We have just heard from Prothena that the Pronto trial, investigating NEOD001 in AL Amyloidosis, has not met its primary endpoint. This is an extremely disappointing outcome and one which has surprised the company, with a much bigger and more significant placebo effect being observed than anything seen in prior trials would have suggested. As a result, Prothena has announced that it will halt all spending on NEOD001 immediately, including the termination of the ongoing Vital study, which had been due to read-out next year.
Over recent months, Prothena’s share price has been volatile with the market pricing in the prospect of a trial failure but, despite this, we should expect the market to react badly in the short term to today’s announcement. We have always been clear why we have backed Prothena and, given the positive progress throughout the development of this drug, we have been increasingly confident it would be successful. Such trial results are symptomatic of early-stage investing, however, and with specific regard to biotech companies, trial outcomes are binary. Nevertheless, the result of this trial is undoubtedly a blow and we will be working with the company and its management team on its strategy beyond Pronto.
Prothena has options. It still has an early and mid-stage clinical pipeline. It has a technology platform and a world-leading specialism in misfolding proteins, which are implicated in a number of different neurological disorders. This research platform has been validated by two major pharmaceutical companies – Roche (which is partnering Prothena in PRX002 in Parkinson’s disease, currently in Phase II trials) and Celgene (which has recently collaborated with Prothena on three earlier stage clinical assets). The company also has its own, unpartnered assets about to enter the clinic and, with more than $500m on its balance sheet, it is very well-funded.
The market may not acknowledge the monetary value of these attractions in the near term, but they are important valuation anchors for us, which allow us to maintain conviction in the long-term investment case, as Neil explains in the video below.
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Some might say this is the nature of investing – but apart from more bad news for the Equity Income Fund, it does lead me to question the approach to investments, when the stated aim is primarily around producing long term returns from under valued stocks (UK based), with solid credentials. This type of bio-tech surely sits outside of the stated objective, in its approach, to deploying this funds investments?
Hi Peter,
The objective of the Woodford Equity Income Fund (and indeed the Woodford Income Focus Fund) is to provide a combination of income and capital growth. The fund is primarily invested in UK stocks, but it does retain some flexibility to invest outside of the UK too. Investment opportunities such as Prothena have a role to play in delivering the long-term capital growth element of the objective. There is risk involved of course and in the instance of this particular trial, that risk has not paid off. But this sort of investment opportunity is very much within the remit of the funds’ stated objectives.
Kind regards
Mitch
I have recently decided to commit to the EI fund, albeit with only c40% of my previous maximal holding
For all it’s previous failures I personally think it’s currently generally in reasonable shape going forward
Regarding Prothena this has been a long time coming
I am not dismayed – as being a doctor myself – I know that amyoidosis is a vanishingly rare condition so even if the drug succeeded it would have had a very small clientele to serve. Having said that I am glad not to be invested in the PC fund where the weighting for a biotech is far too high.
I would like your team to remember that you should not place too much emphasis on being angel investors in early unquoted stock but look much harder at firm fundamentals – including future guidance – for ALL of your holdings
But I am in for the next few years and least – so thank you for all of your work going forward
Simon,
Thank you for your support.
Kind regards
Mitch
I’ve invested with Neil since perpetual high income – paper certificates – and he’s always been amongst my largest holdings, even during the tech bubble etc. I am getting concerned about the performance since striking out on his own though.
The hedge funds called prothena right so why did we get it so wrong, having 9-16% of wpct invested in prothena seems a fine line between bold and reckless. Anyone who makes decisions will get some wrong but there just seems too many that could / should have been avoided / reduced at the moment – we all know the names over the last 18 months. Even some of the tech investments that have not gone south seem dubious in their logic.
Has the investment process changed since starting up woodford, is there enough resources to support Neil, is he missing a key lieutenant from previous roles, is he focusing on the company rather than the investments, spreading himself too thin, are you getting too close to management – they all talk their own book but has this part of the process changed (thinking prothena, provident, capita etc)
Appreciate you taking the time to clarify some of the above.
Steve.
As a very long term investor with NRH I too echo Mr Dunn’s comments in particular is there a key hire required, perhaps to support the analysis of the biotech sector?
