Patient Capital Trust update, October 2017

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Mitchell Fraser-Jones 17 November 2017 Est. reading: 4 min read

It was a challenging month of performance for the Woodford Patient Capital Trust, despite, as the stock specific updates below highlight, continued meaningful operational progress across a number of holdings. Although this has not yet been reflected in share prices, we remain very confident that ultimately it will be. In the meantime, we understand that investors may feel impatient at the lack of NAV progression. However, we would remind investors of the long-term nature of this investment vehicle and the length of time it can take early-stage businesses to mature.


ReNeuron reported two positive developments during the month. Firstly, the company reported supportive pre-clinical data for ExoPr0, its exosome therapy candidate for cancer. Exosomes are nanoparticles which are believed to play a key role in a number of cell functions, including regulating cellular immunity and helping the activation of repair mechanisms in diseased or injured cells. This asset is at a very early-stage of its development but the new data is very encouraging, as it underlines the potential of ExoPr0 as both a drug delivery vehicle and a therapeutic platform with broad applicability in multiple diseases, including solid tumours.

Meanwhile, towards the end of the month, ReNeuron released further positive news from the phase II clinical trial (Pisces II) of its CTX therapy for sufferers of stroke disability. The company first reported positive data from the trial late last year and this additional release re-enforces the clinical potential of ReNeuron’s therapy. The data demonstrates that patients sustained the positive effects of the treatment – regaining some of the motor function lost after stroke – for 12 months. This indicates that CTX is well-tolerated and has the potential to produce meaningful improvements as a therapy for stroke disability.

RateSetter (unquoted)

Peer-to-peer lending platform, RateSetter was granted full regulatory authorisation by the Financial Conduct Authority (FCA) during the month. This represents an important milestone for the business, as it provides validation of the company’s business model and paves the way for the launch of its individual savings account (ISA) range. Already, Ratesetter has more than 50,000 investors and has lent over £2bn – full regulatory approval opens up the opportunity for significant further expansion.

Evofem (unquoted)

Evofem, the US biotechnology business which has been an unquoted holding in the portfolio since November 2015, has agreed a merger with US-listed business Neothetics (not held in the portfolio). The deal, which is expected to complete in the first quarter of 2018, is essentially a reverse takeover, through which the newly formed company, Evofem Biosciences, will attain a Nasdaq listing as a specialty pharmaceuticals business focused on the $9bn women’s health industry.

Evofem’s main asset, Amphora, is a non-hormonal, woman-controlled contraceptive gel which is currently in a phase III trial which is expected to read out in late 2018. The company is also identifying and developing other novel products to address unmet needs in sexual and reproductive health. This deal is very good news, because it creates a strong platform for the future development of Evofem’s pipeline and represents a significant step forward in the company’s journey towards commercialisation.


Norwegian technology business Idex announced during the month that it has reached an R&D agreement with its major global partner in payment cards to deliver advanced biometric technologies for payment card products. Although financial details of the agreement were not disclosed, this is a positive development for Idex in its efforts to commercialise its technology in the biometric payment card market, which is expected to grow substantially in the years ahead.

Idex shares have been under pressure in recent months, as investors reacted to the narrowing opportunity for its fingerprint sensor technology in mobile phones. However, the Idex share price does now appear to be significantly undervaluing the potential that exists for the company in the payment card market, as demonstrated by this latest announcement, which moves Idex even closer to its commercial goals.

Mereo BioPharma

Towards the end of the month, Mereo BioPharma announced that it had reached an agreement with AstraZeneca to acquire an exclusive license for AZD9668, which is being developed as a potential oral therapy for alpha-1 antitrypsin deficiency, an untreated orphan disease that causes progressive lung destruction. Mereo will now initiate a phase II trial for the asset in this condition and the agreement includes the option to acquire it outright, should the trial proceed successfully.

This new deal brings Mereo its fourth clinical-stage asset, which is already supported by substantial clinical data in a range of respiratory conditions. The deal also brings AstraZeneca on to the Mereo share register. From our perspective, this latest deal makes sense financially and provides further validation of the Mereo business model, which looks to acquire and develop novel, mid-to-late stage therapies from major pharmaceutical companies. These assets are typically in rare and specialty disease areas which means they are too small to be prioritised by the major industry players, but they represent meaningful opportunities for Mereo to pursue, develop and commercialise.

Woodford Patient Capital Trust plc
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What are the risks?

  • The value of investments and any income from them may go down as well as up, so you may get back less than you invested
  • Past performance cannot be relied upon as a guide to future performance
  • The ongoing charges figure is charged to capital, so the income of the funds may be higher but capital growth may be restricted or capital may be eroded
  • The funds may invest in other transferable securities, money market instruments, warrants, collective investment schemes and deposits – some of these security types could increase the funds’ volatility and increase the level of indirect charges to which the funds are exposed
  • The funds and trust may invest in overseas securities and be exposed to currencies other than pound sterling – as a result, exchange rate movements may cause the sterling value of these investments and the income from them, to fluctuate
  • The LF Woodford Income Focus Fund will be invested in a concentrated portfolio of securities – the fund is not restricted by reference to any geographical region, sector or market capitalisation
  • The LF Woodford Equity Income Fund and the Woodford Patient Capital Trust may invest in unquoted securities, which may be less liquid and more difficult to value, because they are generally not publicly traded – the lack of an open market may also make it more difficult to establish fair value
  • The price of shares in the Woodford Patient Capital Trust is determined by market supply and demand, and this may be different to the net asset value of the trust. This means the price may be volatile in response to changes in demand
  • 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
  • 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 – it can take years for young businesses to fulfil their potential, this investment requires patience

Important information

Before investing, you should read the Key Investor Information Document (KIID) for the fund – or Key Information Document (KID) for the trust – and the Prospectus which, along with our terms and conditions, can be obtained from the downloads page or from our registered office. If you have a financial adviser, you should seek their advice before investing. Woodford Investment Management Ltd is not authorised to provide investment advice.

The Woodford Patient Capital 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.

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


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.

© 2019 Woodford Investment Management Ltd.
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