFSC Code applies to all companies that hold a
licence from the GFSC under the regulatory laws or which are
registered or authorised as Collective Investment Schemes,
which includes the Company. The GFSC has stated in the
GFSC Code that companies which report against the UK
Code or the AIC Code are deemed to meet the GFSC code,
and need take no furtheraction.
The Company’s prospectus dated 5 January 2024 stated
thatthe Company intended to comply with the AIC Code.
TheCompany is a member of the AIC and the Board of the
Company has accordingly considered, and resolved to follow,
the principles and recommendations of the AIC Code (available
from the AIC’s website, https://www.theaic.co.uk).
The AIC Code addresses all the principles set out in the
UKCode, as well as setting out additional principles and
recommendations on issues that are of specific relevance
toinvestment companies such as the Company. The Board
considers that reporting against the principles and
recommendations of the AIC Code (which incorporates the
UKCode) provides better information to shareholders whilst
meeting the requirements of the GFSC Code.
The Company’s previous prospectus, dated 14 October 2019,
stated that the Company would comply with the UK Code. For
the reasons set out in the preamble to the UK Code, the Board
considers certain of these provisions are not relevant to the
position of the Group as an externally managed investment
group. In particular, all of the Group’s day-to-day management
and administrative functions are outsourced to third parties.
As a result, the Group has no chief executive or any executive
directors, employees or internal operations and has therefore
not reported further in respect of these provisions.
The Directors recognise the value of the AIC Code and have
taken appropriate measures to ensure that the Group has
complied and continues to comply, as far as possible given the
Group’s size and nature of the business, with the AIC Code. For
years prior to 2024, and for the reasons explained in our 2023
financial statements, we did not previously appoint a Senior
Independent Director in line with Provision 14 of the AIC Code.
As shareholders will be aware, the Company complied with the
Board gender diversity rules then applicable to the Company
from Listing in 2019 up to and including 2022. The FCA revised
(on a comply or explain basis) the target for female
representation to 40% of board positions for financial
accounting periods commencing on or after 1 April 2022.
Consequently, the first year to which this requirement applied
to the Company was that ending December 2023. As we
explained in our 2023 financial statements, and considering
theincrease in scale to be achieved by the imminent Arix
acquisition in early 2024, the Board believed that the Company
would better placed to recruit an additional independent
Director with relevant senior industry expertise. Since
Baroness Nicola Blackwood’s appointment as Senior
Independent Director, the Group has complied with Provision
14 of the AIC Code and the FCA revised requirement that 40%
of the Board positions are held by women.
The Board and its Committees
The Board monitors developments in corporate governance
to ensure the Board remains aligned with best practices,
especially with respect to the increased focus on diversity
(see the Directors’ Remuneration Report on pages 57 to 59).
The Directors of the Company at the date of this report are
William Simpson (Chair of the Board, Chair of the Management
Engagement Committee and Chair of the Sustainability
Committee), Paul Le Page (Chair of the Audit Committee),
William Scott (Chair of the Nomination and Remuneration
Committee), Baroness Nicola Blackwood (Senior Independent
Non-Executive Director) and Stephanie Sirota. The Board
believes the current Board members have the appropriate
qualifications, experience and expertise to manage the Group.
The Director’s biographies can be found on pages 46 to 47.
The Board meets at least on a quarterly basis. The dates for
each scheduled meeting are planned prior to the start of each
calendar year and confirmed in writing in accordance with
theCompany’s Articles of Incorporation. Meetings for urgent
issues may be and are convened at short notice if all Directors
are informed. In addition to formal Board and/or committee
meetings and, to the extent practicable and appropriate,
theDirectors maintain close contact with each other, the
Investment Manager and the Administrator, by email and
conference calls, for the purpose of keeping themselves
informed about the Group’s activities. The Board requires
information to be supplied in a timely manner by the
Administrator and other advisors in a form and of a
qualityappropriate to enable it to discharge its duties.
The Board has delegated certain responsibilities to its
AuditCommittee, Management Engagement Committee,
Nomination and Remuneration Committee and Sustainability
Committee (together the “Committees”). Given the size and
nature of the Board it is felt appropriate that all independent
Directors are members of each of the Committees.
The roles and responsibilities of the Committees are set out
in the terms of reference and are summarised on the
followingpage.
Items are discussed and, as appropriate, matters are
endorsed, approved or recommended to the Board by the
Committees. The chair of each of the Committees provides
the Board with a summary of the main discussion points at
the Committee meetings and any decisions made by the
Committee along with any recommendations which require
Board approval.
The Board may also delegate certain functions to other
Biographies
ofDirectors
page 46
Strategic Report Governance Report Financial Statements Additional Information
51
Corporate Governance Report
continued
During the year, the Management Engagement Committee
conducted a formal review of the Group’s service providers
andconcluded that each of the Group’s service providers
hadperformed either satisfactorily or well. In the opinion of
theManagement Engagement Committee and Board, the
continued appointment of the Investment Manager and the
Group’s key service providers on the respective terms agreed
is in the best interests of the shareholders as a whole.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee is chaired by
William Scott. The committee currently consists of Baroness
Nicola Blackwood, William Scott, William Simpson and Paul Le
Page. The Nomination and Remuneration Committee meets
at least once a year pursuant to its terms of reference, which
are available on the Company’s website https://www.rtwfunds.
com/rtw-biotech-opportunities-ltd.
Further information of the Nomination and Remuneration
Committee, Board diversity and Directors’ remuneration
areprovided in the Directors’ Remuneration Report on
pages57 to 59.
Sustainability Committee
The Sustainability Committee is chaired by William Simpson.
The committee considers responsible investing, ESG matters
and reporting, and regulatory updates, amongst other things.
On 6 June 2023, Terra Instinct was appointed to advise the
Group with respect to ESG matters, including sustainability
disclosure requirements and compliance with the FCA’s
anti-greenwashing rule.
A summary of the Group’s approach to environmental and
social matters is provided in Responsible Investment on
page44.
Board meeting attendance
The Board meets at least four times a year, with further
adhoc Board and Board Committee meetings as required.
Between meetings, there is regular contact with the
Secretary and the Company’s Brokers, as necessary.
parties; in particular, the Directors may delegate to the
Investment Manager. However, the Directors retain
responsibility for exercising overall control and supervision
ofthe Investment Manager. Matters reserved for the Board
include, amongst others, approval and oversight of the
Group’s investment activities by ensuring that the Group
hascomplied with its investment restrictions. The Board
alsoreviews the performance of the Group against its target
return (as defined in the Prospectus) and, in light of the
current market conditions, considers the strategy taken by
the Investment Manager. Approval of the Annual and Interim
Reports, announcements, and dividends are also reserved for
the Board.
Audit Committee
The Audit Committee is chaired by Paul Le Page with formally
delegated duties and responsibilities within written terms of
reference, which are available on the Company’s website
https://www.rtwfunds.com/rtw-biotech-opportunities-ltd.
Further information on the Audit Committee is included in
theReport of the Audit Committee on pages 60 to 63.
Management Engagement Committee
The Management Engagement Committee is chaired by
William Simpson. The committee currently consists of
Baroness Nicola Blackwood, William Simpson, William Scott
and Paul Le Page. The Management Engagement Committee
meets at least once a year pursuant to its terms of reference,
which are available on the Company’s website https://www.
rtwfunds.com/rtw-biotech-opportunities-ltd.
The Management Engagement Committee provides a
formalmechanism for the review of the performance of the
Company’s advisers, including the Investment Manager. It
carries out this review through consideration of a number of
objective and subjective criteria and through a review of the
terms and conditions of the advisers’ appointments with the
aim of evaluating performance, identifying any weaknesses and
ensuring value for money for the Company’s shareholders.
Directors’
Remuneration
Report
page 57
The attendance record of the Directors for the year is set out below:
Director
Scheduled
Board Meetings
(1)
Audit
Committee
Meetings
Management
Engagement
Committee
Meetings
Nomination and
Remuneration
Committee
Meetings
Sustainability
Committee
William Simpson 9/9 8/8 1/1 2/2 2/2
Nicola Blackwood 4/4 3/3 1/1 1/1 1/1
Paul Le Page 9/9 8/8 1/1 2/2 2/2
William Scott 9/9 8/8 1/1 2/2 2/2
Stephanie Sirota
(2)
7/9 n/a n/a n /a 1/2
(1) Six ad hoc Board meetings that were held in the year have not been included in this total.
(2) Ms Sirota is not a member of the Audit Committee, Management Engagement Committee or Nomination and Remuneration Committee,
however from time to time she is invited to attend and did so at most meetings held during the year.
52
Board performance and evaluation
In accordance with Provision 26 of the AIC Code, the Board
isrequired to undertake a formal and rigorous evaluation
ofits performance on an annual basis. Such an evaluation
ofthe performance of the Board as a whole and the Chair
iscarried out under the mandate of the Board in the form
ofself-appraisal questionnaires and a detailed discussion
todetermine effectiveness and performance in various
areasas well as the Directors’ continued independence.
The performance and effectiveness of the Directors is
assessed annually having regard to the specific responsibilities
of each Director as described in their service agreements.
To date, the Board has not engaged in the use of an external
facilitator but continues to consider the appropriateness
ofan external review. The Directors believe that the current
mix of skills, experience, ages and length of service of the
Directors is appropriate to the requirements of the Group.
With any new Director appointment to the Board, induction
training will be provided.
Directors’ conflicts of interest
All of the Directors are non-executive. William Simpson and
William Scott are directors of a number of funds managed by
members of the Man group of companies. Paul Le Page was
employed by Man Group until 31 December 2019 and was a
director of the investment managers of those funds. None
ofthe initial Directors at IPO were responsible for the
appointment of the others, the decision in respect of which
was made by an independent party. Having considered the
information disclosed above, the Board has concluded that
William Simpson, Paul Le Page, and William Scott remain
independent under provision 10 of the AIC Code. The Board
considers William Simpson, Paul Le Page, Baroness Nicola
Blackwood and Bill Scott as independent of each other and
free from any business or other relationship that could
materially interfere with the exercise of their independent
judgment. The Board when taken as a whole is independent
ofthe Investment Manager. Stephanie Sirota is a Board
representative of the Investment Manager and is therefore
not considered independent.
The Chair of the Board must be independent and is appointed
in accordance with the Company's Articles of Incorporation.
Mr Simpson’s independence is evaluated annually and he is
considered to be independent because he:
• has no direct or indirect current or historical employment
with the Investment Manager; and
• has no current directorships in any other entities (other
than the Company and its subsidiaries) for which the
Investment Manager provides services.
Duties and responsibilities
The Board has overall responsibility for maximising the
Group's success by directing and supervising the affairs
ofthebusiness and meeting the appropriate interests of
shareholders and relevant stakeholders, while enhancing
thevalue of the Group and also ensuring the protection
ofinvestors. A summary of the Board's responsibilities
isasfollows:
• statutory obligations and public disclosure;
• strategic matters and financial reporting;
• risk assessment and management including reporting,
compliance, governance, monitoring and control; and
• other matters having a material effect on the Group.
The Board is responsible to shareholders for the overall
management of the Group. The Board has adopted a
Schedule of Matters Reserved for the Board which sets out
those matters not delegated to other parties. Such reserved
powers include decisions relating to the determination of
investment policy and approval of changes in strategy, capital
structure, statutory obligations and public disclosure, and
entering into any material contracts by the Group.
The Directors have access to the advice and services of the
Administrator, which is responsible to the Board for ensuring
that Board procedures are followed and that it complies with
the Companies Law and applicable rules and regulations of
the GFSC and the LSE. Where necessary, in carrying out their
duties, the Directors may seek independent legal or other
professional advice and services at the expense of the Group.
As a result of the use of professional service providers and
the nature of the Group’s operations, the Group does not
have any employees.
The Group maintains appropriate Directors’ and Officers’
liability insurance in respect of legal action against its Directors.
The Board’s responsibilities for the Annual Report are set out
in the Statement of Directors' Responsibilities on page 56.
The Board is also responsible for issuing appropriate Interim
Reports and other price-sensitive public reports.
The primary focus at Board meetings is to review the Group
strategy, investment performance and associated matters
such as share price discount/premium, investor relations,
peer group information, gearing and industry issues and to
consider recommendations from the Audit Committee and
other Committees of the Board, as appropriate.
Biographies
ofDirectors
page 46
Statement of
Directors’
Responsibilities
page 56
Strategic Report Governance Report Financial Statements Additional Information
53
Report of the
Audit Committee
page 60
Corporate Governance Report
continued
Listing requirements
Following Initial admission to the SFS on 30 October 2019 and
subsequent admission 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),
theCompany became subject to the Prospectus Rules, the
Disclosure Guidance and Transparency Rules (as implemented
in the UK through the Financial Services and Markets Act 2000
of the United Kingdom, as amended), the Market Abuse
Regulation and the admission and disclosure standards
oftheLondon Stock Exchange.
Since admission to the SFS and subsequent admission to
trading on the Main Market of the London Stock Exchange,
the Company has complied with the applicable Listing Rules.
Common Reporting Standard and Tax
Reporting requirements
The Common Reporting Standard (“CRS”) is an information
standard for the automatic exchange of information
developed by the Organisation for Economic Co-operation
and Development. CRS is a measure to counter tax evasion
and it builds upon other information sharing legislation, such
as FATCA, the UK-Guernsey Intergovernmental Agreement
for the Automatic Exchange of Information, and the European
Union Savings Directive. Under the UK-Guernsey IGA, certain
disclosure requirements may be imposed in respect of certain
shareholders in the Group who are, or are entities that are
controlled by one or more, residents of the United Kingdom.
In addition, under FATCA, the Group is required to make
certain disclosures and reports to further compliance with
the legislation’s requirements. It is the Group’s policy to
comply with applicable requirements under CRS, the
UK-Guernsey IGA and FATCA.
