Woodford finally closes chapter on failed Vernalis investment
Neil Woodford’s eponymous Patient Capital Trust (WPCT) will have to look forward to receiving just £1.8m for the 30.6m shareholding – acquired in 2015 for £18.5m – in Vernalis, the UK biotech whose failed endeavour to break into the US cough/cold market led to it being put up for sale. This follows the announcement yesterday that Ligand Pharmaceuticals would acquire the UK company for £32.6m ($43m) in cash, just $11m more than forecast $32m cash holding.
The 90% fall in the value of Vernalis has proved to be one of a number of poor biotech investments by WPCT that has also included Prothena, Circassia, 4D Pharma, Net Scientific, Abzena and most famously, Northwest Biotherapeutics. Against this, the trust has done well on Autolus, which is now its largest holdings accounting for 13% of gross asset value.
Woodford Investment Management as a whole has a holding in Vernalis of 157.9m shares (including those held by WPCT), representing 29.9% of the company’s share capital. The fund recorded a -59% return on the stock in the 12 months to 30 June and -89% over three years.
WPCT was the bottom performer and only one of the 14 biotech investment trusts monitored by Marten & Co to have recorded a negative NAV return (of -0.8%) in the year to date period (seven months to end July). Its share price has fallen by 6% over this timeframe, as its discount to NAV widened to 12.6%, the largest of any of the trusts.