Patient Capital Trust update, December 2017

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Mitchell Fraser-Jones 19 January 2018 Est. reading: 4 min read

Mereo BioPharma

During the month, UK-based biopharmaceutical company, Mereo BioPharma, released positive top-line results from its phase II trial for BCT-197, an orally active agent for acute exacerbations of chronic obstructive pulmonary disease (AECOPD). The data showed that the treatment met its primary endpoint for both low and high doses, demonstrating a statistically significant improvement in forced expiratory volume-one second (FEV1) – a measure of how much air can be exhaled in one second following a deep inhalation which is used to assess whether the respiratory capacity of patients suffering from severe pulmonary diseases has improved or not. Additionally, the results evidenced that BCT-197 is safe and well-tolerated.

In our view, this is excellent news which again underlines the solid progress that Mereo has been making in advancing its innovative pipeline of assets. We are delighted with Mereo’s overall development and believe it is increasingly well-placed to create substantial shareholder value over the long-term.


Animal health and genetics business Benchmark announced that its next generation sea lice treatment, Ectosan, successfully completed its first commercial scale field trial. The treatment demonstrated 100% efficacy against sea lice with no environmental impact, due to the company’s proprietary purification system (Cleantreat) that removes any detectable trace of medicine from treatment water before discharging it into the ocean.

This is an important breakthrough for Benchmark which has been developing this product since its initial public offering in 2013. Although further field trials in key market are still required, this development represents a significant step forward for the business in its efforts to commercialise Ectosan as a potential treatment for one of the salmon industry’s biggest disease challenges.

Xeros Technology

Xeros announced a £25m placing during the month, in a key funding round which allows the business to proceed to the next phase of its development. Specifically, the proceeds will be used to accelerate the commercialisation of the company’s portfolio of waterless technologies (which includes cleaning technologies, tanning products and textiles applications) and to continue its research and development projects. We participated in the funding round, which also attracted new investors to the share register, as the business moves closer towards meaningful commercialisation of its revolutionary technology.


ReNeuron received regulatory approval to start a phase IIb clinical study in the US for its CTX cell therapy for patients suffering from stroke disability. This is a great example of the patience that is required to achieve successful outcomes in this area of investing – the CTX cell therapy technology has already been in its development phase for almost ten years.

Although this particular study is expected to read out in late 2019 and further pivotal trials are likely to be required before the company can progress towards market approval, the commercial opportunity ahead for ReNeuron’s innovative pipeline of assets is, in our view, substantial.

ReNeuron, thus far, is doing everything that we hoped it would in terms of operational development. The long-term potential here is undeniable but the short-term interest from the stock market remains almost imperceptible. In an increasingly short-term world, businesses like ReNeuron are exactly the sort of investment opportunity that the Patient Capital Trust was set-up to support, nurture and, ultimately, benefit from as they fulfil their commercial potential. As we have consistently said, not all will fulfil that potential, but the rewards for those that do succeed will be substantial.

RM2 International

The company announced in December that it had been unsuccessful in securing funding for the year ahead. RM2 has had its fair share of challenges in recent years and in many respects, it epitomises how difficult it can be for early-stage businesses to develop and scale-up. We continue to see value in the disruptive pallet technology that RM2 International has been progressing towards commercialisation, overcoming many production challenges and enhancing the product offering along the way. The position is now small in the context of the patient capital portfolio but we will continue to work with the company to find an appropriate solution for its capital requirements and to give it the best chance of fulfilling its potential.


Scifluor Life Sciences, an Allied Minds portfolio company which is held directly in the Patient Capital Trust’s portfolio, announced positive trial results from a phase I / II study of SF0166, its potential eye drop treatment for patients suffering from wet age-related macular degeneration (AMD). This disease eventually leads to blurred vision or even complete vision loss and it is generally caused by abnormal blood vessels underneath the retina that leak fluid or blood. Current treatments require frequent injections into the back of the eye but the effectiveness of this invasive therapy decreases over time. Therefore, the need for alternative therapies, such as SciFluor’s eye drops, is obvious.

The data demonstrated statistically significant biological activity, meaning that over 20% of the patients experienced a reduction in retinal thickness. Additionally, the results suggest that SF0166 is well tolerated. Combined with the positive trial results for SF0166 in patients from diabetic macular edema (DME) released earlier in the year, the company now has a robust data package that demonstrates the clean safety profile of its potential eye drop treatment which, importantly, appears to be reaching the back of the eye effectively. This provides strong support for the continued clinical advancement of this asset.

Woodford Patient Capital Trust plc
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What are the risks?

  • Young businesses have a different risk profile to mature blue-chip companies – risks are much more stock-specific, which implies a lower correlation with equity markets and the wider economy
  • Long-term outcomes are more binary – extremely attractive rewards for success but some businesses will inevitably fail to fulfil their potential and this may expose investors to the risk of capital losses
  • As it can take years for young businesses to fulfil their potential, this investment requires patience
  • The value of the trust as well as any income it pays will fluctuate which may partly be the result of exchange rate changes
  • The price of shares in the trust is determined by market supply and demand, and this may be different to the net asset value of the trust
  • The trust may invest in overseas securities and be exposed to currencies other than pound sterling
  • The trust may invest in unquoted securities, which may be less liquid and more difficult to realise than publicly traded securities

Important information

We do not give investment advice so you need to decide if an investment is suitable for you. If you are unsure whether to invest, you should contact a financial adviser. The trust currently intends to conduct its affairs so that its securities can be recommended by IFAs to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The securities are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an investment trust.

Woodford Investment Management Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 745433). Incorporated in England and Wales, company number 10118169. Registered address 9400 Garsington Road, Oxford OX4 2HN.

Woodford Patient Capital Trust plc is incorporated in England and Wales, company number 09405653. Registered as an investment company under section 833 of the Companies Act 2006. Registered address Beaufort House, 51 New North Road, Exeter, EX4 4EP.

The Woodford Funds (Ireland) ICAV (the “Fund”) has appointed as Swiss Representative Oligo Swiss Fund Services SA, Av. Villamont 17, 1005 Lausanne, Switzerland. The Fund’s Swiss paying agent is Neue Helvetische Bank AG. All fund documentation including, Prospectus, Key Investor Information Documents, Instrument of Incorporation and financial reports may be obtained free of charge from the Swiss Representative in Lausanne. The place of performance and jurisdiction for all shares distributed in or from Switzerland is at the registered office of the Swiss Representative. Fund prices can be found at

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