London, UK, 1 November 2023

Edison issues flash on RTW Biotech Opportunities (RTWBIO): Significant acquisition of Arix Bioscience’s assets

On 1 November 2023, RTW Biotech Opportunities (RTWBIO), a full life cycle biotech investor, announced what it considers to be a transformational deal. It plans to acquire the assets of UK-listed Arix Bioscience in an all-share transaction, which on a pro-forma basis would increase RTWBIO’s NAV by c $550m (c 63%). The deal brings the prospects of increased liquidity in RTWBIO’s shares and a more efficient cost base, and potential for a higher RTWBIO valuation. Arix’s shareholders would receive new RTWBIO shares at an implied c 46% premium to the level before Arix announced a strategic review. Meanwhile, RTWBIO’s management team anticipates that the deal would be single-digit accretive to the company’s NAV per share at completion.

During 2022 and so far in 2023, RTWBIO has made nine new investments and had seven successful IPOs or exits of portfolio companies. The acquisition would bring c $128m of Arix’s liquid assets, of which c $60m is expected to be in cash following completion of the scheme and the cost of the deal. RTWBIO intends to invest this capital in both public and private assets and can deploy cash quickly via investment in its ‘other public’ portfolio, which is made up of listed companies held by other RTW funds, to minimise cash drag. It can also deploy capital through its royalty and structured finance strategy, which provides an income stream with returns that are uncorrelated with equity returns and stock market volatility.

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