AIFMD
The Directors have considered the impact of AIFMD on
theGroup and its operations. The Company is a non-EU
domiciled Alternative Investment Fund and the Investment
Manager has been appointed as the Group’s non-EU AIFM.
Asthe Group is managed by a non-EU AIFM, only a limited
number of provisions of AIFMD apply. The Investment
Manager has made the notifications or applications and
received, where relevant, approvals for the marketing of the
Ordinary Shares to “professional investors” (as defined in
AIFMD) in the United Kingdom and (with effect from 8 January
2024) Belgium.
Internal control and financial reporting
The Directors acknowledge that they are responsible for
establishing and maintaining the Company’s system of
internal control and reviewing its effectiveness. Internal
control systems are designed to manage rather than
eliminate the failure to achieve business objectives and can
only provide reasonable but not absolute assurance against
material misstatements or loss. The Directors review all
controls including operations, compliance and risk
management. The key procedures which have been
established to provide internal control are:
• The Board monitors the actions of the Group and
undertakings of any external consultant as appointed by
the Group at regular Board meetings and is given frequent
updates on developments arising from the operations and
strategic direction of the underlying investee companies.
The Board has also delegated administration and company
secretarial services to the Administrator; however, it
retains accountability for all functions it delegates.
• The Board clearly defines the duties and responsibilities
ofthe Group’s agents and advisers and appointments are
made by the Board after due and careful consideration.
The Board monitors the ongoing performance of such
agents and advisers and will continue to do so.
• The Administrator maintains a system of internal control
on which they report to the Board. The Board has
reviewed the need for an internal audit function and has
decided that the systems and procedures employed by the
Administrator provide the assurance that a sound system
of risk management and internal control should, which
safeguards shareholders' investment and the Group's
assets. An internal audit function specific to the Group
istherefore considered unnecessary.
The systems of control referred to above are designed to
ensure effectiveness and efficient operation, internal control
and compliance with laws and regulations. In establishing the
systems of internal control, regard is given to the materiality
of relevant risks, the likelihood of costs being incurred and
costs of control.
The need for an internal audit function is discussed in the
Report of the Audit Committee.
54
The UK Modern Slavery Act
The Board conducts the business of the Group ethically
andwith integrity, and has a zero-tolerance policy towards
modern slavery in all its forms. As the Group has no
employees, all of its Directors are non-executive and all its
functions are outsourced, there are no further disclosures
tobe made in respect of employees and human rights. The
Board notes that the companies in which the Group invests
directly or indirectly may have employee, community, human
rights or social impacts of which the Board has no visibility
orcontrol.
Litigation
So far as the Directors are aware, no litigation or claim
ofmaterial importance is pending or threatened against
theGroup.
On behalf of the Board
William Simpson
Chair
28 March 2025
Anti-bribery and corruption policy
The Board has a zero-tolerance approach to instances of
bribery and corruption and has reiterated its commitment to
carry out business fairly, honestly and openly. Accordingly, it
expressly prohibits any Director or associated persons, when
acting on behalf of the Group, from accepting, soliciting, paying,
offering or promising to pay or authorise any payment, public
or private, in the United Kingdom or abroad to secure any
improper benefit for themselves or for the Group. The
Investment Manager has also adopted a zero-tolerance
approach to instances of bribery and corruption. The Board
insists on strict observance with these same standards by
itsservice providers in their activities for the Group.
Criminal Finances Act
The Board has a zero-tolerance commitment to preventing
persons associated with it from engaging in criminal
facilitation of tax evasion. The Board expects the same of
itsservice providers and will not work with service providers
that it knows do not demonstrate the same zero-tolerance
commitment to preventing persons associated with it from
engaging in criminal facilitation of tax evasion.
Environment, employees, human rights and
social matters
The Group has an investment management contract with
theInvestment Manager. The Group has no employees and
allof its Directors are non-executive, with day-to-day
activities being carried out by third party service providers.
There are therefore no disclosures to be made in respect
ofits employees. Further, because the Company and its
Subsidiaries are closed-ended investment companies with no
employees, its environmental impact is minimal. The Board
notes that the companies in which the Group invests directly
or indirectly may have an environmental, employee, human
rights or social impact of which the Board has no visibility
orcontrol.
Strategic Report Governance Report Financial Statements Additional Information
55
Statement of Directors’ Responsibilities
Statement of Directors’
Responsibilities
The Directors are responsible for preparing the Annual
Report and consolidated financial statements in accordance
with applicable law and regulations.
The Companies Law requires the Directors to prepare
financial statements for each financial year. Under that law,
the Directors have elected to prepare the consolidated
financial statements in accordance with accounting principles
generally accepted in the United States of America and
applicable law.
Under the Companies Law, the Directors must not approve
the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group
and of its profit or loss for that period. In preparing these
consolidated financial statements, the Directors are
requiredto:
• Select suitable accounting policies and then apply them
consistently;
• Make judgements and estimates that are reasonable,
relevant and reliable;
• State whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the consolidated financial statements;
• Assess the Group’s and the Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern; and
• Use the going concern basis of accounting unless
liquidation is imminent.
The Directors confirm that they have complied with
theaboverequirements in preparing the consolidated
financial statements.
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any
time the financial position of the Company and of the Group
and enable them to ensure that its financial statements
comply with the Companies (Guernsey) Law, 2008. They are
responsible for such internal control as they determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets
of the Company and of the Group and to prevent and detect
fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website (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.
Responsibility Statement
The Directors who hold office at the date of approval of this
Director’s Report confirm that so far as they are aware, there
is no relevant audit information of which the Group’s auditor
is unaware, and that each Director has taken all the steps he
ought to have taken as a director to make himself or herself
aware of any relevant audit information and to establish that
the Group’s auditor is aware of that information.
We confirm that to the best of our knowledge:
• the consolidated financial statements, prepared in
accordance with US GAAP, give a true and fair view of
theassets, liabilities, financial position and profit or loss
ofthe Group;
• the Strategic Report contained in the Annual Report
includes a fair review of the development and performance
of the business and the position of the Group together
with a description of the principal risks and uncertainties
that they face;
• the Annual Report and audited consolidated financial
statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for
shareholders to assess the Group’s performance, position,
business model and strategy; and
• the Annual Report and audited consolidated financial
statements includes information required by the FCA for
the purpose of ensuring that the Group complies with the
provisions of the Listing Rules and the Disclosure Guidance
and Transparency Rules of the FCA.
The responsibility statement was approved by the Board
ofDirectors on 28 March 2025 and was signed on behalf
oftheBoard.
On behalf of the Board
William Simpson Paul Le Page
Chair Director
28 March 2025 28 March 2025
56
Directors’ Remuneration
Report
The Nomination and Remuneration Committee has been
established to consider the appointment and reappointment
of Directors and ensure that the Company maintains fair and
appropriate remuneration policies and controls. The
Nomination and Remuneration Committee comprises all the
independent Directors of the Company and is chaired by
William Scott.
The Company is not required to present a Directors’
Remuneration Report, and whilst this report does not purport
to meet all of the requirements of a typical listed UK company’s
Directors’ Remuneration Report, it has been provided as the
Directors believe that it may be useful to users of this annual
report and consolidated financial statements.
The Group has no employees and no executive directors.
Directors do not have service contracts, but are appointed
under letters of appointment, copies of which are available
upon request from the Company Secretary and will be
available for inspection at the AGM.
Regarding nomination, the Nomination and Remuneration
Committee’s remit is to review regularly the structure, size
and composition of the Board, to give full consideration to
succession planning for Directors, to keep under review the
leadership needs of the Group and be responsible for
identifying and nominating for the approval of the Board
candidates to fill Board vacancies as and when they arise.
Board diversity
The Director’s biographies can be found on pages 46 to 47.
Nospecific diversity parameters have been set as the Board
believes that all appointments should be made on merit and
taken in the context of skills, knowledge and experience
required for an effective Board. The Board recognises the
importance of diversity and, in line with the FCA’s current
guidelines to have 40% of board positions held by women,
took proactive steps in 2024 to enhance gender
representation while also increasing the size of the Board
toinclude a broader range of relevant expertise. As part of
this effort, the Board appointed Baroness Nicola Blackwood
to the Company’s Board on 11 July 2024, increasing female
representation to 40%. Both gender and ethnic diversity
factors will be considered by the Board when making any
newappointments or replacing current Board members.
The future growth of the Board will be linked to the growth
ofthe Group’s shareholder base as the Board has been
mindful of the need to manage the Group’s fixed costs whilst
it was relatively small. The Board believes the current Board
members have the appropriate qualifications, experience and
expertise to manage the Group.
Tenure policy
Each Director retires at each AGM subsequent to his or her
appointment and is eligible for re-election by the shareholders
at such AGM.
A Director who retires at an AGM may, if willing to continue
toact, be elected or re-elected at that meeting. If, at a
general meeting at which a Director retires, the shareholders
neither re-elect that Director nor appoint another person to
the Board in their place, the retiring Director shall, if willing to
act, be deemed to have been re-elected unless at the general
meeting it is resolved not to fill the vacancy or unless a
resolution for the re-election of the Director is put to the
meeting and not passed.
In accordance with the AIC Code, if and when any Director
hasbeen in office (or upon re-election would at the end of that
term, be in office) for more than nine years, or in the case of
the Chair ten years, the Company will consider whether there
is a risk that such Director might reasonably be deemed to
have lost independence through such long service.
The Chair, Mr Le Page and Ms Sirota have been members
ofthe Board since their appointment on 2 October 2019.
MrScott was appointed on 3 October 2019. Baroness Nicola
Blackwood was appointed on 11 July 2024.
Termination policy
Should a Director not be re-elected by shareholders, or
retires from office under the Articles of Incorporation, the
appointment shall be terminated with immediate effect and
without compensation.
A Director may resign at any time by notice in writing to
theBoard in accordance with the Articles of Incorporation.
The Company may terminate a Director’s appointment with
immediate effect should the Director have:
• Committed any serious breach or (after warning in writing)
any repeated or continued material breach of their
obligations to the Group; or
• Been guilty of any act of dishonesty, fraud or serious
misconduct or any conduct which (in the reasonable
opinion of the Board) tends to bring the Director or Group
into disrepute.
Succession policy
The Board gives full consideration to succession planning,
including the succession of the Chair and Directors, in the
course of its work, taking into account the challenges and
opportunities facing the Group, and what skills and expertise
are therefore needed on the Board in the future.
Biographies
of Directors
page 46
Strategic Report Governance Report Financial Statements Additional Information
57
.
Directors’ Remuneration Report
continued
In setting the level of each non-executive Director’s fee, the
Board had regard to: the time commitments expected; the
level of skill and experience of each Director; and the current
market and levels of companies of similar size and complexity.
Following this evaluation, the Board determined that the fees
set out in this remuneration policy were appropriate, following
the increase in rates agreed with effect from 1 January 2024.
Under the terms of their appointments as non-executive
Directors, the Directors are entitled to the following
annualfees:
Rate with effect
from 1 January 2024
Rate prior to
1January 2024
William Simpson
GBP 60,000 GBP 50,000
Paul Le Page
GBP 47,000 GBP 40,000
William Scott
GBP 40,000 GBP 35,000
Nicola Blackwood
(appointed 11 July
2024)
GBP 40,000
(1)
n/a
Stephanie Sirota
US$ 50,000 US$ 42,000
(1) Following her appointment as the Company’s Senior Independent
Non-Executive Director on 9 December 2024, Baroness Nicola
Blackwood’s fee increased to GBP 50,000.
All of the Directors are also entitled to be paid all reasonable
expenses properly incurred by them in attending general
meetings, Board or Committee meetings or otherwise in
connection with the performance of their duties. The Board
may determine that additional remuneration may be paid,
from time to time, to any one or more Directors in the event
such Director or Directors are requested by the Board to
perform extra or special services on behalf of the Group. The
Directors do not participate in any discussions relating to
their own fee, which is determined by the other Directors.
On termination of the appointment, Directors shall only be
entitled to such fees as may have accrued to the date of
termination, together with reimbursement in the normal
wayof any expenses properly incurred prior to that date.
Overboarding policy
To ensure that each Director has sufficient time to meet
theirresponsibilities to the Group, the Board has adopted an
overboarding policy which outlines its expectations regarding
the time commitments of the Directors.
Should a Director wish to take on an additional external
directorship of a London listed, or equivalent, company, or is
anticipating a significant increase in time commitment of an
existing appointment, details must be provided to the Chair
(or, if the Chair is taking on the external directorship, the
Chair of the Audit Committee) for approval prior to accepting
the external directorship or additional time commitment.
The Director should:
• Confirm that the external directorship or change in time
commitment is not in conflict with the Group;
• Provide an estimate of the time commitment required;
• Confirm that they have sufficient surplus capacity to meet
their commitments to the Group; and
• Confirm that no commercial conflict of interest is likely
toarise or be perceived to arise.
To assist in the Chair’s decision, on an ongoing basis, at
eachBoard meeting, the Directors disclose their other
directorships at each quarterly meeting of the Company.
Remuneration policy
The Directors shall be remunerated at such a rate as the
Directors shall determine provided that the aggregate
amount of such fees shall not exceed US$500,000 per annum
(or the applicable currency equivalent thereof). The Board is
conscious that it needs to ensure that it has the right skills
and experience appointed to the Board to best support the
Group’s growth and its strategic plans and priorities over
coming years. The Board believes that the Fee Cap of
US$500,000 provides appropriate headroom to
accommodate any future market-based adjustments to
Directors’ fees and increases to the size and composition of
the Board, and ensures that the Group maintains the ability
to pay competitive fees and attract and retain high calibre
Directors. The Board does not expect to utilise the full
amount of the proposed Fee Cap in the short to medium
term. The Board benchmarks against comparable investment
companies to ensure that any future changes are appropriate
to remain in line with market levels.
