Neil Woodford. Woodford Investment Management via YouTube

Biotech uni­corns first to go as Neil Wood­ford auc­tions as­sets off sus­pend­ed fund — re­port

As Neil Wood­ford seeks much-need­ed cash to end what threat­ens to be a pro­longed sus­pen­sion of his flag­ship fund, his biotech hold­ings might be the first chunk on the chop­ping block.

Reuters is re­port­ing that Wood­ford’s over­seers at Link have brought in a bou­tique in­vest­ment bank to han­dle the sale, which would fol­low a se­ries of small­er auc­tions from the frozen Eq­ui­ty In­come Fund that reaped £300 mil­lion ($379 mil­lion) in the first month af­ter Wood­ford abrupt­ly blocked in­vestors from pulling out. But that was clear­ly not enough to re­open the flag­ship fund — Link an­nounced on the same day, ear­li­er this month, that the fund would stay closed for at least an­oth­er 28 days.

And many more 28-day pe­ri­ods to come, it ap­pears. The struc­tured auc­tion process could last up to three months, a source told Reuters.

Saku Sa­ha Wood­ford

The in­abil­i­ty to meet re­demp­tions — due to a high pro­por­tion of illiq­uid or un­list­ed as­sets that just wors­ened with an ex­o­dus of in­vestors that shrunk the fund from £10.2 bil­lion to £3.7 bil­lion in two years — was a big rea­son be­hind the sus­pen­sion. In or­der for Wood­ford’s turn­around mis­sion to work, he must be able to re­bal­ance his hold­ings with more liq­uid and list­ed stocks that can be sold off eas­i­ly in the fu­ture.

Link had pre­vi­ous­ly stat­ed that it in­tends to ap­point a part­ner to as­sist with the ef­fort. The re­freshed port­fo­lio “will con­tin­ue to be fo­cused on un­der­val­ued com­pa­nies, but the ma­jor­i­ty of them will be FTSE 100 and FTSE 250 in­dex con­stituents,” it wrote in a state­ment.

Ac­cord­ing to sources, that part­ner will be PJT, a spin­off of Black­stone helmed by Mor­gan Stan­ley vet Paul Taub­man. And they will like­ly be tar­get­ing buy­ers from hedge funds and sec­ondary mar­kets in the US and Eu­rope.

Paul Taub­man PTJ

Health­care and biotech in­vest­ments made up al­most a quar­ter of the Wood­ford Eq­ui­ty In­come Fund — though many of them have gone sour. Days ago, Saku Sa­ha, a top Wood­ford lieu­tenant in charge of ear­ly-stage biotech bets, left the knack­ered com­pa­ny.

The main stakes be­ing prepped for auc­tion will be Benev­o­len­tAI and Ox­ford Nanopore, two uni­corns fo­cused on AI-aid­ed drug dis­cov­ery and DNA se­quenc­ing, Reuters not­ed. Ex­ist­ing in­vestors, who have pre-emp­tive rights to a stock sale, in­clude Lans­downe Part­ners, Odey As­set Man­age­ment, Red­mile for and Sin­ga­pore’s GIC for Ox­ford Nanopore and Broad Street Prin­ci­pal In­vest­ments for Benev­o­len­tAI.

Since these are pri­vate com­pa­nies with some­what opaque val­u­a­tions, the price Wood­ford man­ages to ne­go­ti­ate would be of essence.

In a video pub­lished ear­li­er this month, where he ex­plained the con­tin­ued sus­pen­sion to in­vestors, Wood­ford ac­knowl­edges in­vestor con­cerns about sell­ing these stakes short.

“My view is that we won’t have to take big dis­counts,” he said. “These as­sets are fun­da­men­tal­ly at­trac­tive, and I’m con­fi­dent we’ll be able to ex­e­cute the strat­e­gy and get very good val­ue for our un­quot­ed and illiq­uid port­fo­lio.”

Ven­ture Cap­i­tal as a Strate­gic Part­ner: Fu­el­ing In­no­va­tion be­yond Fi­nance

The average level of investment required for a biotech start-up to succeed is increasing every year, elevating the pressure even further on venture capital to make smart financial investments. Financial investment alone, however, does not always guarantee that exciting innovations can be transformed into real businesses that make a meaningful difference to patients.

Beyond just capital

At Astellas Venture Management (AVM) – a wholly-owned venture capital organization within Astellas, headquartered in the San Francisco Bay Area – capital is just one of the ingredients we offer to add value to our biotechnology investments and partnerships. We generally take a strategic investor approach for companies in our invested portfolio, providing access to expertise, technology and/or resources in addition to the injection of finance. An equity investment from AVM can include access to Astellas’ research and development (R&D) capabilities and expertise, and a global network of partner academic institutions and biotechnology companies, to help advance and accelerate the start-up’s innovation.

