RTW Biotech Opportunities’ 2025: big rebound, tighter discount, FTSE 250 status
RTW Biotech Opportunities (LSE: RTW) has reported a strong 2025, riding a sector turnaround and a flurry of biotech M&A. Net asset value (NAV) per Ordinary Share rose +35.7% to $2.45, while the share price jumped +54.8% to $2.16, narrowing the discount to 12.0% at year-end. The Company also secured inclusion in the FTSE All-Share in September and the FTSE 250 in December.
In plain English: the portfolio did well, the market liked it even more, and RTW’s shares moved much closer to the underlying asset value. That matters for returns today and for future access to new investors via the indices.
2025 by the numbers: performance, scale, and mix
| Metric | 31 Dec 2025 | Movement |
|---|---|---|
| NAV (Ordinary Shares) | US$800.9 million | +35.7% |
| NAV per Ordinary Share | $2.45 | +35.7% |
| Share price | $2.16 | +54.8% |
| Discount to NAV | 12.0% | from 22.8% |
| Shares in issue | 326.4 million | (2.8%) year-on-year |
| Public portfolio return | +46.1% | Outperformed biotech indices |
| Private portfolio return | -2.0% | Expected valuation lag |
| Royalty sleeve | 2.3% of NAV | +0.9% NAV contribution |
| Portfolio mix | Public 70.9% | Private 24.0% | Royalty 2.3% | Higher public weighting |
| Ongoing charges ratio | 1.74% | 2024: 1.75% |
Quick jargon check: NAV is the per-share value of the underlying portfolio. The discount is how far the market price sits below that NAV. Narrowing the discount usually signals improving sentiment and/or stronger delivery.
What drove the outperformance: public book led the way
RTW’s strategy is built around “full life-cycle” investing – backing companies from private stages through to the public markets. In a recovery year for biotech, that exposure paid off. The public portfolio returned +46.1%, beating the Russell 2000 Biotech and Nasdaq Biotech indices.
Top contributors and detractors
- Avidity Biosciences: +9.5% contribution to NAV after FDA alignment and a Novartis take-out at a meaningful premium.
- PTC Therapeutics: +5.1% on commercial momentum for Sephience and growing interest in rare neurology.
- Stoke Therapeutics: +4.9% supported by data backing a near-term filing for Dravet syndrome therapy.
- Rocket Pharmaceuticals: sole material detractor at -3.9% following a serious adverse event and trial protocol changes.
M&A was a clear tailwind, with five exits across public and private holdings during the year. Public take-outs included Verona, Akero, Avidity and Merus; private portfolio company Alcyone was acquired too. This matters because strategic buyers are paying for late-stage and de-risked assets again – a classic catalyst for investment trusts focused on innovation.
Private portfolio: modest dip now, set-up improves
The private sleeve, 24.0% of NAV, delivered -2.0% in 2025. That’s not unusual in a rebound: private marks typically trail public markets. Under the bonnet, there was a mix of steady progress and select write-downs.
- Corxel: +0.9% NAV contribution in-year; post period-end, completed a US$287 million Series D-1 to advance oral GLP-1 CX11 into global Phase 2/3 preparation.
- Alcyone: +0.9% via M&A realisation.
- Artios: -2.9% after a conservative revaluation reflecting broader programme breadth and higher capital needs, despite encouraging Phase 1/2a oncology data.
RTW continued company building, adding Prolium (1.5% of NAV) focused on bispecific antibodies in autoimmune disease, alongside several newCo formations. Average private-company cash runway was 26 months at year-end, with Corxel’s financing improving the profile post period-end.
Royalty investments: small slice, helpful ballast
Royalties provided income and diversification, representing 2.3% of NAV and adding +0.9% to NAV in 2025. The 4010 Royalty Fund reported an approximately 20% net IRR as of Q4, with 33% of commitments deployed into commercial-stage assets.
- Avadel’s Lumryz: RTW exercised a contractual put right post Alkermes’ acquisition, exiting at the full 2.5x return cap (expected close Q1 2026).
- UroGen: steady Jelmyto growth (8-12%); Zusduri won FDA approval in June 2025, adding a fresh revenue stream.
- Cardamyst: FDA approval in December 2025 triggered the associated royalty commitment shortly after year-end.
RTW also committed to near-term, event-driven royalties tied to clear regulatory milestones, including Aquestive’s Anaphylm and Savara’s Molbreevi.
FTSE 250 inclusion and buybacks: two levers for the discount
Index inclusion is a meaningful step up in visibility and potential demand from institutional trackers. RTW entered the FTSE All-Share in September and the FTSE 250 in December. The Board kept capital allocation front and centre, repurchasing $12.6 million of shares in 2025 and approving a further US$15 million for buybacks following successful M&A exits. No dividend is recommended, consistent with the focus on capital growth.
Positioning: obesity and cardiometabolic, plus selective China and AI angles
RTW is leaning into secular growth areas: obesity and cardiometabolic disease feature prominently via Corxel and Kailera, with additional exposure through commercial names like Madrigal and Insmed. The team also highlights two broader trends: accelerating discovery via AI tools and an increasingly productive innovation engine in China. Portfolio exposure to China is described as modest, but RTW sees scope to support global licensing of fast-iterating Chinese assets.
Risks and balance: what could go wrong?
- Clinical risk never goes away in biotech, as Rocket’s setback shows. Precision therapies can be binary around key data or safety events.
- Concentration: the largest position, PTC Therapeutics, is 11.6% of NAV. High-conviction bets can amplify outcomes both ways.
- Policy and regulatory: while 2025 brought clarity and friendlier M&A conditions, FDA leadership churn is noted as a remaining uncertainty. That said, the FDA still approved 54 new treatments in 2025, in line with the decade-long average.
- Private marks: the -2.0% private return underlines how valuations lag. If the IPO window stays tight, realisations may remain more reliant on trade buyers.
Why this update matters for shareholders
- Execution is meeting the moment: +35.7% NAV return and +54.8% share price return in a recovering sector shows RTW’s public equity selection working.
- Discount momentum: a 12.0% discount leaves scope for further narrowing if performance and M&A activity persist, with buybacks offering support.
- Realisations are back: five take-outs across the book and robust royalty outcomes point to healthy cash recycling and validation of the strategy.
- Clear near-term catalysts: management flags upcoming reads and milestones – for example, Stoke’s potential faster filing path around mid-2026, Immatics Phase 3 data update in H1 2026, and Corxel’s CX11 Phase 2 progress – which could move NAV.
My take: a cleaner set-up into 2026
This is the kind of year investors in a specialist biotech trust want to see after a long bear market: strong NAV growth, multiple exits, and a shrinking discount backed by active buybacks and new index buyers. The royalty sleeve is doing its job as ballast, and the overweight to commercial or late-stage assets helped in a risk-on snap-back.
On the flip side, biotech remains a catalyst-driven arena. The portfolio’s high-conviction nature brings exposure to idiosyncratic outcomes, and the private book’s recovery typically trails public markets. Still, with US$800.9 million of NAV, FTSE 250 inclusion, and positioning in obesity and cardiometabolic megatrends, RTW looks well set for a sector still described as attractively valued and under-owned.
Bottom line: a positive, execution-heavy year that narrows the gap between price and value. If 2026 delivers on the clinical and M&A pipeline outlined here, there could be more room for that 12.0% discount to tighten further.
