REG - Syncona Limited - Final Results
16/06/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220616:nRSP0602Pa&default-theme=true
RNS Number : 0602P Syncona Limited 16 June 2022
Syncona Limited
Final Results for the Year Ended 31 March 2022
Pivotal year further validating the Syncona model; positive progress and
momentum delivered across the portfolio against a challenging macro backdrop
16 June 2022
Syncona Ltd, ("Syncona"), a leading healthcare company focused on founding,
building and funding a portfolio of global leaders in life science, today
announces its Final Results for the year ended 31 March 2022.
Martin Murphy, CEO and Chair, Syncona Investment Management Limited, said:
"This year marks an important milestone for Syncona, a decade since it was
founded. I am proud of our achievements over the last 10 years, which have
validated the vision we set out in 2012, to build globally leading life
science companies that have the potential to deliver transformational outcomes
for patients.
Whilst we have seen underperformance across our listed holdings in this
financial year and macroeconomic headwinds have impacted sentiment in the
biotech sector, our model has continued to deliver notable successes in the
period. We have worked closely with our companies to continue to drive
progress, investing at scale into the portfolio and generating valuation
uplifts across our privately held companies. Our companies raised more than
$700 million across seven financings during the financial year, ensuring they
are well funded to deliver on key upcoming milestones. We also executed our
largest transaction to date, the sale of Gyroscope to Novartis for up to $1.5
billion including milestones. Our strengthened balance sheet is an important
competitive advantage, particularly in challenging market conditions, and will
allow us to continue to pursue new investment opportunities, whilst supporting
our existing portfolio companies as they scale.
The future for the life science industry in the UK and across Europe is
exciting and our platform is well-placed to capture the significant
opportunity ahead."
Financial performance
· Net assets of £1,309.8 million (31 March 2021: £1,300.3 million);
194.4p(( 1 (#_ftn1) )) per share (31 March 2021: 193.9p per share), a NAV
total return of 0.3 per cent(( 2 (#_ftn2) )) (31 March 2021: 4.4 per cent)
o The sale of Gyroscope Therapeutics (Gyroscope) and valuation write ups from
Series B financings of Quell Therapeutics (Quell), Anaveon and OMass
Therapeutics (OMass) drive £274.8 million (41p per share) valuation uplift
o Performance offset by decline in share prices of our listed portfolio
companies Autolus Therapeutics (Autolus), Achilles Therapeutics (Achilles) and
Freeline Therapeutics (Freeline) in a period of significant market volatility,
with the value of these holdings reducing by £278.5 million
· Life science portfolio, valued at £524.9 million (31 March 2021: £722.1
million), a 0.8 per cent return(( 3 (#_ftn3) )) (31 March 2021: 11.8 per cent
return); delivering a return in challenging market conditions for biotech(( 4
(#_ftn4) ))
· Strengthened capital base of £784.9 million at 31 March 2022 (31 March 2021:
£578.2 million) following sale of Gyroscope to Novartis
· Deployed £123.2 million(( 5 (#_ftn5) )) of capital in the year (31 March
2021: £189.2 million)
Sale of Gyroscope to Novartis for up to $1.5 billion, demonstrating growing
track record of success(( 6 (#_ftn6) ))
· Syncona's largest transaction to date and the UK's fourth largest biotech
exit; builds on successful track record with the three sales from Syncona's
portfolio generating returns of >£930 million, an aggregate 4.6 multiple
on invested capital(( 7 (#_ftn7) ))
· Transaction included $800.0 million (£589.4 million) in upfront cash
proceeds, which represents $442.2 million (£325.8 million) for our holding in
Gyroscope delivering a 2.9 multiple on cost and 50 per cent IRR in the six
years following its foundation(( 8 (#_ftn8) ))
· The sale of Gyroscope will potentially generate a further £255.3 million for
Syncona, through future milestone payments which, if received, would take
total proceeds to £581.1 million, a 5.1 multiple on cost
· The upfront cash proceeds and the value of the discounted risk-adjusted
milestone payments represent an uplift to NAV of £225.5 million to Syncona's
31 March 2021 valuation of Gyroscope
· Syncona also positioned to benefit from any future commercialisation of
Gyroscope's lead programme via a low single-digit royalty on future sales
revenue
Multiple financings across the portfolio at valuation uplifts, with $712.2
million of capital raised in the financial year
· Portfolio raised $712.2 million (£531.8 million) of commitments across seven
financings during the period; $585.8 million (£434.1 million) raised from
global institutional investors and companies, with $126.4 million (£97.7
million) committed by Syncona
· Two further Series B financings announced post period end:
o OMass raised £75.5 million in a syndicated round, with Syncona committing
£15.0 million at a 32 per cent valuation uplift to previous holding value
o SwanBio Therapeutics (SwanBio) raised $55.9 million, with Syncona committing
$53.7 million
· Our diversified portfolio of 11 companies is well positioned and funded to
deliver on its key upcoming milestones
Positive clinical progress and upcoming clinical milestones have potential to
drive value over the next 12 months
· 12 clinical data read-outs during FY2021/2 with our most clinically advanced
company, Autolus, approaching a meaningful read-out from its pivotal trial in
obe-cel in H2 CY2022
· Seven clinical stage companies expected in the next 12 months, with Quell,
SwanBio and Neogene Therapeutics (Neogene) set to enter the clinic
Next generation cell therapy company, Clade Therapeutics (Clade), added to the
portfolio, and a strong pipeline of new opportunities
· $87.1 million Series A financing in November 2021 into new portfolio company
Clade, with a $30.0 million commitment from Syncona
· Excited by the diverse opportunities for new investment that we continue to
see across therapeutic and domain areas, including in gene therapy, cell
therapy, small molecules, biologics, antibodies, and other Third Wave
modalities such as nucleic acid therapies
Strengthening the Syncona team to scale the business
· Three appointments to the senior leadership team, including Rolf Soderstrom as
Chief Financial Officer, Markus John, M.D. as Chief Medical Officer and Head
of R&D, and Fiona Langton-Smith as Chief Human Resources Officer
· Two further additions to the senior investment team: Lisa Bright as Commercial
Advisor and Ben Woolven as Business Strategy and Operations partner
Delivering on our strategy to build a diversified portfolio of leading life
science companies and deliver strong risk-adjusted returns
Optimised financing approach
As outlined in our interim results in November 2021, as we build Syncona
towards our target of having a diversified portfolio of 15-20 companies, we
are evolving our approach to funding our companies to optimise the balance of
risk and reward across the portfolio and further leverage our competitive
differentiation in identifying science, defining commercial opportunity, and
building a company around it. This optimised approach will involve holding a
small number of companies privately for longer, whilst syndicating others at
an earlier stage before the point of clinical validation.
Capital deployment to increase in FY2022/3
Syncona's strengthened capital base, following the Gyroscope sale, provides us
with a strategic advantage, particularly in the current market environment. We
expect to deploy £150-£250 million of capital in FY2022/3 as we found new
companies, invest in our existing portfolio, and hold a select number of
companies privately for longer as part of the evolution of our financing
approach. We continue to maintain a disciplined approach to capital
allocation.
Key upcoming milestones
Positive data generated from our clinical pipeline will be the main driver of
value and, while not without risk, we have a number of portfolio companies
approaching key clinical milestones.
· Autolus expects to:
o Progress its pivotal study in obe-cel in r/r adult ALL and provide a
meaningful data read-out in H2 CY2022; full data expected H1 CY2023
o Announce longer follow-up data for AUTO1/22 in paediatric ALL in H2 CY2022
· Achilles expects to provide interim data from higher dose clinical cohorts of
its cNeT therapy in NSCLC and melanoma in H2 CY2022
· Freeline expects to make progress across its three programmes:
o Initial data from first cohort in Phase I/II dose confirmation study in
haemophilia B to be presented at Congress of the International Society on
Thrombosis and Haemostasis (ISTH) in July 2022
o Initiate second cohort of Phase I/II Fabry disease programme in mid-CY2022,
programme update expected in H2 CY2022
o Report initial data from Phase I/II Gaucher disease Type 1 programme in H2
CY2022
· Anaveon expects to publish further data from its Phase I trial for its
selective IL-2 agonist, ANV419, in H2 CY2022
· Quell expects to dose the first patient in its lead programme, QEL-001, in H2
CY2022
· SwanBio expects to enter the clinic with its lead SBT101 programme in
adrenomyeloneuropathy (AMN) in H2 CY2022
· Neogene expects to enter the clinic with its NT-125 TCR therapy in advanced
solid tumours in H1 CY2023
Enquiries
Syncona Ltd
Natalie Garland-Collins / Fergus Witt
Tel: +44 (0) 7714 916615
FTI Consulting
Ben Atwell / Julia Bradshaw / Tim Stamper
Tel: +44 (0) 20 3727 1000
About Syncona
Syncona's purpose is to invest to extend and enhance human life. We do this by
founding and building companies to deliver transformational treatments to
patients in areas of high unmet need.
Our strategy is to found, build and fund companies around exceptional science
to create a diversified portfolio of 15-20 globally leading healthcare
businesses, across development stage and therapeutic areas, for the benefit of
all our stakeholders. We focus on developing treatments for patients by
working in close partnership with world-class academic founders and management
teams. Our balance sheet underpins our strategy enabling us to take a
long-term view as we look to improve the lives of patients with no or poor
treatment options, build sustainable life science companies and deliver strong
risk-adjusted returns to shareholders.
Copies of this press release and other corporate information can be found on
the company website at: www.synconaltd.com (http://www.synconaltd.com)
Forward-looking statements - this announcement contains certain
forward-looking statements with respect to the portfolio of investments of
Syncona Limited. These statements and forecasts involve risk and uncertainty
because they relate to events and depend upon circumstances that may or may
not occur in the future. There are a number of factors that could cause actual
results or developments to differ materially from those expressed or implied
by these forward-looking statements. In particular, many companies in the
Syncona Limited portfolio are conducting scientific research and clinical
trials where the outcome is inherently uncertain and there is significant risk
of negative results or adverse events arising. In addition, many companies in
the Syncona Limited portfolio have yet to commercialise a product and their
ability to do so may be affected by operational, commercial and other risks.
Chair statement, Melanie Gee
This was a pivotal year for Syncona. We completed our third successful exit,
added a new company to the portfolio, optimised our financing approach,
strengthened our team and capital base, and made positive financial, clinical
and operational progress in the portfolio. I'm proud that the team achieved
this while navigating continued COVID-19 constraints and volatile market
conditions for much of the year, overcoming these challenges to deliver
significant progress towards our long-term goals.
Financial performance
The second half of CY2021 was marked by significant volatility across equity
markets globally. This uncertainty has carried on into 2022, compounded by
concerns around inflation, interest rates and Russia's invasion of Ukraine and
the ongoing humanitarian crisis. This has impacted investor sentiment towards
risk assets. We have seen a macro rotation away from growth stocks, impacting
both valuations and financings of biotech companies, especially smaller,
earlier stage companies. As market volatility has increased, the Syncona team
continues to carefully review the requirements of each of our portfolio
companies and our capital pool to ensure that our Company is well positioned
to navigate continuing challenging markets. Our balance sheet provides us with
a strategic advantage, and the team's expertise and rigorous approach to risk
management means we continue to take a disciplined approach to capital
allocation across a well-funded portfolio and exciting pipeline.
Syncona ended the year with net assets of £1,309.8 million or 194.4p per
share, a 0.3 per cent return in the year (31 March 2021: net assets of
£1,300.3 million, NAV per share of 193.9p, 4.4 per cent return), despite the
wider market backdrop for life science companies, which saw the NASDAQ
Biotechnology Index decline 12 per cent during the period. The significant NAV
uplift achieved through the sale of Gyroscope to Novartis and multiple
successful private financings offset the decline in share prices of our three
listed companies, Autolus, Freeline and Achilles. We recognise that the
performance of these listed companies has been disappointing for our
shareholders. Our team have worked closely with portfolio company management
teams to support them as they continue to execute their development plans.
Similarly, the challenging market conditions have also impacted Syncona's
share price performance in the financial year, which has been disappointing.
Whilst the market environment for early stage biotech companies continues to
be challenging, our listed companies are funded to deliver clinical data which
represent key milestones for their businesses, and we believe Syncona is well
positioned to deliver growth over the long term.
Delivering our long-term strategy underpinned by a disciplined approach to
capital allocation
Ensuring we have a strong capital base to support our companies, as they scale
and access the significant value that can be created when companies are set up
and built to deliver products to patients, is fundamental to the Syncona
model. This is a key strategic advantage that has been considerably
strengthened with the sale of Gyroscope.
