Investment trusts Woodford Patient Capital (WPCT) and Syncona (SYNC) get a major boost as the initial public offering (IPO) of portfolio company Autolus was priced at the top of the $15 to $17 range.
Autolus is a gene therapy developer at the cutting edge of cancer treatment. It is working on Chimeric Antigen Receptor therapies for white blood cells called T-cells, or CAR-T therapies. The idea is to encourage people's natural immune system to recognise cancers as a threat and attack them.
The London-based company has raised $150m ahead of its Nasdaq IPO in the US.
A WELCOME WINNER FOR WOODFORD
Popular fund manager Neil Woodford has long backed Autolus via the Woodford Patient Capital investment trust. The IPO pricing means the value of the trust's stake in the company has surged, revalued 51% higher to $104.7m.
Back of notebook calculations suggest that its will add 3.2p per share to the trust's 84.13p net asset value (NAV) per share, announced on 22 June. The investment trust will retain a 15.9% stake in Autolus following the IPO.
This will come as a relief to investors in Woodford Patient Capital after the trust was booted out of the FTSE 250 index earlier this month following sustained share price underperformance. The trust's share price had slumped 29% since hitting 106p in July 2017, before today's 5% rally to 78.9p.
That means an instant 3.8% increase to NAV.
‘This outcome vindicates Woodford’s approach of finding businesses with outstanding intellectual property, helping them grow with financial support, and then reaping the rewards with ‘exceptional long-term returns,’ says Russ Mould, investment director at investment platform AJ Bell.
He warns that investors should take note of the name, and be patient with the investment trust as the timing of valuation uplifts can be unpredictable despite 89 holdings under Woodford’s watchful eye.
SYNCONA TO INVEST $24M POST IPO
Life sciences focused investment trust Syncona is also a big winner from Autolus, saying its pre-IPO stake in Autolus has jumped from £69.6m to £86.7m thanks to the firmer pricing.
Syncona has also committed an extra $24m to the Autolus IPO, which will take the trust's stake to 33.8%.
'Autolus is now a globally differentiated, clinical stage company at the forefront of a potential revolution in cancer treatment,' said Syncona’s chief executive Martin Murphy.
Numis calculates a 6.5% lift to Syncona’s NAV, last reported at 161.49p.
Life sciences investor Arix Bioscience (ARIX) saw its share price advance 1.3% to 200p thanks to its own stake in Autolus. It has agreed to invest an extra $7.2m into the IPO to retain an 8.2% stake in the business.
