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Woodford Patient milestones fail to lift shares’ rating

Woodford Patient milestones fail to lift shares’ rating

Woodford Patient Capital (WPCT) has hailed a ‘summer of milestones’ for the a number of its early-stage company investments, but investors have been left unmoved, with the shares continuing to trade on a lowly rating.

In its latest update to investors in the trust, Woodford Investment Management pointed to a number of flotations, funding rounds and treatment breakthroughs for companies held.

The most tangible of these for the trust's net asset value (NAV) has been the US flotation of London-based cancer specialist Autolus Therapeutics (AUTL.O).

An initial public offer (IPO) at $17 per share handed a £35 million boost to the Patient Capital NAV, and the shares have nearly doubled since then. At the end of July, the stock had risen to become the trust's second largest holding. A continued rally since then means it is likely to occupy the top spot now.

Sensyne Health (SENSS) hasn’t enjoyed quite as spectacular start to life as a listed company, but shares in the drug research company are up 18% on their IPO price, having floated last month.

Sensyne has been spun out of former health minister Paul Drayson's Drayson Technologies group, which fund manager Neil Woodford first backed in 2015. 

The company analyses patient data from the NHS and has signed agreements with three NHS trusts since then end of July.

Autolus and Sensyne's buoyant shares have helped to drive an 11.1% rise in Woodford Patient Capital's NAV over the last three months, placing the fund within the top 10 investment trust performers over that period.

But that hasn’t been enough to lift sentiment on the shares, which trade at a 13.9% discount to NAV, not far off a record 15.8%.

Investors have shunned the trust after a difficult start to life for the early-stage company-focused fund. With the shares trading at 80.7% today, they remain nearly 20% down on their 100p price at launch more than three years ago.

The biggest blow to the trust remains the key drug test failure for Irish biotech company Prothena (PRTA.O), then a major holding for the trust, which had come under attack from short-sellers Kerrisdale Capital.

But as Woodford  railed against those attacks earlier this year, he also claimed that a number of his portfolio companies were 'on the cusp' of a breakthrough.

That has now borne fruit for a number of the trust's investments, according to the fund group. Woodford Investment Management highlighted some of the progress made by unquoted holdings. The impact of these on valuations will be less immediate as, unlike listed stocks which trade every day, these companies are valued much less frequently.

Woodford highlighted Proton Partners International, which treated its first patient with proton beam therapy in June. It is the fifth biggest portfolio holding.

In August, Proton Partners announced the opening of its second cancer centre in Northumberland, following a location in Newport.

Proton beam therapy is expected to become available in early 2019.

Another holding, biotech company Kymab, which is also backed by the Wellcome Trust and the Bill & Melinda Gates Foundation, is developing ‘monoclonal antibody treatments - a type of therapeutic drug - to counter illnesses such as atopic dermatitis and cancer’. 

In July, it announced its potential atopic dermatitis treatment, KY1005, was moving to a second trial phase following positive results the first phase.


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Neil Woodford
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