Rtw Biotech Regulatory News (RTW)

LEI: 549300Q7EXQQH6KF7Z84

22nd January 2024

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM, THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO ACQUIRE, ANY SECURITIES IN THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES, AND THE DISTRICT OF COLUMBIA) OR ANY OTHER JURISDICTION IN WHICH ANY OFFER, SOLICITATION OR SALE OF SECURITIES WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. NO SECURITIES MAY BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. ANY PUBLIC OFFERING OF SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE ISSUER (OR, IF APPLICABLE, A SELLING SECURITY HOLDER) AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS. RTW BIOTECH OPPORTUNITIES LIMITED DOES NOT INTEND TO MAKE ANY PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES. NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT SHALL FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH OR ACT AS AN INDUCEMENT TO ENTER INTO ANY CONTRACT OR COMMITMENT WHATSOEVER.

RTW Biotech Opportunities Ltd ("RTW BIO" or the "Company") Update on Arix Scheme and RTW BIO Capital Allocation

· RTW BIO has completed the previously announced $57.1M acquisition of a 25.5% stake in Arix, representing a purchase price of £1.37 per Arix share

· RTW BIO reaffirms the highly compelling transaction with Arix that delivers immediate and long-term benefits for both RTW BIO and Arix shareholders

· RTW BIO's NAV has increased by 29.3% since the announcement of the transaction on 1 November 2023 and currently delivers value equivalent of £1.58 per Arix share

· Arix's first general meeting is due to take place on 29 January 2024 and RTW BIO has undertaken to vote its 25.5% stake to support the Arix Scheme, which has been recommended by the Arix Special Committee

· Two leading proxy advisory firms have published recommendations in favour of the Arix Scheme

· RTW BIO to increase capital returns to shareholders to a total of up to $30 million post completion of the Arix Scheme

London - 22 January 2024 - RTW BIO, a London Stock Exchange-listed investment company focused on identifying transformative assets with high growth potential across the biopharmaceutical and medical technology sectors, has completed the previously announced investment in Arix Bioscience plc ("Arix") to support the previously announced all-share acquisition of Arix's assets by RTW BIO, to be effected through a scheme of reconstruction and the voluntary winding-up of Arix under section 110 of the Insolvency Act 1986 (the "Arix Scheme").

New Investment in Arix Bioscience

RTW BIO has acquired 33,023,210 Arix shares from Merton Acquisition HoldCo LLC, a wholly owned subsidiary of Acacia Research Corporation, representing a 25.5% interest in Arix (the "Acacia Stake"). As previously agreed, the transaction was at a fixed price of US$57,078,670.12, which today represents an equivalent purchase price of £1.37 per Arix share (based on USD:GBP foreign exchange rate of 0.7900 as at 17 January 2024), with RTW BIO benefiting from the weakening dollar-pound exchange rate since deal signing. The transaction was agreed and settled in USD contingent upon receiving clearance from the FCA, which was granted on 15 January 2024.

RTW BIO has undertaken to vote all 33,023,210 Arix shares in favour of all resolutions in respect of the Arix Scheme, representing a 25.5% interest of Arix shareholder registry.

Update on RTW BIO Performance

Since the Arix Scheme was announced on 1 November 2023, RTW BIO's NAV has increased by 29.3% as of 31 December 2023. The RTW BIO share price has also seen a meaningful increase since announcement and, at the Arix Scheme's fixed exchange ratio of 1.4633 RTW BIO share per Arix share, the Arix Scheme currently delivers value equivalent of £1.58 per Arix share, meaningfully higher than the Arix share price of £1.35 (based on RTW BIO share price of $1.37 and USD:GBP foreign exchange rate of 0.7900, all as at 17 January 2024). This price represents a 61.6% premium to the Arix unaffected price as of 12 July 2023, the day immediately prior to Arix's announcement commencing a strategic review, and a 34.2% premium to the closing Arix share price on 31 October 2023, the day immediately prior to the announcement of the Arix Scheme. This is a meaningful immediate economic opportunity for Arix shareholders in addition to the announced long-term benefits of the transaction that include:

· RTW as a best-in-class manager with superior capabilities for Arix's assets

· An enhanced return potential from deployment of Arix's capital

· Immediate scale and complementary portfolio benefits

· Compelling value creation today and in the future for all shareholders

· Enhanced profile providing liquidity and re-rating opportunity

· Unique opportunity to buy into a depressed market while innovation is booming

Update on the Arix Scheme

With RTW BIO completing the purchase of the Acacia Stake, after receiving written confirmation from the FCA confirming that it has approved the proposed change in control of Arix, Arix is expected to publish the shareholder circular in due course to convene the second general meeting in connection with the Scheme. Subject to satisfaction (or, if applicable, waiver) of the conditions to the Scheme, the Scheme is expected to become effective in Q1 2024.

Proxy Adviser Recommendations

RTW BIO is pleased to note that two leading independent proxy adviser firms have each published proxy advisory reports recommending that Arix shareholders vote in favour of the resolution in respect of the Arix Scheme to be proposed at the first general meeting.

