UK Edition
Market report: Prothena biotech news lifts Woodford
Embattled star fund manager Neil Woodford was provided some much-needed respite after his top pick, Prothena, soared on landing a deal with a US biotech giant, boosting his London-listed investment trust to the top of the FTSE 250 risers.
Woodford’s stellar reputation built on riding out the financial crisis unscathed has been dealt a number of blows in the last year. A string of his top picks, including the AA, Capita and Provident Financial, have suffered sharp share price plunges, but rocked Woodford vowed last month not “to abandon the investment discipline that has guided me for 30 years”.
Prothena, the top holding in his listed Woodford Patient Capital Trust, finally provided the fund manager a long-awaited boost today, bagging a contract with Celgene to develop treatments for neurodegenerative diseases.
Analysts said the tie-up would allay concerns over the company’s pipeline, with the biotech minnow receiving a $100m (£71m) upfront payment.
Prothena shares, which had plunged to three-year lows in February, surged as much as 23pc on opening in New York following the deal. Woodford Patient leapt 8.2p to 81p off a record all-time low, while other top Woodford pick Purplebricks also clawed away from lows, rebounding 26.6p to 316.6p.
Elsewhere, engineering giant GKN gained 4.2p to 429p as City analysts at Numis weighed in on the £8.1bn bid battle, upgrading the FTSE 100 company to “add”.
With the clock ticking on the deadline for shareholders to back Melrose’s bid, analyst David Larkham depicted the turnaround specialist as the tortoise in the race and GKN’s incumbent management as the hare.
He argued that investors “looking for short-term face value should vote for the GKN management plan and Dana transaction” while “those with longer-term horizons should opt for the Melrose proposal”. But he concluded that GKN’s shares are undervalued “whichever side wins the battle”. Petrofac boss Ayman Asfari tightened his grip on the struggling oilfield services firm, snapping up another £10m of shares to take his total stake to 19.4pc.
Online grocer Ocado dipped 18.2p to 550p after Goldman Sachs analysts downgraded the FTSE 250 rising star to “neutral”, arguing only a takeover or tie-up with a huge grocer can take its share price another notch higher.
Battered pharma firm Vectura tumbled a further 12.3p to 68.4p after recording worse than expected losses in 2017 as its copycat version of asthma drug Advair struggles to win regulatory approval in the US.
Rallying oil prices touching over $69 per barrel helped US stocks shake off any pre-Federal Reserve meeting jitters but European stocks struggled with the FTSE 100 sinking 22.3 points to 7,038.97.