WPCT still at bottom of bio specialist trust league in May

WPCT still at bottom of bio specialist trust league in May

Neil Woodford’s eponymous Patient Capital Trust (WPCT) has once again ranked at the bottom of the performance league table of biotech/healthcare specialist investment trusts maintained by Marten & Co in the month of May, both in terms of price and NAV total return. This is the same position the trust has held for most of this year, although its run of poor performance was briefly broken in March when it  surprisingly shot to top place among the 13 trusts, helped by a short term surge in value of one of its then top investee companies Prothena, amid a wider downturn in biotech. However, Prothena subsequently saw its lead product blow up and has now fallen to tenth place in the trust portfolio, causing performance to return to its disappointing long term trend.

In an otherwise positive month for the sector where the benchmark Nasdaq biotechnology index rose by 8.4% in sterling terms, WPCT managed only a 1.4% gain in NAV, while its share price fell by 3%. Although the trust’s heavy orientation towards private companies does mean the monthly comparison could be considered a little unfair, WPCT has also underperformed over longer periods of time. For example over the first five months of the year, its NAV fell by 8.5%, against an 3% gain for the benchmark index. Furthermore, this longer period included positive revaluations for its now two largest holdings, Oxford Nanopore and BenevolentAI, both of which completed private fund raisings, but also saw a substantial fall in value of Prothena as a result of the clinical trial blow up of its lead product.

However, WPCT’s managers will be hoping a successful Nasdaq IPO of Atolus Therapeutics, another top ten investee, which is due to complete later this week. This should provide a significant boost to NAV, as the offer price range is between c50-70% above the current carrying value. And, given the degree of investor interest in the CAR-T space, Autolus may even open at a premium.

Marten & Co’s latest monthly biotech specialist trust performance update shows only one trust – London-listed BB Healthcare (BBH), although SV Health-managed International Biotechnology Trust (IBT) came very close.  The sterling-denominated NAV and share price total return for May is shown in the table below.

Over the five months to 31 May, six trusts managed to beat the benchmark index,  with two – BB Healthcare and HBM Healthcare – doing so by a considerable margin. HBM Healthcare’s almost 26% increase in share price over the period is also notable. The sterling-denominated NAV and share price total return for the five months to 31 May is shown in the table below.