58
Annual report on remuneration
Service contracts obligations and payment on loss of office
No Director has a service contract with the Group and, as such, no Director is entitled to compensation payments upon
termination of their appointment or loss of office.
Directors’ remuneration
During the year ended 31 December 2024, the US Dollar equivalent of Directors’ remuneration (including reimbursement
ofreasonable expenses) was as follows:
31 December 2024
(US$)
31 December 2023
(US$)
William Simpson 76,339 62,121
Paul Le Page 59,799 49,697
William Scott 50,893 43,485
Nicola Blackwood (appointed 11 July 2024) 25,446 -
Stephanie Sirota 50,000 42,000
Total 262,477 197,303
All of the above remuneration relates to fixed annual fees. The remuneration of each of the Directors, other than Ms Sirota, is
fixed in Pounds Sterling (as set out in the table on page 58) and the US Dollar equivalent set out above may vary in accordance
with fluctuations in the Pounds Sterling/US Dollar exchange rate.
Directors are not eligible for bonuses, share options or long-term incentive schemes or other performance-related benefits.
There are no pension arrangements in place for the Directors of the Company. Accordingly, there were no other items in the
nature of remuneration, pension entitlements or incentive scheme arrangements which were paid or accrued to the Directors
during the year.
Directors’ shareholdings in the Company
Directors of the Company and their beneficial interests in the Company as at 31 December 2024 are detailed below:
Director
Number of Shares
% Holding
28 March
2025
% Holding
31 December
2024
% Holding
31 December
2023
28 March
2025
31 December
2024
31 December
2023
William Simpson 240,000 200,000 200,000 0.07% 0.06% 0.09%
Paul Le Page 128,000 128,000 128,000 0.04% 0.04% 0.06%
William Scott 400,000 400,000 350,000 0.12% 0.12% 0.17%
Stephanie Sirota 1,010,000 1,010,000 1,010,000 0.30% 0.30% 0.48%
Nicola Blackwood - - - -% -% -%
On behalf of the Board
William Scott
Chair of the Nomination and Remuneration Committee
28 March 2025
Strategic Report Governance Report Financial Statements Additional Information
59
Report of the Audit Committee
I present the Audit Committee’s
report for financial year ended
31 December 2024, setting
forth the Audit Committee’s
structure, duties, and activities
during the reporting period.”
Paul Le Page
Independent
Non-Executive Director
Chair of the Audit Committee
Report of the
Audit Committee
Composition
The Audit Committee, chaired by Paul Le Page, operates
within clearly defined terms of reference which include all
matters indicated by DTR 7.1 and the AIC Code. Its other
members are Nicola Blackwood (who joined the Audit
Committee upon her appointment as a Director on 11 July
2024), William Simpson and William Scott. The Chair of the
Board is a member of the Audit Committee but does not chair
it. His membership of the Audit Committee is considered
appropriate due to: the lack of perceived conflict; the small size
of the Board; and because the Directors consider that he acts
in a non-executive capacity and continues to be independent.
Only independent Directors can serve on the Audit
Committee, and members of the Audit Committee must have
no current links with the Group's external auditor and must
be independent of the Investment Manager. The Audit
Committee can request the attendance of the Investment
Manager, the auditors or any service provider at its meetings.
Member
Audit Committee
meetings attended
Paul Le Page
Independent Non-Executive Director
8/8
Nicola Blackwood
Senior Independent Non-Executive Director
3/3
William Simpson
Chair and Independent
Non-Executive Director
8/8
William Scott
Independent Non-Executive Director
8/8
60
The Board has taken note of the requirement that at least
one member of the Audit Committee should have recent and
relevant financial experience and is satisfied that the Audit
Committee is properly constituted in that respect, with all
members being highly experienced and, in particular, one
member of the Committee is a chartered accountant.
The performance of the Chair of the Audit Committee is
reviewed on an annual basis and the membership of the
AuditCommittee and its terms of reference are kept under
regular review.
Responsibilities
The Audit Committee is the formal forum through which
theexternal auditor reports to the Board of Directors. The
objectivity of the external auditor is reviewed by the Audit
Committee, which also reviews the terms under which the
external auditor is appointed to perform non-audit services
and the fees paid to the external auditor or their affiliated
firms overseas.
The main duties of the Audit Committee are:
• Giving full consideration and recommending to the Board
for approval of the contents of the Interim Report and
Annual Report and reviewing the external auditor’s report
thereon;
• Reviewing the scope, results, cost effectiveness,
independence and objectivity of the external auditor;
• Reviewing the draft valuations of the Group’s investments
prepared by the Investment Manager, and making a
recommendation to the Board on the valuation of the
Group’s investments;
• Reviewing and recommending to the Board for approval of
the audit, audit related and non-audit fees payable to the
external auditor and the terms of their engagement;
• Reviewing and approving the external auditor’s plan for the
annual audit and interim review;
• Reviewing the appropriateness of the Group’s accounting
policies;
• Ensuring the standards and adequacy of the service
providers’ control systems;
• Reviewing and considering the UK Code, the AIC Code and
the FRC Guidance on Audit Committees; and
• Reviewing the risks facing the Group and monitoring the
risk matrix.
The Audit Committee is required to report its findings to
theBoard, identifying any matters on which it considers that
action or improvement is needed, and make recommendations
on the steps to be taken.
The external auditor is invited to attend the Audit Committee
meetings at which the Interim Reports and Annual Reports
are considered and at which they have the opportunity to
meet with the Audit Committee without representatives
ofany other service provider or consultant being present
atleast once a year.
Financial reporting
The primary role of the Audit Committee in relation to
financial reporting is to review with the Administrator,
Sub-Administrator, any external consultant as appointed
bythe Investment Manager and the external auditor, the
appropriateness of the Interim Reports and Annual Reports,
concentrating on, amongst other matters:
• the quality and acceptability of accounting policies and
practices;
• the clarity of the disclosures and compliance with financial
reporting standards and relevant financial and governance
reporting requirements;
• material areas in which significant judgements have been
applied or there has been discussion with both any
external consultant as appointed by the Investment
Manager and the external auditor;
• whether the Annual Report, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Group’s
performance, business model and strategy; and
• any correspondence from regulators in relation to the
Group’s financial reporting.
To aid its review, the Audit Committee considers reports
from the Investment Manager and any external consultant as
appointed by the Investment Manager and also reports from
the external auditor on the outcomes of its interim review
and annual audit.
Meetings
The Audit Committee meets no less than twice a year in
Guernsey, at such other times as the Audit Committee Chair
shall require, and meets the external auditor at least once a
year in Guernsey. The Audit Committee met eight times in
the year ended 31 December 2024 (2023: seven times).
The matters discussed at these meetings were:
• Review of the terms of reference of the Audit Committee
to confirm that they are appropriate to the business of the
Audit Committee and the current regulatory environment
in which the Group operates;
• Semi-annual reviews of the valuations of the Group’s
investments;
• Review of the accounting policies and format of the
consolidated financial statements;
• The relationship with the external auditor;
• Discussion and approval of the fee for the external audit;
• Discussion and review of the audit plan;
• Review and consideration of viability model;
• Review of compliance with the AIC Code of Corporate
Governance;
• Review of the related party register;
• Consideration of the requirement for an internal audit
function;
• Consideration of and recommendations to the Board
regarding the appointment of third-party service providers
and the adequacy of their arrangements; and
• Review of the Group’s key risks and internal controls.
Board
experiences
page 46
Directors’
responsibilities
page 56
Strategic Report Governance Report Financial Statements Additional Information
61
Report of the Audit Committee
continued
The Audit Committee has reviewed the valuation papers
prepared by the Investment Manager. The Investment
Manager confirmed to the Audit Committee that the
valuation methodology had been applied consistently during
the year. After reviewing the scope and results of the work
ofthe external auditor, the Audit Committee concluded that
they had not identified any material errors or inconsistencies.
The external auditor explained the results of its audit work
onthe valuations, including its challenge of management’s
underlying projections, the economic assumptions, and prices
used. On the basis of its audit work, there were no material
adjustments proposed to those valuations as approved by the
Audit Committee.
Internal audit
The Audit Committee shall consider at least once a year
whether there is a need for an internal audit function.
Currently, the Audit Committee does not consider there to
bea need for an internal audit function, given that there are no
employees in the Group and all outsourced functions are with
parties who have their own internal controls and procedures.
The Audit Committee worked with the Administrator and the
Investment Manager to structure a risk matrix for the Group,
which considered the controls applied by the Board, the
Investment Manager and key service providers. The matrix
has also been reviewed with the Investment Manager and
wasused to form the basis of the Company’s principal and
emerging risk disclosures in the Strategic Report on pages38
to 40.
Appointment of the external auditor
KPMG has been appointed as the statutory external
auditorof the Company since the Company re-domiciled
fromDelaware to Guernsey on 2 October 2019. The Audit
Committee held meetings with KPMG before the start of the
audit to discuss formal planning and to discuss any possible
issues, along with the scope of the audit and appropriate
timetable. Informal meetings have also been held with the
Chair of the Audit Committee in order that the Chair is kept
up to date with the progress of the audit and formal reporting
requirement by the Audit Committee.
The objectivity of the external auditor is reviewed by the
Audit Committee, which also reviews the terms under which
the external auditor may be appointed to perform non-audit
services. The Audit Committee reviews the scope and results
of the audit, its cost effectiveness and the independence and
objectivity of the external auditor, with particular regard to
any non-audit work that the external auditor may undertake
and the level of fees associated to this non-audit work. In
order to safeguard external auditor independence and
objectivity, the Audit Committee ensures that audit related,
non-audit, or advisory services provided by the external
auditor do not conflict with its statutory audit responsibilities.
Audit related services will generally only cover reviews of
interim financial statements and capital raising work. Any
non-audit services conducted by the external auditor requires
the consent of the Audit Committee before being initiated.
Primary area of judgement
The Audit Committee determined that the key risk
ofmisstatement of the Group’s consolidated financial
statements related to the valuation of investment in
securities, at fair value, in the context of the judgements
necessary to evaluate current fair values.
As outlined in Note 2 to the consolidated financial statements
of the Group, the total carrying value of the Group’s
investments in securities at fair value as at 31 December 2024
was US$611.0 million (2023: US$367.6 million), of which
US$217.8 million (2023: US$123.9 million) related to private
company investments. Market quotations are available for
those financial assets that are listed and traded and have an
active market quote.
For private company investments, the value of the Group’s
investments is based on the value of the relevant underlying
investee companies as determined by the Investment Manager
and approved by the Board. The valuation of the Group’s private
and restricted investments, the methodology used for the year
end valuation, and the constitution of the Investment Manager’s
Valuation Committee were discussed with the Investment
Manager and with the external auditor in attendance at an
Audit Committee meeting held on 11 February 2025, and
theIndependent Valuers, as appointed by the Investment
Manager, carry out valuations semi-annually on the private
company investments.
The Group values investment in private investment
companies using the net asset values provided by the
administrators of the private investment companies
concerned 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 NAV of the investment.
Please see Private Portfolio Valuations and Cash Runway
Analysis Information on page 23 for information on the
valuation of private company investments.
The Audit Committee has met with both of the Group’s
third-party valuation firms to satisfy itself of their
qualifications and experience to fulfil their roles. The Audit
Committee independently reviews and challenges the
Investment Manager’s private company valuations on a
semi-annual basis in two formal valuation committee meetings
that the Group’s auditor is invited to observe. Any valuation
discrepancies are highlighted in meeting minutes. The
Valuation Committee can overrule the third-party valuation
agents, but there has never been a material divergence.
Audit Committee members have a wide breadth of experience
and skills in the alternative investment space, from chairing
other board committees of large London-listed companies,
toserving as a chartered accountant with a background in
corporate finance and private equity; another who has served
as a partner of a major international fund law firm, and most
recently one who brings considerable life sciences experience
that informs a detailed understanding of the political,
economic and technical factors that impact our industry
andour portfolio companies.
62
The fees charged by KPMG to the Group during the last two
years were as follows:
2024 2023
Audit fee GBP 240,500 GBP 191,000
Review of interim financial
statements
GBP 55,900 GBP 50,300
Other non-audit services
(1)
– GBP 82,800
Total GBP 296,400 GBP 324,100
(1) During the year ended 31 December 2023, KPMG charged fees
of GBP 82,800 in respect of its work on the Arix deal. These
services were preapproved by the Audit Committee and work
was performed by a separate team within KPMG from those
working on the Group’s audit.
The external auditor may not undertake any work for the
Company in respect of the following matters – preparation
ofthe financial statements, preparation of valuations used
infinancial statements, provision of investment advice,
takingmanagement decisions or advocacy work in
adversarialsituations.
In addition, in 2023 and 2024, a KPMG member firm was
paidEUR12,750 and EUR16,821 respectively for the audit
of4010 Royalty Offshore FNT Fund, LP.
The Audit Committee reviews the scope and results of
theaudit, its cost effectiveness and the independence and
objectivity of the auditor, with particular regard to the level
ofnon-audit fees. The Audit Committee considers KPMG to
be independent of the Group and that the provision of such
non-audit services is not a threat to the objectivity and
independence of the conduct of the audit as appropriate
safeguards are in place.
To fulfil its responsibility regarding the independence of the
external auditor, the Audit Committee considered:
• audit personnel in the audit plan for the current year;
• a report from the external auditor describing its
arrangements to identify, report and manage any conflicts
of interest; and
• the extent of non-audit services provided by the external
auditor.
To assess the effectiveness of the external auditor, the Audit
Committee reviewed:
• the external auditor’s fulfilment of the agreed audit plan
and variations from it;
• reports highlighting the findings that arose during the
course of the audit; and
• feedback from the Investment Manager, Administrator,
Sub-Administrator, and any external consultant as
appointed by the Investment Manager in evaluating the
performance of the audit team.
