Investment Pitches

Pitch Summary:
We initiated a stake in GE HealthCare Technologies (GEHC). GEHC was spun off from General Electric and provides imaging products such as MRIs, CT scanners, and ultrasound equipment to healthcare facilities. Their large equipment generates significant recurring revenue through service and maintenance contracts. New AI features have the potential to drive significant revenue growth as customers adopt software upgrades in their existing equipment.

BSD Analysis:
GE HealthCare combines a defensive installed base with emerging growth vectors from AI-enabled imaging and diagnostic software. Recurring service revenue provides stability, while new product cycles in MR, CT, and ultrasound support mid-single to high-single-digit growth. Valuation remains reasonable relative to peers given improving margins, deleveraging, and optionality from software attach rates.

Pitch Summary:
ENTG reported poor results in the first quarter due to macro uncertainty as well as tariffs on product going to and from China. Management believes the second half of the year will show improvement as some of their customers begin producing the next smaller node, which uses significantly more of their product. Additionally, new facilities in Colorado and Taiwan should be fully qualified by customers, which bodes well for 2026.

BSD Analysis:
Despite near-term headwinds, Entegris is well positioned for a cyclical upturn as leading-edge node transitions structurally increase material intensity. Tariff exposure is transitory, while capacity ramps in Colorado and Taiwan support mid-term revenue acceleration. The company’s dominant share in filtration and specialty materials provides pricing leverage and high switching costs. Valuation remains depressed relative to normalized earnings power.