Hi Geoffrey,
I’m not sure what you mean by NRH but I can confirm that we believe the team to be appropriately resourced, with qualified specialist knowledge in this area. Lucinda Crabtree, a senior investment analyst for the team, holds a PhD in pharmacology from University College London and has several years of experience in analytical roles at large international banks focused on the pharmaceutical and biotechnology sectors, as well as significant experience in the pharmaceutical industry itself. Saku Saha, meanwhile, although not from a scientific background, has been working alongside Neil since 2009, with a specific focus on early-stage healthcare companies. We can and do also draw upon a wealth of experience from our network of specialist contacts, in order to analyse the many different aspects of clinical trials, from design through to data.
Clearly, none of this completely eradicates the probability of making errors of judgement but we do believe we have the right resources in place.
Kind regards
Mitch
Hi Steve,
Thank you for your support. As a long-term investor in Neil’s funds, you will be very familiar with the attractive returns he has generated over a very long period of time, and the fact that there have been periods in the past when he and his investors have had to endure periods of under-performance.
We do understand why you’re asking these questions, and we want to do our best to avoid you and other clients drawing the wrong conclusions about the causes of the recent run of disappointing performance. We will be providing more content to help answer your questions and others like them in due course, but in the meantime, you may find the links below helpful.
We can confirm that the the foundation and core disciplines of Neil’s investment approach and process have been in place consistently for many years. Neil answers that question here: https://woodfordfunds.com/words/awkward-corner/changed-approach-since-started-woodford/
Neil answers your question about the quality of his team versus history and the current team’s resources, here… https://woodfordfunds.com/words/awkward-corner/big-enough-team/
…and here: https://woodfordfunds.com/words/awkward-corner/youre-spending-much-time-early-stage-companies/
Kind regards
Mitch
About a tenth of the fund was invested in PRTA.
In the November 2017 update on this investment, prompted by the announcement that there would be a delay in the read out of the NEOD001 study, Mr Woodford said that he had spent some time trying to understand the causes of the delay, and that he had concluded the delay was encouraging. That was because, he said, the delay “can only be for two reasons. (1) The standard of care has improved (or is better than the dataset had suggested). (2) NEOD001 is working”. Having dismissed the possibility that the standard of care had improved, he concluded that NEOD001 was working. This formed the basis for the continued conviction in the investment: a conviction so strong that it justified keeping a tenth of fund invested in a single company.
As we now know, these were not the only two possible reasons for the delay in the read out. There was a third possibility. The third possibility was that NEOD001 was simply not working, and that the read out was delayed by PRTA in the hope that a longer study might generate a positive result. Indeed, ‘David H’ made a comment on this blog on 23 December 2017 to precisely that effect. He explained convincingly, and at length, that if the trial had been extended then this could only be because “the differences between the study arms is too small to allow statistical significance to be reached with the number of events that they expect to have accumulated by the end of the study at the current event rate.” As he said, the explanation given in WIM’s blog, if true, would have resulted in the suspension of the trial.
Did WIM have any scientific basis (other than what it might have been told by the board of PRTA, who had a powerful vested interest) for the palpably false assertion that there were only two possible explanations for the delay in the read out?
There is only ever 1 reason for a delay in a clinical trial to report – the endpoints have not been met.
As a doc I know this for a fact.
Please team take this advice on board wrt all of your Pharma holdings in whichever fund
Please could you give us some information on the medical or pharmaceutical background of the employees of WIM involved in reseach into your biomedical holdings. I am medically trained and read the Kerrisdale report. I could find nothing to reassure me that the drug prospect was likely to be an effective treatment for AL. Who in your organisation saw something so different in this report that gave you the confidence to be so critical of those shorting this share. Hubris is the word that springs to mind.
Nab,
As you may have seen in response to a previous comment, Lucinda Crabtree, a senior investment analyst for the team, holds a PhD in pharmacology from University College London and has several years of experience in analytical roles at large international banks focused on the pharmaceutical and biotechnology sectors, as well as significant experience in the pharmaceutical industry itself. Saku Saha, meanwhile, although not from a scientific background, has been working alongside Neil since 2009, with a specific focus on early-stage healthcare companies. We can and do also draw upon a wealth of experience from our network of specialist contacts, in order to analyse the many different aspects of clinical trials, from design through to data.