Together with the management team, the Syncona Board has undertaken a review
of our financing strategy and, as outlined in our interim results in November
2021, we have optimised our approach to support us in shaping the balance of
financial risk and reward across the portfolio as we build towards a
diversified portfolio of 15-20 companies. We believe holding a small number of
companies privately over a longer time frame than we have historically will
provide our shareholders with improved risk-adjusted returns over the long
term.
Our role in society and engaging our major stakeholders
Whilst a core focus is looking at how to deliver value for our shareholders,
the Board and the investment team have continued to engage with our major
stakeholders over the year. Our people are highly motivated by making a
difference to the lives of patients by founding and building companies based
on exciting science. We believe our work can have a positive social impact
across different areas of society. I was particularly pleased that the
discussions we had around the decision to sell Gyroscope to Novartis
considered the impact of the change in ownership on each of our key
stakeholder groups, critically from a patient perspective. Our view was that
Novartis has the capability and expertise to drive Gyroscope's exciting
therapies through the development and regulatory pathway to reach patients on
an accelerated trajectory.
A core part of our social contribution, outside of the day-to-day work that we
do, has always been our donation (currently 0.35 per cent of NAV) to charity
delivered primarily through our commitment to The Syncona Foundation (the
"Foundation"). The Foundation continues to have a significant impact across
the UK and throughout the world. The charities the Foundation supports have
faced immense challenges throughout the pandemic, and we are proud that our
support has helped them to continue their important work during this time.
Sustainable impact
Following the publication of our Sustainability Policy and Responsible
Investment Policy last year, the team have worked with passion and dedication
to advance our sustainability agenda this year. I have been delighted to see
the progress that has been made in engaging our portfolio companies on these
important issues. We recognise, as significant shareholders in these
businesses, the influence we can have, and have engaged them on a number of
important topics such as diversity and animal welfare. The leadership teams at
our portfolio companies have positively engaged with us and share our
priorities. We expect to report on their progress in these areas as they move
forward.
There has also been good progress on our own culture and diversity
initiatives. These will be covered in further detail in our Sustainability
Report 2022. I am proud of the progress the Company has made in trying to
improve diversity in the life science space, whilst recognising it is an area
where we have more work to do.
We recognise the importance of having a strong framework in place to minimise
our carbon footprint. With this in mind, Syncona has reported this year for
the first time in line with the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD). It has also set an aspiration to
be net zero amongst its full value chain by 2050, including portfolio company
emissions.
Governance changes
As Syncona entered its 10(th) year since foundation, there have been a number
of Board changes, with Nigel Keen and Nicholas Moss stepping down as
Non-Executive Directors on 31 December 2021, whilst Tom Henderson stepped down
at the 2021/2 Annual General Meeting. Nigel was the founding Chair of Syncona
Partners in 2012 while Nicholas had been a Director of Syncona (then BACIT)
when it originally listed in that year; both made invaluable contributions to
the business over their nine-year tenures and leave with our immense gratitude
for their service and with the Company well positioned for future growth. Tom
also made a significant contribution to the business during his time with us
and we have been delighted that he has continued his involvement with Syncona
through his Chair role at The Syncona Foundation. Following their departures,
Virginia Holmes has taken up the role of Senior Independent Director and Gian
Piero Reverberi became Chair of the Remuneration Committee, whilst Martin
Murphy has taken over the role of Chair of Syncona Investment Management
Limited.
We have also appointed two Directors with significant life science experience
to enhance the diverse blend of expertise and insights that the Board provides
to the management team as they seek to expand and develop a maturing
portfolio. Dr Julie Cherrington comes with a strong track record of bringing
drugs into the clinic and through to commercialisation, with particular
expertise in the oncology setting, and Dr Cristina Csimma joins Syncona with
nearly 30 years' experience of drug development, new company formation, value
creation and strategic guidance across a broad range of therapeutic areas.
Cristina also brings significant expertise in venture capital and the US
biotech capital market environment. I am delighted to be working alongside
both Julie and Cristina on the next phase of Syncona's growth and development.
Looking ahead
We have further strengthened our platform this year with key hires to our
expert team, a strategic capital base, optimised financing approach, and
exciting portfolio of life science companies. The business is well positioned
to create a diversified portfolio of 15-20 companies with a goal of delivering
three to five companies in which we retain a significant ownership interest to
the point of product approval on a rolling 10-year basis. We believe if we
achieve this goal, we will deliver transformational outcomes for patients and
strong risk-adjusted returns for shareholders.
I would like to close by thanking the Syncona team, the portfolio company
management teams and my Board colleagues for their hard work and dedication
this year, as well as our shareholders and other stakeholders for their
continuing support.
Strategic and operational review, Martin Murphy, CEO and Chair of Syncona
Investment Management Limited
The Syncona life science business is celebrating 10 years of exceptional
progress and I am delighted that FY2021/2 was a year in which we further
validated our model and approach. We have made significant progress with
multiple financings and the sale of Gyroscope to Novartis, our third
successful exit and our largest ever transaction. Our portfolio has positive
momentum and we have further strengthened our team and capital base as we
continue to scale for long-term success. I am pleased that we have also
delivered a solid financial performance in what has been challenging market
conditions for biotech.
Strong financial, clinical and operational progress in the portfolio delivered
against a challenging market backdrop
We ended the year with a portfolio of 11 companies diversified across the
development cycle and therapeutic focus areas, with four at clinical stage and
Quell, SwanBio and Neogene expected to enter the clinic in the next 12 months.
Many of our portfolio companies have made good progress, with multiple private
financings at uplifted valuations, and significant clinical and operational
progress with 12 clinical data read-outs during FY2021/2. We continue to seek
to build globally competitive businesses which have the potential to make a
difference to the lives of patients and to deliver attractive returns for our
shareholders.
Against a challenging macro backdrop, we have delivered value progression
through financings in our private companies and the sale of Gyroscope to
Novartis. However, this strong performance, which delivered an aggregate
uplift of £274.8 million in NAV, has been offset by the decline in the share
prices of our listed holdings, Autolus, Achilles and Freeline, with the value
of these holdings reducing by £278.5 million. These listed holdings were
impacted by volatility in the equity markets and challenging market sentiment
towards cell and gene therapies. In the case of Freeline, the COVID-19
pandemic also led to operational challenges in the business, which we have
worked closely with the company to address. We ended the year with net assets
of £1,309.8 million or 194.4p per share, a 0.3 per cent return in the year
(31 March 2021: net assets of £1,300.3 million, NAV per share of 193.9p, 4.4
per cent return), and a strengthened capital base of £784.9 million at 31
March 2022 (31 March 2021: £578.2 million). The life science portfolio
delivered a return of 0.8 per cent in the year, compared to a return from the
NASDAQ Biotechnology Index of (12) per cent.
For Autolus and Achilles, the focus is on executing well on their clinical
plans and the new leadership team at Freeline has driven efficiencies and
increased focus on execution across the pipeline. Clinical data is the key
driver of value in our sector and all three are well positioned and well
funded to deliver on their key upcoming clinical milestones. I believe a core
strength of our diverse portfolio, which provides access to innovative private
companies, is that we have been able to deliver solid performance even when
the biotech sector is experiencing very challenging conditions.
A growing track record of successfully building globally competitive
businesses
In December 2021, we announced our largest exit to date, the sale of retinal
gene therapy company, Gyroscope, to Novartis, for up to $1.5 billion (£1.1
billion)(( 9 (#_ftn9) )). The transaction generated upfront cash proceeds of
$442.2 million (£325.8 million) for our holding in Gyroscope, a 2.9 multiple
on cost and 50 per cent IRR(( 10 (#_ftn10) )).
We have shown through the sales of Nightstar, Blue Earth and now Gyroscope,
that we can deliver strong risk-adjusted returns for our shareholders. These
three exits have generated returns of >£930 million, an aggregate 4.6
multiple on our invested capital(( 11 (#_ftn11) )).
We founded Gyroscope in 2016 upon the research of the late Sir Peter Lachmann
into complement factor I, and in under six years built it from an idea to a
leader in retinal gene therapy; a platform company with world-class delivery
and manufacturing capability, and an exciting therapy advancing through Phase
II development for the treatment of geographic atrophy (GA) secondary to dry
age-related macular degeneration (dAMD).
In addition to the upfront cash proceeds, the sale of Gyroscope will
potentially generate a further £255.3 million for Syncona, through future
milestone payments, which, if received, would take total proceeds to £581.1
million, a 5.1 multiple on original cost(( 12 (#_ftn12) )). At 31 March 2022,
we are valuing these potential future payments, on a risk-adjusted and
discounted valuation basis, at $65.4 million (£49.8 million)(( 13 (#_ftn13)
)). Syncona is also positioned to benefit from any future commercialisation of
Gyroscope's lead programme via a low single-digit royalty on future sales
revenue.
We believe this transaction further validates our strategy that a long-term
approach to ownership and focus on delivering approved medical products
ensures that we are able to build globally competitive businesses and can
deliver cash returns to fund exciting opportunities in the portfolio and in
our pipeline.
A well-funded portfolio with $712.2 million of capital raised
Our portfolio companies have continued to attract substantial capital
commitments from specialist institutional and strategic investors, with
financings announced across seven of our portfolio companies in the financial
year: Autolus, Quell, Anaveon, Gyroscope, Clade, Freeline and Resolution
Therapeutics (Resolution), totalling $712.2 million (£531.8 million), of
which Syncona committed $126.4 million (£97.7 million).
This significant investment into the portfolio continued post period end. In
April, OMass announced an oversubscribed Series B financing of £75.5 million,
with Syncona committing £15.0 million alongside a leading global syndicate of
new and existing investors including GV, Northpond, Sanofi Ventures, Oxford
Science Enterprises and Oxford University. In May, we also announced a $53.7
million (£43.6 million) commitment to SwanBio in a $55.9 million (£45.3
million) Series B financing, which will provide further funding to the company
as it prepares to dose the first patient in its lead SBT101 programme, as well
as develop its broader pipeline.
Managing risk and reward, core to the delivery of our long-term strategy
As we build towards our rolling 10-year target of a balanced and diversified
portfolio of 15-20 companies across development stage and domain area, we have
optimised our approach to funding our portfolio companies.
Our balance sheet and expertise provide us with flexibility but, as outlined
in our interim announcement, there will be an earlier decision for each
portfolio company to follow one of two main financing paths for our companies:
1. Bring in external investors early (before the point of clinical validation) to
provide capital at scale, allowing Syncona to maintain a significant ownership
position in the company whilst providing the company with a broader set of
supportive investors
2. Companies to be funded privately for longer, to the point of clinical
validation
Decisions on which approach to pursue for each portfolio company will be taken
on a company-by-company basis. This continued evolution and refinement of the
funding approach for our companies will change the financial risk profile of
our portfolio. Over the long term, we believe this approach will create a
well-diversified portfolio and help us to effectively manage some of the
volatility seen to date through accessing the public markets, as we look to
provide our shareholders with access to a financially diversified portfolio of
private and listed high growth life science companies.
We will continue to balance our position as a long-term strategic holder of
our companies alongside our focus on delivering strong risk-adjusted returns
to our shareholders. In some instances, our view of the balance of risk and
reward may result in us selling a portfolio company, as we have recently done
with Gyroscope. In any exit decision, we look at the opportunity available to
the business, the market context, the level of scientific or clinical risk,
the level of funding required to take full advantage of the opportunity, and
the potential return that could be delivered today and in the future.
Capital deployment to increase over the next financial year
During the financial year, Syncona has deployed £123.2 million of capital
into the portfolio, underpinned by our strong capital base, which has
increased to £784.9 million following the recent sale of Gyroscope. This
provides us with a strategic advantage to fund our companies over the long
term and attract world-class leaders to our portfolio, as well as the ability
to support our portfolio companies during challenging market conditions, such
as we see today.
We have reviewed our approach to capital pool asset allocation in light of the
current inflationary environment, including our approach to foreign exchange
exposure, resulting in a decision to selectively introduce a number of fund
investments to the capital pool, and to hold more US dollars on an ongoing
basis to align against future US dollar portfolio investment requirements. We
continue to balance liquidity and access to capital to protect the value of
the capital pool.
We expect to deploy £150-£250 million of capital in FY2022/3 as we found new
companies, our existing portfolio companies continue to scale, and we hold a
select number of companies privately for longer.
Innovative cell therapy company added to the portfolio and a strong pipeline
of opportunities ahead
We continue to be excited about the opportunities we see in our sector. We
welcomed Clade to our portfolio, an innovative, next generation stem-cell
based therapeutics company, leading a $87.1 million Series A financing
alongside a syndicate of long-term investors. This investment provides us with
exposure to the allogeneic cell therapy field, and further builds out our cell
therapy portfolio.