Pitch Summary:
With a market capitalisation of GBP 4.9bn, Whitbread, the owner of Premier Inn, is the largest hotel brand in the United Kingdom and Ireland and is also a leading hotel operator in Germany. We have followed the company for a long time and liked it very much when Whitbread sold Costa Coffee in 2018 to return cash to shareholders, focusing on its core brand, Premier Inn. After the severe interruption of the pandemic and an unfortunate dilutive capital increase, we see the strong focus on returns and shareholder value very much in place again and are surprised that the market does not appreciate this at present. In fact, considering the value of the freehold property estimated at around GBP 5bn, investors are paying very little for the core operational business, which we believe enjoys a competitive edge in its domestic market largely driven by scale, a high share of direct distribution, and a strong ‘value-for-money’ brand. Additionally, Whitbread has established itself as a key player in the German market with significant growth potential. The shares are trading at a discount to historic valuation despite management’s plan to unlock value from its real estate and the German operations starting to turn profitable. We believe the current UK macroeconomic headwind is the major driver for the valuation discount, and we regard this as a temporary window of opportunity for Whitbread to gain market share from weak independent players and for us to build a long-term position in the company. Whitbread has come a long way since its founding in 1742 as a London brewery by Samuel Whitbread and becoming at one time the largest UK brewer. In the 1970s and 80s, it diversified into restaurants and hotels and had a very busy period in the 90s buying a variety of different businesses. This strategy was subsequently reversed by a two-decade long divestment process which led to Whitbread becoming a focussed hotel operator and the largest hotel brand with a 12% market share and over 850 hotels in its core UK market. The final stage of these divestments was the sale of Costa Coffee to Coca-Cola in 2018 for GBP 3.9bn, of which GBP 2.5bn has been returned through share buybacks, with the remaining amount used for paying back debt and funding the pension scheme. Whitbread has established Premier Inn as a very strong local brand that is benefitting from excellent brand awareness and a value-for-money reputation which has attracted a loyal customer base. This enables Premier Inn to keep a very large share of direct distribution, circumventing high commissions from the likes of Booking.com. Additionally, the business is benefitting from its sheer scale, being the largest player in a still fragmented market, where Premier Inn is gaining from independent players exiting. We regard the UK and Ireland operations as a mature business and think management is focusing on the right initiatives. With a large freehold property portfolio worth around GBP 5bn and lots of mature and profitable sites, management is recycling cash through sale and leaseback operations where the property can be sold off at attractive yields of 4% and investing the extracted cash into high-margin new developments such as London area hotels. Additionally, Whitbread still operates restaurants off and onsite and has started to close low-margin operations as well as converting those onsite to high-margin hotel rooms - owning the property enables this flexibility. Its pure scale helps Premier Inn to cope with higher inflation and wages, optimising processes, and taking out costs to counter these increases. This should lead to sustainably higher operating margins, and indeed management is targeting a 15% return on capital employed, up from its historic average of 12%. When the strategy of the Accelerated Growth Plan was announced early last year, shares were still trading higher on the back of a good 2023, having fully recovered from the pandemic. However, with weak economic growth in the UK, high public debt and limited fiscal headroom, trading has been weak in its core market and shares have come down to historic low valuations. We do not know when we will see an inflection point in trading, but we are sure that Premier Inn can count on its strength and is gaining market share, especially from independent players who are struggling in this environment. Additionally, its reputation for value for money should continue to benefit from consumers trading down. Whitbread sales declined -1% to GBP 2.9bn and underlying operating profit decreased 14% to GBP 483m in fiscal year 2024/25 ending February. This trend has not yet reversed, with recent first-quarter results driven by the UK, being down -3%, with revenue per available room under pressure. Total revenues show a roughly flat picture thanks to the German business growing strongly. Today, Germany accounts for 10% of total revenues, having grown from scratch in 2016. Total invested and committed capital of GBP 1.3bn is by no means reflected in its valuation and is currently perceived by many investors as bad capital allocation. We take a different view and think that Premier Inn has great potential to replicate its success in the UK in the long run. After failing to acquire its closest peer in Germany, Motel One, management decided to grow its German business organically through new developments and acquisition of existing hotels. The pandemic provided an opportunity to acquire many existing hotels while the whole industry was still struggling. This growth has enabled Premier Inn to become one of the largest premium budget hotel chains in Germany, which is a very attractive market. The German market is 40% larger than the UK but is still much more fragmented with a high share of independent players at around 60% (vs 40% in the UK), and a strong inbound market driven by trade fairs and domestic leisure. As of last year, the German business with 62 hotels and 11k beds generated revenues of GBP 231m and earnings before interest, tax, depreciation, amortisation and rent (EBITDAR) of GBP 66m. In Germany, Motel One operates just about the same number of hotels but more rooms. The founder of Motel One has recently sold off his stake to PAI Partners and extracted the freehold properties into a separate property group. While we have only limited financial insight, we estimate that if a similar transaction multiple were applied to Whitbread, it would result in a fair value of GBP 9.6bn, representing 90% upside to its current share price. We think there is a large discrepancy between what Whitbread would be valued at in a private market transaction and the current valuation the public market is applying to it. We regard this as a great opportunity with an attractive risk/return profile given its high-quality hotel business, conservative balance sheet with low net debt of GBP 483m, strong value in its freehold property and long-term growth potential in Germany, which we see as the real underappreciated growth driver. On the ground in Germany, we have witnessed the rapid growth of Premier Inn in recent years, and we believe that Premier Inn’s branding fits very well with German consumer preferences. In our view, it has the potential to grow substantially and become the largest premium budget hotel brand in Germany. While we wait for the market to recognise this value, we are rewarded with a 3.5% dividend yield and further share buybacks, which management plans to execute up to GBP 2bn until fiscal year 29/30, equating to returning cash at a rate of 8%. Additionally, management is targeting GBP 300m of incremental operating profit stemming from above-mentioned initiatives over the same time frame. Based on our estimate of this year’s underlying net operating profits of GBP 350m and a return to the historic average multiple of 20 times enterprise value to net operating profits after tax, excluding leasing liabilities, we believe the shares offer upside of at least 30% over the next 12 months. We see more upside potential when the Accelerated Growth Plan results come through and Germany turns sustainably profitable.

BSD Analysis:
Whitbread represents a deep value mispricing created by temporary UK macro headwinds overshadowing strong structural tailwinds. Premier Inn’s direct-booking model, scale-driven cost advantages, and consolidation opportunity uniquely position it to gain share as independent operators exit. Despite owning a GBP 5bn freehold estate, Whitbread trades well below private-market hotel valuation multiples, implying significant hidden asset value. German operations are scaling rapidly and could become a major multi-year earnings engine, with private-market transaction comps implying substantial upside. Balance-sheet strength, 3.5% dividend yield, and multi-billion-pound buybacks create a compelling capital-return backdrop. Catalysts include improving UK RevPAR, German profitability inflection, and execution of the Accelerated Growth Plan.