Update on RTW BIO Capital Allocation

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."

About RTW Biotech Opportunities Ltd

RTW Biotech Opportunities Ltd (LSE: RTW & RTWG) is an investment fund focused on identifying transformative assets with high growth potential across the biopharmaceutical and medical technology sectors. Driven by a long-term approach to support innovative businesses, RTW Biotech Opportunities Ltd invests in companies developing next-generation therapies and technologies that can significantly improve patients' lives. RTW Biotech Opportunities Ltd is managed by RTW Investments, LP, a leading healthcare-focused entrepreneurial investment firm with deep scientific expertise and a strong track record of supporting companies developing life-changing therapies.

About RTW Investments, LP

RTW Investments, LP is a New York-based, global, full life-cycle investment firm that focuses on identifying transformational and disruptive innovations across the biopharmaceutical and medical technologies sectors. As a leading partner of industry and academia, RTW combines deep scientific expertise with a solution-oriented investment approach to advance emerging medical therapies by building and supporting the companies and/or academics developing them. For further information about RTW, please visit www.RTWfunds.com.

Enquiries

Important information

Merrill Lynch International ("BofA Securities"), which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the Financial Conduct Authority ("FCA") and the PRA in the United Kingdom, is acting exclusively for RTW BIO and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than RTW BIO for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this announcement. Neither BofA Securities, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of BofA Securities in connection with this announcement, any statement contained herein or otherwise, or any transaction or arrangement referred to herein.

Numis Securities Limited (which is trading for these purposes as Deutsche Numis) ("Deutsche Numis"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting as corporate broker exclusively for RTW BIO and for no one else and will not be responsible to anyone other than RTW BIO for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this announcement. Neither Deutsche Numis, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Deutsche Numis in connection with this announcement, any statement contained herein or otherwise, or any transaction or arrangement referred to herein.

Notice to US Shareholders in Arix

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities of 1933, as amended (the "Securities Act"), any state securities laws or the securities laws of any other jurisdiction and may not be offered or sold in the United States or to any "U.S. persons" (as defined in Rule 902 under the Securities Act), except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

The Scheme Shares will be offered and sold for investment purposes only in the United States or to U.S. Persons (as such terms are defined in Rule 902 of Regulation S promulgated under the Securities Act) under the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in compliance with the applicable securities laws of each state or other jurisdiction in which the offering will be made. Each prospective investor that is within the United States or that is a U.S. Person (as such term is defined in Rule 902 of Regulation S promulgated under the Securities Act) must be both (i) an "accredited investor" as defined in Rule 501(a) of Regulation D of the Securities Act and (ii) a (A) "qualified purchaser" as the term is defined under Section 2(a)(51) of the U.S. Investment Company Act of 1940, as amended (the "1940 Act") and the rules and regulations promulgated thereunder or (B) "knowledgeable employee" as such term is defined in Rule 3c-5(a)(4) promulgated under the 1940 Act. Scheme Shares will be offered and sold outside of the United States to investors that are not U.S. Persons in accordance with Regulation S under the Securities Act.

RTW BIO is not registered, and does not intend to be subject to registration, as an investment company under the 1940 Act in reliance upon one or more exclusions or exemptions from registration thereunder. U.S. Shareholders of Arix are requested to execute an investor letter ("AI/QP Investor Letter") appended to the Prospectus. The AI/QP Investor Letter contains representations and restrictions on transfer designed to assure that the conditions of such exclusions or exemptions will be met. Investors in RTW BIO will therefore not receive the protections afforded by the 1940 Act to investors in a registered investment company. RTW BIO will not make a public offering of the Scheme Shares to satisfy the exclusion from registration as an investment company under the 1940 Act. If RTW BIO is deemed to be an investment company and therefore is required to register under the 1940 Act, such requirement could prohibit RTW BIO from operating in its intended manner and could have a material adverse effect on RTW BIO.

The Scheme Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act, the 1940 Act and any applicable state and other securities laws, pursuant to registration or an exclusion or exemption therefrom. The transferability of the Scheme Shares are further restricted by the terms of the AI/QP Investor Letter, and any re-offer or resale of any Scheme Shares in the United States or to U.S. Persons may constitute a violation of U.S. law. U.S. Shareholders of Arix should be aware that they may be required to bear the financial risks of any investment in RTW BIO for an indefinite period of time. RTW BIO reserves the right to refuse to accept any subscriptions, resales or other transfers of Scheme Shares to U.S. Persons or to any person, including on the basis that doing so would risk RTW BIO's loss of an exclusion or exemption under U.S. securities laws (e.g., the Securities Act and the 1940 Act). RTW BIO further reserves the right to require the transfer or redemption of Scheme Shares held by any person for any reason, including circumstances that may prejudice the tax status of RTW BIO, may cause RTW BIO to be in violation of the Securities Act, the 1940 Act or any applicable state securities act or may cause RTW BIO to suffer any pecuniary, fiscal or administrative disadvantage which may be unlawful or detrimental to the interests or well-being of RTW BIO.