We have a strong pipeline of potential new Syncona companies as well, with
multiple advanced opportunities that are in late-stage due diligence. We are
excited by the diverse opportunities for new investment that we continue to
see across therapeutic and domain areas, including in gene therapy, cell
therapy, small molecules, biologics, antibodies, and other Third Wave
modalities such as nucleic acid therapies, as we continue to leverage the
team's expertise in identifying exceptional science that has the potential to
deliver dramatic efficacy in areas of high unmet medical need.
We are excited by the opportunities for new investment, as we look to continue
to add on average two to three companies per year.
A leading cell and gene therapy portfolio
Within our portfolio, our companies are at the forefront of innovation in cell
and gene therapy. We are excited by the transformational potential of these
treatments for patients and the significant commercial opportunity for
pioneering biotech companies in this field.
There have been some challenges identified across the cell and gene therapy
sector, namely around safety in certain gene therapy approaches and the
complexity of cell therapy manufacturing, which have impacted sentiment
towards early stage businesses operating in this space. These are not new
issues and, as part of our investment thesis, we work to navigate and address
these challenges as we found and build our companies. We are comfortable that
our companies are continuing to strive to deliver safe and effective
treatments for patients.
Scaling the Syncona business for success
We are continuing to scale Syncona, broadening the bench of talent and skills
across all areas of the business.
As previously announced, during the year Syncona has appointed Rolf Soderstrom
as Chief Financial Officer, Markus John, M.D. as Chief Medical Officer and
Head of R&D, and Fiona Langton-Smith as Chief Human Resources Officer.
These hires are already making a valuable contribution to Syncona, driving
growth and execution across the business.
We have also appointed Lisa Bright as Commercial Advisor and Ben Woolven as
Business Strategy and Operations partner. Lisa is a senior commercial leader
and board member with over 30 years' experience in biopharmaceuticals, serving
in executive and general management roles where she has developed expertise in
launching innovative specialty medicines. Lisa already serves on the board of
portfolio company Resolution and this expanded role will allow her to utilise
her experience more broadly across Syncona. Ben joined from GSK, bringing over
a decade of strategy development, business operations and project management
experience, to help build our portfolio of innovative life science companies.
Milestones across the portfolio provide opportunity for value creation and
significant long-term opportunity
Clinical data is key to driving value in our portfolio, and we are excited by
the potential for our companies to deliver transformational treatments to
patients in areas of high unmet medical need. As we look ahead, we believe our
companies are well positioned to deliver on their upcoming milestones. Our
clinical stage companies are approaching key data milestones that we believe
will drive value for our shareholders.
After a decade of exciting progress across our industry and business, we
remain focused on delivering on our strategy and long-term targets. There
continues to be a thriving life science industry in the UK and Europe, which
provides us with a significant opportunity to apply the Syncona model to
found, build and fund globally competitive businesses. With a strengthened
balance sheet and optimised funding approach, we believe Syncona is in a
strong position to build a portfolio of 15-20 leading life science companies
over a 10-year rolling period. I am excited about the next 10 years and the
potential to change the lives of patients and deliver strong returns for
shareholders.
Life science portfolio review
Clinical
Autolus (4.7% of NAV, 19% shareholding)
· Published further data in lead programme of obe-cel in adult acute
lymphoblastic leukaemia (ALL); meaningful data read-out expected in H2 CY2022
· Positive data published at EHA Congress, including from AUTO1/22 in paediatric
ALL (pALL) and AUTO4 in T cell lymphoma
· Commitment of up to $250.0 million from Blackstone; funded into 2024 with
$268.6 million(( 14 (#_ftn14) )) in cash
Autolus is developing next generation programmed T cell therapies for the
treatment of cancer with a broad clinical pipeline targeting haematological
malignancies and solid tumours.
During the period Autolus released further encouraging data in its lead
programme obe-cel in relapsed/refractory (r/r) adult ALL. As presented at the
American Society of Hematology (ASH) conference in December 2021, patients in
the Phase Ib portion of the potentially pivotal FELIX study showed comparable
results in efficacy and safety to the Phase I ALLCAR19 study, with further
data released from ALLCAR19 demonstrating continued durability of response in
patients up to 42 months post-dosing. Autolus continues to enrol patients in
the Phase II portion of the FELIX study and expects to report initial data
from this trial in the second half of CY2022, in advance of a full read-out in
H1 CY2023. This data is expected to form the basis of a planned Biologics
License Application (BLA) submission by the company. During the period,
obe-cel received Orphan Medical Product Designation and PRIority MEdicines
(PRIME) designation from the European Medicines Agency (EMA), and Regenerative
Medicine Advanced Therapy (RMAT) designation from the US Food and Drug
Administration (FDA) post period end. These designations further underline the
opportunity for obe-cel as a potentially transformational treatment for
patients with r/r adult ALL.
The company has also shown strong progress in its broader pipeline, releasing
encouraging data from four programmes at the European Hematology Association
(EHA) Congress post period end. The early clinical data showed a promising
safety and efficacy profile across the AUTO4 programme in T cell lymphoma,
AUTO1/22 in pALL, obe-cel in r/r primary central nervous system lymphoma
(PCNSL), and obe-cel in r/r B cell non-Hodgkin's lymphoma (B-NHL) and chronic
lymphocytic leukaemia (CLL). This data reinforces the strength of the pipeline
at Autolus, which is diversified across therapies targeting both B cell
malignancies and T cell lymphomas.
Autolus has continued to attract external validation for its technology in the
period, signing an Option and License Agreement with Moderna granting Moderna
an exclusive licence to develop and commercialise messenger RNA (mRNA)
therapies incorporating Autolus' proprietary binders in up to four
immuno-oncology targets. It also attracted a commitment of up to $250.0
million from Blackstone, consisting of an investment of $100.0 million in
equity and up to $150.0 million in product financing. With this funding
Autolus is able to operate with a strengthened balance sheet and is funded
into CY2024, past the delivery of the pivotal data in its lead obe-cel
programme.
The business continued to attract strong leadership to the company at Board
and executive level throughout the period. Experienced biopharma executive
John H. Johnson joined as Chair in September, following a period where
Syncona's CEO Martin Murphy held the position, bringing to the company more
than 30 years' life science experience in a non-executive and executive
capacity, where most recently he served as CEO of Strongbridge Biopharma.
Edgar Braendle joined the company as Chief Development Officer (CDO) from
Sumitomo Dainippon where he was Chief Medical Officer (CMO) and Global Head of
Development, and moving forward will have an important role in leading the
company's development functions. Dr Lucinda Crabtree was appointed Chief
Financial Officer (CFO). Lucinda was previously Senior Vice President of
Finance and played a key role in the Blackstone transaction in November 2021.
Whilst Autolus' share price has fallen this year, and has been impacted by
broader biotech sector market dynamics, we remain confident in its potential
as it approaches a meaningful data read-out in its lead obe-cel programme in
the second half of CY2022. In addition, the company has demonstrated positive
momentum across its broader pipeline and continues to show the potential
opportunity that autologous CAR T therapies represent for patients suffering
from a range of cancers.
Anaveon (4.6% of NAV, 38% shareholding)
· Published initial Phase I clinical data from its lead programme ANV419 post
period end; further data from this study is expected in H2 CY2022
· Successful Series B financing of CHF 110.0 million (£89.8 million) from
international syndicate of specialist investors, cornerstoned by Syncona at an
uplift of 88 per cent (£19.7 million, 3p per share) to previous holding
value; CHF 35.0 million (£28.6 million) commitment from Syncona
Anaveon is developing a selective Interleukin 2 (IL-2) Receptor Agonist, a
type of protein that could enhance a patient's immune system to respond
therapeutically to cancer.
The company released its first clinical data from its lead programme ANV419 in
April 2022, post period end. This data underlined the compelling selectivity
and safety profile for the drug, which is highly encouraging given the severe,
dose-limiting side effects which have been seen elsewhere in the use of human
IL-2 in solid cancers. Further data from the Phase I study is expected later
in CY2022. Based on this initial data, a Phase I/II programme of ANV419 has
been initiated in multiple tumour types to evaluate clinical efficacy in both
monotherapy and combination settings and post period end, the company received
FDA clearance of its Investigational New Drug (IND) application for the Phase
I/II study of ANV419 in advanced cutaneous melanoma.
Anaveon also successfully completed an oversubscribed CHF 110.0 million
(£89.8 million) financing in the period, attracting a leading international
investor syndicate, resulting in Syncona's holding being written up by £19.7
million (3p per share), an 88 per cent uplift. Syncona committed CHF 35.0
million (£28.6 million) to the financing, and remains Anaveon's largest
investor with a 38 per cent holding in the company. Anaveon is now well
financed and is delivering well on its clinical plan, as it progresses towards
its goal of becoming the best-in-class therapy in the IL-2 space.
Freeline (2.5% of NAV, 53% shareholding)
· Data read-outs from FLT190 programme in Fabry disease, with accelerated
progression to second dose cohort; further encouraging data in FLT180a
programme in haemophilia B
· New executive leadership with Michael Parini becoming CEO, Pamela Foulds
joining as CMO and Henning Stennicke becoming Chief Scientific Officer; Paul
Schneider joined as CFO post period end
· Extended cash runway to H2 CY2023 following $26.1 million registered direct
offering, including $20.0 million commitment from Syncona
Freeline, our gene therapy company focused on liver expression for a range of
chronic systemic diseases, continued to progress its programmes through the
clinic during the period.
In its most advanced programme, FLT180a in haemophilia B, Freeline has
completed dosing its first cohort in the B-LIEVE dose confirmation study and
has initiated dosing the second cohort post period end. Efficacy and safety
data from the first cohort will be presented at the Congress of the
International Society on Thrombosis and Haemostasis (ISTH) being held between
9-13 July 2022. This follows positive long-term follow-up data presented in
December 2021 by the company from the B-AMAZE dose-finding trial for FLT180a,
which found sustained expression of factor IX (FIX), the key enzyme for
patients with haemophilia B, up to 3.5 years post dosing.
Freeline has continued to progress the Phase I/II MARVEL-1 study for its
FLT190 programme in Fabry disease. The company presented encouraging data from
the first two patients at the lower dose cohort at the 18th Annual
WORLDSymposium(TM) in February 2022, demonstrating that the treatment
continued to be well tolerated with a potentially dose-dependent increase in
levels of the key enzyme (α-Gal A), which is absent or markedly deficient in
Fabry patients. In March, Freeline announced it would progress immediately to
the second dose cohort in the MARVEL-1 study. This followed a comprehensive
review of the pre-clinical data, and the clinical efficacy and safety data
from the first and second patients in the MARVEL-1 study. This data was
presented to the study's independent Data Monitoring Committee, which
supported accelerated progression to the second cohort. This resulted in a
revision to the previous clinical development plan which included dosing a
third patient in the lower dose cohort and publishing updated data from the
first two patients dosed, and initial data from the third, in the first half
of 2022. The company now expects to provide a programme update in H2 CY2022.
Freeline continued to progress its FLT201 programme in the year. FLT201 is a
therapy seeking to provide a functional cure in patients with Gaucher disease
Type 1, an indication where there is currently no approved gene therapy. The
company announced in May 2022 that it expects to complete dosing of the first
cohort of its Phase I/II trial by mid-CY2022, and progress to the second
cohort in H2 CY2022. An initial data read-out is expected in H2 CY2022.
The company has made a number of key changes to its executive team; Michael
Parini, formerly President and Chief Operating Officer, became CEO in August
2021 with Pamela Foulds, who was formerly at Aegerion Pharmaceuticals and
Biogen, joining as CMO in November 2021. In addition, Henning Stennicke joined
as CSO in March 2022 from Novo Nordisk, while Paul Schneider joined as CFO
post period end from Exo Therapeutics. These four experienced executives have
substantial life science experience, bringing significant development,
clinical, regulatory, operational and financial expertise in rare diseases to
the executive team.
Under the leadership of Michael Parini, the company led a thorough review of
its operational plans, discontinuing further development of its pre-clinical
programme of FLT210 in haemophilia A. This, along with a $26.1 million direct
offering by the company in March 2022 which was led by Syncona, has provided
an extension of Freeline's cash runway to H2 CY2023. Freeline also stands to
benefit from the flexibility of an American Depositary Share (ADS) purchase
agreement with Lincoln Park Capital (LPC), which was entered into during the
period. This will provide Freeline with the right to sell LPC up to $35
million in ADSs, subject to certain conditions being satisfied.
Whilst Freeline has experienced operational issues, partly driven by the
impact of delays in its clinical trials due to the COVID-19 pandemic, it is
now delivering effectively on its updated operational plan with programme
updates expected in all three of its programmes in H2 CY2022. Whilst the share
price has continued to be impacted by market conditions which have
particularly affected the valuations of smaller cap listed biotech companies,
we remain confident in the fundamentals of the business as it moves forward
with its clinical pipeline.