Pitch Summary:
On the long side, Costain +17%, +0.8% contribution, the UK engineering and infrastructure company, continued its recent run of positive performance as the company gave an upbeat trading statement and cited new opportunities in segments such as nuclear power and water. The company also announced a share buyback program and an improvement in the position of its defined benefit pension scheme.

BSD Analysis:
Costain is benefiting from strengthening fundamentals in UK infrastructure spending, particularly in regulated utilities and nuclear projects. The upbeat trading update suggests improving revenue visibility, while the reinstated buyback signals management confidence and balance-sheet resilience. Shares still trade at a discounted valuation relative to peers, despite improving margins and a stabilizing pension position. Strong government-backed investment cycles and a shift toward higher-quality earnings mix support further upside. Key risks relate to contract execution and legacy project volatility, but near-term momentum appears positive.

Pitch Summary:
CDW is the largest IT reseller in North America. It effectively serves as an outsourced sales and marketing provider for hardware and software vendors, and an extension of its customer’s IT team, who rely on CDW’s expertise. Operating trends for the business have been persistently weak as IT hardware spending, which accounts for roughly 50% of its gross profit, has been in a downturn. CDW’s customer base, which skews smaller, has also had to deal with higher interest rates and digesting IT spend from the COVID period. We exited the investment in CDW earlier in the year.

BSD Analysis:
CDW is the go-to IT solutions provider for enterprises that need hardware, software, and services bundled and deployed fast. Its scale and vendor relationships give it pricing leverage and access to the latest technologies before smaller integrators. While tech spending can be choppy, CDW sits at the center of refresh cycles, cloud migrations, and now AI-driven infrastructure upgrades. The company’s services mix continues to rise, nudging margins upward and making the business stickier. CDW’s execution is consistently elite — tight cost control, disciplined working capital, and strong cash generation. It wins not because it’s flashy, but because it’s reliable and integrated into thousands of IT budgets. The stock trades like a boring distributor, but the economics are much better than that.

Pitch Summary:
B&M European Value Retail is a variety discount retailer in the UK which has been in the portfolio since November 2022. The company’s disappointing results over last 12 to 18 months eventually resulted in the CEO’s resignation. During our investment period operating trends have weakened, and whilst some of this weakness was driven by the economic environment, the customer value proposition and management execution have both been diluted. We were not fast enough in recognising this and exiting the position. We are no longer shareholders.

BSD Analysis:
B&M is one of the quiet winners of Europe’s value retail boom, thriving as consumers hunt for bargains but still want recognizable brands at low prices. Its treasure-hunt merchandising model keeps traffic strong and turns inventory quickly, supporting enviable cash generation. New store openings remain highly accretive, particularly in the U.K. where B&M’s format is now mainstream. The company benefits from supply-chain flexibility and opportunistic buying, giving it gross margin advantages over traditional grocers. Consumer belt-tightening actually plays to B&M’s strengths, allowing it to capture share from mid-tier retailers. The model has been tested across cycles and consistently delivers high returns. Investors often underestimate how scalable this value format still is.

Pitch Summary:
TKO Holdings (TKO) is the owner and operator of the two leading combat sports content assets – the UFC and WWE. We wrote about TKO in our September Quarterly Report. Since making our initial investment, the company has also acquired Premier Bull Riding (PBR), sports marketing agency IMG and premium (sports) experience provider On Location (in a single transaction). The core UFC and WWE assets still account for the vast majority of TKO’s economics. TKO has had a strong start to 2025; UFC and WWE grew EBITDA 17% and 38% respectively in the March quarter and the company expects to grow EBITDA at a mid-teens rate for calendar year 2025. An important near-term milestone is the renewal of the UFC media rights in the US. These rights account for over 15% of TKO’s revenues, so while the absolute dollar figure is important (and we expect a material step-up from the current deal), we are more focused on the partners TKO chooses to work with. For example, TKO signed a landmark global deal with Netflix for the WWE last year and this is proving to unlock material upside in the other parts of content flywheel, namely sponsorship and live events. We also believe that there is a larger site fee opportunity for TKO, as compared to our initial expectations. TKO currently earns site fees from local governments on a portion of its 24 marquee annual events. Across UFC, WWE and PBR the company puts on close to 200 annual events. By “festivalising” a combination of these events across multiple days, TKO is demonstrating they can deliver more economic value to cities and hence earn site fees on previously unmonetised events. The agreement with the Perth Government announced earlier this year demonstrates this with the press release referencing a “weekend takeover” featuring three WWE events and material economic benefit to hosting such events. These additional revenue opportunities are especially valuable for a content business where revenue growth drops through to profits at very attractive margins due to low marginal costs. TKO are promoting these events with or without site fees.

