View more on these topics

Woodford suffers another setback over pharma investment

Woodford-Neil.WoodfordIM.2014.jpgNeil Woodford’s holdings continue to suffer more setbacks this week as pharmaceutical company Vernalis saw its share price drop 10 per cent on hurdles entering the US market.

Woodford’s three funds have suffered a streak of bad news over the last fortnight resulting in all underperforming their respective sectors.

The Aim-quoted company has been told by the US Food and Drug Administration that it must address further issues before its treatment for coughs and colds can be licensed, The Times reports.

It is the second time in as many weeks that a Woodford holding has taken a hit from the FDA with Imperial Brands, one of the top holdings in both the Equity Income and Income Focus funds, falling 4 per cent on news the US was planning to cut nicotine in cigarettes.

Woodford holds Vernalis through the Patient Capital Trust, where it accounts for 0.9 per cent of the portfolio, and the Equity Income fund, with 0.2 per cent allocated.

Woodford did not comment on the share price fall.

Vernalis chief executive Ian Garland says the company is working with its partner in the US, Tris, to resubmit applications to the FDA as soon as possible.

The rebuff from the FDA comes ahead of the cough and cold season in winter.

Woodford has faced setbacks in a number of his holdings over the last fortnight with AstraZeneca and AA both suffering double-digit share price drops. The former suffered from disappointing results in an immuno-oncology drug trail, while the latter saw its chairman removed on a misconduct matter.

Last week, Purplebricks suffered a 7 per cent share price fall following a BBC Panorama investigation into misleading claims in the real estate agent’s advertising. The company had been one of the main contributors to the Patient Capital Trust in H1.

The Woodford Patient Capital Trust has delivered zero returns over the last two weeks, compared to 1.9 per cent in the UK All Companies sector. The Equity Income fund has delivered -1.6 per cent and the Income Focus fund has taken a 0.9 per cent hit.

The UK Equity Income sector has returned 1.3 per cent over the period.

However, over three years the flagship Equity Income fund has returned 37.8 per cent compared to 30.6 per cent in the sector.

While Woodford’s Imperial Brands holding took a hit last month he avoided further share price falls from British American Tobacco, which he dropped from both his Equity Income and Income Focus funds in June.

The tobacco giant suffered a 10 per cent fall on the news from the FCA, then fell 4 per cent a couple of days later when the SFO revealed it was investigating the company for bribery and corruption in Africa.



News and expert analysis straight to your inbox

Sign up


    Leave a comment