Investments  

Top Woodford holding suffers damning report

Top Woodford holding suffers damning report

Woodford Investment Management's fund Patient Capital Trust suffered some bad news in a damning report into the prospects for one of its leading stock holdings, Prothena Corp.

Fund manager Neil Woodford holds development-stage biotechnology company Prothena in his Patient Capital Trust, where it comprises 16.33 per cent of the portfolio. It is also the fourth largest holding in Woodford’s Equity Income fund at around 4 per cent.

The report from Kerrisdale Capital Management argued the lead asset of Prothena, NEOD001, will fail its next two trials.

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Following its publication, the stock fell around 9 per cent.

NEOD001 is a monoclonal antibody designed to treat amyloid light chain amyloidosis, a condition with ultimately impacts organ function.

Kerrisdale makes special mention of Mr Woodford in its report saying: “Neil Woodford has bid the price up [of Prothena] but history shows the Woodford effect does not last.

"Investors should beware when no notable healthcare hedge funds are involved in a multi-billion dollar name, and the largest investor has made repeated large mistakes in the biotech sector."

The report goes on to criticise Mr Woodford's previous investment decisions in the biotech sector.

“Within biotechnology, Woodford is best known for buying a 28 per cent stake in Northwest Biotherapeutics, a company alleged to have engaged in a paid stock-promotion scheme and currently under SEC investigation.

"The stock has declined by more than 95 per cent and Woodford’s stake, originally purchased for  more that $150m (£114m), is now virtually worthless.

"Woodford also holds 28 per cent of Allied Minds, a publicly-traded venture capital firm primarily owning stakes in healthcare companies. We previously published negative views on Allied Minds in September 2015, and the stock has since declined more than 60 per cent.”

Woodford Investment Management has been contacted for comment.