Achilles (1.9% of NAV, 25% of shareholding)
· Encouraging progress in Phase I/IIa studies in non-small cell lung cancer
(NSCLC) and melanoma, with positive data from the initial lower dose process
reported as the trials move to a higher dose
· Strong cash position of $236.9 million(( 15 (#_ftn15) )) with runway into H2
CY2024
Achilles, a clinical-stage biopharmaceutical company developing precision T
cell therapies to treat solid tumours, continued to make good operational
progress in the year.
The company continued to progress its ongoing Phase I/IIa studies in advanced
NSCLC and melanoma. In November 2021, the company presented data at the
Society for Immunotherapy of Cancer (SITC) annual meeting, showing the ability
of Achilles' technology to detect, quantify, and track patient-specific clonal
neoantigen-reactive T cells (cNeT). At the ESMO I-O annual meeting in December
2021, the company presented data from pre-clinical GMP manufacturing runs
showing increased cNeT doses from its VELOS™ Process 2 manufacturing, the
company's manufacturing process to generate higher doses. The company also
released further data at SITC from its VELOS™ Process 1 process, underlining
that the tolerability profile of the therapy was in-line with standard
tumour-infiltrating lymphocyte (TIL) products that have not been enriched for
cNeT reactivity.
The company continues to make progress in moving towards the higher dose
VELOS™ Process 2 manufacturing, dosing its first patient in the higher dose
in the CHIRON trial in NSCLC post period end, and expects to announce data
from the higher dose processes in both CHIRON and the THETIS trial in melanoma
in H2 CY2022. The move to the higher dose will be supported from Achilles'
manufacturing facilities at the UK Cell and Gene Therapy Catapult (CGT
Catapult), which received a manufacturing licence from the Medicines and
Healthcare products Regulatory Agency (MHRA) post period end, and a new
facility in the US in partnership with the Center for Breakthrough Medicines
(CBM).
The company also continued to strengthen its Board, with Julie O'Neill joining
as a non-executive in May 2021, bringing more than two decades of executive
experience in senior leadership roles, most recently as Executive Vice
President of Global Operations at Alexion Pharmaceuticals. Post period end,
Bernhard Ehmer also joined the Achilles Board, bringing more than three
decades of experience across senior leadership roles in biotechnology and
pharmaceuticals, most recently as CEO of Biogest AG.
Achilles continues to be well funded with a cash runway through to H2 CY2024,
and although it has seen share price volatility through the year, we remain
confident that it is well positioned to deliver on its upcoming operational
and clinical plans as it moves towards clinical read-outs from its higher dose
programmes.
Pre-clinical
Quell (6.2% of NAV, 37% shareholding)
· Initiated clinical trial sites in lead QEL-001 programme
· Successful $156.3 million (£116.6 million) Series B financing with leading
international syndicate at a 41 per cent uplift (£18.5 million, 3p per share)
to the previous holding value; co-led by Syncona with a $25.0 million (£18.7
million) commitment
Quell has been established with the aim of developing engineered T-regulatory
(Treg) cell therapies to treat a range of conditions such as solid organ
transplant rejection, autoimmune and inflammatory diseases.
The company has made good progress as it prepares to dose its first patient
with its lead candidate QEL-001, which is designed to prevent organ rejection
in liver transplant patients. It announced a collaboration with CGT Catapult
which allows the company access to one of the CGT Catapult's specialist
large-scale manufacturing facilities. Quell's Clinical Trial Application (CTA)
for QEL-001 was also approved by the UK MHRA during the period, with the
company now initiating trial sites for the programme, and is expected to dose
its first patient in H2 CY2022.
The company successfully completed a $156.3 million (£116.6 million) Series B
financing during the period, with Syncona committing $25.0 million (£18.7
million) alongside a syndicate of international specialist investors.
Following the financing, Syncona's holding in Quell was written up by £18.5
million (3p per share), a 41 per cent uplift to the previous holding value.
This funding will enable Quell to fund the development of its lead QEL-001
programme in liver transplantation, as well as allowing Quell to progress its
broader clinical pipeline, its plans to develop an allogeneic CAR-Treg
platform, and the expansion of its manufacturing footprint.
The company also expanded its leadership team during the period with Dominik
Hartl joining as CMO from the Novartis Institutes for BioMedical Research
(NIBR), and Tracey Lodie joining as CSO from Gamida Cell. They bring a wealth
of experience across cell therapies and autoimmune disorders and will play a
key role as Quell progresses QEL-001 and its broader pipeline.
SwanBio (5.7% NAV, 75% shareholding)
SwanBio is a gene therapy company focused on neurological disorders. Its lead
programme is targeting the treatment of adrenomyeloneuropathy (AMN), a genetic
neuro-degenerative disease affecting the spine.
The company continues to make progress as it approaches the clinical entry of
its lead programme SBT101 in AMN. The company received clearance for its IND
application for the programme from the FDA in January 2022, with Fast Track
and Orphan Drug designations following in February and March 2022
respectively. The company will enter the clinic with a Phase I/II study to
assess the safety and efficacy of SBT101 in H2 CY2022, assisted by the
insights gathered from its ongoing natural history study, CYGNET, which
enrolled its first patient earlier in the period. Post period end, the company
announced further pre-clinical data from SBT101, which supports the safety
profile of the therapy and supports the dosing strategy for the upcoming Phase
I/II trial.
Post period end SwanBio also completed a $55.9 million (£45.3 million) Series
B financing, with Syncona committing $53.7 million (£43.6 million). The
proceeds will primarily be used to fund the ongoing clinical development of
SBT101, as well as supporting the company's broader pipeline for other
neurological conditions. Following the financing, Syncona's holding is now
valued at £96.3 million following the first tranche investment of $19.2
million (£15.6 million), with Syncona holding 80 per cent of the company on a
fully diluted basis.
Purespring (1.4% NAV, 84% shareholding)
Purespring Therapeutics (Purespring) was founded by Syncona in November 2020,
with the company seeking to advance gene therapies for the treatment of
chronic renal diseases which are currently poorly served by existing
treatments.
The company continues to deliver on its ambitious operational growth plans as
it progresses towards the clinic with its three pre-clinical programmes, with
the goal of becoming the first AAV gene therapy company targeting the kidney
in clinical trials. Purespring built out its executive team in the period, in
particular through Julian Hanak joining as CDO. He brings 25 years' experience
spanning gene therapy, manufacturing, regulatory affairs and CMC, previously
serving as head of manufacturing at Nightstar. He will support Purespring's
CEO Richard Francis as he looks to progress the company to the clinic and
become a global leader in renal gene therapy.
Neogene (1.1% NAV, 8% shareholding)
Neogene is developing an engineered cell therapy product for solid tumours
based on a patient's own neoantigens. The company was founded in 2018 around
the work of world-class founders, Dr Ton Schumacher and Dr Carsten Linnemann.
The company signed an exclusive licence during the period with the US National
Cancer Institute for a portfolio of T cell receptors (TCRs) targeting KRAS and
TP53 mutations for the treatment of cancer. These two mutations are among the
most commonly mutated genes in cancers and combined with Neogene's proprietary
TCR isolation platform, this licence will expand Neogene's capability in
targeting multiple neoantigens in individual patients.
The company continued to attract world-class executive leaders throughout the
period. Brent Pfeiffenberger joined as COO from Bristol Myers Squibb, where he
was senior vice president of U.S. Oncology. The company also welcomed Han Lee
(previously CFO at Arcellx, Inc) as CFO, and Raphael Rousseau, M.D, PhD, as
CMO from Gritstone Bio, where he was Executive Vice President, Head of Product
Development and CMO. Dr Rousseau brings extensive experience in oncology drug
development, including in engineered T cell therapies. These three key hires
are already playing a key role in the development of Neogene as it moves
towards clinical stage, having had its CTA approved for its lead programme in
the Netherlands post period end. The company expects to enter the clinic in H1
CY2023.
Clade (0.9% NAV, 23% shareholding)
Clade was established with the aim of discovering and delivering scalable
next-generation induced pluripotent stem cell (iPSC) derived medicines.
Syncona led the $87.1 million Series A financing in November 2021, with a
commitment of $30.0 million (£21.7 million). This investment further expanded
our leading cell therapy portfolio into next generation stem cell-based
therapeutics.
The company is led by a world class team, with Dr Chad Cowan, a scientific
co-founder of CRISPR Therapeutics and former Associate Professor at Harvard
University in the Department of Stem Cell and Regenerative Biology as CEO and
Dr Jim Glasheen, co-founder of Atlanta Therapeutics and former general partner
at Technology Partners Venture Capital as President and Chief Business
Officer. Clade continues to build out its operations and leadership team, and
in the period appointed Dr Derek Hei as its Chief Technology Officer. Dr Hei
joined Clade from Vertex Pharmaceuticals, where he was Senior Vice President
of Preclinical and Clinical Manufacturing, Cell and Gene Therapies, and brings
significant expertise in cell therapy and over 20 years' experience of leading
manufacturing teams at biotech companies.
Resolution (0.8% NAV, 81% shareholding)
Resolution is a cell therapy company investigating the use of the restorative
effect of macrophages in the treatment of end-stage liver disease.
The company continued its strong operational momentum during the period. It
continued to progress its ongoing MATCH II academic study of non-engineered
autologous macrophages in liver cirrhosis. During the period Syncona committed
£10.0 million to the company in an extension to its Series A financing, which
will fund the continued development of its existing autologous programme as
well as its developing allogeneic platform(( 16 (#_ftn16) )). Following this
financing, Syncona's holding in Resolution is £10.4 million, with Syncona
holding 81 per cent of the company on a fully diluted basis.
Post-period end, the company announced a research collaboration with panCELLA
Inc, which will allow Resolution access to the company's hypo-immunogenic
engineered iPSC technology, potentially providing Resolution with the
technology to develop "off the shelf" macrophage cell therapies.
The company also continued to attract senior leaders at Board level, with Lisa
Bright joining as a non-executive in the period, bringing 30 years' experience
across pharma and early stage biotech.
Drug discovery
OMass (2.6% NAV, 49% shareholding)
OMass is developing small molecule drugs to treat rare diseases and
immunological conditions. It uses its proprietary drug platform, OdyssION™,
to accurately interrogate potential targets within their natural ecosystem,
providing critical information which heightens the chances of finding
effective small molecule medicines which will be successful in clinical
trials.
During the period the company made significant progress in developing its
pipeline of programmes, announcing five candidates with a focus on
immunological and orphan diseases. Its lead programme, focused on the MC2
receptor, has entered lead optimisation stage and is targeting orphan
endocrine disorders.
Post period end, the company successfully completed a £75.5 million Series B
financing, of which Syncona committed £15.0 million. This financing included
a syndicate of top-tier international life science investors, including new
investors GV, Northpond and Sanofi Ventures, with the proceeds to be used to
fund OMass' pipeline of programmes as the company moves towards clinical
trials. The financing resulted in a 32 per cent uplift (£8.3 million, 1p per
share) to Syncona's previous holding value in the company. Including the first
tranche of Syncona's Series B investment, its holding of OMass is now valued
at £43.7 million, holding 31 per cent of the company on a fully diluted
basis.
Life Science Investments
Beyond our core portfolio of 11 life science portfolio companies, we have a
smaller number of life science investments. During the period, Cambridge
Epigenetix (CEGX) raised $88.0 million in a Series D financing which was led
by Temasek. We chose not to participate in this funding round, however we were
pleased to see the company attract significant funding, seeing this as
validation of the company's potential. The financing round resulted in a
£15.4 million uplift to Syncona's previous holding value in the company, with
Syncona's holding now valued at £17.3 million following an initial investment
of £2.4 million.
Post period end, another of Syncona's life science investments, Forcefield
Therapeutics (Forcefield), announced its official company launch. The company
is a pioneer of best-in-class therapeutics, with its approach seeking to
retain heart function following myocardial infarctions (heart attacks),
specifically by preventing the loss of cardiomyocytes. Syncona first announced
its £5.5 million Series A investment in Forcefield in 2020, and since this
time the company has been working to identify its pre-clinical pipeline, which
is centred on three identified proteins which have the potential to retain
heart function. These targets have been identified through the 'FunSel'
discovery platform, which is also used by Syncona portfolio company
Purespring. The company was founded by Purespring co-founder Professor Mauro
Giacca, a leader in cardiovascular disease and genetic biology at the School
of Cardiovascular Medicine and Sciences, King's College London, and Richard
Francis, CEO of Purespring, also acts as CEO of Forcefield.
