LONDON, UK: RTW BIO, a biopharmaceutical and medical technology investment company, has completed its investment in Arix Bioscience, a life sciences venture capital firm, ahead of their planned merger.

RTW BIO has acquired a 25.5% stake in Arix from Acacia Research Corporation for US$57 million, or £1.37 per share, and has committed to vote in favour of the merger.

The merger, which was announced on 1 November 2023, will create a leading global life sciences investment platform with a diversified portfolio of innovative companies. The deal values Arix at £1.58 per share, a 61.6% premium to its price before the strategic review, and offers significant benefits to both RTW BIO and Arix shareholders, such as enhanced return potential, immediate scale, compelling value creation, and improved liquidity and profile.

The merger is expected to be completed in Q1 2024, subject to shareholder approval and other conditions. Two independent proxy advisers have recommended that Arix shareholders vote in favour of the merger at the first general meeting.

The Board of RTW BIO continues to believe that the discount to NAV per Ordinary Share at which the Company’s shares currently trade materially undervalues the Company and its portfolio. Therefore, given the increased scale that the Arix Scheme will provide, the Board of RTW BIO intends to increase capital returns to shareholders to a total of up to $30 million post completion of the Arix Scheme.

This total includes the previously announced share buyback of up to $10 million, of which c.$2.8 million has already been executed. The NAV-accretive share buyback will be implemented over time at the Company’s discretion. The Board believes that this allocation clearly demonstrates its confidence in the outlook for the biotech sector and the Company’s portfolio and its capital allocation discipline whilst also providing additional liquidity to shareholders. On 31 December 2023, 12.9% of the Company’s NAV was held in “cash and other” and 20.4% was invested in the “other public” segment of the portfolio, which is an invested liquidity pool designed to mitigate the drag of setting aside cash for future deployment.

Roderick Wong, M.D., Managing Partner and Chief Investment Officer of RTW Investments, said: “We remain excited to partner with Arix and combine our complementary portfolios to capitalize on the tremendous opportunities across the life sciences markets. Today’s announcement is an important milestone towards the overall completion of the transaction and RTW BIO has undertaken to vote its entire Arix shareholding to support the Arix Scheme.

We believe this combination will create immense value and opportunity for both RTW BIO and Arix shareholders and are pleased two leading proxy advisory firms have published recommendations in favour of the Arix Scheme. We look forward to closing this transaction and leveraging our talented investment team and scientific expertise to unlock value day 1 and drive long-term value in an enhanced RTW BIO for all of our future combined shareholders.”

RTW Biotech agrees to takeover Arix Bioscience plc at the rate of £1.43 per share