Clearly, none of this completely eradicates the probability of making errors of judgement but we do believe we have the right resources in place.
Kind regards
Mitch
Mark,
With the benefit of hindsight, the reason for the Vital trial delay was likely a combination of both of the explanations that we outlined at the time. It is worth noting that the Hazard Ratio 0.84 announced last week indicates that drug arm of the study was indeed doing better, but the margin of difference between the two arms was not sufficient to be statistically significant. We stand by the scientific basis upon which we made that judgement, using the information that was available at the time.
Regards
Saku
Ouch, Prothena down 60%, WPCT 11% down, and this will take about 5% off the NAV of WPCT.
The total blow is not about PRTA, it’s about WPCT. I am not an expert but during the last few months I could pick up enough expert opinions to totally doubt monoclonal antibodies’ merit in many types of treatments because of their size, excessive complexity, and instability (I left a comment anticipating this back in January). My mea culpa in not having exited WPCT when the losses were more modest. At this point I believe that Neil may be out of his depth trying to invest in investigational biotech microcaps like PRTA. He would do much better if he stuck to companies he can really understand. Just an opinion.
Very disappointing news – just when the Trust seemed to be regaining some of its value at long last, it then gets wiped out in one stroke due to a single piece of bad news affecting one holding (albeit a large one at c 9%). I’m trying really hard to be ‘patient’ but that is being severely tested to be frank and I think one more failure will see me cut my losses and run to the arms of a ‘luckier General’ as Napoleon might have said.
Hi David,
We completely understand your perspective and share your disappointment. Hopefully you will have seen the WPCT annual report that was published earlier this week (https://woodfordfunds.com/words/insights/wpct-annual-report-2017), which should provide you with a bit more encouragement that there is a lot of positive stuff going on in the Patient Capital portfolio which should not be overshadowed by Prothena, despite its significance.
Thank you for your patience so far.
Kind regards
Mitch
I’m reminded of Lady Bracknell’s comment, “To lose one parent is unfortunate; to lose two is sheer negligence.”
Too many disappointments and upsets in major Fund holdings.
Apologies/explanations have become too regular.
Question judgement and accuracy of analysis.
Kerrisdale said Prothena had issues and you dismissed the advice. I had independent analysis of the two arguments and your explanation was considered very week. I therefore sold my holdings in WPCT crystallising significant losses. Thank heavens I did! However what’s more to the point is why on Earth is Prothena in the Income Focus Fund (which I still hold) it doesn’t pay any dividends does it? Surely this is misleading ? Why am I sitting on further losses for a dodgy biotech ? Having been burnt by your poor judgement on Northwest Bio, circassa, shire, etc etc I thought I would put that part of my investing career down to my own stupidity. However I find that for some reason you have sneaked in exposure to this “binary gamble” within a supposedly safe and steady dividend fund. Why ????
Hi Steve,
Prothena was added to the Woodford Income Focus Fund in November last year – we wrote about it at the time (https://woodfordfunds.com/words/insights/wiff-november-2017/), explaining that our confidence that the fund was on track to exceed its income target had allowed us to “free up a small part of the portfolio to opportunistically capture some long-term capital growth potential for the fund”. I note that you commented on its inclusion on the subsequent month’s fund roundup.
You are correct that Prothena does not pay a dividend but although the vast majority of the fund’s holding are income-bearing, it is not a prerequisite for inclusion in the portfolio. Clearly, in the case of Prothena and the Pronto trial, events have not played out the way we had anticipated. However, I do not believe it is appropriate to suggest that we have sneaked this exposure into the fund when we have been fully transparent in publishing all portfolio holdings and explained the rationale for its inclusion.
Kind regards
Mitch
Another disappointment along with Capita. Patience and loyalty are in short supply !
did you ever read the article that kerrisdale capital published prior to their short?
they spoke to more than one expert on the subject who said it was a scientific impossibility that the drug would work.
this has shaken my belief in the woodford team. even more so when i see neil’s video where he appears once again to dismiss this setback as just another hump in the road and accuse the market of overreacting.
Hi Bernard,
Yes we did. For what it’s worth, although the Pronto trial was not successful and the Vital trial has been halted, there was some evidence that the drug was effective – just not well enough to be statistically significant.
