Link Fund Solutions has reduced its stake in a respiratory drug discovery business that sits in Neil Woodford’s former UK equity fund and is surging in price as it begins trials on a possible treatment for the coronavirus outbreak.
Aim-listed Synairgen announced on 18 March health authorities had expedited approvals for it to launch trials of an inhalant to treat patients with Covid-19. It had been trading at 24.5p but doubled in price following the announcement.
Its share price had been trading below 6p in December before the coronavirus expanded into a global pandemic. It has since peaked at 70p.
A regulatory filing shows Link Fund Solutions reduced its holding in Synairgen from 19.50% to 17.73% on 30 March. Blackrock is responsible for selling the liquid part of Woodford’s fund as it winds down, while PJT Partners has the more difficult task of selling unquoted holdings.
The day following the Link sale, Synairgen provided a further update on the trial noting that the first patient had received a dose of the drug at the University Hospital Southhampton. A further six trial sites were expected to start dosing in the following days.
The small healthcare business had represented a small part, just 0.07%, of the Woodford Equity Income fund at its latest interim report for the period ended June 2019. Shares have nearly quintupled in the period since from the 11.75p they were trading at the time of the fund’s reporting period.
Link Fund Solutions remains the largest shareholder followed closely by Lansdowne Partners, which holds a 17.2% stake. Former Mercury Asset Management star fund manager Leonard Licht is the next largest shareholder with a 8.1% stake held in a personal capacity.
To date, Link Fund Solutions has returned £2.3bn to LF Equity Income investors with a distribution of £141.7m made in March. Woodford is reportedly organising a consortium of investors to try and buy back some of the illiquid holdings that remain in his old fund at discounted price.
How Synairgen hopes to treat Covid-19
Synairgen hopes to treat Covid-19 patients with a protein called interferon beta. It occurs naturally and orchestrates the body’s antiviral response but some coronaviruses, like Covid-19, supress production.
Additionally, some at-risk patient groups may already be deficient in their ability to produce this protein, according to the company, which was founded by a trio of University of Southampton professors.
The Synairgen drug applies the protein directly to the lungs via nebulisation either before or during Covid-19 infection.
Phase II trials of the drug showed it improved lung function in asthma patients by activating antiviral pathways.