BSD Analysis:
TKO is a media-rights powerhouse created by UFC and WWE joining forces, giving it unmatched control over combat entertainment and a global fanbase. Its content is exactly what streamers, networks, and international partners want: live, unscripted, and culturally sticky. Media rights renewals are the real crown jewel — each cycle pushes pricing higher as platforms bid aggressively for tentpole live content. Sponsorship and international expansion add optionality, with UFC still under-monetized in many global markets. The Endeavor/management influence also means cost cuts come fast and hard, supporting margin expansion. Regulatory noise exists, but demand for this type of content is only rising. TKO’s earnings profile has more visibility than skeptics think, especially as live sports scarcity intensifies.

Pitch Summary:
Scout24 is Germany’s leading online property portal. We have been investors in Scout24 for over five years, having followed the business for several years prior. Our interest was piqued following the combination of management change and the subsequent sale of effectively half the business in 2020 (Scout24’s automotive portal). Generally, management teams don’t like running smaller businesses. In this case, Scout24’s new CEO Tobias Hartmann identified the lack of synergy between the two businesses, extracted a very good sale price for the automotive portal and then doubled down on the opportunity in property. In his words to us at that time “we want to be an inch wide and a mile deep in our domain”. This pivot to focus resonated with us. Management then began a journey of re-invigorating its customer value proposition. The key goal was to make Scout24 more valuable to all sides of the ecosystem (property buyers, sellers and agents) and then broaden the revenue drivers of the business. This required investment in product as well as back-end infrastructure. Near term financial performance was impacted by this investment – revenue growth was muted and margins contracted. This was reflected in the share price which declined over 40% from its 2020 peak to lows in 2022. Despite this, we could see value building all the while through management’s execution at the operational level. Scout24 was increasing the competitive gap with its closest peer, and customer numbers continued growing across the ecosystem. More recently, Scout24’s financial performance has begun to reflect the operational improvement in the business – sales growth has accelerated, and margins have expanded. The market has now recognised this with the share price doubling over the last two years. We have begun to exit the position as much of this value is now reflected in the current market prices.

BSD Analysis:
Scout24 is the default online real estate marketplace in Germany, a position that gives it near-monopolistic economics in a market that hates friction. Even with housing transactions down, landlords and agents still need to advertise — making Scout24 more resilient than the underlying property cycle. Its premium landlord services and data tools keep expanding ARPU, turning a classifieds business into a high-margin SaaS-like model. Regulatory pressure around rents ironically reinforces the platform’s value because it makes transparent market data even more essential. The company is disciplined on costs, consistently widening margins despite mixed macro signals. With structural pricing power and an asset-light model, Scout24 generates dependable cash flow. Investors often treat it like a cyclical classifieds name, but it behaves much more like a durable digital utility.

Pitch Summary:
International Game Technology (IGT) is about to change their name to Brightstar Lottery (BRSL) on the closing of their deal with Apollo and Everi Holdings (EVRI), rumored to happen this week. Brightstar "won" the Italian Lotto rebid that includes a 2.23 million Euro upfront fee, significantly higher than many expected. We should find out more detailed capital return plans in the near future, which might spark a longer update from me including revisions to my valuation thinking after the Italian lotto bid and better accounting for the non-controlling interests.