Next key milestones for clinical programmes at 31 March 2022
Autolus - cell therapy / oncology
Obe-cel - adult ALL Meaningful data read-out from pivotal FELIX study in obe-cel in r/r adult ALL
expected in H2 CY2022; full data expected in H1 CY2023
AUTO1/22 - paediatric ALL Longer-term follow-up data expected in H2 CY2022
Achilles - cell therapy / oncology
cNeT - non-small cell lung cancer Data from higher dose cNeT therapy expected in H2 CY2022
cNeT - melanoma Data from higher dose cNeT therapy expected in H2 CY2022
Freeline - gene therapy / systemic diseases
FLT180a - haemophilia B Initial data from first cohort in Phase I/II dose confirmation study in
haemophilia B to be presented at the Congress of the International Society on
Thrombosis and Haemostasis (ISTH), July 2022
FLT190 - Fabry disease Initiate second cohort in mid-CY2022; programme update expected in H2 CY2022
FLT201 - Gaucher disease Type 1 Initial data from Phase I/II Gaucher disease Type 1 programme expected in H2
CY2022
Anaveon - biologics
ANV419 - multiple tumour types Further data in Phase I study of selective IL-2 agonist expected in H2 CY2022
Next milestones for pre-clinical programmes as at 31 March 2022
Quell - cell therapy / autoimmune diseases
QEL-001 - liver transplant Expects to dose the first patient in Phase I/II lead programme targeting liver
transplant in H2 CY2022
SwanBio - gene therapy / neurological diseases
SBT101 - adrenomyeloneuropathy (AMN) Expects to enter the clinic with lead programme targeting AMN in H2 CY2022
Neogene - TCR cell therapy
NT-125 - advanced solid tumours Expects to enter clinic with TCR therapy in H1 CY2023
Life science portfolio valuation table
Company 31 March Net invest-ment in the period Valuation FX 31 March 2022 % of Group Valuation Fully diluted owner- Focus area
2021 change movement NAV basis(( 17 (#_ftn17) )),(( 18 (#_ftn18) )),(( 19 (#_ftn19) )) ship
stake
(£m) (£m) (£m) (£m) (£m) (%)
Portfolio Companies
Clinical
Autolus 81.2 - (22.1) 2.9 62.0 4.7% Quoted 18.8% Cell therapy
Anaveon 18.5 20.4 17.9 3.0 59.8 4.6% PRI 37.9% Biologics
Freeline 167.9 15.4 (151.6) 0.6 32.3 2.5% Quoted 53.4% Gene therapy
Achilles 133.1 - (109.5) 1.2 24.8 1.9% Quoted 25.3% Cell therapy
Gyroscope 150.1 (325.8) 168.3 7.4 - 0.0% Sold 0.0% Gene therapy
Pre-Clinical
Quell 35.1 26.3 18.5 1.5 81.4 6.2% PRI 37.4% Cell therapy
SwanBio 53.7 17.7 0.5 3.2 75.1 5.7% Cost 75.4%(( 20 (#_ftn20) )) Gene therapy
Purespring 3.9 14.6 - - 18.5 1.4% Cost 84.0% Gene therapy
Neogene 11.0 2.9 - 0.6 14.5 1.1% Cost 7.9% Cell therapy
Clade - 10.8 - 0.6 11.4 0.9% Cost 22.6% Cell Therapy
Resolution 7.4 3.0 - - 10.4 0.8% Cost 81.1% Cell Therapy
Drug discovery
OMass 16.4 10.0 8.3 - 34.7 2.6% PRI 49.3%(( 21 (#_ftn21) )) Small molecule
Life Science Investment
Gyroscope milestone payments(( 22 (#_ftn22) )) - - 49.8 - 49.8 3.8% DCF 0.0% Gene therapy
CRT Pioneer Fund 36.6 (0.4) (8.0) - 28.2 2.2% Adj Third Party 64.1% Oncology
CEGX 1.5 - 15.4 0.4 17.3 1.3% PRI 5.5% Epigenetics
Forcefield 0.4 2.1 - - 2.5 0.2% Cost 82.0% Biologics
Adaptimmune 5.3 - (3.2) 0.1 2.2 0.2% Quoted 0.8% Cell therapy
Total Life Science Portfolio 722.1 (203.0) (15.7) 21.5 524.9 40.1%
Supplementary information
Our growing track record
− £905.7 million deployed in life science portfolio since foundation
− 27 per cent IRR and 1.6x multiple on cost across whole
portfolio(( 23 (#_ftn23) ))
Company Cost (£m) Value (£m) Multiple IRR
Generation 1
Blue Earth 35.3 351.0 9.9 83%
Nightstar 56.4 255.8 4.5 71%
Autolus 124.0 62.0 0.5 -18%
Generation 2
Freeline 183.1 32.3 0.2 -55%
Gyroscope 113.1 374.8 3.3 57%
Achilles 60.7 24.8 0.4 -29%
Generation 3
OMass 26.4 34.7 1.3 16%
Resolution 10.4 10.4 1.0 0%
SwanBio 75.1 75.1 1.0 0%
Anaveon 39.9 59.8 1.5 38%
Quell 61.4 81.4 1.3 24%
Azeria 6.5 2.1 0.3 -58%
Generation 4
Neogene 14.3 14.5 1.0 0%
Purespring 18.5 18.5 1.0 0%
Clade 10.8 11.4 1.1 9%
Forcefield 2.5 2.5 1.0 0%
Investments
Unrealised Investments 50.9 47.7 0.9 0%
Realised Investments 16.5 21.8 1.3 26%
Total 905.7 1,480.5 1.6 27%
Clinical trial disclosure process
Currently, our portfolio companies are progressing 11 clinical trials. These
trials represent both a significant opportunity and risk for each company
and for Syncona.
Unlike typical randomised controlled pharmaceutical clinical trials, currently
all clinical trials are open-label trials. Open label trials are clinical
studies in which both the researchers and the patients are aware of the drug
being given. In some cases, the number of patients in a trial may be
relatively small. Data is generated as each patient is dosed with the drug in
a trial and is collected over time as results of the treatment are analysed
and, in the early stages of these studies, dose-ranging
studies are completed.
Because of the trial design, clinical data in open-label trials is received by
our portfolio companies on a frequent basis. However, individual data points
need to be treated with caution, and it is typically only when all or
substantially all of the data from a trial is available and can be analysed
that meaningful conclusions can be drawn from that data about the prospect of
success or otherwise of the trial. In particular it is highly possible that
early developments (positive or negative) in a trial can be overtaken by later
analysis with further data as the trial progresses.
Our portfolio companies may decide or be required to announce publicly interim
clinical trial data, for example where the company or researchers connected
with it are presenting at a scientific conference, and we will generally also
issue a simultaneous announcement about that clinical trial data. We would
also expect to announce our assessment of the results of a trial at the point
we conclude on the data available to us that it has succeeded or failed. We
would not generally expect to otherwise announce our assessment of interim
clinical data in an ongoing trial, although we review all such data to enable
us to comply with our legal obligations under the Market Abuse Regulation or
otherwise.
Principal risks and uncertainties
The principal risks that the Board has identified are set out in the following
table, along with the consequences and mitigation of each risk. Further
information on risk factors is set out in note 18 to the Consolidated
Financial Statements.
Description Key Controls Changes in the year
Business model risks
Scientific theses fail · Extensive due diligence process, resulting in identification of key Continued to seek to de-risk scientific theses in our early stage companies.
risks and clear operational plan to mitigate these.
· Tranching of investment to minimise capital exposed until key
We invest in scientific ideas that we believe have the potential to be de-risking steps are completed (particularly fundamental biological Significant capital raised by portfolio companies to support de-risking
treatments for a range of diseases, but where there may be no or little uncertainty). Consideration of syndicating investments. scientific theses.
substantial evidence of clinical effectiveness or ability to deliver the
technology in a commercially viable way. Material capital may need to be · Syncona team work closely with new companies to ensure focus on key
invested to resolve these uncertainties. risks and high quality operational build-out. Team members may take operating
roles where appropriate.
· Robust oversight by Syncona team, including formal review at our
Impacts include: quarterly business review and ongoing monitoring through board roles.
· Financial loss and reputational impact from failure of investment.
Clinical development doesn't deliver a commercially viable product · Build products in areas with significant unmet need and that show 12 clinical data read-outs during the financial year with our most clinically
substantial and differentiated efficacy and therefore will potentially have advanced company, Autolus, approaching a meaningful read-out from its pivotal
less competition and more pricing power. trial in obe-cel in H2 CY2022.
Success for our companies depends on delivering a commercially viable target · Focus, oversight and support from the Syncona team on recruiting
product profile through clinical development. This can be affected by trial dedicated specialist clinical teams in each portfolio company to manage trials
data not showing required efficacy or adverse safety events. It can also be effectively, maximise likelihood of success, and with a clear understanding of One company, Anaveon, moved into the clinic with its lead programme, ANV419.
affected by progress of competitors, IP rights, the company's ability to gain the requirements of regulators.
regulatory approval for and credibly market the product, potential pricing and
ability to manufacture cost-effectively. · Investment process considers strength of IP or regulatory exclusivity
protection and this is then operationalised by each company. Competitive environment has intensified for some of our companies.
· Investment process considers manufacturing as a key issue from
Impacts include: inception of each company, rather than leaving to later stage, and this is
then operationalised.
· Material impact on valuation, given capital required to take products
through clinical development. · Company business plans seek to have multiple products in different
indications so that failure in one does not damage all value of company.
· Material harm to one or more individuals, and potential reputational
issues for Syncona. · At portfolio level, building a portfolio with multiple companies at
clinical/later stages, to enable us to absorb failures. Consideration of
syndicating investments.
· Clinical trials policy requires reporting of significant trial issues
to Syncona team and to Board in serious cases.
Portfolio concentration to · Team pays close attention to scientific, clinical, regulatory or Continued to monitor developments in cell and gene therapy, particularly the
commercial developments in the field. outcomes of the FDA advisory committee on gene therapy in September and safety
platform technology
developments on certain programmes under development; market sentiment to cell
· Where there are genuine risks, identified and managed through and gene therapy has been less positive in the year.
diligence and investment process.
The Syncona team bring strong domain experience in cell and gene therapy, and
a substantial part of the portfolio is in these areas. Systemic issues
(whether scientific, clinical, regulatory or commercial) may emerge that
affect these technologies.
Impacts include:
· Material impact on valuation.
· Impact on reputation of Syncona resulting from failure of technology
we are strongly identified with.
Concentration risk and binary outcomes · Board provides strong oversight drawing on a range of relevant Sale of Gyroscope allowed us to capture significant returns and retain
experience, including life science, FTSE and investment company expertise. exposure to future successful development through milestone payments and
The Company's investment strategy is to invest in a concentrated portfolio of Board has clear understanding of strategy and risk. royalties, while removing risk of a negative outcome.
early stage life science businesses where it is necessary to accept very
significant and often binary risks. It is expected that some things will · Transparent communication from Syncona team to Board about portfolio
succeed (and potentially result in substantial returns) but others will fail opportunities and risks including upside and downside valuation cases.
(potentially resulting in substantial loss of value). This is likely to result
Significant reduction in value during year of listed portfolio companies, as
in a volatile return profile. · Clear communication to shareholders of the opportunities and risks of market sentiment changed.
the strategy.
Impacts include:
· Provide information to shareholders about portfolio companies to
· Loss of shareholder support, potentially reducing ability to raise assist them in understanding portfolio value and risks.
new equity when required.
· Building diversified portfolio with multiple companies and products
· Reputation risk from perceived failure of business model. at clinical/later stages. Consideration of syndicating investments.
· Willing to sell investments at/above fair value, prior to approval,
which removes binary risks.
Financing risks
Not having capital to invest · Syncona team monitoring capital allocation on an ongoing basis with a Sale of Gyroscope strengthened capital base to £784.9 million at 31 March
3-year forward outlook, with transparent reporting to the Board. 2022.
· Seek to maintain capital pool of 2-3 years' (or more) financing
Early stage life science businesses are very capital intensive, and delivering requirements, although noting this risks being a significant drag on overall
our strategy will require us to have access to substantial capital. returns. Portfolio raised $712.2 million of capital across seven financings during the
period; $585.8 million committed by global institutional investors and
· Maximise potential to raise new equity through developing companies, with $126.4 million from Syncona.
institutional shareholder base.
Impacts include:
· Ongoing consideration of alternative or additional capital raising
· Dilution of stake in portfolio companies with loss of potential structures (e.g. side funds; operating company vs investment company; use of
upside. debt).
· Loss of control of portfolio companies resulting in poorer strategic · Ongoing consideration of syndication strategy at portfolio company
execution. level, to maximise value and minimise dilution when external capital is
brought in. Clarity of funding options: solo hold and partner approaches.
· Inability for portfolio companies to deliver their business plans due
to financing constraint. · Ongoing consideration of exit opportunities for portfolio companies.
Private/public markets don't value or fund our companies when we wish to · Maintain access to significant capital, to reduce risk of being Macroeconomic headwinds have impacted sentiment in the biotech sector, with
access them forced to syndicate / forced seller. particular impact on public markets for biotech companies.