UP­DAT­ED: Ver­tex joins Mer­ck, Pfiz­er — re­vamp­ing multi­bil­lion-dol­lar tri­al strat­e­gy as biotech R&D crum­bles

You can add Pfizer, Merck and — as we found out Friday morning — Vertex to the growing list of pharma giants hitting the pause button on a range of clinical trials. But not everyone in R&D is getting a red light.

Vertex says that it’s doing its best to keep working its pipeline strategy, coming up with a plan “to enable virtual clinic visits and home delivery of study drug to ensure study continuity and medical monitoring, and to facilitate study procedures.”

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Covid-19 roundup: In­ter­cept, blue­bird and a grow­ing list of biotechs feel the pain as pan­dem­ic man­gles FDA, R&D sched­ules

Around 100 staffers at Boston area hospitals have now tested positive for Covid-19, spotlighting the growing risk that the pandemic will sideline many of the most essential workers in healthcare as caseloads peak in the US and around the globe. With more than 3,400 deaths, Spain has become the latest country to surpass the official death count attributed to the new coronavirus in China, where the outbreak originated. As of Thursday morning, confirmed global cases had crossed 470,000 and the death count eclipsed 21,000.

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Af­ter crit­ics lam­bast­ed Gilead for grab­bing the FDA's spe­cial rare drug sta­tus on remde­sivir, they're giv­ing it back

Two days after Gilead won orphan drug status for remdesivir as a potential treatment for Covid-19, they’re handing it back.

The company was slammed from several sides after Gilead reported that the FDA had come through with the special status, which comes with 7 years of market exclusivity, the waiver of FDA fees and some tax credits as well. Typically, everyone who can get orphan status lands it without much of a fuss, but Democratic presidential candidate Bernie Sanders, Public Citizen and other consumer groups were outraged.

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Mod­er­na CEO Stéphane Ban­cel out­lines a short path for emer­gency use of a coro­n­avirus vac­cine

NIAID director Anthony Fauci has left no doubts that it takes 12 to 18 months to get a new vaccine tested and in commercial use, in the best of circumstances. But in times of a global emergency — like these — maybe there’s another, faster route to follow.

In an SEC filing on Tuesday, Moderna $MRNA staked out a record-setting pathway to getting their mRNA vaccine into the frontline of the healthcare response as early as this fall. The SEC filing notes that CEO Stéphane Bancel told Goldman Sachs that an emergency use approval could allow the vaccine to go to healthcare workers and certain individuals in a matter of months — presumably provided the NIH sees the safety and efficacy data they would need from the Phase I.

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Caught in a Covid-19 mael­strom, Eli Lil­ly locks down clin­i­cal tri­als as multi­bil­lion-dol­lar R&D ops de­rail

The Covid-19 pandemic has derailed Eli Lilly’s $6 billion R&D operations.

The pharma giant reported Monday morning that it has decided to hit the brakes on most new study starts and pause enrollment for most ongoing studies. Lilly adds that it is continuing dosing for ongoing studies, “but with study-by-study consideration.”

The pandemic has severely disrupted healthcare systems around the globe, says Lilly, making it difficult or impossible to conduct studies at many research sites. And there’s no timeline for when it expects to get back on track.

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As share buy­backs come un­der scruti­ny, what's in store for the bio­phar­ma in­dus­try?

Stock buybacks are not to be permitted for companies that will be bailed out in the coronavirus stimulus package, Congressional leaders have signaled. To what degree the biopharma industry has relied on buybacks for earnings growth in recent years, and if the trend continues, are the big questions as scrutiny into the practice heightens and balance sheets weaken with the coronavirus pandemic wreaking havoc on global economies.

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A Sin­ga­pore VC rais­es $200M for a new round, but will Covid-19 pre­vent it from rais­ing the rest?

A top Singaporean biotech venture fund is nearly halfway toward its largest ever fund, but in a sign of what could be in store for VCs amid a global economic freeze, said they could face headwinds raising the other half.

Vickers Venture Partners has secured $200 million out of a targeted $500 million for its 6th fund, first announced in early 2018. They’ve given themselves 13 months to complete the financing, Vickers founder Finian Tan told Deal Street Asia, but the financial frost settling amid the Covid-19 pandemic could slow efforts.

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Strug­gling Unum ex­ecs are ready to con­sid­er a sale, merg­er or any deal that comes its way

Unum $UMRX is working its way through a survival plan of sorts.

After getting hit with a trio of FDA holds in its brief public history and triggering its second pivot to a new lead drug program while laying off 60% of the staff, the troubled penny stock biotech Unum Therapeutics has hatched new plans to secure financial backing while lining up a go-forward strategy for the company.

First, Lincoln Park Capital Fund has agreed to buy up to $25 million of the long-suffering stock, as Unum directs. And the executive team — led by CEO Chuck Wilson — has put everything on the table for consideration: a sale, acquisition, merger, licensing deal, you name it. The ACTR707 program, meanwhile, is being formally wrapped up — their second failed lead program.