Another one of Neil Woodford's portfolio companies escapes as UK biotech execs flee a collapse of faith
LONDON — Malin has joined the growing queue of life sciences companies that have managed to extricate themselves from a flailing Neil Woodford.
The biotech investment group $MLC noted in a release that Pentwater Capital — a US hedge fund — had boosted its holdings in the company to 26%, taking out a large portion of the stake that was held by a deeply troubled Woodford Investment Management, which now holds less than 3% of the stock.
The Irish company was one in a large group of biotechs to come under the gun over the summer as Woodford — once one of the most highly revered fund managers in the UK — put a halt to investor defections from Woodford Equity Income Fund during a classic run on the bank. His financial troubles, which came after years of some poorly chosen industry investments, in turn created a major headache for the portfolio companies — where he often took positions ranging from 20% to 30% of the total — as it became apparent that Woodford would run a fire sale to liquidate holdings at a fraction of what he had paid. That in turn inspired some serious short selling in what must have looked like a sure thing to many.
Recently two of his portfolio companies — Immunocore and BenevolentAI — have been able to raise cash, but only after seriously cutting back on their unicorn valuations. And Prothena — where shares collapsed last spring following a key trial failure — and others have worked to find buyers to take Woodford out to relieve the pressure arising from the debacle.
Malin also has sizable investments in Immunocore, Kymab and Poseida, where Pentwater is also involved.
Woodford’s investors, meanwhile, continue to suffer, watching their stakes shrivel 20% since he closed the till, according to the UK financial press, which has provided a drumbeat of bad news in recent months. His failure at biotech investing has created an overhang for the regional industry that will likely cast a shadow for some time, influencing valuations for UK companies that often find it tough going in raising cash.
The board at Patient Capital Trust, meanwhile, has been looking for another manager to replace Woodford.