BSD Analysis:
International Game Technology PLC (IGT) IGT is a capital return powerhouse in the global gambling technology sector, simplifying its business to maximize shareholder yield following the strategic spin-off and sale of its large global gaming and digital assets. The investment is a pure bet on the structural dominance of its Global Lottery segment, which is a high-margin, long-term contractual annuity business that provides superior revenue visibility and cash flow stability. The primary catalyst is the successful execution of the planned split, which will eliminate the conglomerate discount and leave behind a clean, defensible lottery business with a transparent, aggressive dividend and capital return policy. IGT is a value-driven play on a necessary, recurring government service that is protected by regulatory moats.

Pitch Summary:
Enhabit (EHAB) is a home health and hospice operator that was spun-off of Encompass Health (EHC), following the spinoff the company stubbed its toe badly (as is typical for many spins) as it was behind the industry shift from Medicare to Medicare Advantage plans. Much of that mix-shift is largely behind them, now it is more of a deleveraging story with a nice demographic and economic tailwind. Seniors want to stay and its cheaper to care for them in their homes. There's not an obvious near-term catalyst here, but a multiple at 9.4x EBITDA (during the last round of consolidation, industry peers were taken out at double this multiple) and levered 5.4x EBITDA, a return to steady growth should do wonders for the share price over time. [Late edit, CMS proposed some pretty punitive rate action for 2026, including -5% temporary adjustment to recoup perceived overpayments from 2020-2025. Not great if you're overweight Medicare and leveraged.]

BSD Analysis:
Enhabit, Inc. (EHAB) Enhabit is a post-spin-off arbitrage play in the fragmented, high-growth home health and hospice market, benefiting from the unavoidable demographic tailwind of an aging U.S. population and the persistent shift to lower-cost care settings. The investment thesis is built on the company's superior market density in its localized rural regions, which provides an efficient scale advantage over competitors. The stock is currently trading at a significant discount due to its recent separation from Encompass Health and lingering short interest, masking the clean, cash-flow-rich nature of the core business. The key catalyst is the company's ability to demonstrate consistent margin expansion and become an attractive, non-cyclical M&A target for larger healthcare organizations seeking scale.

Pitch Summary:
Soho House & Co (SHCO) is an operator of private social clubs, late last year, the company announced it had received a $9/share cash offer from a consortium that includes Executive Chairman Ron Burkle. In late January, Dan Loeb's Third Point (9.9% owner) sent a letter to the Soho House board pushing for a better deal. Since then, the company has been mysteriously quiet, the debt markets seem pretty open, I'm not sure what the hold up is exactly? I've lightened up a bit on position after adding to it during the tariff driven broad market selloff.

BSD Analysis:
Soho House & Co Inc. (SHCO) Soho House is a bet on the luxury "experience economy," building a highly defensible, global network effect through its exclusive, membership-driven platform. The investment thesis focuses on the high-margin, sticky Services segment—membership dues—that provides predictable, recurring revenue, shielding the company from the volatility of its food and beverage operations. The company's persistent valuation challenge is due to past execution issues and high debt, but its enormous Net Asset Value (NAV) per member, combined with a waiting list exceeding 100,000, proves the pricing power and brand scarcity are structurally sound. The narrative hinges on the accelerating path to consistent profitability and Free Cash Flow, which will force a transition from a volatile growth stock to a stable luxury subscription model.

Pitch Summary:
NSTS Bancorp (NSTS) (~$60MM market capitalization) is the holding company for a three branch community bank, North Shore Trust & Savings, located in Waukegan, IL with $282MM of assets. Like many other thrifts, NSTS has a fairly simple business model, they take in deposits from the local community and primarily (~90% of the loan book) make 1-4 family residential mortgages in the area. The bank is significantly overcapitalized (Tier 1 capital ratio is 23.11%) due to their demutualization in January 2022 and three years later, still struggles to turn a profit. The assets are pretty clean, the entire securities portfolio is accounted for as available for sale (held on the balance sheet at fair value) and the loan book has minimal credit issues, but the tangible book value would take a $1.30/share haircut if the loans were held at fair value. Normally, this wouldn't be of particular interest, but a few things make this a likely sale candidate in the relatively near future: Thrift conversions need to wait out a three year cooling off period as a public company before they can be acquired. NSTS passed that mark this past January. In this year's proxy statement, the following proposal was made by a shareholder recommending the sale or merger of the company, and the Board was notably non-committal in opposing it, saying they would consider the voting results. Share repurchases have stopped for no particular reason, indicating they might be going ahead with a sale process. This is a little bit more "reading the tea leaves" than I like, but the signs certainly point to the pressure being ratcheted up on NSTS to sell the bank. What could it fetch in a sale? I think at least TBV would be the floor, or ~$15/share, maybe more if it is bought by a credit union, it trades for $11.88 as of today.