The Audit Committee is satisfied with KPMG’s effectiveness
and independence as external auditor having considered the
degree of diligence and professional scepticism demonstrated
by them. Having carried out the review described above and
having satisfied itself that the external auditor remains
independent and effective, the Audit Committee has
recommended to the Board that KPMG be reappointed as
external auditor for the year ending 31 December 2025 and
KPMG has confirmed its willingness to remain in this role.
Annual Report
The Audit Committee members have each reviewed this
Annual Report and earlier drafts of it in detail, comparing its
content with their own knowledge of the Company, reporting
requirements and shareholder expectations. Formal meetings
of the Audit Committee have also reviewed the Annual Report
and its content and have received reports and explanations
from the Company’s service providers about the content and
the financial results. The Audit Committee has concluded that
the Annual Report, taken as a whole, is fair, balanced and
understandable, and that the Board can reasonably and with
justification approve the Statement of Directors’
Responsibilities on page 56.
Key activities of the Audit Committee
The most significant transaction during the year was the
acquisition of Arix and the Audit Committee held calls with
RTW and the Company’s administrator and had discussions
with the company’s auditors to ensure that the transaction
was reported in a fair and transparent manner.
The Audit Committee oversaw the integrity of the valuation
process and conducted two independent reviews of RTW’s
valuation policies and procedures when the interim and annual
statements were produced.
The Company’s private investment valuations were reviewed
on a monthly basis as part of the NAV production process by
RTW’s Valuation Committee with supporting independent
papers being prepared by the Company’s two independent
valuation agents to ensure that private assets were fair valued
in accordance with RTW’s policies. Additional independent
valuations were obtained following the transfer of the Arix
private portfolio positions. The Company’s auditors KPMG
received meeting summaries and valuation reports of the
monthly Valuation Committee meetings.
Independent valuations for the Company’s private positions
were prepared by Alvarez and Marsal and Hoolihan Lokey and
the Audit Committee held conference calls with both firms to
satisfy itself that they have suitable qualifications and
experience to fulfil their roles.
The Committee also independently reviewed and challenged
RTW’s private company valuations in two formal valuation
committee meetings that our auditor KPMG attended to ensure
that the committee fulfilled its responsibilities. The questions
that were raised in these meetings ranged from the impact of
major geopolitical events and macro variables on the valuations
through to company-specific factors such as the need for
re-financing or the performance of peer group companies.
The Committee was strengthened during the year by the
addition of Baroness Nicola Blackwood who has a detailed
understanding of the political, economic and technical factors
that impact the Company and its investments.
On behalf of the Audit Committee,
Paul Le Page
Chair of the Audit Committee
28 March 2025
Strategic Report Governance Report Financial Statements Additional Information
63
  CONSOLIDATED FINANCIAL STATEMENTS
65 Independent Auditor’s Report
69 Consolidated Statement of Assets
and Liabilities
70 Consolidated Condensed Schedule of
Investments
80 Consolidated Statement of Operations
81 Consolidated Statement of Changes
in Net Assets
83 Consolidated Statement of Cash Flows
84 Notes to the Consolidated Financial
Statements
Consolidated
Financial
Statements
64
Our opinion is unmodified
We have audited the consolidated financial statements of
RTW Biotech Opportunities Ltd (the “Company”) and its
subsidiaries (together, the “Group”), which comprise the
consolidated statement of assets and liabilities including the
consolidated condensed schedule of investments as at 31
December 2024, the consolidated statements of operations,
changes in net assets and cash flows for the year then ended,
and notes, comprising significant accounting policies and
other explanatory information.
In our opinion, the accompanying
consolidated financial statements:
• give a true and fair view of the financial position of the
Group as at 31 December 2024, and of the Group’s financial
performance and cash flows for the year then ended;
• are prepared in accordance with U.S. generally accepted
accounting principles (“US GAAP”); and
• comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Independent Auditor’s Report to the
Members of RTW Biotech Opportunities Ltd
Our responsibilities are described below. We have fulfilled
ourethical responsibilities under, and are independent of
theCompany and Group in accordance with, UK ethical
requirements including the FRC Ethical Standard as required
by the Crown Dependencies’ Audit Rules and Guidance. We
believe that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion.
Key audit matters: our assessment
of the risks of material misstatement
Key audit matters are those matters that, in our professional
judgement, were of most significance in the audit of the
consolidated financial statements and include the most
significant assessed risks of material misstatement (whether
or not due to fraud) identified by us, including those which had
the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in
the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
In arriving at our audit opinion above, the key audit matter
was as follows (unchanged from 2023):
The risk Our response
Valuation of
investments in
securities, at fair value
$611,011,096 (2023:
$367,611,231)
Refer to the Report
ofthe Audit Committee
on pages 60 to 63,
theConsolidated
Condensed Schedule
ofInvestments as at
31December 2024 on
pages 70 to 74, note 1
fair value significant
accounting policies
andnote 2 fair value
measurements
disclosures.
Basis:
The Group’s investment portfolio
represents the most significant balance
on the consolidated statement of assets
and liabilities and is the principal driver of
the Group’s net asset value (2024: 97%;
2023: 86%). The investment portfolio is
composed of publicly quoted and private
unquoted life science investments
(together the “Investments”).
Publicly quoted life science investments,
representing 64.6% of the fair value of
Investments, are valued using third party
data sources.
Private unquoted life science investments,
representing 35.4% of the fair value of
Investments, are valued using recognised
valuation methodologies, including option
pricing models.
The Investment Manager utilises an
Independent Valuer to assist them in their
determination of the fair value of certain
private unquoted life science investments.
Risk:
The valuation of the Group’s Investments
is considered a significant area of our
audit, given that it represents the
majority of the net assets of the Group.
The valuation risk of the private unquoted
life science investments incorporates
both a risk of fraud and error given the
significance of the estimates and
judgements that are involved in the
determination of their fair value.
Our audit procedures included, but were not limited to:
Controls evaluation:
We assessed the design and implementation of the Investment Manager’s review control
in relation to the valuation of private unquoted life science investments.
Challenging managements’ Investments valuation, including the use of our KPMG
valuation specialists, as applicable:
For a value driven selection of the publicly quoted life science investments, we
independently priced to third party data sources.
Private unquoted life science investments
For a risk driven selection of the private unquoted life science investments we performed
the following procedures, as applicable:
• Obtained and read the valuation memorandums produced by the Investment Manager
and Independent Valuer;
• We assessed the appropriateness of the valuation methodology used to estimate fair value;
• Assessed the objectivity, capabilities and competency of the Independent Valuer. We
considered the scope of their engagement and methodology applied by the Independent
Valuer in performing their work. We obtained and assessed their findings and
considered the impact, if any, on our audit work;
• Agreed the price of investments acquired during the year to supporting documentation
such as purchase agreements, funding draw down requests and bank statements. We
performed public searches for contradictory or dis-confirming evidence to challenge
both the absence or appropriateness of fair value movements since acquisition;
• For those private unquoted life science investments valued using valuation models, such
as option pricing models, with the assistance of our own valuation specialists, we
assessed and challenged the key assumptions used by comparing them to available
market information and corroborated key inputs to supporting documentation;
• Considered market transactions in close proximity to the year-end and assessed their
appropriateness as being representative of fair value; and
• For private investment company life science investments, valued based on the their net
asset value, we obtained independent confirmation, from the administrator of those
private investment companies, of the net asset value per share and reconciled these to the
net asset value used in the Group’s valuation. Further we obtained the coterminous audited
financial statements for those private investment companies to corroborate the net asset
value per share used. We also evaluated the accounting framework and accounting policies
applied and considered the impact, if any, of the issued audit opinion therein.
Assessing disclosures:
We also considered whether the Group’s consolidated financial statement disclosures in
relation to the use of estimates and judgements regarding the fair value of investments in
securities and the Company’s investment valuation policies adopted and the fair value
disclosures, in notes 1 and 2 respectively, are in accordance with US GAAP.
65
Strategic Report Governance Report Financial Statements Additional Information
Independent Auditor’s Report to the Members of RTW Biotech Opportunities Ltd
continued
Our application of materiality and
an overview of the scope of our audit
Materiality for the consolidated financial statements as
awhole was set at $13.6m, determined with reference to
abenchmark of group net assets of $632.6m, of which
itrepresents approximately 2.0% (2023: 2.0%).
In line with our audit methodology, our procedures on
individual account balances and disclosures were performed
to a lower threshold, performance materiality, so as to reduce
to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a
material amount across the consolidated financial statements
as a whole. Performance materiality for the Group was set at
75% (2023: 75%) of materiality for the consolidated financial
statements as a whole, which equates to $10.2m. We applied
this percentage in our determination of performance
materiality because we did not identify any factors indicating
an elevated level of risk.
We reported to the Audit Committee any corrected or
uncorrected identified misstatements exceeding $0.68m, in
addition to other identified misstatements that warranted
reporting on qualitative grounds.
Our audit of the Group was undertaken to the materiality
level specified above, which has informed our identification of
significant risks of material misstatement and the associated
audit procedures performed in those areas as detailed above.
The group team performed the audit of the Group as if it was
a single aggregated set of financial information. The audit was
performed using the materiality level set out above and
covered 100% of total group revenue, total group profit
before tax, and total group assets and liabilities.
Going concern
The directors have prepared the consolidated financial
statements on the going concern basis as they do not intend
to liquidate the Group or the Company or to cease their
operations, and as they have concluded that the Group and
the Company’s financial position means that this is realistic.
They have also concluded that there are no material
uncertainties that could have cast significant doubt over their
ability to continue as a going concern for at least a year from
the date of approval of the consolidated financial statements
(the “going concern period”).
In our evaluation of the directors’ conclusions, we considered
the inherent risks to the Group and the Company’s business
model and analysed how those risks might affect the Group
and the Company’s financial resources or ability to continue
operations over the going concern period. The risks that we
considered most likely to affect the Group and the Company’s
financial resources or ability to continue operations over this
period was the availability of capital to meet operating costs
and other financial commitments.
We considered whether this risk could plausibly affect the
liquidity in the going concern period by comparing severe, but
plausible downside scenarios that could arise from this risk
against the level of available financial resources indicated by
the Company’s financial forecasts.
We considered whether the going concern disclosure in note 1
to the financial statements gives a full and accurate
description of the directors’ assessment of going concern.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern
basis of accounting in the preparation of the consolidated
financial statements is appropriate;
• we have not identified, and concur with the directors’
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
collectively, may cast significant doubt on the Group and
the Company’s ability to continue as a going concern for
the going concern period; and
• we have nothing material to add or draw attention to in
relation to the directors’ statement in the notes to the
consolidated financial statements on the use of the going
concern basis of accounting with no material uncertainties
that may cast significant doubt over the Group and the
Company’s use of that basis for the going concern period,
and that statement is materially consistent with the
consolidated financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions
and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time
they were made, the above conclusions are not a guarantee
that the Group and the Company will continue in operation.
Fraud and breaches of laws
and regulations – ability to detect
Identifying and responding to risks of material
misstatement due to fraud
To identify risks of material misstatement due to fraud
(“fraud risks”) we assessed events or conditions that could
indicate an incentive or pressure to commit fraud or provide
an opportunity to commit fraud. Our risk assessment
procedures included:
• enquiring of management as to the Group’s policies and
procedures to prevent and detect fraud as well as
enquiring whether management have knowledge of any
actual, suspected or alleged fraud;
• reading minutes of meetings of those charged with
governance; and
• using analytical procedures to identify any unusual or
unexpected relationships.
As required by auditing standards, and taking into account
possible incentives or pressures to misstate performance and
our overall knowledge of the control environment, we perform
procedures to address the risk of management override of
controls, in particular the risk that management may be in a
position to make inappropriate accounting entries, and the
risk of bias in accounting estimates such as valuation of
private unquoted life science investments. On this audit we do
not believe there is a fraud risk related to revenue recognition
because the Group’s revenue streams are simple in nature
with respect to accounting policy choice, and are easily
verifiable to external data sources or agreements with little
or no requirement for estimation from management. We did
not identify any additional fraud risks.
66
We performed procedures including:
• identifying journal entries and other adjustments to test
based on risk criteria and comparing any identified entries
to supporting documentation;
• incorporating an element of unpredictability in our audit
procedures; and
• assessing significant accounting estimates for bias.
Further detail in respect of valuation of private unquoted life
science investments is set out in the key audit matter section
of this report.
Identifying and responding to risks of material
misstatement due to non-compliance with laws
andregulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
consolidated financial statements from our sector experience
and through discussion with management (as required by
auditing standards), and from inspection of the Group’s
regulatory and legal correspondence, if any, and discussed with
management the policies and procedures regarding compliance
with laws and regulations. As the Group is regulated, our
assessment of risks involved gaining an understanding of the
control environment including the entity’s procedures for
complying with regulatory requirements.
The Group is subject to laws and regulations that directly
affectthe consolidated financial statements including financial
reporting legislation and taxation legislation and we assessed
the extent of compliance with these laws and regulations as part
of our procedures on the related financial statement items.
The Group is subject to other laws and regulations where the
consequences of non-compliance could have a material effect
on amounts or disclosures in the consolidated financial
statements, for instance through the imposition of fines or
litigation or impacts on the Group and the Company’s ability
to operate. We identified financial services regulation as being
the area most likely to have such an effect, recognising the
regulated nature of the Group’s activities and its legal form.
Auditing standards limit the required audit procedures to
identify non-compliance with these laws and regulations to
enquiry of management and inspection of regulatory and legal
correspondence, if any. Therefore if a breach of operational
regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or
breaches of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the consolidated financial
statements, even though we have properly planned and
performed our audit in accordance with auditing standards.
For example, the further removed non-compliance with laws
and regulations is from the events and transactions reflected
in the consolidated financial statements, the less likely the
inherently limited procedures required by auditing standards
would identify it.
