PATIENT CAPITAL TRUST UPDATE, MAY 2017

Mitchell Fraser-Jones, 15 June 2017

The views expressed in this article are those

of the author at the date of publication and
not necessarily those of Woodford
Investment Management Ltd. The contents
of this article are not intended as investment
advice and will not be updated after
publication unless otherwise stated.

The Woodford Patient Capital Trust delivered a solid positive return during the month with
unquoted biotechnology business, Immunocore making one of the largest contributions to
performance.

Readers may remember that we focused enthusiastically on the opportunity that lies ahead
for Immunocore in a company spotlight last year. Last week, the company attended the
worlds biggest oncology conference, ASCO1, and presented compelling data from its lead
programme, investigating IMCgp100 in metastatic uveal melanoma, a rare eye disease with
no current treatment options. The data shows a meaningful improvement in progression
free survival for patients with the condition. Effectively, this means that the drug doubles the
length of time the condition stays stable without progressing further. With the drug already
having orphan drug designation in the US, the company now intends to rapidly progress the
treatment through clinical development to make it commercially available to patients as
soon as possible. This is clearly great news for Immunocore, and the valuation at which the
position is held within the portfolio had already been uplifted to reflect the positive nature of
the data. Looking forward, we remain very confident that Immunocore can deliver significant
further growth as it progresses towards the commercialisation of its highly promising
technology and advances additional development candidates towards the clinic.

Another noteworthy positive performer was unquoted fibre network telecoms operator
Gigaclear. The company was revalued upwards following the successful completion of a
further funding round. In recent months, Gigaclear has secured a number of significant
tenders to deliver its ultrafast broadband networks to tens of thousands of homes and
businesses across the UK and the fresh capital will enable the company to accelerate its
broadband network expansion and deliver on its contracts. We are delighted with how the
company is progressing and believe it can continue to deliver meaningful growth over the
long-term.

In the quoted part of the portfolio, hybrid property agent Purplebricks was another strong
performer, with its share up almost 40%. During the month, the company issued a positive
trading update, highlighting continued strong UK growth and good progress in its Australian
business. We think that the market has been slightly behind the curve with Purplebricks and
is only now starting to appreciate the companys success in muscling its way into a position
of market dominance. We continue to believe that there is much more room to grow for the
company in the months and years ahead.

Mereo Biopharma also performed well. The company announced encouraging pipeline
progress during the month, initiating a Phase IIb clinical study of BPS-804, its potential
therapy for brittle bone disease and completing patient enrolment in its Phase II trial of
BCT-197, a potential treatment for acute exacerbations of chronic obstructive pulmonary
disease (COPD).
PATIENT CAPITAL TRUST UPDATE, MAY 2017

Mitchell Fraser-Jones, 15 June 2017

Meanwhile, Eve Sleep, successfully completed its initial public offering (IPO) in May, which
took place at a slightly higher valuation than it had been held as an unquoted holding. The
position had already been marked up earlier in the year to reflect the strong operational
progress the company has made since we first invested. We are very pleased by Eve Sleeps
stock market listing, which reflects the companys clear ambition to grow meaningfully over
the long-term. The funding raised by the IPO will be used to accelerate Eves growth strategy,
by further strengthening its brand, extending its product range and growing its share of the
fragmented European mattress market.

Among the detractors from performance were US biotech stocks Theravance Biopharma
and Prothena. Although both registered share-price declines over the month, there was no
fundamental justification for either move. We think that this was simply a continuation of the
volatility that has characterised the US biotech sector in recent times. Looking beyond the
near-term noise, we continue to see substantial long-term potential in both companies.

Turning to portfolio activity, as well as participating in Eve Sleeps IPO, we added Ratesetter,
one of the largest peer-to-peer lending platforms in the UK, to the portfolio during its latest
funding round. We also added to the positions in Prothena and Thin Film Electronics, to take
advantage of unjustified share price weakness.

We remain very confident in the shape of the portfolio and the prospect of delivering very
attractive returns to investors over the long-term.

Footnotes
American Society for Clinical Oncology

What are the risks?

Young businesses have a different risk profile to mature blue-chip companies risks are
much more stock-specific, which implies a lower correlation with equity markets and the
wider economy
Long-term outcomes are more binary extremely attractive rewards for success but some
businesses will inevitably fail to fulfil their potential and this may expose investors to the risk
of capital losses
As it can take years for young businesses to fulfil their potential, this investment requires
patience
The value of the trust as well as any income it pays will fluctuate which may partly be the
result of exchange rate changes
The price of shares in the trust is determined by market supply and demand, and this may
be different to the net asset value of the trust
The trust may invest in overseas securities and be exposed to currencies other than pound
sterling
The trust may invest in unquoted securities, which may be less liquid and more difficult to
realise than publicly traded securities
We do not give investment advice so you need to decide if an investment is suitable for you.
If you are unsure whether to invest, you should contact a financial adviser.
Important Information:

We do not give investment advice so you need to decide if an investment is suitable for you.
If you are unsure whether to invest, you should contact a financial adviser. The trust
currently intends to conduct its affairs so that its securities can be recommended by IFAs to
ordinary retail investors in accordance with the FCAs rules in relation to non-mainstream
investment products and intends to continue to do so for the foreseeable future. The
securities are excluded from the FCAs restrictions which apply to non-mainstream
investment products because they are shares in an investment trust.

Woodford Investment Management Ltd is authorised and regulated by the Financial Conduct
Authority.