Kind regards
Mitch
Thank you for the update. I’m not too disappointed though. In the last few weeks I’ve seen some positive movements in the other holdings in the equity income fund which I hope will continue. Many of the holdings seem genuinely “cheap” and will surely move up in the months ahead. I expect a good year for the fund.
Me too
Thanks Nick and Simon.
SP now 76p. This patient needs a painkiller.
It seems like WPCT price correlation to Prothena stock is MASSIVE. Is really WPCT = Prothena and that’s it..?
There needs to be some accountability for this. Or at least an actual apology for getting the call so wrong. I’m not expecting a public self-flagellation but at least a bit of humility instead of just trotting out the same old “the markets have reacted badly” line.
The most concerning thing as an investor is that this is not a one off mis-call. This is the same pattern as previous busts. E.g. Capita – meeting with the board in December in which you say you were “reassured” by the business case and thought a profits warning unlikely, share price fall was irrtational and markets weren’t seeing the true value of the company – followed the following month by a triple whammy of profits warning, cash call and dividend suspension leading to a collapse in the share price.
For Provident you met with the board after the first profits warning, were reassured that the transformation was going well, said stock was oversold etc. Share price cratered after the second profits warning and hasn’t recovered since.
For PRTA you had a “very positive meeting with the management team” in December, again accepting reassurance from them on the business case and in particular NEOD001’s prospects, despite initial data looking shaky and massive short interest.
Is there really any value in meeting with boards when you know they have a vested interest in giving a rosy picture? Look at the hard data and make your own decisions. Kerrisdale and Muddy Waters both issued detailed reports on why NEOD001 was doomed to fail. I’m no fan of short sellers but the actual data analysis was never refuted in any detail by Woodford.
Mr Jones is right on point. Boards and management have to give a comforting picture. For them to say “it’s worse than it appears” won’t happen. Becuase it’s called market sensitive information and illegal.
So why NW buys that line is beyond me.
It begs the question why so much of the fund and the income fund is in this one super risky company?
Given your conviction and off the back of the 60% plus decline in Prothenas share price today will you be buying more at this ‘bargain’ price?
I like other shareholders despair at the lack of progress in share price and nav we are years in and there is no light at the end of the tunnel of even getting my original investment back… and I fail to share your optimism of this changing any time soon.
Urgh another disappointing update for another holding …patience is certainly being tested
Oh dear, looked like Kerrisdale called it then. Shares like this have no place in an income fund, buy some Shell and Bp, oil going to 100 bucks a barrel!
Mitchell you mention the company has 500 million dollars in cash.
Do you know as of what date this was and also what debt the company has? It looks like equity market cap at US close last night was below 500 million.
Hi Darren,
Prothena’s published 2017 year end cash figure was $418m. Our current estimate of more than $500m on Prothena’s balance sheet takes into account its forecast cash burn rate and the recent investment of $150m from Celgene.
You are correct, the share price reaction has taken Prothena’s market cap to a level which is below this estimated cash value.
Kind regards
Mitch
Seems like a similar scenario than that experienced at Circassia – promising data presented at each trial phase in order to extend funding and then a complete blank at the final fence – seems rather suspicious and illustrates the risk management by any investor in this kind of company. If the scientists don’t have any surety in the outcome of their research trials, it sure means that everyone else is gambling on a binary outcome.
Maybe it’s time to mitigate risk and weed out many other biotech companies where investment is akin to a long shot, low odds gamble.
LR
This is very disappointing. I’ve been investing for several decades now, so there are a few companies and funds that I wish I’d never heard of, and WPCT is now one of them. Down about a quarter since launch, if you compare performance with a simple All-Share tracker, it is down by over a third. I am reminded of Woody Allen’s film (Midsummer Night’s Sex Comedy), where he asked what his job in Wall Street involves, and he says “I help people with their investments until there’s nothing left”.