In addition, as with any audit, there remains a higher risk of
non-detection of fraud, as this may involve collusion, forgery,
intentional omissions, misrepresentations, or the override
ofinternal controls. Our audit procedures are designed to
detect material misstatement. We are not responsible for
preventing non-compliance or fraud and cannot be expected
to detect non-compliance with all laws and regulations.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the
annual report but does not include the consolidated financial
statements and our auditor’s report thereon. Our opinion on
the consolidated financial statements does not cover the
other information and we do not express an audit opinion
orany form of assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated. If, based on
the work we have performed, we conclude that there is a
material misstatement of this other information, we are
required to report that fact. We have nothing to report
inthisregard.
Disclosures of emerging and principal
risks and longer term viability
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
disclosures in respect of emerging and principal risks and the
viability statement, and the consolidated financial statements
and our audit knowledge. we have nothing material to add or
draw attention to in relation to:
• the directors’ confirmation within the Longer Term
Viability Statement (page 41) that they have carried out
arobust assessment of the emerging and principal risks
facing the Group, including those that would threaten its
business model, future performance, solvency or liquidity;
• the emerging and principal risks disclosures describing
these risks and explaining how they are being managed
ormitigated;
• the directors’ explanation in the Longer Term Viability
Statement (page 41) as to how they have assessed the
prospects of the Group, over what period they have done
so and why they consider that period to be appropriate,
and their statement as to whether they have a reasonable
expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the
period of their assessment, including any related
disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the Longer Term Viability
Statement, set out on page 41 under the Listing Rules. Based
on the above procedures, we have concluded that the above
disclosures are materially consistent with the consolidated
financial statements and our audit knowledge.
67
Strategic Report Governance Report Financial Statements Additional Information
Independent Auditor’s Report to the Members of RTW Biotech Opportunities Ltd
continued
Corporate governance disclosures
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
corporate governance disclosures and the consolidated
financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of
the following is materially consistent with the consolidated
financial statements and our audit knowledge:
• the directors’ statement that they consider that the
annual report and consolidated financial statements taken
as a whole is fair, balanced and understandable, and
provides the information necessary for shareholders to
assess the Company’s position and performance, business
model and strategy;
• the section of the annual report describing the work of the
Audit Committee, including the significant issues that the
audit committee considered in relation to the financial
statements, and how these issues were addressed; and
• the section of the annual report that describes the review
of the effectiveness of the Company’s risk management
and internal control systems.
We are required to review the part of Corporate Governance
Statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code specified by
the Listing Rules for our review. We have nothing to report in
this respect.
We have nothing to report on other matters on which we
are required to report by exception
We have nothing to report in respect of the following matters
where the Companies (Guernsey) Law, 2008 requires us to
report to you if, in our opinion:
• the Company has not kept proper accounting records; or
• the consolidated financial statements are not in agreement
with the accounting records; or
• we have not received all the information and explanations,
which to the best of our knowledge and belief are
necessary for the purpose of our audit.
Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 56,
the directors are responsible for: the preparation of the
consolidated financial statements including being satisfied
that they give a true and fair view; such internal control as
they determine is necessary to enable the preparation of
consolidated financial statements that are free from material
misstatement, whether due to fraud or error; assessing the
Group and 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.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or
error, and to issue our opinion in an auditor’s report.
Reasonable assurance is a high level of assurance, but does
not guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial
statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of this report and restrictions on its use by
persons other than the Company’s members as a body
This report is made solely to the Company’s members, as a
body, in accordance with section 262 of the Companies
(Guernsey) Law, 2008. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s
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 and the Company’s
members, as a body, for our audit work, for this report, or for
the opinions we have formed.
Andrew J. Salisbury
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognised Auditors
Guernsey
28 March 2025
68
2024 2023
ASSETS:
Investments in securities, at fair value (cost at 31 December 2024: $529,516,651; 31 December 2023: $244,056,637) 611,011,096 367,611,231
Derivative contracts, at fair value (cost at 31 December 2024: $60,427,785; 31 December 2023: $6,271,193) 110,177,172 15,463,820
Cash and cash equivalents 5,360,022 2,721,553
Due from brokers 27,990,478 57,887,214
Receivable from unsettled trades 4,237,674 –
Other assets 1,239,967 2,550,609
TOTAL ASSETS 760,016,409 446,234,427
LIABILITIES:
Securities sold short, at fair value (proceeds at 31 December 2024: $102,512,585; 31 December 2023: $1,399,242) 95,151,493 1,197,921
Derivative contracts, at fair value (proceeds at 31 December 2024: $nil; 31 December 2023: $nil) 7,799,422 8,390,327
Due to brokers 23,570,906 5,329,681
Accrued expenses 850,903 2,293,541
TOTAL LIABILITIES 127,372,724 17,211,470
TOTAL NET ASSETS 632,643,685 429,022,957
NET ASSETS attributable to Ordinary Shares
(shares at 31 December 2024: 335,713,649; 31 December 2023: 210,635,347) 606,921,161 399,283,811
NET ASSETS attributable to Non-Controlling Interest 25,722,524 29,739,146
NAV per Ordinary Share 1.8079 1.8956
The audited consolidated financial statements of the Group were approved and authorised for issue by the Board of Directors on 28 March 2025 and
signed on its behalf by:
William Simpson Paul Le Page
Chair Director
See accompanying notes to the consolidated financial statements.
Consolidated Statement of Assets and Liabilities
as at 31 December 2024 and 31 December 2023
(Expressed in United States Dollars)
69
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
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 consolidated financial statements.
Consolidated Condensed Schedule of Investments
as at 31 December 2024
(Expressed in United States Dollars)
70
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 consolidated financial statements.
Consolidated Condensed Schedule of Investments (continued)
as at 31 December 2024
(Expressed in United States Dollars)
71
Strategic Report Governance Report Financial Statements Additional Information
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 consolidated financial statements.
Consolidated Condensed Schedule of Investments (continued)
as at 31 December 2024
(Expressed in United States Dollars)
72
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 consolidated financial statements.
Consolidated Condensed Schedule of Investments (continued)
as at 31 December 2024
(Expressed in United States Dollars)
73
Strategic Report Governance Report Financial Statements Additional Information
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
See accompanying notes to the consolidated financial statements.
Consolidated Condensed Schedule of Investments (continued)
as at 31 December 2024
(Expressed in United States Dollars)
74
Descriptions Number of Shares Cost Fair Value
Percentage
of Net Assets
Investments in securities, at fair value
Common stocks
United States
Healthcare
Rocket Pharmaceuticals, Inc. 2,400,755 8,188,796 71,950,627 16.77
Others* 87,817,542 121,224,790 28.26
Total United States 96,006,338 193,175,417 45.03
Netherlands
Healthcare 5,570,915 6,878,343 1.60
Ireland
Healthcare 6,090,973 3,974,203 0.93
China
Healthcare
Ji Xing Pharmaceuticals Ltd. 541,205 216,482 798,382 0.19
Others* 402,213 677,342 0.16
Total China 618,695 1,475,724 0.35
Canada
Healthcare 2,953,012 646,323 0.15
British Virgin Islands
Healthcare 776,929 477,179 0.11
Cayman Islands
Financials 46,790 51,001 0.01
Total common stocks 112,063,652 206,678,190 48.18
Convertible preferred stocks
China
Healthcare
Ji Xing Pharmaceuticals Ltd. 14,177,776 25,664,114 33,052,656 7.70
Others* 4,110,584 4,168,056 0.97
Total China 29,774,698 37,220,712 8.67
United States
Healthcare* 40,654,612 36,321,860 8.47
Ireland
Healthcare 1,093,042 1,854,238 0.43
* No individual investment security or contract constitutes greater than 5 per cent of net assets.
See accompanying notes to the consolidated financial statements.
Consolidated Condensed Schedule of Investments
as at 31 December 2023
(Expressed in United States Dollars)
75
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Descriptions Number of Shares Cost Fair Value
Percentage
of Net Assets
Investments in securities, at fair value (continued)
Convertible preferred stocks
Switzerland
Healthcare 1,729,518 1,723,249 0.40
United Kingdom
Healthcare 774,317 760,071 0.18
Total convertible preferred stocks 74,026,187 77,880,130 18.15
Investment in private investment companies
Cayman Islands
Healthcare
4010 Royalty Offshore FNT Fund, LP 23,892,852 25,982,258 6.06
Ireland
Healthcare 11,814,933 15,873,635 3.70
Total investment in private investment companies 35,707,785 41,855,893 9.76
American depository receipts
United Kingdom
Healthcare
Immunocore Holdings plc 462,249 11,872,691 31,580,852 7.36
Netherlands
Healthcare 1,331,626 1,434,221 0.33
Ireland
Healthcare 161,953 198,555 0.05
Total American depository receipts 13,366,270 33,213,628 7.74
See accompanying notes to the consolidated financial statements.
Consolidated Condensed Schedule of Investments (continued)
as at 31 December 2023
(Expressed in United States Dollars)
76
Descriptions Number of Shares Cost Fair Value
Percentage
of Net Assets
Investments in securities, at fair value (continued)
Convertible notes
Canada
Healthcare 7,512,664 7,566,259 1.76
United States
Healthcare 1,380,079 417,131 0.10
Total convertible notes 8,892,743 7,983,390 1.86
Total investments in securities, at fair value 244,056,637 367,611,231 85.69
See accompanying notes to the consolidated financial statements.
Consolidated Condensed Schedule of Investments (continued)
as at 31 December 2023
(Expressed in United States Dollars)
77
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Descriptions Number of contracts Cost Fair Value
Percentage
of Net Assets
Derivative contracts – assets, at fair value
Equity swaps
United States
Healthcare 7,185,030 1.67
United Kingdom
Healthcare
Immunocore Holdings plc 12,498 280,979 0.07
British Virgin Islands
Healthcare 9,793 0.00
Total equity swaps 7,475,802 1.74
Warrants
United States
Healthcare
Rocket Pharmaceuticals, Inc. 170,764 2,565,561 4,800,495 1.12
Others* 1,242,926 1,764,580 0.41
Total United States 3,808,487 6,565,075 1.53
Canada
Healthcare 2,462,706 881,237 0.21
Total warrants 6,271,193 7,446,312 1.74
Contingent value rights
United States
Healthcare 541,706 0.13
Total contingent value rights 541,706 0.13
Total derivative contracts – assets, at fair value 6,271,193 15,463,820 3.61
* No individual investment security or contract constitutes greater than 5 per cent of net assets.
See accompanying notes to the consolidated financial statements.
Consolidated Condensed Schedule of Investments (continued)
as at 31 December 2023
(Expressed in United States Dollars)
78
Descriptions Proceeds Fair Value
Percentage
of Net Assets
Securities sold short, at fair value
Common stocks
United States
Healthcare 1,353,107 1,146,920 0.28
Cayman Islands
Financials 46,135 51,001 0.01
Total common stocks 1,399,242 1,197,921 0.29
Total securities sold short, at fair value 1,399,242 1,197,921 0.29
Descriptions Fair Value
Percentage
of Net Assets
Derivative contracts – liabilities, at fair value
Equity swaps
United States
Healthcare 8,390,327 1.96
Total United States 8,390,327 1.96
Total derivative contracts – liabilities, at fair value 8,390,327 1.96
See accompanying notes to the consolidated financial statements.
Consolidated Condensed Schedule of Investments (continued)
as at 31 December 2023
(Expressed in United States Dollars)
79
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
2024 2023
Investment income
Interest income (net of withholding taxes of $nil; 31 December 2023: $nil) 6,347,583 2,419,117
Dividends (net of withholding taxes of $82,087; 31 December 2023: $2,537) 390,961 571,473
Other income 1,451,293 1,179,964
Total investment income 8,189,837 4,170,554
Expenses
Management fees 7,611,701 4,269,757
Interest expense 4,772,375 1,560,429
Professional fees 1,432,954 749,328
Research costs 849,452 474,511
Administrative fees 749,649 673,422
Audit fees 366,984 341,500
Directors’ fees 262,477 177,011
Other expenses 887,540 687,805
Total expenses 16,933,132 8,933,763
Net investment income/(loss) (8,743,295) (4,763,209)
Realised and change in unrealised gain/(loss) on investments, derivatives and foreign currency transactions
Net realised gain/(loss) on securities and foreign currency transactions 28,021,357 69,546,080
Net change in unrealised gain/(loss) on securities and foreign currency translation (34,485,235) 29,962,442
Net realised gain/(loss) on derivative contracts 8,239,477 (2,428,987)
Net change in unrealised gain/(loss) on derivative contracts 41,147,665 (9,123,947)
Net realised and unrealised gain/(loss) on investments, derivatives and foreign currency transactions 42,923,264 87,955,588
Net increase/(decrease) in net assets resulting from operations 34,179,969 83,192,379
See accompanying notes to the consolidated financial statements.
Consolidated Statement of Operations
For the year ended 31 December 2024 and 31 December 2023
(Expressed in United States Dollars)
80
Ordinary Share
Class
Non-Controlling
Interest
Net assets, beginning of year 399,283,811 29,739,146
Operations
Net investment income/(loss) (8,743,295) -
Net realised gain/(loss) on securities and foreign currency transactions 28,021,357 –
Net change in unrealised gain/(loss) on securities and foreign currency translation (34,485,235) –
Net realised gain/(loss) on derivative contracts 8,239,477 –
Net change in unrealised gain/(loss) on derivative contracts 41,147,665 –
Income/(loss) attributable to Non-Controlling Interest 4,016,622 (4,016,622)
Net change in net assets resulting from operations 38,196,591 (4,016,622)
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) (Note 9) (11,340,306) –
Net change in net assets resulting from capital transactions 169,440,759 –
Net assets, end of year 606,921,161 25,722,524
See accompanying notes to the consolidated financial statements.