· Focus, oversight and support from the Syncona team on financing plan
for each company, with support to the company to develop its financing story
Our capital allocation strategy includes considering bringing third party at an early stage. Sale of Gyroscope to Novartis for up to $1.5 billion, with $800 million in
capital into our portfolio companies, at the right stage of development. In up-front cash proceeds to the selling shareholders and up to $700 million in
addition we may consider exit opportunities either on the public markets or further milestone payments.
through private sales.
Portfolio raised $712.2 million of capital across seven financings during the
Impacts include: period; $585.8 million committed by global institutional investors and
companies, with $126.4 million from Syncona, to fund to key milestones.
· Syncona is required to invest further capital, leading to greater
exposure to individual companies than desired and less ability to support
other companies.
· Inability for portfolio companies to deliver their business plans due
to financing constraint.
· Exit opportunities may be less attractive, with impact on
availability of capital.
· Reputation risk from failed transactions.
Capital pool losses or illiquidity · Protection against risk and liquidity are key characteristics; return Reviewed approach to capital pool asset allocation in light of inflationary
a focus to avoid loss of real value, but secondary consideration. environment, resulting in decision to introduce a number of fund investments
to the capital pool and to hold more US dollars on an ongoing basis.
· Risk parameters monitored monthly by Syncona team, with enhanced
The capital pool is exposed to the risk of loss or illiquidity. Impacts review on a quarterly basis.
include:
· External adviser (Barnett Waddingham) engaged to carry out annual
· Loss of capital (or reduction in the value of capital due to review of capital pool against chosen parameters.
inflation).
· Inability to finance life science investments.
· Reputation risk from losses in non-core area.
Operational execution risks
Reliance on small Syncona team · Market benchmarking of remuneration for staff. Changes to life science investment landscape in the UK and Europe, potentially
creating greater competition in recruitment, as a result this risk was
· Provision of long-term incentive scheme to incentivise and retain increased in the period.
staff.
The execution of the Company's strategy is dependent on a small number of key
individuals with specialised expertise. This is at risk if the team does not · Ongoing recruitment to strengthen team and deepen resilience.
succeed in retaining skilled personnel or is unable to recruit new personnel
Seeking to broaden bench of talent and skills within the business. Appointed
with relevant skills. · Focus on investment team development to provide internal succession Rolf Soderstrom as Chief Financial Officer, Markus John, M.D. as Chief Medical
from next tier of leaders, with process supported by CHRO. Officer and Head of R&D, and Fiona Langton-Smith as Chief Human Resources
Officer, and established a Corporate Team to oversee management of the
· Process development within corporate functions to reduce single point business.
Impacts include: risks.
· Poorer oversight of portfolio companies, risk of loss of value from · Building high quality teams within portfolio companies that can
poor strategic/operational decisions. operate at a high strategic level. During the year Dominic Schmidt and Ken Galbraith left the business, and we
appointed Lisa Bright as Commercial Advisor and Ben Woolven as Business
· Insufficient resource to take advantage of investment opportunities. Strategy and Operations partner.
· Loss of license to operate if insufficient resource or processes mean
we fail to meet stakeholder expectations.
Systems and controls failures · Systems and control procedures are reviewed regularly by Syncona Implementing processes during the year to deliver on our Sustainability
team, with input from specialist external advisers where appropriate. Policy.
· Certain systems have been outsourced to the Administrator who
We rely on a series of systems and controls to ensure proper control of provides independent assurance of its own systems.
assets, record-keeping and reporting, and operation of Syncona's business.
Ongoing reviews of our processes, working with external advisers where
· Annual review of systems and controls carried out by the Audit appropriate, to seek to meet current stakeholder requirements.
Committee.
Impacts include:
· Risk of loss of assets.
· Inability to properly oversee Syncona team.
· Inaccurate reporting to shareholders.
· Syncona team unable to carry out its functions properly.
· Breach of legal or regulatory requirements.
· Reputation risk, loss of confidence from shareholders and other
stakeholders.
Portfolio company operational risks
Unable to build high quality teams in portfolio companies · Seek to build high quality teams in portfolio companies. This can Team and Board changes in a number of our companies, including Autolus,
begin before an investment is made. Freeline, Achilles, Quell, Purespring, Resolution and others.
· Ensure executive team aim to build a high quality culture from the
Portfolio companies are reliant on recruiting highly specialised, high quality outset, and monitor and support its effectiveness.
staff to deliver their strategies. This can be challenging given a limited
Anaveon entered the clinic, joining Autolus, Freeline and Achilles, and a
pool of people with the necessary skills in the UK/Europe. In addition, these · Build strong portfolio company boards (including representatives from further three companies are approaching the clinic. With an increasing number
are fast-growing companies and establishing a high quality culture from the our team and experienced non-execs) to provide effective oversight and of companies in the clinic, both the capital invested and the operational
outset is key. support. challenges have increased. As a result, this risk was increased in the period.
· Support from our team, including taking operational roles where
necessary, and facilitating access to support from across the portfolio where
Impacts include: appropriate, or external consultant resource from our networks.
· Ultimately, failure to deliver key elements of operational plans
resulting in material loss of value.
Unable to execute business plans · Seek to build high quality teams in portfolio companies. This can Operational issues at Freeline, partly driven by the impact of delays in its
begin before an investment is made. Where possible these should include clinical trials due to the COVID-19 pandemic.
resilience to deal with unexpected external factors, though companies will
also be focused on maximising value from capital invested.
Portfolio company business plans may be impacted by a number of external
factors, including access to patients, delivery by suppliers, and the wider · Seek to maintain capital buffers to cope with unanticipated issues
business environment (including factors such as COVID-19). before cash out.
· Oversight of key external factors/relationships that are important to
delivering business plan.
Impacts include:
· Sharing of knowledge (where appropriate) across portfolio to support
· Ultimately, failure to deliver key elements of operational plans companies in managing external factors.
resulting in material loss of value.
Responsibility statement
The Directors' responsibility statement below has been prepared in conjunction
with, and is extracted from, the Company's Annual Report and Accounts for the
year ended 31 March 2022 ("2022 Annual Report"), whereas this announcement
contains extracts from the 2022 Annual Report. The responsibility statement is
repeated here solely for the purpose of complying with DTR 6.3.5. These
responsibilities are for the full 2022 Annual Report and not the extracted
information presented in this announcement or otherwise.
The Directors of the Company are:
Melanie Gee, Chair
Julie Cherrington, Non-Executive Director
Cristina Csimma, Non-Executive Director
Virginia Holmes, Non-Executive Director
Rob Hutchinson, Non-Executive Director
Kemal Malik, Non-Executive Director
Gian Piero Reverberi, Non-Executive Director
The Directors confirm to the best of our knowledge:
§ the financial statements, prepared in accordance with International
Financial Reporting Standards as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Group and the undertakings included in the consolidation taken as
a whole;
§ the Annual Report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary for
shareholders to assess the Company's position and performance, business model
and strategy: and
§ the financial statements include information and details in the Chair's
statement, the Strategic Report, the Corporate Governance Report, the
Directors' report and the notes to the Consolidated Financial Statements,
which provide a fair review of the information required by:
a) DTR 4.1.8 of the Disclosure and Transparency Rules, being a fair review
of the Company business and a description of the principal risks and
uncertainties facing the Company; and
b) DTR 4.1.11 of the Disclosure and Transparency Rules, being an
indication of important events that have occurred since the end of the
financial year and the likely future development of the Company
SYNCONA LIMITED
UNAUDITED GROUP PORTFOLIO STATEMENT
As at 31 March 2022
2022 2021
Fair value % of Fair value % of
£'000 Group NAV £'000 Group NAV
£'000 £'000
Life science portfolio
Life science companies
Achilles Therapeutics plc 24,810 1.9 133,127 10.2
Anaveon AG 59,818 4.6 18,575 1.4
Autolus Therapeutics plc 61,979 4.7 81,180 6.2
Cambridge Epigenetix Limited 17,345 1.3 - -
Freeline Therapeutics Holdings plc 32,277 2.5 167,902 12.9
Gyroscope Therapeutics Limited - - 150,062 11.5
OMass Therapeutics Limited 34,712 2.7 16,436 1.3
Purespring Therapeutics Limited 18,500 1.4 - -
Quell Therapeutics Limited 81,416 6.2 35,069 2.7
SwanBio Therapeutics Limited 75,103 5.7 53,689 4.1
Companies of less than 1% of NAV 40,929 3.1 29,526 2.4
Total life science companies((1)) 446,889 34.1 685,566 52.7
CRT Pioneer Fund((2)) 28,183 2.2 36,576 2.8
Milestone payments 49,802 3.8 - -
Total life science portfolio((3)) 524,874 40.1 722,142 55.5
Capital pool investments
UK treasury bills 179,984 13.7 344,862 26.5
Capital pool investment funds 99,489 7.6 - -
Legacy funds 39,857 3.1 72,366 5.6
Total capital pool investments((2)) 319,330 24.4 417,228 32.1
Other net assets
Cash and cash equivalents((4)) 485,223 37.0 199,833 15.4
Charitable donations (4,250) (0.3) (4,710) (0.4)
Other assets and liabilities (15,336) (1.2) (34,204) (2.6)
Total other net assets 465,637 35.5 160,919 12.4
Total NAV of the Group 1,309,841 100.0 1,300,289 100.0
(()(1)) The fair value of Syncona Holdings Limited amounting to £980,282,165
(31 March 2021: £956,279,205) is comprised of investments in life science
companies of £446,888,721 (31 March 2021: £685,566,309), investments in
Syncona Investment Management Limited of £5,822,250 (31 March 2021:
£5,752,423), milestone payments on Gyroscope sale of £49,801,548 (31 March
2021: £Nil), other net assets of £482,281,565 (31 March 2021: £269,383,714)
in Syncona Portfolio Limited and other net liabilities of £4,511,919 (31
March 2021: £4,422,241) in Syncona Holdings Limited.
((2)) The fair value of the investment in Syncona Investments LP Incorporated
amounting to £342,949,949 (31 March 2021: £371,667,317) is comprised of the
investment in the capital pool investments of £319,330,598 (31 March 2021:
£417,227,726), the investment in the CRT Pioneer Fund of £28,183,492 (31
March 2021: £36,576,032), cash of £475,786,299 (31 March 2021:
£189,439,798) and other net liabilities of £480,350,440 (31 March 2021:
£271,576,239).
((3)) The life science portfolio of £524,873,761 (31 March 2021:
£722,142,341) consists of life science investments totalling £446,888,721
(31 March 2021: £685,566,309), milestone payments on Gyroscope sale of
£49,801,548 held by Syncona Holdings Limited and CRT Pioneer Fund of
£28,183,492 (31 March 2021: £36,576,032) held by Syncona Investments LP
Incorporated.
((4)) Cash amounting to £275,902 (31 March 2021: £13,916) is held by Syncona
Limited. The remaining £484,947,557 (31 March 2021: £199,819,232) is held by
its subsidiaries other than portfolio companies ("Syncona Group Companies").
Cash held by Syncona Group Companies other than Syncona GP Limited is not
shown in Syncona Limited's Consolidated Statement of Financial Position since
it is included within financial assets at fair value through profit or loss.
See note 1 for a description of Syncona Holdings Limited and Syncona
Investments LP Incorporated.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2022
2022 2021
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment income
Other income 6 25,391 - 25,391 19,934 - 19,934
Total investment income 25,391 - 25,391 19,934 - 19,934
Net (losses)/gains on financial assets at fair value through profit or loss 7 - (6,698) (6,698) - 58,605 58,605
Total (losses)/gains - (6,698) (6,698) - 58,605 58,605
Expenses
Charitable donations 8 4,250 - 4,250 4,710 - 4,710
General expenses 9 5,605 - 5,605 20,671 - 20,671
Total expenses 9,855 - 9,855 25,381 - 25,381
Profit/(loss) for the year 15,536 (6,698) 8,838 (5,447) 58,605 53,158
Profit/(loss) for the year after tax 15,536 (6,698) 8,838 (5,447) 58,605 53,158
Earnings/(loss) per Ordinary Share 14 2.34p (1.01)p 1.33p (0.82)p 8.82p 8.00p
Earnings/(loss) per Diluted Share 14 2.31p (1.00)p 1.31p (0.81)p 8.74p 7.93p
The total columns of this statement represent the Group's Consolidated
Statement of Comprehensive Income, prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European Union.
The profit/(loss) for the year is equivalent to the "total comprehensive
income" as defined by International Accounting Standards ("IAS") 1
"Presentation of Financial Statements". There is no other comprehensive income
as defined by IFRS.
