Woodford sees options for Prothena, Muddy Waters likens firm to lame horse
Woodford Investment Management, a shareholder of Prothena, posted a blog post today, saying in part, "Over recent months, Prothena's share price has been volatile with the market pricing in the prospect of a trial failure but, despite this, we should expect the market to react badly in the short term to today's announcement. We have always been clear why we have backed Prothena and, given the positive progress throughout the development of this drug, we have been increasingly confident it would be successful. Such trial results are symptomatic of early-stage investing, however, and with specific regard to biotech companies, trial outcomes are binary. Nevertheless, the result of this trial is undoubtedly a blow and we will be working with the company and its management team on its strategy beyond Pronto. Prothena has options. It still has an early and mid-stage clinical pipeline. It has a technology platform and a world-leading specialism in misfolding proteins, which are implicated in a number of different neurological disorders. This research platform has been validated by two major pharmaceutical companies - Roche (which is partnering Prothena in PRX002 in Parkinson's disease, currently in Phase II trials) and Celgene (which has recently collaborated with Prothena on three earlier stage clinical assets). The company also has its own, unpartnered assets about to enter the clinic and, with more than $500m on its balance sheet, it is very well-funded." Muddy Waters, who last year issued a short call on the stock, responded to the blog post by tweeting, "Neil Woodford with an iron grip on his $PRTA bag 'The company has options'. @woodfordfunds: When it comes to biotech investing, if you were a horse, they'd shoot you." Prothena shares in early trading are down 69%, or $25.31, to $11.53.