Consolidated Statement of Changes in Net Assets
For the year ended 31 December 2024
(Expressed in United States Dollars)
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Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Ordinary Share
Class
Non-Controlling
Interest
Net assets, beginning of year 326,079,521 21,844,468
Operations
Net investment income/(loss) (4,763,209) –
Net realised gain/(loss) on securities and foreign currency transactions 69,546,080 –
Net change in unrealised gain/(loss) on securities and foreign currency translation 29,962,442 –
Net realised gain/(loss) on derivative contracts (2,428,987) –
Net change in unrealised gain/(loss) on derivative contracts (9,123,947) –
Income/(loss) attributable to Non-Controlling Interest (7,894,678) 7,894,678
Net change in net assets resulting from operations 75,297,701 7,894,678
Share buyback (Gross of $4,178 transaction costs) (Note 9) (2,093,411) –
Net assets, end of year 399,283,811 29,739,146
See accompanying notes to the consolidated financial statements.
Consolidated Statement of Changes in Net Assets
For the year ended 31 December 2023
(Expressed in United States Dollars)
82
2024 2023
Cash flows from operating activities
Net increase/(decrease) in net assets resulting from operations 34,179,969 83,192,379
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 (28,021,357) (69,546,080)
Net change in unrealised (gain)/loss on securities and foreign currency translation 34,485,235 (29,962,442)
Net realised (gain)/loss on derivative contracts (8,239,477) 2,428,987
Net change in unrealised (gain)/loss on derivative contracts (41,147,665) 9,123,947
Effect of exchange rate changes on cash and cash equivalents 99,291 (80,371)
Purchases of investments in securities (530,568,570) (147,986,641)
Proceeds from sales of investments in securities 321,657,762 203,554,346
Proceeds from securities sold short 174,423,104 27,233,184
Payments for securities sold short (51,329,764) (11,938,063)
Proceeds from derivative contracts 31,242,577 15,512,690
Payments for derivative contracts (75,360,177) (21,598,211)
Accretion of bond discount (3,847) –
Changes in operating assets and liabilities:
Other assets 1,684,089 (2,204,859)
(Receivable from)/payable for unsettled trades (4,237,674) (5,121,762)
Due to brokers 18,241,225 (20,493,335)
Accrued expenses (1,442,638) 1,426,785
Net cash provided by/(used in) operating activities (124,337,917) 33,540,554
Cash flows from financing activities
Net proceeds from issuance of shares 108,419,956 –
Share buyback (11,340,306) (2,093,411)
Net cash provided by/(used in) financing activities 97,079,650 (2,093,411)
Net change in cash and cash equivalents (27,258,267) 31,447,143
Cash, cash equivalents, and restricted cash, beginning of the year 60,608,767 29,161,624
Cash, cash equivalents, and restricted cash, end of the year 33,350,500 60,608,767
At 31 December, the amounts categorised in cash, cash equivalents, and restricted cash include the following:
Cash and cash equivalents 5,360,022 2,721,553
Due from brokers 27,990,478 57,887,214
Tota l 33,350,500 60,608,767
Supplemental disclosure of cash flow information
Cash paid during the year for interest 4,356,455 1,620,709
Cancellation of shares in RTW Biotech Opportunities Ltd received in Arix acquisition 59,221,117 –
* 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 consolidated financial statements.
Consolidated Statement of Cash Flows
For the year ended 31 December 2024 and 31 December 2023
(Expressed in United States Dollars)
83
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
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 (the former standard and premium listing
segments of the London Stock Exchange Main Market were consolidated into a single segment on 29 July 2024) of the London Stock Exchange 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 consolidated statement of cash flows and within Note 9.
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 consolidated financial statements are expressed in United States Dollars. The 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 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 consolidated financial statements include accounts of the Company consolidated with the accounts of the Subsidiary and the UK Subsidiary.
All inter-group balances have been eliminated upon consolidation. The Subsidiary is incorporated in Guernsey and the UK Subsidiary is incorporated
in the United Kingdom
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 year ended 31 December 2024, $1,259,780 of the total loss of $4,016,622 attributable to the Non-Controlling Interest was
comprised of mark to market movements of Notional Ordinary Shares (31 December 2023: $5,137,836), with $2,756,842 of the loss related to a
reversal of uncrystallized performance allocation from Ordinary Shareholders to the Performance Allocation Share Class (31 December 2023:
allocation of $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 31 December 2024 and 31 December 2023, 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.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2024
(Expressed in United States Dollars)
84
1. Nature of operations and summary of significant accounting policies (continued)
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.
85
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(Expressed in United States Dollars)
1. Nature of operations and summary of significant accounting policies (continued)
Fair value – valuation techniques and inputs (continued)
Investments in securities and securities sold short (continued)
Unlisted investments (continued)
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 31 December 2024, 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 31 December 2024, 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 31 December
2024, these investments are categorised in Level 2 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 31 December 2024, these investments are categorised in Level 1 of the fair value hierarchy and
are recognised within common stock 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 31 December 2024, these investments are categorised in Level 3 of the fair value hierarchy.
86
1. Nature of operations and summary of significant accounting policies (continued)
Fair value – valuation techniques and inputs (continued)
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 31 December 2024, 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 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.
87
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(Expressed in United States Dollars)
1. Nature of operations and summary of significant accounting policies (continued)
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 31 December 2024, the Group had
cash collateral receivables of $23,390,565 (31 December 2023: $23,793,429) (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 (2023: GBP 1,200).
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
consolidated financial statements. Income tax and related interest and penalties would be recognised as a tax expense in the 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 and the Subsidiary 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 31 December 2024
or 31 December 2023.
Use of estimates
Preparing 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 consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ
from those estimates.
88
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 31 December 2024:
Level 1 Level 2 Level 3
Investments
measured at net
asset value* Tota l
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.
89
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(Expressed in United States Dollars)
2. Fair value measurements (continued)
The following table presents information about the Group’s assets and liabilities measured at fair value as of 31 December 2023:
Level 1 Level 2 Level 3
Investments
measured at net
asset value* Tota l
Assets (at fair value)
Investments in securities
Common stocks 204,773,131 1,000,720 904,339 – 206,678,190
Convertible preferred stocks 1,854,238 2,836,628 73,189,264 – 77,880,130
Investment in private investment companies – – – 41,855,893 41,855,893
American depository receipts 33,213,628 – – – 33,213,628
Convertible notes – – 7,983,390 – 7,983,390
Total investments in securities 239,840,997 3,837,348 82,076,993 41,855,893 367,611,231
Derivative contracts
Equity swaps – 7,475,802 – – 7,475,802
Warrants 5,247 6,743,593 697,472 – 7,446,312
Contingent value rights – – 541,706 – 541,706
Total derivative contracts 5,247 14,219,395 1,239,178 – 15,463,820
239,846,244 18,056,743 83,316,171 41,855,893 383,075,051
Liabilities (at fair value)
Securities sold short
Common stocks 1,146,920 51,001 – – 1,197,921
Total securities sold short 1,146,920 51,001 – – 1,197,921
Derivative contracts
Equity swaps – 8,390,327 – – 8,390,327
Total derivative contracts – 8,390,327 – – 8,390,327
1,146,920 8,441,328 – – 9,588,248
* The Group’s investment in private investment companies that are valued at their net asset value are not categorised within the fair value hierarchy.
90
2. Fair value measurements (continued)
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 31 December 2024 and 31 December 2023:
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
Revenue multiples
Market step-up multiple
10% – 20%
4.0x
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
and/or market approach
WACC 28% – 28%
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
and/or market approach
and option pricing model
Expected volatility
40%
Total derivative contracts 2,523,045
91
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(Expressed in United States Dollars)
2. Fair value measurements (continued)
Fair value at
31 December 2023 Valuation techniques Significant unobservable inputs Range of inputs
Assets (at fair value)
Investments in securities
Convertible preferred stocks 44,732,084 Recent transaction price n/a n/a
19,614,346 Discounted cash flow WACC 13% – 30%
and/or market approach Revenue multiples 2.8x – 4.0x
Market rate of returns (18%) – 10%
8,727,481 Probability-weighted expected
return method (“PWERM”)
WACC
Revenue multiples
Market step-up multiple
12% – 20%
4.0x
0.7x – 1.8x
Market rate of returns (23)% – 10%
Recovery rate 50%
115,353 Liquidation value n/a n/a
Convertible notes 7,566,258 PWERM Discount rate 5% – 7%
Expected volatility 60%
352,904 Discounted cash flow WACC 26%
and/or market approach Revenue multiples
4.0x
Market rate of returns (3%)
64,228 Recent transaction price n/a n/a
Common stocks 798,531 Recent transaction price n/a n/a
105,808 Market approach Revenue multiples 0.5x – 0.6x
Total investments in securities 82,076,993
Derivative contracts
Warrants 697,472 Recent transaction price Expected volatility 38% – 43%
and option pricing model
Contingent value rights 541,706 Recent transaction price n/a n/a
Total derivative contracts 1,239,178
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.
92
2. Fair value measurements (continued)
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 year ended 31 December 2024 were as follows:
Balance beginning
1 January 2024
Realised gains/
(losses)
(a)
Change in
Unrealised gains/
(losses)
(a)
Purchases Sales
Transfers into/
(from) Level 3
(b)
Ending balance
31 December 2024
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
Changes in Level 3 assets and liabilities measured at fair value for the year ended 31 December 2023 were as follows:
Balance beginning
1 January 2023
Realised gains/
(losses)
(a)
Change in
Unrealised gains/
(losses)
(a)
Purchases Sales
Transfers into/
(from) Level 3
(c)
Ending balance
31 December 2023
Assets (at fair value)
Investments in securities
Common stocks 3,364,557 – (304,109) – – (2,156,109) 904,339
Convertible preferred stocks 57,932,949 – 6,114,014 7,595,169 – 1,547,132 73,189,264
Convertible notes 10,052,833 – (1,329,981) 11,536,901 – (12,276,363) 7,983,390
Total investments in securities 71,350,339 – 4,479,924 19,132,070 – (12,885,340) 82,076,993
Derivative contracts
Warrants 476,911 – 21,813 321,257 – (122,509) 697,472
Contingent value rights – – 541,706 – – – 541,706
Total derivative contracts 476,911 – 563,519 321,257 – (122,509) 1,239,178
(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 consolidated statement of operations.
(b) Conversions of preferred stock into common stock.
(c) Includes conversion of convertible bonds into convertible preferred stock and convertible notes.
Changes in Level 3 unrealised gains and losses during the year for assets still held at year end were as follows:
2024 2023
Common stocks (8,477,436) 116,949
Convertible notes (570,999) (919,115)
Convertible preferred stocks 32,081,173 6,199,338
Revenue Based Financing Agreement 13,882 –
Contingent value rights 430,401 541,706
Warrants 221,386 21,813
Change in unrealised gains and losses during the year for assets still held at year end 23,698,407 5,960,691
93
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(Expressed in United States Dollars)
2. Fair value measurements (continued)
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:
2024 2023
Realised gains 96,931,839 127,739,248
Realised losses (60,671,005) (60,622,155)
Net realised gain on securities, derivative contracts and securities sold short 36,260,834 67,117,093
2024 2023
Change in unrealised gains 190,826,387 132,672,225
Change in unrealised losses (184,163,957) (111,833,730)
Net change in unrealised gain/(loss) on securities, derivative contracts and securities sold short 6,662,430 20,838,495
As at 31 December 2024, the Group had commitments (subject to completion of certain parameters) to certain investments totalling $22,390,694 (31
December 2023: $59,732,160), which was mainly comprised of a $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 31 December 2024, due from brokers totalled $27,990,478 (31 December 2023: $57,887,214). Included within due from brokers is $4,599,913
(31 December 2023: $34,093,785) which can be used for investment. The Group pledged cash collateral to counterparties to over-the-counter
derivative contracts of $23,390,565 (31 December 2023: $23,793,429) 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.
94
4. Derivative contracts (continued)
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 year, categorised by primary underlying risk, to be representative of the
volume of its derivative activities during the year ended 31 December 2024:
Primary underlying risk
2024 2023
Long exposure
Notional amounts
Short exposure
Notional amounts
Long exposure
Notional amounts
Short exposure
Notional amounts
Equity price
Equity swaps 60,394,443 30,266,515 64,032,939 56,046,951
Warrants
(a)
92,282,619 – 3,963,562 –
Contingent value rights 2,070,315 – 541,706 –
154,747,377 30,266,515 68,538,207 56,046,951
(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 consolidated statement of assets and liabilities and consolidated statement of operations
The following tables identify the fair value amounts of derivative instruments included in the consolidated statement of assets and liabilities as
derivative contracts, categorised by primary underlying risk, at 31 December 2024 and 31 December 2023. The following table also identifies the gain
and loss amounts included in the 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 year ended 31 December 2024 and 31 December 2023.
Primary underlying risk
2024
Derivative assets
Derivative
liabilities
Realised gain/
(loss)
Change in
unrealised gain/
(loss)
Equity price
Warrants 88,047,316 – (19,829) 27,075,679
Equity swaps 20,526,482 7,799,422 7,447,081 13,641,585
Contingent value rights 1,603,374 – 812,225 430,401
110,177,172 7,799,422 8,239,477 41,147,665
Primary underlying risk
2023
Derivative assets
Derivative
liabilities
Realised gain/
(loss)
Change in
unrealised gain/
(loss)
Equity price
Equity swaps 7,475,802 8,390,327 (2,428,614) (11,074,111)
Warrants 7,446,312 – (373) 1,408,458
Contingent value rights 541,706 – – 541,706
15,463,820 8,390,327 (2,428,987) (9,123,947)
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 31 December 2024 and 31 December 2023, no securities were loaned and no collateral was received.
