A company previously owned by investors trapped in the now defunct Woodford Equity Income fund has seen its share price soar more than 350 per cent off the back of a coronavirus treatment breakthrough.
Shares in Southampton-based biotech company Synairgen have jumped 352 per cent since markets opened this morning (July 20) after it announced its results of a clinical trial showed a new way of treating coronavirus.
It said its trial of 101 patients had found that those receiving a certain drug had a 79 per cent lower risk of developing severe disease as those not taking the medicine and were twice as likely to recover from Covid-19 as those on placebo.
Richard Marsden, CEO of Synairgen, said it could signal a “major breakthrough” in the treatment of hospitalised Covid-19 patients.
Investors in what was Neil Woodford’s flagship Equity Income fund will not benefit from the boost however, as Synairgen was sold as part of a healthcare bundle of stocks last month to US-listed Acacia Research.
At the beginning of June Link Fund Solutions said it had agreed to sell 50 per cent of the fund’s remaining assets to Acacia for a £224m price tag — a deal later branded ‘undercut’ when Acacia re-sold on some of the assets for a higher figure.
According to data from Morningstar, the funds set to benefit from the increase in share price include Miton UK Microcap, which held Synairgen as 1 per cent of its fund as of June 30.
Synairgen also makes up less than 1 per cent of Polar Capital’s Biotechnology fund and the Chelverton UK Equity Growth fund.
This is not the first time a company Mr Woodford had bet on during his time as a star fund manager has seen its share price jump since his downfall last year.
In May, investors in the Schroder UK Public Private Trust received a boost after Phexxi, a firm Mr Woodford backed in 2016, saw its share price soar 40 per cent when its product received the green light from the regulator.
Mr Woodford, who managed the Woodford Patient Capital Trust up until October last year, pledged in 2016 to invest $25m (£22.6m) in the US-based firm through a series of funding promises.
The former star fund manager, and investors in his portfolios, have often been haunted by his previous investment pledges.
Many of the young companies to which he promised funding underperformed while more than £20m from the now-defunct Equity Income fund has been subtracted from investors’ cash and redirected to honour such pledges.
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know.