All the items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2022
Notes 2022 2021
£'000 £'000
ASSETS
Non-current assets
Financial assets at fair value through profit or loss 10 1,323,232 1,327,946
Current assets
Bank and cash deposits 276 14
Trade and other receivables 11 9,878 10,446
Total assets 1,333,386 1,338,406
LIABILITIES AND EQUITY
Non-current liabilities
Share based payments 12 8,459 23,505
Current liabilities
Share based payments 12 9,388 8,836
Payables 13 5,698 5,776
Total liabilities 23,545 38,117
EQUITY
Share capital 14 767,999 767,999
Capital reserves 14 530,449 537,147
Revenue reserves 11,393 (4,857)
Total equity 1,309,841 1,300,289
Total liabilities and equity 1,333,386 1,338,406
Total net assets attributable to holders of Ordinary Shares 1,309,841 1,300,289
Number of Ordinary Shares in issue 14 666,733,588 664,580,417
Net assets attributable to holders of Ordinary Shares 14 £1.96 £1.96
(per share)
Diluted NAV (per share) 14 £1.94 £1.94
The audited Consolidated Financial Statements were approved on 15 June 2022
and signed on behalf of the Board of Directors by:
Melanie
Gee
Rob Hutchinson
Chair
Non-Executive Director
The accompanying notes are an integral part of the financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF
ORDINARY SHARES
For the year ended 31 March 2022
Notes Share Capital Revenue Total
capital reserves reserves
£'000 £'000 £'000 £'000
As at 31 March 2020 767,999 478,542 - 1,246,541
Total comprehensive income for the year - 58,605 (5,447) 53,158
Transactions with shareholders:
Share based payments - - 590 590
As at 31 March 2021 767,999 537,147 (4,857) 1,300,289
Total comprehensive income for the year - (6,698) 15,536 8,838
Transactions with shareholders:
Share based payments - - 714 714
As at 31 March 2022 767,999 530,449 11,393 1,309,841
The accompanying notes are an integral part of the financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2022
Notes 2022 2021
£'000 £'000
Cash flows from operating activities
Profit for the year 8,838 53,158
Adjusted for:
Losses/(gains) on financial assets at fair value through profit or loss 7 6,698 (58,605)
Non-cash movement in share based payment provision (15,764) 6,374
Operating cash flows before movements in working capital (228) 927
Decrease/(increase) in trade and other receivables 568 (1,315)
(Decrease)/increase in other payables (78) 385
Net cash generated from/(used in) from operating activities 262 (3)
Net increase/(decrease) in cash and cash equivalents 262 (3)
Cash and cash equivalents at beginning of the year 14 17
Cash and cash equivalents at end of the year 276 14
Cash held by the Company and Syncona Group companies is disclosed in the Group
Portfolio Statement.
The accompanying notes are an integral part of the financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2022
1. GENERAL INFORMATION
Syncona Limited (the "Company") is incorporated in Guernsey as a registered
closed-ended investment company. The Company's Ordinary Shares were listed on
the premium segment of the London Stock Exchange on 26 October 2012 when it
commenced its business.
The Company makes its life science investments through Syncona Holdings
Limited (the "Holding Company"), a subsidiary of the Company. The Company
maintains its capital pool through Syncona Investments LP Incorporated (the
"Partnership"), in which the Company is the sole limited partner. The general
partner of the Partnership is Syncona GP Limited (the "General Partner"), a
wholly-owned subsidiary of the Company. Syncona Limited and Syncona GP Limited
are collectively referred to as the "Group".
Syncona Investment Management Limited ("SIML"), a subsidiary, was appointed as
the Company's Alternative Investment Fund Manager ("Investment Manager").
The investment objective and policy is set out in the Directors' Report within
the Annual Report and Accounts.
2. ACCOUNTING POLICIES
The Group's investments in life science companies, other investments within
the life science portfolio and capital pool investments are held through the
Holding Company and the Partnership, which are measured at fair value through
profit or loss in accordance with the requirement of IFRS 10 "Consolidated
Financial Statements".
Statement of compliance
The Consolidated Financial Statements which give a true and fair view are
prepared in accordance with IFRS as adopted by the European Union and are in
compliance with The Companies (Guernsey) Law, 2008. The Consolidated Financial
Statements were approved by the Board and authorised for issue on 15 June
2022.
Information reported to the Board (the Chief Operating Decision Maker
("CODM")) for the purpose of allocating resources and monitoring performance
of the Group's overall strategy to found, build and fund companies in
innovative areas of healthcare, consists of financial information reported at
the Group level. The capital pool is fundamental to the delivery of the
Group's strategy and performance is reviewed by the CODM only to the extent
this enables the allocation of those resources to support the Group's
investment in life science companies. There are no reconciling items between
the results contained within this information and amounts reported in the
financial statements. IFRS requires operating segments to be identified on the
basis of the internal financial reports that are provided to the CODM, and as
such the Directors present the results of the Group as a single operating
segment.
Basis of preparation
The Consolidated Financial Statements have been prepared under the historical
cost basis, except for investments and derivatives held at fair value through
profit or loss, which have been measured at fair value.
The financial information set out in this announcement does not constitute the
Group's statutory accounts for the years ended 2022 and 2021 but is derived
from those accounts. The auditors have reported on those accounts and provided
an unqualified opinion, including key audit matters within their audit report.
It did not draw attention to any matters by way of emphasis without qualifying
their report and did not contain statements under The Companies (Guernsey)
Law, 2008. A copy is available upon written request from the Company's
registered office. The auditors' reports do not necessarily report on all of
the information contained in these financial results. Shareholders are
therefore advised that in order to obtain a full understanding of the nature
of the auditors' engagement they should obtain a copy of the auditors' reports
together with the accompanying financial information from the issuer's
registered office.
Functional and presentational currency
The Group's functional currency is Sterling ("£" or "GBP"). £ is the
currency in which the Group measures its performance and reports its results.
Ordinary Shares are denominated in £ and any dividends declared are paid in
£. The Directors believe that £ best represents the functional currency,
although the Group has significant exposure to other currencies as described
in note 18.
£ is also the Group's presentational currency.
Going concern
The financial statements are prepared on a going concern basis. The net assets
held by the Group and within investment entities controlled by the Group
currently consist of securities and cash amounting to £1,309.8 million (31
March 2021: £1,300.3 million) of which £764.7 million (31 March 2021:
£544.7 million) are readily realisable within three months in normal market
conditions, and liabilities including uncalled commitments to underlying
investments and funds amounting to £88.5 million (31 March 2021: £115.5
million).
Given the Group's capital pool of £784.9 million (31 March 2021: £578.2
million) the Directors consider that the Group has adequate financial
resources to continue its operations, including existing commitments to its
investments and planned additional capital expenditure for 12 months following
the approval of the financial statements. The Directors also continue to
monitor the potential future impact of COVID-19, the war in Ukraine and the
ever changing macro environment on the Group. Hence, the Directors believe
that it is appropriate to continue to adopt the going concern basis in
preparing the Consolidated Financial Statements.
Basis of consolidation
The Group's Consolidated Financial Statements consist of the financial
statements of the Company and the General Partner.
The results of the General Partner during the year are consolidated in the
Consolidated Statement of Comprehensive Income from the effective date of
incorporation and is consolidated in full. The financial statements of the
General Partner are prepared in accordance with United Kingdom ("UK")
Accounting Standards under Financial Reporting Standard 101 "Reduced
Disclosure Framework". Where necessary, adjustments are made to the financial
statements of the General Partner to bring the accounting policies used in
line with those used by the Group. During the years ended 31 March 2022 and
31 March 2021, no such adjustments have been made. All intra-group
transactions, balances and expenses are eliminated on consolidation.
Entities that meet the definition of an investment entity under IFRS 10 are
held at fair value through profit or loss in accordance with IFRS 9 "Financial
Instruments". The Company, the Partnership and the Holding Company meet the
definition of Investment Entities. The General Partner does not meet the
definition of an Investment Entity due to providing investment management
related services to the Group, and is therefore consolidated.
New standards adopted by the Group
The following amendments to accounting standards became effective during the
year and were applied consistently:
Amendments to IFRS 16 "Accounting for COVID-19 related rent concessions"
In March 2021, the IASB issued the amendment to IFRS 16 COVID-19-Related Rent
Concessions beyond 30 June 2021, to update the condition to apply the relief
to a reduction in lease payments originally due on or before 30 June 2022 from
30 June 2021.
The amendment has had no impact on the Group's financial statements.
There are no other standards, amendments to standards or interpretations that
are effective for annual periods beginning on 31 March 2022 that have a
material effect on the Group's Consolidated Financial Statements.
Standards, amendments and interpretations not yet effective
There are a number of other standards, amendments and interpretation that are
not yet effective and are not relevant to the Group as listed below. These are
not discussed in detail as no material impact to the Group's Consolidated
Financial Statements is expected.
- Amendments to IFRS 17, "Insurance Contracts";
- Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an
investor and its associate or joint venture;
- Amendments to IAS 1: Classification of Liabilities as Current or
Non-current;
- Amendments to IFRS 3: Reference to the Conceptual Framework;
- Amendments to IAS 37: Onerous Contracts - Cost of Fulfilling a Contract.
- Amendments to IAS 8: Accounting Policies, Changes in Accounting Estimates
and Errors
- Amendments to IAS 12: Income Taxes
Financial instruments
Financial assets and derivatives are recognised in the Group's Consolidated
Statement of Financial Position when the Group becomes a party to the
contractual provisions of the instrument.
Under IFRS 9, on initial recognition, a financial asset is classified as
measured at amortised cost, fair value through other comprehensive income, or
fair value through profit or loss.
Financial assets at fair value through profit or loss
The Group classifies its financial assets as investments at fair value through
profit or loss based on the Group's business model and the contractual cash
flow characteristics of the financial assets.
Financial assets measured at amortised cost
Financial assets are measured at amortised cost if held within a business
model whose objective is to hold financial assets in order to collect
contractual cash flows and its contractual terms give rise on specified dates
to cash flows that are solely payments of principal and interest on the
principal amount outstanding. The Group includes in this category short-term
non-financing receivables including trade and other receivables.
As at 31 March 2022 and 31 March 2021, there are no financial assets measured
at fair value through other comprehensive income.
Financial liabilities measured at amortised cost
This category includes all financial liabilities, other than those measured at
fair value through profit or loss. The Group includes in this category
short-term payables.
Fair value
The Group's investments in life science companies and capital pool investments
are held through the Holding Company and the Partnership which are measured at
fair value through profit or loss in accordance with the requirement of IFRS
10. The net asset value ("NAV") of the Holding Company and the Partnership
represent the Group's assessment of the fair value of its directly held assets
(see note 10) and have been determined on the basis of the policies adopted
for underlying investments described below.
Fair value - life science portfolio - life science investments
The Group's investments in life science companies are, in the case of quoted
companies, valued based on bid prices in an active market as at the reporting
date.
In the case of the Group's investments in unlisted companies, the fair value
is determined in accordance with the International Private Equity and Venture
Capital ("IPEV") Valuation Guidelines. These may include the use of recent
arm's length transactions, Discounted Cash Flow ("DCF") analysis and earnings
multiples as valuation techniques. Wherever possible, the Group uses valuation
techniques which make maximum use of market-based inputs.
The following considerations are used when calculating the fair value of
unlisted life science companies:
- Cost at the transaction date is the primary input when determining fair
value. Similarly, where there has been a recent investment in the unlisted
company by third parties, the Price of Recent Investment ("PRI") is the
primary input when determining fair value, although further judgement may be
required to the extent that the instrument in which the recent investment was
made is different from the instrument held by the Group.
- The length of period for which it remains appropriate to consider cost or
the PRI as the primary input when determining fair value depends on the
achievement of target milestones of the investment at the time of acquisition.
An analysis of such milestones, which can be value maintaining or value
enhancing, is undertaken at each valuation point and considers changes to the
external environment and the current facts and circumstances. Where this
calibration process shows there is objective evidence that an investment has
been impaired or increased in value since the investment was made, such as
observable data suggesting a change of the financial, technical, or commercial
performance of the underlying investment, the Group carries out an enhanced
assessment which may use one or more of the alternative methodologies set out
in the IPEV Valuation Guidelines.
- DCF involves estimating the fair value of an investment by calculating the
present value of expected future cash flows, based on the most recent
forecasts in respect of the underlying business. Given the significant
uncertainties involved with producing reliable cash flow forecasts for seed,
start-up and early-stage companies, the DCF methodology will more commonly be
used in the event that a life science company is in the final stages of
clinical testing prior to regulatory approval or has filed for regulatory
approval. No investments were valued on a DCF basis as at 31 March 2022 and 31
March 2021.
Fair value - life science portfolio - milestone payments
Milestone payments which form part of the total consideration resulting from a
business combination and is dependent on the meeting of future conditions is
initially recognised at fair value through profit or loss. When estimating the
fair value of the milestone payments the present value of expected future cash
flows is calculated based on the known future cash flows and an estimate of
the likelihood of meeting the stated conditions using publicly available
information where possible.