95
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(Expressed in United States Dollars)
6. Offsetting assets and liabilities
The Group is required to disclose the impact of offsetting assets and liabilities represented in the consolidated statement of assets and liabilities to
enable users of the 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 31 December 2024 and 31 December 2023, the Group held financial instruments and derivative instruments that were eligible for offset in
the 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 consolidated statement of assets and liabilities. The following
table presents the potential effect of netting arrangements for asset derivative contracts presented in the consolidated statement of assets
and liabilities:
Description
Gross amounts of
recognised assets
Gross amounts offset
in the consolidated
statement of assets
and liabilities
Gross amounts of
recognised assets
31 December 2024
Gross amounts not offset in the
consolidated statement of
assets and liabilities
Net amount
Financial
instruments
(a)
Cash collateral
received
(b)
Equity swaps
Cowen Financial Products, LLC 11,004,397 – 11,004,397 (3,666,923) – 7,337,474
Morgan Stanley & Co. LLC 5,639,240 – 5,639,240 (2,056,637) – 3,582,603
Bank of America Merrill Lynch 3,411,345 – 3,411,345 (49) – 3,411,296
Jefferies & Co. 471,500 – 471,500 (471,500) – –
20,526,482 – 20,526,482 (6,195,109) – 14,331,373
Description
Gross amounts of
recognised assets
Gross amounts offset
in the consolidated
statement of assets
and liabilities
Gross amounts of
recognised assets
31 December 2023
Gross amounts not offset in the
consolidated statement of
assets and liabilities
Net amount
Financial
instruments
(a)
Cash collateral
received
(b)
Equity swaps
Cowen Financial Products, LLC 6,235,319 – 6,235,319 (286,396) – 5,948,923
Jefferies & Co. 1,058,293 – 1,058,293 (758,677) – 299,616
Morgan Stanley & Co. LLC 129,527 – 129,527 (129,527) – –
Bank of America Merrill Lynch 52,663 – 52,663 (52,663) – –
7,475,802 – 7,475,802 (1,227,263) – 6,248,539
(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 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.
96
6. Offsetting assets and liabilities (continued)
The following tables present the potential effect of netting arrangements for liability derivative contracts presented in the consolidated statement of
assets and liabilities as of 31 December 2024 and 31 December 2023:
Description
Gross amounts of
recognised
liabilities
Gross amounts offset
in the consolidated
statement of assets
and liabilities
Gross amounts of
recognised
liabilities
31 December 2024
Gross amounts not offset in the
consolidated statement of
assets and liabilities
Net amount
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
Description
Gross amounts of
recognised
liabilities
Gross amounts offset
in the consolidated
statement of assets
and liabilities
Gross amounts of
recognised
liabilities
31 December 2023
Gross amounts not offset in the
consolidated statement of
assets and liabilities
Net amount
Financial
instruments
(a)
Cash collateral
pledged
(b)
Equity swaps
Bank of America Merrill Lynch 4,382,764 – 4,382,764 (52,663) (4,320,957) 9,144
Morgan Stanley & Co. LLC 2,962,490 – 2,962,490 (129,527) (2,832,963) –
Jefferies & Co. 758,677 – 758,677 (758,677) – –
Cowen Financial Products, LLC 286,396 – 286,396 (286,396) – –
8,390,327 – 8,390,327 (1,227,263) (7,153,920) 9,144
(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 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 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.
97
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(Expressed in United States Dollars)
8. Risk factors (continued)
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.
98
9. Share capital
During the year ended 31 December 2024 the Company share activity was as follows:
2024 2024 2023 2023
Number of
Ordinary Shares
Number of
Treasury Shares
Number of
Ordinary Shares
Number of
Treasury Shares
As at 1 January 210,635,347 1,753,791 212,389,138 –
Share issuance 133,578,302 – – –
Share buyback (8,500,000) 8,500,000 (1,753,791) 1,753,791
As at 31 December 335,713,649 10,253,791 210,635,347 1,753,791
During the year ended 31 December 2024, the Company bought back 8,500,000 (31 December 2023: 1,753,791) Ordinary Shares at an average price
of US$1.33 (31 December 2023: $1.19) for a total cost of US$11,340,306 (31 December 2023: $2,093,411), including transaction costs of $22,681
(31 December 2023: $4,178). At the date of approval of these consolidated financial statements, 10,253,791 repurchased Ordinary Shares were held
as treasury shares (31 December 2023: 1,753,791).
During the year ended 31 December 2024, the Company issued 181,901,165 Ordinary 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 Ordinary 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 consolidated statement of cash flows and within Note 1.
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 31 December 2024, there were no Performance Allocation Shares of the Company in issue (31 December
2023: nil) and one New Performance Allocation Share of the Subsidiary in issue (31 December 2023: 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 year ended
31 December 2024 amounted to $7,611,701 (year ended 31 December 2023: $4,269,757) of which $nil (31 December 2023: $nil) was outstanding at the
year end.
99
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(Expressed in United States Dollars)
10. Related party transactions (continued)
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 year ended 31 December 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 $1,259,780 in 2024 (31 December 2023: mark to market gain of $5,137,836), which is included in Performance Allocation within the consolidated
statement of changes in net assets. There was a reversal of uncrystallized performance allocation from Ordinary Shareholders to the Performance
Allocation Share Class of $2,756,842 related to the Group’s performance in the period (31 December 2023: allocation of $2,756,842). The Performance
Allocation Amount was not adjusted in relation to the Ordinary Shares issued related to the Arix transaction (as set out within Note 9).
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 year ended 31 December 2024, the Board did not approve a cash distribution to the
Performance Allocation Share Class (year ended 31 December 2023: $nil). At the year end the Performance Allocation Share Class of the Subsidiary is
reflected within the Non-Controlling Interest balance of $25,722,524 (31 December 2023: $29,739,146).
The Investment Manager is also refunded any research costs incurred on behalf of the Group.
On 6 July 2023, the Group signed a $25,000,000 commitment to 4010 Royalty Fund, a private fund created and managed by RTW Investments, LP. The
Group subsequently funded $23,892,852 of this commitment on 20 July 2023, had $13,544,146 of capital returned on 1 October 2024 and had a remaining
commitment of $14,651,294 at 31 December 2024 (31 December 2023: $1,107,148). No management or performance fees are charged to the Group at the
4010 Royalty Fund.
100
10. Related party transactions (continued)
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 31 December 2024, the number of Ordinary Shares held by each Director was as follows:
2024 2023
Number of
Ordinary Shares
Number of
Ordinary Shares
William Simpson 200,000 200,000
Paul Le Page 128,000 128,000
William Scott 400,000 350,000
Nicola Blackwood – N/A
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 (formerly Ji Xing Pharmaceuticals Ltd.), HSA2 Holdings, LLC and Yarrow Biotechnology. As at 31 December 2024, he
held 49,643,313 Ordinary Shares in the Group (14.79% of the Ordinary Shares in issue) (31 December 2023: 29,593,872, 14.10% of the Ordinary Shares
in issue).
The total Directors’ fees expense for the year amounted to $262,477 (31 December 2023: $177,011) of which $71,029 was outstanding at 31 December
2024 (31 December 2023: $50,369) 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.
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 year ended 31 December 2024, Altum and MSFS charged administration fees of $388,732 and $360,917 respectively (31 December 2023:
Altum charged $421,468 (including $212,000 (GBP165,000) in respect of one-off work and compensation for work performed in prior years) and MSFS
charged $251,954), of which a prepayment of $5,693 and an accrual of $105,860 (31 December 2023: Altum $18,465, MSFS $94,250) were outstanding
at 31 December 2024, and were included within accrued expenses.
101
Strategic Report Governance Report Financial Statements Additional Information
Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(Expressed in United States Dollars)
12. Financial highlights
Financial highlights for the year ended 31 December 2024 and 31 December 2023 are as follows:
2024 2023
Per Ordinary Share operating performance
Net Asset Value, beginning of year $ 1.90 $ 1.54
Cost of issuance of Ordinary Shares (0.23) –
Share buybacks 0.03 –
Income from investments
Net investment income/(loss) (0.03) (0.02)
Net realised and unrealised gain/(loss) on securities, derivatives and foreign currency transactions 0.13 0.42
Income/(loss) attributable to Non-Controlling Interest 0.01 (0.04)
Total from investment operations 0.11 0.36
Net Asset Value, end of year $1.81 $1.90
Total return
Total return before Performance Allocation (5.25) % 24.27 %
Performance Allocation (excluding mark to market) 0.62 % (0.80) %
Total return after Performance Allocation (4.63) % 23.47 %
Ratios to average net assets*
Expenses 2.78 % 2.58 %
Performance Allocation (including mark to market) (0.66) % 2.28 %
Expenses and Performance Allocation 2.12 % 4.86 %
Net investment income/(loss) (1.44) % (1.38) %
NAV total return for the year (4.63) % 23.47 %
* 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
From 31 December 2024 to the date of approval of these consolidated financial statements, the Company bought back 950,000 Ordinary Shares at an
average price of $1.26 for a total cost of $1,199,347, including transaction costs of $1,811. At the point of signing these consolidated financial
statements, all 950,000 of the Ordinary Shares were held as treasury shares.
On 14 February 2025, William Simpson purchased an additional 40,000 Ordinary Shares taking his total holding to 240,000 Ordinary Shares,
representing 0.07% of issued share capital. On 24 February 2025, Rod Wong further increased his shareholding to 50,356,880, representing 15.04%
of issued share capital.
These consolidated financial statements were approved by the Board of Directors on 28 March 2025. Subsequent events have been evaluated through
this date.
102
  ADDITIONAL INFORMATION
104 General Company Information
105 Defined Terms
110 Alternative Performance Measures
112 AIFMD Disclosures
113 Schedule of Key Service Providers
Additional
Information
103
Strategic Report Governance Report Financial Statements Additional Information
103
Additional Information
General Company
Information
General Company Information
Structure Closed-end Investment Fund
Domicile Guernsey
Listing London Stock Exchange
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.rtwfunds.com/rtw-biotech-opportunities-ltd
104
“Adjusted Net Asset Value” the Net Asset Value adjusted by deducting the unrealised gains and unrealised losses in respect of private Portfolio
Companies;
“Administrator” refers to Altum (Guernsey) Limited (previously named Elysium Fund Management Limited);
“Admission” means admission of the Ordinary Shares to trading on the Main Market of the London Stock Exchange on
30October 2019;
"AIC" the Association of Investment Companies;
"AIC Code" the AIC Code of Corporate Governance dated February 2019;
“AIFM” means Alternative Investment Fund Manager;
“AIFMD” the Alternative Investment Fund Managers Directive;
“Annual Report” the Annual Report and audited financial statements;
“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 Bioscience 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;
“Bispecifics” bispecific antibodies (BsAbs) have two distinct binding domains that can bind to two antigens or two epitopes (an
antigen part) of the same antigen simultaneously;
“Calculation Date” 31 December or, if such date is not a business day, the previous business day;
“Cardiometabolic diseases” a group of common but often preventable conditions including heart attack, stroke, diabetes, insulin resistance and
non-alcoholic fatty liver disease;
“Cardiovascular disease” conditions affecting heart and vascular system;
“Clinical stage” or “clinical
trial”
a therapy in development goes through a number of clinical trials to ensure its safety and efficacy. Trials in human
subjects range from Phase 1 to Phase 3;
“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;
“Core portfolio” includes private companies and public companies that were initially added to the portfolio as private investments
and any other position deemed by the Investment Manager to be in the core portfolio;
“Corporate Brokers” Bank of America and Deutsche Numis;
“CRS” Common Reporting Standard;
“Danon Disease” a rare genetic heart condition in children, predominantly boys;
“Directors” or “Board” the directors of the Company and the Subsidiary as at the date of this document and “Director” means any one of
them;
“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;
“GLP-1” drugs that mimic the action of naturally occurring hormone glucagon-like peptide-1, which is produced in the
intestines. Plays a crucial role in regulating blood sugar levels by stimulating insulin release, slowing stomach
emptying and reducing appetite;
“Greater China” encompasses mainland China, Macau, Hong Kong and Taiwan;
“the Group” the Company and its subsidiaries, RTW Biotech Opportunities Operating Ltd RTW Biotech UK Ltd;
“HCM” or “Hypertrophic
cardiomyopathy”
a cardiovascular disease characterised by an abnormally thick heart muscle;
“Investment Manager” RTW Investments, LP, also called RTW Investments;
Defined Terms
105
Strategic Report Governance Report Financial Statements Additional Information
Defined Terms
continued
"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;
“IPO” an initial public offering;
“IRA” Inflation Reduction Act of 2022;
“ISDA” International Swaps and Derivatives Association;
“LAD-I” Leukocyte adhesion deficiency, a rare genetic disorder of immunodeficiency in young children;
“Listing Rules” the listing rules made under section 73A of the Financial Services and Markets Act 2000 (as set out in the FCA
Handbook), as amended;
“London Stock Exchange” London Stock Exchange plc;
“LSE” London Stock Exchange’s main market for listed securities;
“MASH” metabolic dysfunction-associated steatohepatitis;
“Medtech” medical technology subsector of healthcare;
“Merck” Merck & Co., Inc.;
“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;
“Net Asset Value” or “NAV” the value of the assets of the Group less its liabilities, calculated in accordance with the valuation guidelines
established by the Board;
“New Performance
Allocation Shares”
performance allocation shares of no-par value in the capital of the Subsidiary;
“Notional Ordinary Shares” Performance Ordinary Shares, in which receipt of such shares has been deferred;
“Official List” the official list of the UK Listing Authority;
“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;
“Ophthalmic conditions” conditions affecting the eye;
“Ordinary Shares” the Ordinary Shares of the Company;
“Other public portfolio” the portion of the portfolio mostly matching, on a pro-rata basis, the long investments held in our private funds and
designed to mitigate the drag of setting aside cash for future deployment into core positions;
“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;
“PIPE” private investment in a public equity;
“Portfolio Companies” private and public companies in the Group’s portfolio;
“Premium Segment” Premium Segment of the Main Market of the London Stock Exchange, which was consolidated into the Main Market
and ceased to exist as of July 2024;
“Prospectus” the prospectus of the Company, most recently updated on 5 January 2024 and available on the Company’s website
(www.rtwfunds.com/rtw-biotech-opportunities-ltd);
“Pyruvate Kinase
Deficiency” or “PKD”
a rare genetic disorder affecting red blood cells;
“Radiopharmaceuticals” pharmaceutical consisting of a radioactive compound used in radiation therapy;
“Rare disease” a disease that affects a small percentage of the population;
“Registrar” MUFG Pension & Market Services (formerly Link Group);
“RFK Jr” Robert F. Kennedy, Junior;
“RNA medicines” a type of biotechnology that uses RNA to treat a disease;
Defined Terms (continued)
106
“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;
“SPAC” Special Purpose Acquisition Company;
“Sub-Administrator” Morgan Stanley Fund Services USA LLC;
“the Subsidiary” or “OpCo” RTW Biotech Opportunities Operating Ltd;
“Type 1 Diabetes” or “TD1” a type of insulin resistance;
“Total shareholder return” a measure of shareholders’ investment in a company with reference to movements in share price and dividends paid
over time;
“UK AIFMD” refers to a domestic regime of laws regulating the management and marketing of alternative investment funds and
fund managers in the UK, which generally 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;
“the UK Subsidiary” RTW Biotech UK Ltd;
“US GAAP” United States Generally Accepted Accounting Principles;
“Valuation Committee” Valuation Committee of the Investment Manager;
“WACC” weighted average cost of capital;
Defined Terms (continued)
107
Strategic Report Governance Report Financial Statements Additional Information
Defined Terms
continued
Listing of portfolio company abbreviations used throughout this report
Shorthand Company Name Legal Company Name
89Bio 89Bio Inc.