I’ve watched the clip of Neil’s response this morning, and I was struck by his assertion that there was not much in Prothena’s price, at $36, for what he referred to as “D1”. The market obviously disagrees, because yesterday it marked the shares down nearly 70% on the news of the trial failure and abandonment. You may argue that this is an over-reaction, that the market has got it wrong, but I wonder if it was wise to have such a big bet – 9.2% of the fund at the year end – in a stock that could lose 70% of it’s value on the result of one trial. Neil argues that the market does not recognise the value in the stock, but he did likewise with Allied Minds and Circassia, and neither of those have made any serious recovery following failure of trials and write-offs. I get the impression that the managers have become somewhat detached from reality. Added to this the mistakes in other funds, including Capita and Provident, the error of judgment concerning Northwest Biotherapeutics, and I have come to the conclusion that my faith in the judgement of the management team has been exhausted. Time to exit.
I have been very grateful that I have been invested in Neil Woodford funds for many years. Nobody needs me to tell them that he is an excellent fund manager. However I bitterly regret investing in WPC where he seems to have moved beyond his expertise. We saw a similar situation when Anthony Boulton set up the Fidelity China fund. In that case Fidelity was able to install a new fund manager and now the fund is doing well. My concern is that there is no one to tell Neil Woodford that he needs to be replaced at WPC by someone with the right expertise. I would love to see him focus his full attention on the EI fund again.
Much appreciate the detailed updates, Mitch. Thank you.
Buffett teaches that the three most important words in investing are ‘Margin of Safety’. We’d probably all agree that drug discovery is an unusually difficult business, no matter how credible management, the rationale behind the approach, or the promise of early data. The chances of success for a new therapy are low, or, said in another way, the risk of failure is very high. That applies to all pharma, but more so in the case of biotechs.
Therefore to have (had) such a large Prothena holding, almost 10% of one fund, could be seen at best as naive or at worst as reckless. And the risk for their other pipeline drugs can be no better. For Prothena, where did you and do you see the margin of safety? Is biotech drug discovery (as distinguished from medical technology companies) within Neil’s circle of competence?
Thanks.
Hi Victor,
The margin of safety we saw in Prothena is as outlined in the video of Neil. The cash on balance sheet, the other partnered and non-partnered assets, its technology platform and its world-leading expertise in protein misfolding. None of this has helped in terms of the market’s reaction to the trial failure, but in our view, the value of these assets is greater than the c. $36 share price that prevailed prior to last week’s news.
On the subject of biotech drug discovery and development, our track record of trial successes is better than the industry average. Our realised clinical trial success rates are more than 80% across all three phases, which compares to a an industry average success rate of 63% for Phase I, 31% for Phase II and 58% for Phase III (source: BIO / Biomedtracker). This may come as a surprise because the trial failures have been in high profile and high conviction positions, but we can point to evidence that this is indeed an area that sits within the team’s circle of competence.
Kind regards
Mitch
Thanks for taking time to respond in full, Mitch. Interesting.
For the team’s sake I hope Prothena comes thru with its other drugs. But for my money they remain exceptionally risky bets with low predictability. Their technology platform and expertise in protein misfolding will not have great value per se, but maybe the company will get acquired.
Success in drug discovery is when new medicines are launched and become commercial successes. Anything prior to that is merely a stepping stone.
Thanks again and good luck.
Kind regards
Victor
Hi Mitch,
I understand you regarded the pre-collapse price as cheap. In light of this failure of NEOD001, would you still regard the average purchase price of $40 good value considering the other assets in the company?
The market of course takes a different view but do you expect a material appreciation in the price from here in the next year or two?
I am also disappointed with the share price collapse, but if the other assets and future successes will support a materially higher share price in the not-too-distant future, I will be somewhat re-assured.
I believe something along these lines was asserted in relation to Allied Minds. But that has not come to fruition.
Please advise.
Thanks
Peter
Hi Peter,
As I outlined in my reply to the comment above, yes, we do believe the collective value of Prothena’s assets (cash on balance sheet, the other partnered and non-partnered assets, its technology platform and its world-leading expertise in protein misfolding), is greater than the share price that prevailed prior to last week’s news.
