Arix Bioscience (ARIX) shareholders have overwhelmingly approved the sale of the company to RTW Biotech Opportunities (RTW ).

At a general meeting yesterday, 92% of those voting, accounting for 66% of the shares, approved the all-equity deal while only 8%, or 5.6% of the total, voted against.

The transaction was announced on 1 November, provoking a fall in both companies’ share prices due to some concern that Arix’s biggest shareholder Acacia Research was being paid in cash while other investors received RTW shares. 

That criticism appears to have faded in the face of signs that a two-year bear market in biotechnology has ended.

From a low of 110.5p in mid-November, Arix has rallied 29% to 142.5p, in line with the original valuation of the offer of 1.4633 RTW shares for each Arix share. 

However, it could have further to go, according to a valuation by RTW’s broker Deutsche Numis.

RTW, which also dropped from $1.15 to 1.08 on the day of the announcement, has since advanced 27% to $1.37, down 0.9% today. The value of its portfolio has actually jumped 29% since 1 November as biotech companies rallied on hopes of US interest rate cuts and increased bid activity. 

Numis analyst Gavin Trodd said that the gain in RTW implied a valuation of 159p per share, 12% less than Arix’s net asset value (NAV) of 181p per share at 31 December.

RTW, a recent Citywire tip, meanwhile stands at around a 28% discount to its NAV per share of $1.90 at the end of last year. The portfolio, which is set to grow by 63% to $550m (£452m) as a result of the merger, rose 15% in December alone. 

A second general meeting on 12 February to vote on the liquidation of Arix is required to complete the transaction.