Abdera Abdera Therapeutics, Inc.
Acelyrin Acelyrin, Inc.
Alcyone Alcyone Therapeutics, Inc.
Akero Akero Therapeutics
Aktis Aktis Oncology
Alesta Alesta Therapeutics
Allurion Allurion Technologies, Inc.
Amplyx Amplyx Pharmaceuticals
Ancora Ancora Heart, Inc.
Apogee Apogee Therapeutics, Inc.
Artios Artios Pharma, Inc.
Artiva Artiva Biotherapeutics, Inc.
Athira Athira Pharma, Inc.
Avidity Avidity Biosciences, Inc.
Basking Basking Biosciences, Inc.
BioAge Labs BioAge Labs, Inc.
Biomea Biomea Fusion, Inc.
C4 Therapeutics C4 Therapeutics, Inc.
Cargo Cargo Therapeutics, Inc.
CinCor CinCor Pharma, Inc.
City Therapeutics City Therapeutics, Inc.
Corxel Corxel Pharmaceuticals
Depixus Depixus SAS
Encoded Encoded Therapeutics, Inc.
Ensoma Ensoma, Inc.
Evommune Evommune, Inc.
Frequency Frequency Therapeutics, Inc.
GH Research GH Research PLC
Harpoon Harpoon Therapeutics
HSAC2 Health Sciences Acquisition Corporation 2
Immunocore Immunocore Limited
Iteos iTeos Therapeutics, Inc.
Jade Jade Biosciences
Ji Xing or JIXING Ji Xing Pharmaceuticals Limited
Kailera Kailera Therapeutics
Kyverna Kyverna Therapeutics, Inc.
Landos Landos Biopharma, Inc.
Lenz Lenz Therapeutics
Lycia Lycia Therapeutics, Inc.
Magnolia Magnolia Medical Technologies, Inc.
Mantle Mantle Therapeutics
Merus Merus N.V.
Milestone Milestone Pharmaceuticals, Inc.
Mineralys Mineralys Therapeutics, LLC
Mirador Mirado Therapeutics
Monte Rosa Monte Rosa Therapeutics, Inc.
Neurogastrx Neurogastrx, Inc.
Nikang Nikang Therapeutics, Inc.
Nuance Nuance Pharma
Numab Numab Therapeutics, Inc.
Obsidian Obsidian Therapeutics, Inc.
Orchestra Orchestra BioMed, Inc.
108
Shorthand Company Name Legal Company Name
OriCell OriCell Therapeutics (Shanghai) Co., Ltd
Ottimo Ottimo Pharma
Prometheus Prometheus Biosciences, Inc.
Prometheus Labs Prometheus Laboratories, Inc.
Pulmonx Pulmonx Corporation
Pyxis Pyxis Oncology, Inc.
Rocket Rocket Pharmaceuticals, Inc.
RTW Royalty 1 RTW Royalty Holdings LLC (royalty deal for Mavacamten)
RTW Royalty 2 RTW Fund 2 (royalty deal for Jelmyto)
RTW Royalty Fund 4010 Royalty Fund, a private fund created and managed by RTW Investments, LP.
InBrace or Swift Health Swift Health, Inc.
Santa Ana Santa Ana Bio, Inc.
Sorriso Sorriso Pharmaceuticals
Tarsu s Tarsus, Pharmaceuticals, Inc.
Tenaya Tenaya Therapeutics, Inc.
Third Harmonic Third Harmonic Bio, Inc.
Tourmaline Tourmaline Bio, Inc.
Umoja Umoja Biopharma, Inc.
Ventyx Ventyx Biosciences, Inc.
Visus Visus Therapeutics, Inc.
Yarrow RTW Holdings LLC
Yellow Jersey Yellow Jersey Therapeutics
Listing of portfolio company abbreviations used throughout this report (continued)
109
Strategic Report Governance Report Financial Statements Additional Information
Alternative Performance Measures
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 date.
A measure of the supply and
demand for the Company’s shares.
Extracted from the official list of the London Stock
Exchange.
NAV Growth The percentage increase or decrease
in the NAV per Ordinary share during
the reporting period.
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 share at the beginning of the period minus
one expressed as a percentage.
Share price growth/
Total Shareholder
Return
The percentage increase or decrease
in the price per share during the
reporting period.
A measure of the return that could
have been obtained by holding a
share over the reporting period.
The quotient of the price per share at the end of the period
and the price per 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 Ordinary Share, expressed
as a percentage of the NAV per
ordinary share.
A key measure of supply and
demand for the Company’s shares.
A premium implies excess demand
versus supply and vice versa.
The quotient of the price per share at the end of the period
and the NAV per 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 portfolio company.
A measure of return which is used
when multiple investments have
been made over time into a portfolio
company.
The rate also expressed as a percentage that calculates the
returns on the total investment made with increments
through a given period.
Ongoing Charges
Ratio
The recurring costs that the Group
has incurred during the period
excluding performance fees and
one-off legal and professional fees,
expressed as a percentage of the
Group’s average NAV for the period.
A measure of the minimum gross
profit that the Group needs to
produce to make a positive return
for shareholders.
Calculated in accordance with the AIC methodology detailed
at the web link below: 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 of an AIF it manages,
whether through borrowing of cash
securities, or leverage embedded in
derivative positions or by any other
means.
A measure of the excess of the
Group's investments exposure over
its total net assets.
Calculated in accordance with the AIFMD’s gross
andcommitment methodologies as outlined in
Articles 7 and 8 of the Delegated Regulation 231/2013:
https://eur-lex.europa.eu/legal-content/EN/
TXT/?uri=CELEX%3A32013R0231
Alternative Performance Measures (unaudited)
110
Ongoing Charges
2024
US$
2023
US$
Fees to Investment Manager 7,611,701 4,269,757
Legal and professional fees 1,432,954 749,328
Research costs 849,452 474,511
Administration fees
1
749,649 673,422
Audit fees 366,984 341,500
Directors’ remuneration 262,477 177,011
Other expenses 887,540 687,805
Total expenses 12,160,757 7,373,334
Non-recurring expenses (955,871) (453,231)
Total ongoing expenses 11,204,886 6,920,103
Average NAV 638,541,373 369,419,055
Annualised ongoing charges (using AIC methodology) 1.75% 1.87%
1 The Administration fees in 2023 include US$212,000 (GBP 165,000) in respect of one-off work and compensation for work performed in prior years (see note 11),
which is included in the non-recurring expenses.
111
Strategic Report Governance Report Financial Statements Additional Information
AIFMD Disclosures (unaudited)
AIFMD Disclosures (unaudited)
Report on remuneration and quantitative remuneration disclosure
Under the Alternative Investment Fund Managers Regulations (‘UK AIFMD’), we are required to make disclosures relating to remuneration of staff
working for the Investment Manager for the year to 31 December 2024
Amount of remuneration paid
The Investment Manager paid the following remuneration to staff in respect of the financial year ending on 31 December 2024 in relation to work on
the Group.
2024
US$’000
2023
US$’000
Fixed remuneration 1,194 814
Variable remuneration 2,684 1,332
Total remuneration 3,878 2,146
Number of beneficiaries 77 77
The amount of the aggregate remuneration paid (or to be paid) by the Investment Manager to its partners which has been attributed to the Group in
respect of the financial year ending on 31 December 2024 was US$91.0 million (2023: US$77.8 million). The amount of the total remuneration paid by
the Investment Manager to members of its staff whose actions have a material impact on the risk profile of the Group which has been attributed to
the Group in respect of financial year ending on 31 December 2024 was US$76.4 million (2023: US$69.1 million).
Leverage
The Group may employ leverage and borrow cash, up to a maximum of 50 per cent of the NAV at the time of incurrence, in accordance with its stated
investment policy. The use of borrowings and leverage has attendant risks and can, in certain circumstances, substantially increase the adverse
impact to which the Group’s investment portfolio may be subject. For the purposes of this disclosure, leverage is any method by which the Group’s
exposure is increased, whether through borrowing of cash or securities, or leverage embedded in foreign exchange forward contracts or by any other
means. AIFMD requires that each leverage ratio be expressed as the ratio between a company’s exposure and its net asset value, and prescribes two
required methodologies, the gross methodology and the commitment methodology (as set out in AIFMD Level 2 Implementation Guidance), for
calculating such exposure. Using the methodologies prescribed under AIFMD, the leverage of the Group is detailed in the table below:
Commitment leverage as at
31 December
Gross leverage as at
31 December
2024 2023 2024 2023
Leverage ratio 123% 115% 140% 100%
Other risk disclosures
The risk disclosures relating to risk framework and risk profile of the Group are set out in note 8 to the Financial Statements on pages 97 to 98 and
the principal risks and uncertainties on pages 38 to 40.
Pre-investment disclosures
AIFMD requires certain information to be made available to investors in an Alternative Investment Fund (‘AIF’) before they invest and requires that
material changes to this information be disclosed in the Annual Report of the AIF. There have been no material changes (other than those reflected in
these financial statements) to this information requiring disclosure.
112
*
Board of Directors
William Simpson (Chair, Chair of Management Engagement
Committee, Chair of Sustainability Committee)
Paul Le Page (Chair of Audit Committee)
William Scott (Chair of Nomination & Remuneration Committee)
Nicola Blackwood (Senior Independent Non-Executive Director) *
Stephanie Sirota
Investment Manager and AIFM
RTW Investments, LP
40 10th Avenue
Floor 7
New York
NY 10014
United States of America
Registered office
1st Floor, Royal Chambers
St Julian’s Avenue
St Peter Port
Guernsey
GY1 3JX
Administrator and Company Secretary
Altum (Guernsey) Limited (previously named Elysium Fund
Management Limited)
1st Floor, Royal Chambers
St Julian’s Avenue
St Peter Port
Guernsey
GY1 3JX
Sub-Administrator
Morgan Stanley Fund Services USA LLC
2000 Westchester Avenue, 1st Floor
Purchase
NY 10577
United States of America
Guernsey Advocates
Carey Olsen (Guernsey) LLP
Carey House
Les Banques
St Peter Port
Guernsey
GY1 4BZ
UK Legal Advisers
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London EC2A 2EG
Corporate Brokers
BofA Securities
2 King Edward Street
London EC1A 1HQ
Deutsche Numis Securities
45 Gresham Street
London EC2V 7BF
Share Registrar
MUFG Corporate Markets (Guernsey) Limited **
Mont Crevelt House
Bulwer Avenue
St Sampson
Guernsey
GY2 4LH
Sustainability Consultant
Terra Instinct
40-41 Pall Mall
London SW1Y 5JQ
Public Relations & Communications***
Cadarn Capital
c/o WeWork
1 Fore Street Avenue
London
EC2Y 9DT
Distribution & IR Partner
Cadarn Capital
c/o WeWork
1 Fore Street Avenue
London EC2Y 9DT
Independent Auditor
KPMG Channel Islands Limited
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 1WR
Principal Bankers
Barclays Bank PLC, Guernsey Branch
St Julian’s Court
St Julian’s Avenue
St Peter Port
Guernsey
GY1 4NA
Identifiers:
ISIN: GG00BKTRRM22
SEDOL: BKTRRM2
Ticker: RTW
LEI: 549300Q7EXQQH6KF7Z84
www.rtwfunds.com/rtw-biotech-opportunities-ltd/
* On 11 July 2024, Baroness Nicola Blackwood was appointed
as an independent Non-Executive Director, and on 9
December 2024, was appointed as the Company’s Senior
Independent Non-Executive Director.
** The Group’s share registrar, Link Group, was acquired by
MUFG in May 2024.
*** On 1 November 2024, Cadarn Capital was appointed as
Public Relations & Communications Partner.
Schedule of Key Service Providers
113
Strategic Report Governance Report Financial Statements Additional Information
rtwfunds.com
Find more information at:
rtwbio.com
biotechopportunities@rtwfunds.com
RTW Investments, LP
40 10th Avenue, Floor 7
New York, NY 10014
(646) 597-6980
RTW Biotech Opportunities Ltd
1st Floor, Royal Chambers,
St Peter Port, Guernsey, GY1 3JX
United Kingdom
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