Regarding Allied Minds, there is one important word missing from your phrasing – “yet”…
Kind regards
Mitch
Deeply disappointing, especially given the recent progress in WEIF and WPCT. Further good news today completely buried in the tidal wave of justified criticism about Prothena. In all of the very public failures, a single question remains unanswered – how do short sellers such as Kerrisdale and Muddy Waters know more about companies than major investors. These are not self-fulfilling prophecies. They are failures of due diligence even in the face of clearly identified risks. Some responders to this post have identified the potential problem of misplaced loyalty. There may indeed be some rebalancing required between loyalty to management and loyalty to investors. In spite of emerging evidence in support of the WIM macroeconomic analysis, this further individual failure is likely to lead to increased outflows from the funds.
Hi Ray,
We would agree with you about the recent progress being seen elsewhere in the portfolios, but believe you are jumping to the wrong conclusions regarding due diligence and loyalty, as our replies to other comments on this article will suggest.
Kind regards
Mitch
Mitch,
Many thanks for taking the time to respond to my comment. I wouldn’t expect you to do anything other than defend WIM’s approach in terms of loyalty and diligence. In fact, as an investor, I would be disappointed if you didn’t. My point, albeit awkwardly put, is that the broad positive picture has again been masked by a high profile negative story. Many people are coming to a negative conclusion about why that is. One friend recently commented that the WIM approach was beginning to look contrary rather than contrarian. Whatever the truth, the fact is that outflows due to loss of confidence are having a particularly bad effect upon the WPCT. I’m clinging on but finding it a real challenge.
Hi Ray,
No problem – we are fully aware of the conclusions that some investors are drawing, which is why we will continue to try to address misperceptions where we believe they exist.
Thank you for your patience and support.
Kind regards
Mitch
I can understand why such a high risk company (high risk because the majority of new drug trials are halted due to safety or efficacy hurdles not being jumped) being in the WPCT trust with other high risk quoted/unquoted biotech’s but what on earths is Prothena (and Allied Minds for that matter) doing in the Income Focus Fund at nearly 2% of the fund when it is such a high risk and pays no dividend? Yes, you can point out the Income Focus fund states is will only invest in quoted companies and doesn’t say each investment will be a dividend paying company but the crux is that the impression given is the fund is investing in reliable dividend payers. I’m confident the majority of Investment Focus investors will have invested in this fund rather than WPCT because of this. May I therefore ask are you going to continue to include companies such as Prothena and Allied Minds in your Income Focus fund?
Hi Robert,
As I confirmed in reply to another comment, the objective of the Woodford Income Focus Fund is to provide a combination of income and capital growth. As the name suggests, there is a focus on the former but, although the vast majority of the fund’s holding are income-bearing, it is not a prerequisite for inclusion in the portfolio.
Prothena was added to the Woodford Income Focus Fund in November last year, along with Allied Minds and Purplebricks. We wrote about it at the time (https://woodfordfunds.com/words/insights/wiff-november-2017/), explaining that our confidence that the fund was on track to exceed its income target had allowed us to invest “part of the portfolio to opportunistically capture some long-term capital growth potential for the fund”. Clearly, in the case of Prothena and the Pronto trial, events have not played out the way we had anticipated, but this sort of investment opportunity is very much in keeping with the remit of the funds’ stated objectives.
Kind regards
Mitch
Do you (Woodford team) have a follow up review with the managers of the companies that fail to live up to the expectations that they give to you (and you by turn to us)? What is that conversation like? I too wonder what the point of interviewing a company’s management is if they are free to tell you that the outlook is positive when it seems they must know clearly at the time that it is not.
You have held on to many “investments” like Prothena regardless of negative indicators. I have tried to stay optimisitic with you, but felt that I had to stop the risk of continuing capital loss since July 2017 as the bad news never seems to end. I can only believe that it is harder for we who give you our savings to look after to shrug off prolonged periods of persistent losses and bad news than it is for you and your team, who seem to remain blase and optimistic. Bluntly I doubt the loss has as much impact on you as it does on us who are more likely to rely on the money and income for pension etc..
I had intended to be invested in a UK Equity Income Fund managed by a team with rock solid reputation and so potentially lower risk. But is that still the case?
I now sit on the fence with some money still in the LFW Equity Income fund and other money out waiting for signs of re-assurance that there is a positive future.
