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Woodford’s worst biotech stock to delist from Nasdaq

Cancer specialist Northwest Biotherapeutics rounds off tough year with switch to new stock exchange, triggering $11 million bond repayment.

Woodford’s worst biotech stock to delist from Nasdaq

Fund manager Neil Woodford’s worst biotech investment, Northwest Biotherapeutics (NWBO.O), is to delist from Nasdaq, the American technology stock exchange.

In a move that raises questions about its future the Maryland-based cancer specialist has given Nasdaq 10 days’ notice which means its shares will be suspended around 19 December.

It has applied to move its listing to the OTCQB Venture Market designed for early stage companies instead.

Northwest has clashed with Nasdaq this year over the amount of new shares it has issued to finance its research and for its battered share price, which after an 83% plunge, has traded consistently below $1, an infringement of Nasdaq rules.

In a stock exchange filing, the company said delisting from Nasdaq avoided the expense and uncertainty of a hearing with the tech exchange to discuss the issues. It said the move to the junior stock exchange would make it easier to raise funds for ongoing phase two and three trials of its cancer treatments, which use the body’s immune system to fight the disease.

However, it warned that leaving Nasdaq would trigger a ‘fundamental change’ clause in the loan agreements with its convertible bond holders, which means it has 20 business days in which to repay their remaining $11 million debt.

‘The company believes that it has several options for addressing this obligation, and will be evaluating those options over the coming weeks, although there can be no assurance that such options will be available or will be on acceptable terms. If the company fails to satisfy its obligation, that would result in an event of default under the notes,’ it said.

The past year has been a challenging period for Northwest and its chief executive Linda Powers. Having previously proclaimed Woodford’s backing as a sign of its potential to be the next Amgen, or biotech giant, things turned sour when allegations of financial irregularities prompted the UK’s star fund manager to demand an inquiry. The company set up an independent committee to investigate the issues, although its findings have not yet been published. 

Northwest was never a big holding in either of Woodford’s funds. At the end of last year it was the 24th biggest stock in Woodford Patient Capital Trust (WPCT ), accounting for 1.63% of its assets. Today it has tumbled to 61st place in the 71-stock portfolio with a weighting of just 0.29% in the £774 million fund. Meanwhile it represents just 0.07% of Woodford’s flagship £9.4 billion Equity Income fund.

According to a filing to the US Securities Exchange Commission, Woodford Investment Management held a $14 million stake of 25.9 million shares in Northwest at the end of September.

Although small, Northwest’s travails sum up the need for shareholders in Patient Capital to take heed of the message in its name. In December, after his engagement with company’s corporate governance failings first emerged, Woodford reminded investors that not all of its early-stage investments would do well. ‘There will be bumps in the road and some won’t make it to a successful destination,’ he said.

At yesterday’s close of 91.3p Patient Capital shares remain some way below the 100p at which they listed on the London Stock Exchange in April 2015. In the past month, however, the post-US election rally in drugs stocks has boosted the portfolio by over 3% and helped reduce the discount - or gap between the share price and its net asset value - to 2%. 

7 comments so far. Why not have your say?


Dec 08, 2016 at 11:21

We're about to see Woodford's judgment tested again when the Fed announces higher interest rates next week - or not. Woodford has expressed the conviction that they wouldn't raise them. The market thinks otherwise.

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Dec 08, 2016 at 18:08

Patient capital is testing my patience, significant opportunity loss in having money invested in this fund when markets are roaring away...

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Dec 08, 2016 at 23:00

I sold most of stock early on and only have a small holding left now.

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richard tomkin

Dec 08, 2016 at 23:31

Patient Capital is clearly for the long term ,though in the long term we are all dead,as someone famous said.Woodford was much better in his Perpetual days,buying and holding tobacco shares and other sin stocks.He seems to be less good at picking things to keep people alive.

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Dec 09, 2016 at 00:51

Yet another article on Woodford. Citywire are either obsessed with him or have some contractual agreement to be mentioned virtually every week!

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Dec 09, 2016 at 17:50

This company, Northwest Biotherapeutics, subsequently put out an additional Press Release .... see:

NW Bio Provides Update About Phase 3 Trial Of DCVax®-L for Newly Diagnosed Glioblastoma Multiforme Brain Cancer.

This PR includes ..... "the Company had estimated that the numbers of “events” to reach the main endpoints of the Trial may be reached in November 2016." It appears that a number of events must still take place before completion of this Phase III trial, and it gives an idea of the timeline for data lock and analysis of the data.

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Mark Yu

Dec 11, 2016 at 09:57

As the saying goes, long term investment is short term speculation failed. It simply doesn't make sense if you think some investment will only perform in the 10th year, yet you put all you have in it on year one. That is what failed Woodford patient capital. If you are not sure about if and when it will start to perform, surely you need to be cautious and cautious again and deploy your capital accordingly, not like Woodford did to throw in $180 million into Northwest Bio that is now almost worthless.

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