BSD Analysis:
NSTS Bancorp, Inc. (NSTS) NSTS Bancorp is a quintessential small-cap community bank play, operating with conservative lending practices and an enviable deposit base that offers structural defense against rising interest rates. The key value driver is its pristine balance sheet and low public float, making it an ideal, clean target for a larger regional bank seeking accretive growth in its localized market. The investment thesis is a bet on inevitable M&A consolidation in the fragmented regional banking sector, where the premium paid for a clean asset with solid credit quality would deliver a quick, substantial return that is uncorrelated to broader market moves.

Pitch Summary:
Income Opportunity Realty Investors (IOR) days in public markets should be numbered. The company is incredibly simple, the majority of the assets are in a cash-like receivable from the external manager, with remainder in a note to an affordable housing development. In January, the controlling family via Transcontinental Realty Investors (TCI) completed a tender offer where they were only shake out 21,128 shares of IOR at $18/share (versus a book value of $30.22/share) (if you read through the multiple tender offer amendments, it appears some shareholders backed out of the tender) to bring their ownership above the 90% level (allowing them to perform a squeeze out in Nevada). Since the close of the tender, TCI has continued to buy shares in the open market adding another 33,524 shares, all below the $18/share tender offer. Recently, shares have drifted closer to $19, soon the controlling family is likely going to determine they've run out of disinterested sellers (very little public float is remaining) to purchase shares from and do a squeeze out. Hopefully at a more equitable price.

BSD Analysis:
Income Opportunity Realty Investors, Inc. (IORI) Income Opportunity Realty Investors is a tiny, illiquid security that is essentially a holding company trading at a deep discount to its underlying, predominantly residential real estate assets, managed by the highly concentrated Contrarian Group. The investment thesis is pure financial arbitrage: buying a fraction of the portfolio's tangible value, anticipating that management will eventually be forced to liquidate the assets or distribute the trapped capital through a special dividend or buyback. The non-conventional structure and low trading volume ensure it remains consistently overlooked by institutional money, creating a classic mispricing opportunity for investors willing to endure the lack of liquidity.

Pitch Summary:
CKX Lands (CKX) is a microcap Louisiana land bank that started a strategic alternatives process almost two years ago (August 2023), admittedly the success rate for long drawn out processes is not good. The latest update appeared in the 2024 10-K: "As part of management’s desire to maximize value for shareholders through this process, the Company expects to seek to partition, in kind or by sale, ownership of its undivided interests in lands co-owned with others. There can be no assurance that the Company will be successful in reaching a negotiated partition of its co-owned acreage that would avoid the need to seek partition in court." About half of their net acreage is held through a 16.67% ownership in joint venture, it sounds like the leading bidder doesn't want to be part of the JV (understandable!) and wants the acreage partitioned/subdivided which could take significantly more time or not happen at all. There's not much else to go on here, fair value is still likely meaningfully above the current $10-$11 share price, but any failure to sell the company means CKX is likely in forgotten microcap purgatory for another decade.

BSD Analysis:
CKX Lands, Inc. (CKX) CKX is a true hidden asset value play, trading well below the intrinsic Net Asset Value of its extensive Louisiana timber and oil/gas royalty lands. The company's real edge is its multi-generational focus on prudent land stewardship, ensuring a perpetual revenue stream from timber harvests and lucrative mineral leases. Critically, management is actively implementing strategies to unlock the highest and best use of its assets by developing ranchette-style real estate subdivisions, converting passive timberland into high-margin residential sales. The ongoing exploration of "strategic alternatives" signals a willingness to either liquidate assets or entertain a sale of the entire entity, forcing a major re-rating that closes the wide discount between the public valuation and the private-market value of its land.

