Woodford sells Circassia stake as CEO exits trust board

Equities manager had touted stock as patient capital success story – before it fell 65%

Neil Woodford has sold almost his entire stake in Circassia Pharmaceuticals as the chief executive of the firm prepares to stand down as a director on the Woodford Patient Capital Trust board.

A regulatory filing published late on Monday afternoon revealed Woodford Investment Management’s stake in the business had reduced from 19.95% to “less than 5%”.

Woodford had held an even larger stake in the business when his fund suspended on 3 June. A regulatory filing from the week after the suspension showed his stake had reduced from from 29.03% to 24.47% as part of a slew of sales to shore up liquidity.

Circassia’s 65% drop

Woodford investors face a large loss from the stock, which he had held since 2008, when it was an unquoted holding in his portfolios at Invesco.

In 2016, days before the Brexit referendum, Circassia’s failed phase III drug trial for cat allergies had resulted in a 65% fall in shares.

Woodford described the results of the drug trial as “unprecedented” due to the fact the placebo had resulted in largely the impact on symptoms as the Circassia drug.

Two years earlier, in June 2014, the equities manager had been praising Circassia as a patient capital success story. It had listed at £600m three months earlier and was trading around 300p a share at the time.

Woodford last week sold the stock at prices less than 20p a pop, according to Bloomberg data.

Steve Harris exit from WPCT

Woodford’s sale of the shares came less than two weeks after the Woodford Patient Capital Trust revealed Circassia chief executive Steve Harris would exit the board of the investment trust.

After four years, Harris will exit the board on 30 September. The chartered accountant co-founded Circassia in 2006 and has been CEO ever since.

He will be replaced by Ruffer co-founder Jane Tuffnell, who has been welcomed for being “unbiased” and because she has experience on other investment trust boards.

The WPCT board has previously raised eyebrows for potential conflicts of interest with several directors holding senior positions in companies held within the investment trust’s portfolio.

In July, WPCT chairwoman Susan Searle stood down from Merica Technologies, where she was a non-executive director, citing the fact she needed to set aside time for her other commitments. Woodford had been the second-largest shareholder in the firm after Invesco, holding a 24.7% stake.

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