Portfolio Company Update: Prometheus Biosciences

Portfolio Company Update: Prometheus Biosciences


Prometheus Biosciences enters a definitive agreement to be acquired by Merck

RTW Venture Fund Limited (the "Company" or "RTW Venture Fund"), a London Stock Exchange-listed investment fund focused on identifying transformative assets with high growth potential across the life sciences sector, is pleased to note the announcement by Prometheus Biosciences, Inc. (NASDAQ: RXDX) ("Prometheus"), that it has entered into a definitive agreement under which Merck, through a subsidiary, has agreed to acquire Prometheus for $200.00 per share in cash for a total equity value of approximately $10.8 billion, a c. 75% premium to the prior closing price. The acquisition is subject to Prometheus Biosciences shareholder approval and is expected to close in the third quarter of 2023. Prometheus' full announcement can be found here.

Prometheus is the largest holding in RTW Venture Fund's portfolio, representing c. 14.8% of NAV at 31 March 2023. As such, the Company expects that this will translate into a material accretion to the NAV.

Prometheus is a clinical-stage biotechnology company pioneering a precision medicine approach for the discovery, development, and commercialization of novel therapeutic and companion diagnostic products for the treatment of immune-mediated diseases. The company's lead candidate, PRA023, is a humanized monoclonal antibody directed to tumour necrosis factor (TNF)-like ligand 1A (TL1A), a target associated with both intestinal inflammation and fibrosis. PRA023 is currently in Phase 2 clinical trials for inflammatory bowel disease (IBD).

Roderick Wong, M.D., Managing Partner and Chief Investment Officer at the Investment Manager, said:

"We are delighted to see Merck, who has one of the longest histories of successful innovation in medicine, recognize the value of Prometheus' leadership position in TL1a directed therapy, and its broader pipeline for immune-mediated diseases.

This transaction brings to life RTW Venture Fund's investment strategy. Having co-led Prometheus' crossover financing round in November 2020 and then supported their IPO in March 2021, we were able to build our conviction in Prometheus based on an in-depth understanding of their compelling science and pioneering approach to developing a potentially best-in-class treatment for IBD. This conviction allowed us to maintain the position at size through multiple inflection points up to now, despite a significant increase in the share price over the past two years.

This will be the second position in the Company's portfolio to be acquired by large pharma this year after Cincor's acquisition by AstraZeneca was completed on 24 February. With low valuations and large pharma's significant cash positions and emerging patent cliffs, we would expect M&A to continue to accelerate."

For Further Information:

RTW Investments, LP
+44 (0)20 7959 6361
Woody Stileman, Managing Director
Krisha McCune, Director, Client Service

+44 (0)20 7466 5107
Charles Ryland
Henry Wilson
George Beale

+44 (0)20 7260 1000
Freddie Barnfield
Nathan Brown
Euan Brown

BofA Securities
+44 (0) 20 7628 1000
Edward Peel
Kieran Millar

About RTW Venture Fund Limited:

RTW Venture Fund Limited (LSE: RTW & RTWG) is an investment fund focused on identifying transformative assets with high growth potential across the life sciences sector. Driven by a long-term approach to support innovative businesses, RTW Venture Fund invests in companies developing next-generation therapies and technologies that can significantly improve patients' lives.

RTW Venture Fund Limited 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.