The last 16.42% of the former Woodford stake in ReNeuron has now been sold to Obotritia Capital. The rest of the former Woodford stake, 16.58%, is now managed by Schroders in an investment trust. Removing the 16.42% overhang should help the shares to stabilise and recover. Clinically, ReNeuron aims to present more retinitis pigmentosa eye data during 2020 adding to the strong initial data. Stroke data from the CTX PISCES III trial are expected around mid-2021. We value ReNeuron at £197m, unchanged.
By mid-2019, Woodford Investment Management held 32.99% of ReNeuron split over two funds. On 17 October, 16.42% from one fund was transferred to Link Solutions. The 16.58% in the other fund was transferred on 16 December 2019 to an investment trust managed by Schroder Investment Management. The Link holding has been sold to the private German investment firm Obotritia Capital. Obotritia states that it invests in real estate, venture capital, financial services and other corporate opportunities. The crucial factor is that these shares have ceased to overhang the market.
Retinitis pigmentosa (RP) is an inherited, degenerative eye disease caused by one of more than 100 different gene mutations. ReNeuron’s human retinal progenitor cell (hRPC) therapy is cell-based and not mutation specific, so it could potentially treat any RP patient. The dataset for hRPC is currently eight patients, all of whom had at least three months of follow-up (data presented at the 2019 American Academy of Ophthalmology Meeting). The overall result was confounded by two patients who had surgery-related adverse events leading to vision loss. The other six patients had a mean ETDRS visual acuity improvement of 17.8 in the treated eye vs 8.3 in the untreated eye.
ReNeuron recorded a net loss of £3.9m in H120. Cash and equivalents on 30 September were £21.3m, providing funding into 2021. We retain our indicative value of £197m or 624p per share. This uses a 25% probability of success for hRPC. It is possible that hRPC could become the major valuation contributor as more data emerge over 2020, and its positioning against gene therapy products and path to FDA review become clearer. The CTX stroke indication is a major unmet need, but the current PISCES III trial cannot produce data before mid-2021, our expected launch window as from 2024 onwards is unchanged .