WPCT should see benefit on Oxford Nanopore fundraising
Neil Woodford-managed Woodford Patient Capital Trust (WPCT) has finally generated something positive for its long suffering investors, with the fund likely to be able to take a roughly £8m fair value gain on its holding in Oxford Nanopore, following a new £100m fundraising by its UK-based investee company. Oxford Nanopore, which markets what it claims to be the only portable real-time DNA/RNA sequencer, MinION, is the second largest holding for WPCT, accounting for its 9.5% of NAV, as of the end of January.
The financing, which brought in funds from three new global investors – GIC (Singapore), CCB International (China) and Hostplus (Australia) – as well as the company’s existing investors, values Oxford Nanopore at £1.5bn, roughly 11% higher than was the case from its fundraising in December 2016. It is not yet known whether WPCT maintained its stake by investing in the latest round.
Oxford Nanopore says the funds will be used to support the next phase of its commercial expansion, which includes a new high-volume, high-tech manufacturing facility in Oxford to meet accelerating demand for its sequencing technology as well as growth of the commercial team that already serves more than 70 countries. The funds raised will also support R&D as Oxford Nanopore expands its suite of nanopore analysis devices. The currently available pocket MinION and desktop GridION are being joined by high-throughput modular sequencing with PromethION and small, single-test sequencing with Flongle. Flongle is designed to enable the rapid real-time genetic analysis of infectious diseases, targeted analyses in precision medicine, food and/or water-safety surveillance, and science education, while PromethION will enable large-scale, on-demand sequencing of human, plant, or animal genomes.
The fair value gain will be a significant boon to WPCT, coming after a run of extremely poor investments in biotech companies including Sphere Medical, Allied Minds, Northwest Biosciences, Vernalis and 4D Pharma. In the last week, Vernalis decided effectively to wind wind itself up after the failure of its US pharmaceutical business and the company’s shares have lost around 95% of their value in the three years they have been held by the fund. The trust came in second to bottom in terms of performance in January among the sector specialist investment trusts followed by Marten & Co (see Quoteddata.com), and bottom for the whole of 2017 (Quoteddata.com).
But, as reported earlier, WPCT may also gain from the possible US IPO of Autolus, which accounts for 4.1% of the fund’s NAV. This could generate a gains if an IPO establishes a higher pre-money price for company, than was established at its last private round of $305m. Autolus is currently conducting three Phase I/II studies with dual-targeting CAR-T candidates. The first , AUTO2, a dual targeting CAR-T against the BCMA and TACI cancer antigens, is in development for multiple myeloma. The second programme, AUTO3, is in development for DLBCL and pediatric acute lymphocytic leukaemia, and the third, AUTO4, for T-cell lymphoma.
At the current 72p/share, WPCT’s shares have lost more than 25% of their value since launch on 1 May 2015, a performance that stands in marked contrast to other UK biotech specialist investment trusts.
WPCT should see benefit on Oxford Nanopore fundraising