In the latest instalment of Monday Manager, Portfolio Adviser speaks to Rod Wong, managing partner and CIO of RTW Investments and investment manager to RTW Biotech Opportunities. He explains the inner workings of the biotech investment trust, what’s driving M&A in the sector and why GLP-1s are tackling the “largest pharmaceutical event the industry has ever seen”.
For those unfamiliar, can you describe your process and what the fund is aiming to achieve?
Innovation is the best medicine. We invest across the full lifecycle of biotechnology, from early-stage private companies through to mid- and late-stage public businesses and commercial assets. RTW Biotech Opportunities’ (or RTW Bio as we call it) evergreen structure provides a long-term base, giving us the flexibility to deploy capital where we see the most compelling risk-adjusted opportunities.
Our approach is fundamentally bottom-up. We start with the science – understanding disease biology, unmet medical needs and the probability of clinical success – and then apply a rigorous valuation and portfolio construction framework. Having invested through multiple cycles, we emphasise learning, discipline and position sizing. The objective is not to chase short-term momentum, but to grow capital over time by backing durable innovation that can meaningfully improve patients’ lives.
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What are the prospects for biotech in 2026?
The sector is at a structural turning point. After several challenging years, the foundations for a more constructive environment are in place. Valuations remain attractive, large pharmaceutical companies are increasingly focused on acquiring innovation, and scientific progress has continued regardless of market conditions.
We see a significant opportunity in obesity and metabolic disease, oncology, mid-to-late-stage development companies and commercial-stage biotechs. The scale of the obesity and metabolic opportunity is arguably the largest pharmaceutical event the industry has ever seen. While early GLP-1 therapies have been transformative, we believe the next phase will be driven by platforms offering improved efficacy, tolerability and broader metabolic benefit.
In oncology, innovation remains relentless, with increasingly targeted and differentiated approaches. Modalities (therapeutic technologies like cell and gene therapies) that we have been excited about for many years are now maturing. They’re all different in terms of how broad their applicability is and how much new product ultimately they can produce, but, as a group, you’re going to see record-setting numbers of new products, and then the promising businesses from that, five, 10 years down the line.
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There’s been a flurry of M&A activity both in the portfolio and the wider biotech sector. What does this signal about the market?
We’re seeing a meaningful acceleration in biotech M&A, driven by policy clarity and structural industry pressures. In 2025, deal activity reached approximately $105bn, more than double the prior year, with both development-stage and commercial-stage companies attracting strategic interest, reflecting a renewed focus on clinically and commercially relevant innovation.
The looming patent cliff is a central driver. A record number of drug patents are set to expire over the remainder of the decade, with global patent protection on sales projected to fall sharply by 2030. Several blockbuster therapies are approaching loss of exclusivity, creating urgency for large pharmaceutical companies to replenish pipelines. As a result, we are seeing increasingly strategic behaviour from acquirers, with capital directed towards clinically validated assets addressing high unmet needs.
Within our portfolio, transactions involving companies such as Verona and Avidity illustrate this dynamic. In both cases, strategic interest validated differentiated science, focused execution and relevance to large pharmaceutical partners navigating these patent pressures. While regulatory risks remain, the overall backdrop is supportive for continued M&A, particularly in oncology and cardiometabolic disease.
Talk us through an example of your holdings?
Corxel and Kailera, both RTW-incubated private companies, are good examples of our approach to next-generation innovation in obesity and metabolic disease. While first-generation therapies have had a major impact, we see substantial scope to improve efficacy, tolerability and delivery, including both injectable and oral approaches. These companies are advancing differentiated treatments aimed at delivering better outcomes with fewer side effects.
A key part of the opportunity lies in how these assets are sourced and commercialised. In both cases, we acquired the global rights for China developed drugs, enabling us to support the development of high-quality science for international markets. This reflects a broader industry shift, where China has emerged as a major source of biotech innovation, combining speed, scale and scientific capability. To invest globally in biotech today, a meaningful presence in China is essential.
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What led you to being manager of RTW Biotech Opportunities?
The closed-ended structure of RTW Biotech Opportunities is particularly well suited to how we invest. Innovation in biotechnology does not move in straight lines, and the ability to invest patiently across stages – from early-stage companies through to commercial public businesses – is critical.
RTW Bio gives us significant flexibility. We are not constrained by short-term flows, benchmark pressures or artificial time horizons, we can nurture and scale the next generation of life-saving therapies across their entire development journey. Duration is equally important. Many meaningful outcomes in biotech take time, and the evergreen structure enables us to support companies through multiple value-creation phases. In that sense, RTW Bio aligns shareholders’ capital with the timelines of scientific innovation and patient impact.
What has been a career highlight for you?
Rather than a single investment, the highlight has been building a platform that consistently supports innovation with the potential to change patients’ lives. Seeing therapies progress from early science to clinical and commercial impact – and knowing we played a role in that journey – is ultimately what makes this work meaningful.
Our goal is to work with the most promising entrepreneurs and companies with the most promising drugs in development and on the market and help them on their journey. We mostly do that by providing capital, of course, but also, we do it in other ways too. We want to play a central role in broadening understanding and interest in our space.
To that end, I actually have a new book out that covers a lot of the issues we’ve been talking about. It’s a healthcare policy book called Innovation is the Best Medicine.
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