20 years of sustainable investing and what this tells us about the future - Flipbook - Page 11
2011
The Obama White
House convenes session
on Impact Economy to ‘help fuel job
growth, promote innovation, and
advance grassroots social change
across America’.
GW Pharmaceuticals: Leaving SF portfolios after 20 years
Enabling innovation in healthcare has been one of the defining
themes over our 20 years of managing the SF funds and it is with
mixed emotions that we see one of our longest held holdings, GW
Pharmaceuticals, exit our portfolios.
UK company GW has been in the funds since June 2001 and is the
global leader in developing cannabinoid-based treatments, changing
the lives of many people with epilepsy. Recognising this expertise,
Irish-based Jazz Pharmaceuticals agreed a $7.2 billion cash-and-stock
deal to acquire GW and expand its neuroscience portfolio, which
has approval from both boards and is expected to close in the second
quarter of 2021.
GW encapsulates three core elements of our investment approach:
producing a positive outcome for society and our clients, exemplifying
the need for a long-term investment horizon, and requiring courage
to stray from the herd. When we participated in the IPO, we
received a number of innuendo-laden comments linking the
‘hippy’ image of cannabis to the traditional tree-hugger
stigma around sustainable investing. We always felt this
was a serious business, however, exploring an area
where traditional pharmaceutical companies have
feared to tread.
GW’s history also shows the patience required in healthcare investing,
with the company’s Epidiolex product only approved by the US
Food and Drug Administration in 2018 and added to the NHS’s
prescribable drugs to help children with severe types of epilepsy
the following year. It has taken nearly two decades, and a move to
the Nasdaq (changing to dual status in 2013 and abandoning the
London listing three years later), for the company to reap the rewards
of its investment in science and manufacturing.
While the shares have produced considerable returns for our funds over
20 years, with a total return of around 1,460% (Source: Bloomberg)
in dollar terms from September 2001 to the end of January 2021,
performance has been volatile, with the company often caught up with
other ‘cannabis’ stocks. In 2020, for example, the shares dipped on
disappointment over Epidiolex take-up in the US but we are keen this
innovative treatment is not over-prescribed or used ‘off-label’, and only
employed to treat conditions for which it has been trialled.
Innovation is central to the healthcare sector and sustainability overall,
with people needing to be fit and healthy enough to enjoy a cleaner
and safer world in the future. It is also what attracts us to these
companies and, although GW is leaving our portfolios, we continue
to focus on businesses working to address unmet medical needs.
Liontrust: 20 Years of Sustainable Investing - 11