Pitch Summary:
In April, only two short months after announcing strategic alternatives, Third Harmonic Bio (THRD) announced it would be liquidating and returning cash to shareholders. The liquidation was approved almost unanimously (other similarly situated biotechs should take note), the initial distribution is scheduled to take place in the third quarter with an estimated total of $5.30-$5.44/share (the initial distribution will likely be 90-95% of this value). This doesn't include any proceeds from the sale of THB335 (here's what appears to be the asset sale deck). Along with AVTE or ABIO, a model for other broken biotechs to follow.

BSD Analysis:
Third Harmonic Bio, Inc. (THRD) Third Harmonic is a high-risk gamble on whether a selective oral KIT inhibitor can successfully treat mast cell-driven diseases like Chronic Inducible Urticaria without debilitating liver toxicity. The prior Phase 1b trial for its lead asset, THB001, was prematurely halted due to drug-induced liver injury, sending the stock tumbling. The "edgy" thesis assumes that the company can successfully reformulate or re-dose THB001, or pivot to a different asset, leveraging the initial proof-of-concept data that demonstrated rapid and sustained clinical efficacy in cold urticaria patients. This is a deep-value call on an innovative mechanism—mast cell depletion—that offers a breakthrough if the safety profile can be successfully managed.

Pitch Summary:
Repare Therapeutics (RPTX) is a busted biotech with a liquidation value of at least $2/share (possibly more, could be some IP value), but nothing really notable has changed since my write-up last month. One slight positive, they did include a new line in their 10-Q making the strategic review more clear, from the MD&A section: "We plan to explore a full range of strategic alternatives and partnerships across our portfolio to maximize shareholder value."

BSD Analysis:
Repare Therapeutics Inc. (RPTX) Repare is a precision oncology play dedicated to the high-potential field of Synthetic Lethality, a genomic strategy that targets cancer cells by exploiting specific DNA repair deficiencies. The investment thesis centers on its proprietary SNIPRx® platform for identifying novel drug targets, particularly its lead program lunresertib in combination with a WEE1 inhibitor, with a Phase 1 readout expected later in 2025. The company's high valuation is justified by the massive, multi-megablockbuster potential of its platform if any of its pipeline candidates show definitive clinical efficacy and superior durability in patients with difficult-to-treat tumors. This is a platform technology bet, meaning success in one asset could instantly validate the entire portfolio and drive a massive re-rating or M&A interest.

Pitch Summary:
No major news at Mural Oncology (MURA), development has been fully halted and the company is pursuing strategic alternatives. My estimation of liquidation value is $3.25/share against a current quote of $2.50/share. There is some good discussion in the comments about the two-year safe harbor for spins (would falloff this November) and Irish takeover rules pushing this towards being acquired or a reverse merger versus a liquidation.

BSD Analysis:
Mural Oncology plc (MURA) Mural is a distressed post-failure asset shell currently in an active "offer period" under Irish Takeover Rules after abandoning its entire clinical program for nemvaleukin. The investment is a naked bet on a quick cash-out or a reverse merger with another private biotech company, facilitated by its relatively clean balance sheet featuring approximately $144 million in cash as of its last report. The definitive transaction agreement with XOMA Royalty Corporation signals the end-game: a sale of the public shell to realize the residual cash value. Investors are essentially buying a deep discount to cash, expecting the M&A premium to close the gap between the liquidation value and the trading price.

Pitch Summary:
ESSA Pharma (EPIX) is trading for $1.75/share and my estimate of its liquidation value is approximately $2.10/share. 9.5% shareholder BML and 5.1% shareholder Soleus Capital Management have both written public letters to the board pushing for a liquidation. Kevin Tang is also here with a 9.7% stake, but BVF Partners is the largest shareholder at 20%. In the Q1 results (filed after the Soleus & BML letters), EPIX included the line "we have taken productive steps towards a decision and hope to share an update in the near future." That was 53 days ago, hopefully a resolution will take place shortly.

