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Woodford Patient Capital suspends fund raising

Woodford Patient Capital has published its first set of results covering the period from incorporation through its launch in April last year and finishing on 31 December 2015. The net asset value of Woodford Patient Capital Trust ended the period at 97.38p per share (cum income), slightly below the issue price of 100p per share. From launch on 21 April 2015 to year end, the FTSE All Share Index declined by -7.5% in total return terms. They are declaring a final dividend of 0.16 pence per share.

In January, they announced they were looking at ways to raise additional capital but now say, with the continuing uncertainty prevailing in markets, now is not an appropriate time to raise capital. The Board will, however, monitor the situation and advise shareholders of any developments.

RM2 International is a good example of a company that hit a bump in the road during the period under review. RM2 has a high performance composite pallet product which has the potential to significantly disrupt the global goods transportation industry. The company announced some very positive contract wins during the period but also needed to make minor modifications to the coating it applies to its pallets, resulting in delays to its production upswing. They participated in its September share placing and remain very confident that the company will arrive at a successful destination, albeit somewhat later than previously anticipated.

Northwest Biotherapeutics, meanwhile, was the largest negative contributor to performance. They were attracted to Northwest by its technology, which looks to harness the power of the body’s immune system to fight cancer. It’s a broad-based technology for a range of solid tumours and is being trialled in patients who have exhausted all other avenues of cancer treatment. Since they first invested, however, allegations of financial improprieties and regulatory failure have been published by at least one anonymous source. They have engaged with the board on this matter and in a public filing to the US Securities and Exchange Commission, they called for the appointment of an independent non-executive director and the convening of a special committee to investigate the allegations. Accordingly, the company has initiated an investigation and they await its findings.

More positively, their other US biotech holdings provided a strong positive contribution to performance. In particular, the portfolio’s largest position, Prothena, which is developing immuno-therapies in central nervous system and chronic inflammatory disorders, performed very strongly.

Elsewhere, the holding in Vernalis performed well, having received FDA approval for the first of its extended release cough cold products, Tuzistra, in April 2015, shortly after the position was purchased. Investors continue to significantly undervalue the potential of Vernalis’ cough cold franchise, in our view. It has four further products in development, alongside a portfolio of central nervous system and oncology programmes currently in the clinic.

Norwegian fingerprint imaging technology business Idex was rewarded for its continued operational progress. Several mobile phone manufacturers are evaluating the company’s product capabilities and towards the end of the year, it announced that a tier-one mobile phone manufacturer had selected its technology for use in a new device, representing a landmark design win.

Immunocore, the clinical-stage immuno-oncology company, saw an independent revaluation, reflecting the continued positive progress being made by the business. Its well-validated ImmTAC technology platform has already demonstrated proof of concept with good clinical data in melanoma patients and the company continues to make progress on multiple partnered programmes with major pharmaceutical companies. Meanwhile, Stratified Medical was also upwardly revalued as a result of a further funding round. The company has already identified and out-licensed two potential targets for Alzheimer’s disease and is now further developing its powerful algorithm-based technology platform towards ‘self-learning’.

WPCT : Woodford Patient Capital suspends fund raising

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