Healthcare fund RTW Biotech Opportunities (RTW) significantly outperformed its major biotech benchmarks in a ‘standout’ FY25.
The trust delivered an impressive 35.7% net asset value (NAV) return. Additionally, its share price increased by 54.8%, narrowing the NAV discount from 22.8% at the start of 2025 to 12% by year-end.
RTW Bio’s FY25 share price performance put it in the top 10 of all trusts tracked by the Association of Investment Companies (AIC).
The recent FTSE 250 entrant is different to most biotech or healthcare funds because it is solely focused on finding ‘transformative’ technologies. These can range from early-stage academic programs needing funding all the way to mature publicly-traded companies.
Public portfolio leads the way
RTW Bio grew its NAV to $800.9 million in FY25, a substantial increase from $606.9 million in the prior year. The main driver was a 46.1% return in its public portfolio, which outperformed the Russell 2000 and Nasdaq Biotech indices.
Key contributors included Avidity Biosciences, PTC Therapeutics (PTCT), and Stoke Therapeutics (STOK). And an upswing in M&A saw five portfolio companies acquired.
Avidity was the year’s top performer. This followed successful FDA alignment on its muscular dystrophy RNA program and a subsequent takeover by Novartis (NOVN).
The portfolio is increasingly concentrated in areas with ‘powerful secular tailwinds’, most notably obesity and cardiometabolic disease.
Given high-conviction private holdings like Corxel and Kailera, the managers believe the portfolio is ‘well-positioned to benefit from the next wave of innovation-led value creation’.
Re-rating potential
Manager Roderick Wong said 2025 marked a decisive turning point for the Biotech sector. This is because it brought a historic four-year bear market to a close.
‘For RTW Bio, this broader sector recovery, combined with our rigorous asset selection, delivered a standout year’, said Wong.
He added: ‘The combination of regulatory clarity, record M&A demand, and a profound advancement of clinical assets points to a potentially powerful re-rating as we enter 2026.’
The Winterflood view
Despite the lag from private investments, Winterflood described the results as ‘strong’.
‘As long as an adverse interest rate environment does not materialise and wider market turmoil does not derail the nascent Biotech recovery, RTW is very well positioned to outperform in 2026 as private valuations catch up to the listed rally,’ commented Winterflood.
Read the press release here: https://www.rtwfunds.com/rtw-biotech-opportunities-ltd/
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