BSD Analysis:
ESSA Pharma Inc. (EPIX) ESSA is a high-conviction bet on circumventing resistance in the multi-billion-dollar prostate cancer market, challenging the dominance of standard antiandrogen therapies. The company’s lead candidate, masofaniten (EPI-7386), is a first-in-class inhibitor that directly targets the N-terminal domain (NTD) of the androgen receptor, a mechanism untouched by existing drugs. Early Phase 2 combination data with enzalutamide showed impressive responses, with high percentages of patients achieving significant Prostate-Specific Antigen (PSA) decline. The edge lies in the potential to delay the emergence of resistance, offering a massive commercial opportunity if these deep, durable responses are confirmed in later-stage trials. EPIX is essentially an aggressive play on owning the next therapeutic line in a vast, underserved oncology market.

Pitch Summary:
Athira Pharma (ATHA) has a market capitalization of ~$12.1MM despite having $33.7MM in NCAV as of 3/31. This busted biotech announced a strategic review back in September, hiring Cantor Fitzgerald, but didn't completely halt their research pipeline. ATHA has one potential ALS therapy (ATH-1105) currently in a Phase 1 trial with healthy adults, the company is hoping to dose with actual ALS patients later this year. If we assume they'll burn another $15MM (currently spending ~$9MM/quarter) chasing the drug development ghost and on any strategic transaction expenses, liquidation value comes in around $0.48/share versus a current quote of $0.31/share. That's before ascribing anything for the public listing or IP value with ATH-1105. Perspective Advisors is the largest shareholder with ~14% of the shares outstanding, they previously indicated in a 13D filing they have been in discussions with management on a reverse merger or other transaction. BML owns 8% and has been more active in pushing for liquidations recently. This situation isn't as clean as I typically like and has a significant ongoing burn, but I continue to hold a small position.

BSD Analysis:
Athira Pharma, Inc. (ATHA) Athira is a classic high-risk, high-reward biotech speculation currently navigating a precarious strategic review after the failure of its lead Alzheimer's candidate, LIFT-AD. The current narrative hinges entirely on the success of ATH-1105 for ALS, a completely separate indication that is still in early Phase 1 development but has shown promising preclinical effects on the neurotrophic HGF system. Management's decision to implement a significant reverse stock split and aggressively reduce cash burn signals a company fighting for its corporate life and seeking a last-ditch licensing or M&A rescue. For the speculative investor, the upside is a massive re-rating should any further positive ATH-1105 clinical data materialize, but the downside is a near-total loss as the cash runway dwindles amid the search for a buyer.

Pitch Summary:
A defining feature of the fund since inception has been its outsized exposure to foreign equities. We have long believed that many outstanding companies exist around the world, often trading at significant discounts compared to their US-listed counterparts. While such discounts can sometimes reflect deficiencies in business quality, management, or financial strength, most of the fund’s foreign holdings score well on these metrics. As the stock prices of many of these companies have rebounded during this challenging year, it seems global investors may be rediscovering the vast opportunities that exist outside the large US technology sector. If the global economy is indeed fragmenting and “localizing,” it stands to reason that investors would favor companies somewhat insulated from the negative effects of “de-globalization.” In our portfolio, these include companies such as ISS, Air Liquide, Eurofins, and Loomis. Most of our foreign holdings are, to varying degrees, local operators: ISS provides cleaning and related services in Europe and the US; Air Liquide generates the majority of its revenues locally due to the high cost of transporting industrial gases; and Eurofins’ testing and certification services are tailored to the specific countries in which it operates. These are just a few examples of strong, foreign-listed companies that have been well-positioned to weather this year’s challenges—and, not coincidentally, have been among the fund’s better performers.

BSD Analysis:
Air Liquide offers a high-quality combination of defensive cash flows and structural growth, with long-term industrial gas contracts, inflation pass-through mechanisms, and exposure to secular trends like electronics, healthcare, and energy transition. Its localized production model, where gases are generated close to end markets, makes revenues largely domestic and reduces vulnerability to trade frictions—aligning with the fund’s “localization” theme. The company has a strong balance sheet, disciplined capex program, and a long track record of dividend growth. Valuation is typically at a premium to basic chemicals peers, but we think that is warranted by its stability and return profile. Upside comes from decarbonization projects, hydrogen, and continued margin expansion; risks include project execution and cyclical industrial demand.