I, as others have mentioned, would like to know why the LFW Equity Income fund (and perhaps the Income Fund) haven’t remained focused on their original intent? I saw the Mark Dampier interview where it was suggested that the LFW Equity Income fund will shortly no longer qualify to be classified as “Equity Income”. Trustnet I notice now state the asset class as “Equity” rather than “Equity Income”. Hargreaves Lansdown write “.. we view this as a higher-risk UK equity income fund..”. How do you classify it and where do you want to take it? Do we expect a name change shortly?
If it is no longer an Equity Income fund (UK?) I will need to look elsewhere.
Just as a matter of interest do you record conversations with management?
If so do you tell them they are being recorded?
Nothing wrong with not being too cost
It’s business after all
Hi Michael,
Yes, we have regular meetings with all companies in which we have invested, regardless of whether they are performing in line with our expectations or not.
With regard to fund names, we have no plans to make any changes because we believe they are a clear reflection of what the funds intend to deliver. Those intentions have not changed, nor have the investment objectives, which can be found on our fund facts pages (links below) and in all other fund specific literature:
https://woodfordfunds.com/funds/weif/fund-facts/
https://woodfordfunds.com/funds/wiff/fund-facts/
Kind regards
Mitch
On the 5th March 2018 in the “year to Date Round Up of the 1st of March 2018” I posted the following:
>
I notice that you have stated in your replies to others that: “We are confident that distributions from the Woodford Equity Income Fund will be modestly higher in 2018 than they were in 2017 at the fund level”.
Can you please confirm how you measure this? I am expecting that you are stating that “the distribution per unit held” will be higher rather than “the distribution per £ value held in the fund”?
You replied: That is correct, we’re measuring that per share, rather than per £ value. We wrote an article about this in 2016, which may be worth revisiting: https://woodfordfunds.com/words/blog/income-progress/
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Today I notice that the estimated distribution for the LFW EQUITY INCOME Fund with XD date 03APR2018 is the second lowest distribution in any period to date (the lowest being Jan2015). Do you still have the confidence in exceeding the 2017 ditributions this year? They have been lower year to date than 2017, 2016 and 2015. If you are no longer confident what has happened since March 5th 2018 when you were confident?
Thank you.
I asked the question about Prothena many months ago. Of all the biotech companies available for investment why choose this one for such a large bet. With such a high risk portfolio?. I think WPCT needs a stronger scientific due diligence team. There is a number of examples of costly failures (PRTA, Allied Minds, Circassia, northwest bio, vernalis) . I cannot remember any significant success stories to balance these?
I would also be very interested to hear an update on projected income from the LFW Equity Income during 2018. Specifically, and as per Michael’s comment above, if you still forecast it to be higher than previous years.
Hi B,
Please see my reply above – in summary, yes, we still intend to deliver modest growth in income from the Woodford Equity Income Fund this year.
Kind regards
Mitch
Hi Michael,
We remain confident that both open-ended funds will deliver against the income expectations that we have previously laid out. There will always be some volatility in the quarterly distributions, which relates to changes to the portfolio’s composition as well as changes to the level of dividend payments from individual companies. The first quarterly payment this year is the first in which the Provident Financial dividend suspension impacts fully (last year, it paid its final dividend in February). This will explain in part the lower payment this quarter from the Woodford Equity Income Fund, but I can confirm that we still intend to deliver modest growth for the year as a whole.
Kind regards
Mitch
Interesting to read all the comments, one starts to get the picture that Woodford fund customers are starting to get fed up with the bad news, time after time. The fund is happily loosing its customers funds, funds that should be showing some element of growth after this time. Neil and his team needs to remember that every pound lost is the future of his customers, their pension, funding for their future.
Indeed, certainly not the fund nor investment concept offered by WIM. I had funds in WIF since inception, with recent rise in ftse100 over last few days I’m back to parity (plus a small return but less than inflation). No place in this fund for Prothena, purple bricks et al. Sold bulk yesterday and remainder has been cashed in today. I’m out, DONE.
My wife also has a modest sum in her ISA with EIF and she intends liquidating shortly with only very modest gains from the 115p or so at which she bought in.
WIF are doing their clients a disservice by investing seemingly so outside of the remit of the funds’ theses.
Hi Gary,
We are always very aware of whose money it is that we manage. I don’t think it’s fair to suggest that we are happy about disappointing performance but we are confident that the funds are positioned appropriately.
Kind regards
Mitch