Over the past few days you may have become aware of press reports concerning our investment in Northwest Biotherapeutics. It’s a stock that we hold in the CF Woodford Equity Income Fund and Woodford Patient Capital Trust.
Many of these press reports were informed by a public filing we made to the U.S. Securities and Exchange Commission on 24 November 2015, which for our part was driven by our belief in robust and corporate governance, and our responsibility to our investors to protect their investments where we deem it necessary.
The filing called for the appointment of an independent non-executive director to the Board of Northwest and, following this appointment, the convening of a special committee of non-executive directors to investigate recent allegations of financial improprieties and regulatory failure that have been published by at least one anonymous source.
Given the level of coverage, I believe it is appropriate to share my views on the situation with you, to give you the context behind our investment in Northwest.
When my team and I first met with Northwest we were attracted to 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.
Our conviction in the technology and early clinical data, supported by globally leading oncology clinicians, is the principal factor in our investment. Our long-term aim is also to help the company get into a position where it can attract the consistent funding it will need to successfully complete a Phase III clinical study and beyond. If the company is going to move into a sustainable position to attract a broader range of investors that, in turn, will give it a runway to complete its clinical trials, it needs to put these allegations to rest once and for all.
What I have said all along, and reiterate today, is that with some early-stage investments not everything will go well. There will be bumps in the road and some won’t make it to a successful destination. It is too early to pass judgement on Northwest but we have hit a bump in the road that needs to be addressed.
We have often talked about how, as active fund managers, we engage with boards to represent the interests of our shareholders. The situation with Northwest is such an example. We remain confident in our approach to early-stage investments across all sectors. Indeed, we have seen some notable success over the past 18 months that have contributed to some positive performance for our investors.
Over the next few weeks, we hope that an investigation of the allegations will begin and I will, of course, keep you up-to-date on developments.