The US firm that scooped up a bundle of bargain biotech stocks from the Woodford Equity Income fund has responded to criticism over its decision to flip a handful of companies days after acquiring them.
Last week Link Fund Solutions, the authorised corporate director of Neil Woodford’s former fund, transferred eight stocks worth an estimated £150m to Acacia as part of a £224m deal that will see it acquire 19 healthcare holdings from the soon to be defunct fund.
But within days of acquiring the stakes Acacia had already offloaded a significant portion, selling out of two holdings, Midatech and Theravance, entirely.
In the case of Midatech, RNS filings state the California-based buyer snapped up a 9.9% stake for £65,000 on 4 June, paying 1.7p per share, despite the fact shares were trading at 24.5p on the day. It turned around and divested its entire holding for around £817,000, suggesting it netted a profit of £752,000.
Acacia CEO dismisses ‘silly’ criticism
News that Acacia had been able to sell the stakes so quickly, and in the case of Midatech ostensibly for a vast profit, riled critics who slammed Link for allowing another middleman to chip away at Woodford Equity Income investors’ savings.
Acacia CEO Clifford Press told the Sunday Times a single price of £224m had been agreed for the entire portfolio and that the smaller allocated purchase price for Midatech shares was “a function of the tax and accounting treatment in a multi-jurisdictional trade”.
Press described the criticism of Acacia’s profiting from the situation as “silly”.
He added that Acacia intends on managing the remaining investments that have yet to be transferred, including unquoted unicorns Oxford Nanopore and Immunocore, from a new headquarters in Oxford.
Acacia has sold a total of £129m assets so far. Six London-listed businesses were included in the initial transfer from Link – 4D Pharma, Mereo Biopharma, Midatech, Open Orphan, Synairgen and Tissue Regenix. Acacia also snagged stakes in American firms Evofem Biosciences and Theravance.
An RNS filing from Monday revealed it sold another 2 million shares in 4D Pharma worth an estimated £960,000 on 10 June, bringing its initially acquired 11.96% stake in the business down to 8.99%.
Since Link announced the deal with Acacia it has emerged that Tencent is also in talks to buy a stake in Oxford Nanopore from Woodford’s former Invesco Income fund.
