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Replies to post #57131 on NorthWest Biotherapeutics Inc (NWBO)
03/16/16 7:25 PM
ROBERT DWEK says:
March 11, 2016 2:22 am
I have growing concerns about my investment in WPCT and its potential undermining of Neil’s reputation (akin to when when Anthony Bolton lost some of his lustre after launching his China fund):
The word “patient” has been made a bit of a nonsense by all of this: firstly by the investors who were extremely impatient to give the IT such a premium to NAV. But, more importantly, why were the fund managers so incredibly impatient in investing all that money ?
Neil said at the time that certain biotech stocks were at “rock bottom” prices but the fund’s performance has been hit numerous times by the air coming out of many of its biotech holdings – none more so than Northwest Biotherapeutics, into which you poured £120m (?) at much higher prices but apparently refused to be part of its latest fund raising at the current bombed out price. One can only conclude that you have had a dramatic change of heart about NWBO.
Now WPCT wants to raise more funds itself for other “great opportunities” but I agree with people who say this is clearly because you were far too impatient in investing (some would say blowing) much of the original capital.
Going into biotech on such a large scale, no matter how much previous experience the fund managers claim to have had in this area, was always going to be a very dangerous path, even without the prospect of Hilary Clinton over-regulating the US healthcare industry.
I would like some reassurance from you that the concerns expressed above are overblown.
Thank you.
NEIL WOODFORDMODERATOR says:
Today 6:09 pm
Hi Robert,
The pace at which we have invested the money in no way reflects impatience – it was a consequence of the abundance of high quality, profoundly undervalued, exciting young businesses that have been presented to us in the last 18 months. Some of these opportunities had been under comprehensive due-diligence for a long period prior to the trust’s launch. Raising a larger pool of assets has allowed us to take larger stakes in some of the companies with the greatest long-term potential than we would otherwise have been able to. Furthermore, it also allowed us to tap into a deeper and richer seam of early-stage businesses than we previously realised existed.
The term ‘patient’ applies as much to our portfolio construction process, therefore, as it does to our attitude towards the businesses we have backed as they evolve and slowly realise their full long-term commercial potential. There’s not much we can do to ensure that this ‘patience’ is shared by the trust’s shareholders other than to remain consistent in our explanation of the investment opportunity and in the application of our long-term, fundamentals-based investment approach.
Regarding our biotech exposure, we continue to believe in the secular growth drivers across the healthcare industry. Not all biotechs will be winners, in the same way that not all pharma stocks will be. However, the companies we have selected in these sectors, we believe, will deliver long-term value for investors. We are intending to follow up with a more in-depth article on this subject on the blog in the near future, focusing on why we like the sector in general and the specific attractions of the companies we’ve invested in. As for the future regulation of the US healthcare industry, we wrote about this last year here (https://woodfordfunds.com/rewarding-innovation/) and stand by the conclusion that real healthcare innovation will continue to be appropriately rewarded.
Finally, on the subject of a future fundraising, no decision has been made but we will, of course, keep you informed of any developments and would hope to be able to do so very soon.
Regards
Neil
