RTW Investments

“Our best ideas, this conviction piece, our very best ideas. And sometimes we don't even have one that reaches this level in a given year, but we are willing to take up to a five percent loss if we're flat out wrong.”

“I don't know the exact number, but healthcare dedicated firms that are managing meaningful amounts of capital, like north of a billion dollars is probably, you know, a dozen plus or minus something like that.”

“We just consider each point in time, almost kind of like you're re-underwriting the investment, right? So No matter where an investment is trading or where it's been marked last, you're thinking about then what is the next step in terms of key event, probabili…”

“So we are 18 months into a biotech bear market that's the second worst Correction in the history of the industry, right? The first being the obvious one, the genomics bubble bursting in 2000 to 2003. It's second longest, second deepest.”

“If you know that a tumor is caused by this mutation, or if you know that this rare disease, they are missing this gene, and if you can express the protein that's missing or replace it, that's probably going to work. And as simple as it sounds, we continue to m…”

“So at the end of the day, the strategy was find those things that offer high probability asymmetric risk reward over a medium to long duration and build a portfolio out of those things, recognizing that great drugs that are underappreciated by the market shoul…”

“We've more than tripled the number of technologies That you can produce drugs from, and that list I just kind of rattled off, that's not science fiction. The only things I've named are things that have proven themselves mature enough to actually have drugs com…”

“We're fundamentally value oriented and we are looking for asymmetric risk reward. The trick is that you have to overlay that we live in a probabilistic business or one that's binary.”

“And now, what is a great deck? A great deck is probably four slides.”

“The culture that developed in our ecosystem was one that we worked together to get things. So most of us are friends with some portion of the rest of us. And the culture is to default to not be competitive, but try to be collaborative. And that spirit, I think…”

“You know, the rough rule of thumb is you can do an equity offering for like, 10 to 20% of a company's market cap at any given time. But some companies need three, four X that amount of capital.”

“And we've got very good at doing exercises by, for example, counting patients at certain centers, by knowing how to use insurance data, more recently knowing how to use genetic data from public databases, and using that to conclude what The outcome was likely …”

“We studied all these historical constipation trials, going back into the literature, and we found that phase twos, a lot of them work, and phase threes, they all fail, every single one. So empirically, we said, actually, the statistician is wrong. Doesn't matt…”

“They are small teams that are very, very good at what they do. And you develop big personalities, big egos from that. And that's a management challenge when what you're talking about is you want people with different expertise to really come together and work …”

“You know, I think one of the things I'm most concerned about is payers and the pressure that we're seeing on paying for innovation in drug development. That's probably my number one long-term concern.”

“So we'll have larger positions that are five to 10% plus of the portfolio. That must mean that those larger positions have some kind of base business value support. They sell a drug on the market, and we're playing for the second drug. And then you have a numb…”

“Our second largest loser was actually a short position against a company called Map Pharma. They're developing a single use inhaler for migraine. And the very short version of the story is our research said that That they can't manufacture this stuff.”

“It's very hard, especially when the wiring of your leadership, everything that's gotten them to that point are the same things that will cause their business to fail. Being a lone wolf, not embracing teamwork, not embracing structure. I think that's one key th…”

“I think another key thing is falling in love with science and not doing the risk management part of the job properly.”

“When you think about what actually drives the business or the returns of the funds, it is finding things early when they're misunderstood or simply no one's paying attention, doing the work, getting convicted, and then supporting it along multiple steps, stage…”

“I think it's those two factors that are driving the boom, and I think, you know, it should be a couple decades at least of then improving these modalities, utilizing the information, and just getting a lot more drugs developed.”

“I mean, honestly, I think biotech, especially the way we, that I've always done it, which is longer term oriented, is difficult to fit in any larger firm that's not focused only on healthcare.”

“One adjustment that we made as a result was on our shorts. We slashed the max position size.”