Patient Capital Trust update, June 2017

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Mitchell Fraser-Jones 14 July 2017 Est. reading: 3 min read

Home > Words > Insights > Patient Capital Trust update, June 2017

The Woodford Patient Capital Trust delivered a positive return in June, with the bulk of positive contributions coming from the trust’s biotechnology holdings.

Prothena and Theravance Biopharma both saw their shares climb higher on renewed appetite for US biotech stocks. This is of course a sector that has been subject to some sharp swings in sentiment over the last couple of years and, although it is difficult to fathom exactly what has driven the recent pick-up in share prices, it has been helpful to short-term performance. The market has exhibited a fickle tendency towards the sector as a whole, so it is worth reminding investors that our interest in the sector is focused on the specific and compelling attractions of individual biotechnology companies. Their return to form in recent weeks is pleasing but it is a drop in the ocean when compared to the long-term potential that they hold.

Meanwhile, UK biotech business Abzena also performed well. The company reported an encouraging set of full-year results, updating investors on the excellent overall progress it has made in building a services platform that can support significant future growth.

During the month, we also visited Proton Partners’ Rutherford Cancer Centre in Newport, South Wales. This was a great opportunity for us to get an update on the excellent progress Proton Partners is making in bringing proton beam therapy to the UK. Proton beam therapy is an innovative oncology therapy which uses protons (sub-atomic particles) to target and kill cancer cells with little or no damage to the surrounding tissue.

Proton Partners has successfully fired the first high energy proton beam using its first cyclotron – a proton beam therapy system which weighs 90 tonnes, has to be super-cooled to four degrees Kelvin (or -269 degrees Celsius!) and speeds up hydrogen atoms to two-thirds of the speed of light before firing a proton. This sounds (and looks) like a machine from a sci-fi movie or book – but it is very real. Proton Partners will also install cyclotrons across its other treatment centres which are currently under development across the UK. We are pleased with the company’s rapid progress to becoming a leading developer and provider of proton beam therapy and we expect much more to come from this highly innovative business in the years ahead.

On a less positive note, Benchmark performed poorly despite reporting an encouraging set of half-year results. The company is well-placed to benefit from the long-term growth of the aquaculture industry which is expected to become a much more important part of the global food market in the future. Its management expects to have two-to-three key products launched by the end of this year. However, its share price implies that some investors are frustrated at how long it is taking for the company to successfully execute its growth strategy. We however continue to believe the company can deliver attractive returns going forward as it takes advantage of its unique position in this growth industry.

In terms of portfolio activity, we participated in a couple of funding rounds – one for Drayson Technologies and one for Accelerated Digital Ventures. Drayson is progressing well but at a slower pace than we previously anticipated and therefore, the new funding round corresponded with a downward revaluation of the trust’s holding in the company. We continue to believe that Drayson’s technology has considerable commercial potential – as reflected in its strategic agreement with the University of Oxford and the Oxford University Hospitals NHS Foundation Trust, which was announced earlier this week. This deal will enable Drayson to commercialise world-class digital health technology and reinforces our confidence in this innovative young business.

Meanwhile, the funding round for Accelerated Digital Ventures was a further tranche, in line with our initial investment agreement and did not result in a change in valuation. This additional capital will provide Accelerated Digital Ventures with the necessary financial capacity to continue to nurture and expand its investment portfolio of exciting early-stage digital businesses.

We also added to the trust’s positions in Halosource, Thin Film Electronics, Idex, Theravance Biopharma and Xeros. There were no disposals during the month.

We remain confident in the trust’s ability to deliver attractive long-term returns to shareholders.

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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