Fair value - capital pool investments in underlying funds
The Group's capital pool investments in underlying funds are ordinarily valued
using the values (whether final or estimated) as advised to the Investment
Manager by the managers, general partners or administrators of the relevant
underlying fund. The valuation date of such investments may not always be
coterminous with the valuation dates of the Company and in such cases the
valuation of the investments as at the last valuation date is used. The NAV
reported by the administrator may be unaudited and, in some cases, the
notified asset values are based upon estimates. The Group or the Investment
Manager may depart from this policy where it is considered such valuation is
inappropriate and may, at its discretion, permit any other valuation method to
be used if it considers that such valuation method better reflects value
generally or in particular markets or market conditions and is in accordance
with good accounting practice.
Forward currency contracts
Forward foreign currency contracts are derivative contracts and as such are
recognised at fair value on the date on which they are entered into and
subsequently remeasured at their fair value. Fair value is determined by
forward rates in active currency markets. Whilst the Group currently holds no
forward currency contracts, forward currency contracts are held by the
Partnership and Syncona Portfolio Limited from time to time for hedging
purposes only.
Other financial liabilities
Other financial liabilities include all other financial liabilities other than
financial liabilities at fair value through profit or loss. The Group's other
financial liabilities include payables. The carrying amounts shown in the
Consolidated Statement of Financial Position approximate the fair values due
to the short-term nature of these other financial liabilities.
Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the
Consolidated Statement of Financial Position if, and only if, there is a
currently enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis, or to realise assets and settle the
liabilities simultaneously.
Derecognition of financial instruments
A financial asset is derecognised when: (a) the rights to receive cash flows
from the financial asset have expired, (b) the Group retains the right to
receive cash flows from the financial asset, but has assumed an obligation to
pay them in full without material delay to a third party under a "pass through
arrangement"; or (c) the Group has transferred substantially all the risks and
rewards of the financial asset, or has neither transferred nor retained
substantially all the risks and rewards of the financial asset, but has
transferred control of the financial asset.
A financial liability is derecognised when the contractual obligation under
the liability is discharged, cancelled or expired.
Impairment of financial assets
IFRS 9 requires the Group to record expected credit losses ("ECLs") on all
financial assets held at amortised cost, all loans and trade receivables,
either on a 12-month or lifetime basis. The Group only holds receivables with
no financing component and which have maturities of less than 12 months at
amortised cost and therefore has applied the simplified approach to recognise
lifetime ECLs permitted by IFRS 9.
Commitments
Through its investment in the Holding Company and the Partnership, the Group
has outstanding commitments to investments that are not recognised in the
Consolidated Financial Statements. Refer to note 20 for further details.
Share based payments
Certain employees of SIML participate in equity incentive arrangements under
which they receive awards of Management Equity Shares ("MES") in the Holding
Company above a base line value set out at the date of award. The MES are not
entitled to dividends but any dividends or capital value realised by the Group
in relation to the Holding Company are taken into account in determining the
value of the MES. MES vest if an individual remains in employment for the
applicable vesting period. 25% of an individual MES become realisable each
year, they have the right to sell these realisable shares to the Company and
the Company is obligated to purchase said shares. The price is determined
using a formula stipulated in the Articles of Association ("Articles") of the
Holding Company.
The terms of the equity incentive arrangements provide that half of the
proceeds (net of expected taxes) are settled in Company shares which must be
held for at least 12 months, with the balance paid in cash. Consequently, the
arrangements are deemed to be partly an equity-settled share based payment
scheme and partly a cash-settled share based payment scheme under IFRS 2
"Share Based Payments" in the Consolidated Financial Statements of the Group.
The fair value of the MES at the time of the initial award is determined in
accordance with IFRS 2 and taking into account the particular rights attached
to the MES as described in the Articles. The fair value is measured using a
probability-weighted expected returns methodology, which is an appropriate
future-oriented approach when considering the fair value of shares that have
no intrinsic value at the time of issue. The approach replicates that of a
binomial option pricing model. The key assumptions used within the model are:
NAV progression; discount rates ranging from 12% to 30% (31 March 2021: 11% to
31%); and probabilities of success that result in an average cumulative
probability of success across the life science portfolio of 32% (31 March
2021: 31%). In this case, the expected future payout to the MES was made by
reference to the expected evolution of the Holding Company's value, including
expected dividends and other realisations which is then compared to the base
line value. This is then discounted into present value terms adopting an
appropriate discount rate. The "capital asset pricing methodology" was used
when considering an appropriate discount rate to apply to the payout expected
to accrue to the MES on realisation.
When MES are awarded, a share based payment charge is recognised in the
Consolidated Statement of Comprehensive Income of the employing company, SIML,
equal to the fair value at that date, spread over the vesting period. In its
own financial statements, the Company records a capital contribution to the
Holding Company with an amount credited to the share based payments reserve in
respect of the equity-settled proportion and to liabilities in respect of the
cash-settled proportion (see below).
When the Company issues new shares to acquire the MES, the fair value of the
MES is credited to share capital.
To the extent that the Company expects to pay cash to acquire the MES, the
fair value of the MES is recognised as a liability in the Company's
Consolidated Statement of Financial Position. The fair value is established at
each statement of financial position date and recognised in the Consolidated
Statement of Comprehensive Income throughout the vesting period, based on the
proportion vested at each Statement of Financial Position date and adjusted to
reflect subsequent movements in fair value up to the date of acquisition of
the MES by the Company.
The fair value paid to acquire MES (whether in shares in the Company or cash)
will result in an increase in the carrying value of the Holding Company by the
Company.
The movement in the share based payment provision of the Group is a non-cash
fair value movement to the reported liability, rather than a working capital
balance movement. This movement is recognised directly in the Consolidated
Statement of Comprehensive Income.
Income
All income is accounted for in accordance with IFRS 15 "Revenue from Contracts
with Customers" and is recognised in the Consolidated Statement of
Comprehensive Income. Income is further discussed in note 6.
Expenses
Expenses are accounted for on accruals basis. Expenses incurred on the
acquisition of investments at fair value through profit or loss are presented
within the Capital column of the Consolidated Statement of Comprehensive
Income. All other expenses are presented within the Revenue column of the
Consolidated Statement of Comprehensive Income. Charitable donations are
accounted for on accruals basis and are recognised in the Consolidated
Statement of Comprehensive Income. Expenses directly attributable to the
issuance of shares are charged against capital and recognised in the
Consolidated Statement of Changes in Net Assets Attributable to Holders of
Ordinary Shares.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and demand deposits. Cash
equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to insignificant
changes in value.
Translation of foreign currency
Items included in the Group's Consolidated Financial Statements are measured
in £, which is the currency of the primary economic environment where the
Group operates. The Group's assets are primarily denominated in £.
Transactions in currencies other than £ are translated at the rate of
exchange ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the date of the Consolidated
Statement of Financial Position are retranslated into £ at the rate of
exchange ruling at that date.
Foreign exchange differences arising on retranslation are recognised in the
Consolidated Statement of Comprehensive Income. Non-monetary assets and
liabilities that are measured in terms of historical cost in a foreign
currency are translated using the rate of exchange at the date of the
transaction.
Non-monetary assets and liabilities denominated in foreign currencies that are
stated at fair value are retranslated into £ at foreign exchange rates ruling
at the date the fair value was determined.
Presentation of the Consolidated Statement of Comprehensive Income
In order to better reflect the activities of an investment company,
supplementary information which analyses the Consolidated Statement of
Comprehensive Income between items of a revenue and capital nature has been
presented alongside the Consolidated Statement of Comprehensive Income.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Group's Consolidated Financial Statements requires
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income
and expenses at the reporting date. However, uncertainties about these
assumptions and estimates, in particular relating to underlying investments of
private equity investments and the life science investments could result in
outcomes that require a material adjustment to the carrying amount of the
assets or liabilities affected in future periods.
Critical accounting judgements
In the process of applying the Group's accounting policies, the following
judgements have been made, which have the most significant effect on the
amounts recognised in the Consolidated Financial Statements:
Fair value - life science portfolio
In the case of the Group's investments in unlisted companies, the fair value
is determined in accordance with the IPEV Valuation Guidelines. These include
the use of recent arm's length transactions, DCF analysis and earnings
multiples. Wherever possible, the Group uses valuation techniques which make
maximum use of market-based inputs.
In most cases, where the Group is the sole institutional investor and/or until
such time as substantial clinical data has been generated, the primary
valuation input is Cost or PRI, subject to adequate consideration being given
to current facts and circumstances. This includes whether there is objective
evidence that suggests the investment has been impaired or increased in value
due to observable data, technical, or commercial performance.
Where considered appropriate, once substantial clinical data has been
generated the Group will use input from independent valuation advisors to
assist in the determination of fair value.
The key judgement relates to determining whether a Cost or PRI (Market) based
approach is the most appropriate for determining fair value of the Group's
investments in unlisted companies. In making this judgement, the Group
highlights that the majority of its investments are early-stage businesses,
typically with products in the discovery stage of drug development and
pre-revenue generation. As a result, it considers that the determination of
fair value should be based on what a market participant buyer would pay to
acquire or develop a substitute asset with comparable scientific or commercial
progression, adjusted for obsolescence (i.e. its current replacement cost).
This technique is applied until such time that the life science investment is
at a stage in its life cycle where cash flow forecasts are more predictable,
thus using an income-based approach provides a more reliable estimate of fair
value.
However there are also other methodologies that can be used to determine the
fair value of investments in private companies including the use of the DCF
methodology. It is possible that the use of an alternative valuation
methodology would result in a different fair value than that recorded by the
Group.
When assessing the judgement, the Group's determination of the fair values of
certain investments took into consideration multiple sources including
Management and publicly available information and publications, as well as
input from an independent review by L.E.K. Consulting LLP ("L.E.K.") in
respect of Syncona's valuation of the following investments: Anaveon AG; OMass
Therapeutics Limited; Quell Therapeutics Limited; and SwanBio Therapeutics
Limited.
The review was limited to certain specific limited procedures which we
identified and requested L.E.K. to perform within an agreed limited scope, and
it was subject to assumptions which are forward looking in nature and
subjective judgements. Upon completion of the review within the parameters of
the agreed procedures L.E.K. estimated an independent range of fair values of
those investments. The limited procedures carried out by L.E.K. did not
involve an audit, review, compilation or any other form of verification,
examination or attestation under generally accepted auditing standards and
were based on the sources agreed in the limited scope only. Syncona Investment
Management Limited ("the AIFM") is responsible for determining the fair value
of the investments, and the review performed by L.E.K. to assist Syncona is
only one element of the enquiries and procedures in the process in making a
determination of the fair value of those investments and for which SIML is
ultimately responsible.
During the year the investment in Gyroscope was sold to an external third
party for consideration comprising of upfront cash and cash to be paid in the
future subject to certain milestones being met ("milestone payments").
Gyroscope was previously held as an investment at fair value through profit or
loss by Syncona Portfolio Limited due to Syncona Portfolio Limited meeting the
conditions of being an investment entity and holding its subsidiaries at fair
value through profit or loss.
There is currently no prescriptive accounting standard for the seller where
milestone payments which are contingent on a future event is agreed in a
contract for the disposal of a subsidiary. Guidance available within IFRS 3
"Business Combinations" to the acquiring entity was therefore applied to the
recognition and measurement of the milestone payments. IFRS 3 requires the
acquirer to recognise any milestone payments dependent on uncertain events to
be recognised as a financial liability at fair value through profit or loss in
their financial statements. In accordance with available guidance and industry
practice it was concluded that the milestone payments receivable following the
sale of Gyroscope are required to be recognised as a financial asset measured
at fair value through profit or loss in the financial statements of Syncona
Portfolio Limited. This forms part of the fair value of the Groups investment
in the Holding Company.
Key sources of estimation uncertainty
The Group's investments consist of its investments in the Holding Company and
the Partnership, both of which are classified at fair value through profit or
loss and are valued accordingly, as disclosed in note 2.
The key sources of estimation uncertainty are the valuation of the Holding
Company's investments in privately held life science companies and milestone
payments on sale of a subsidiary, the Partnership's private equity investments
and investment in the CRT Pioneer Fund, and the valuation of the share based
payment liability.
The unquoted investments within the life science portfolio are very illiquid.
Many of the companies are early stage investments and privately owned.
Accordingly, a market value can be difficult to determine. The primary inputs
used by the Company to determine the fair value of investments in privately
held life science companies are the cost of the capital invested and PRI,
adjusted to reflect the achievement or otherwise of milestones or other
factors. The accounting policy for all investments is described in note 2 and
the fair value of all investments is described in note 19.
In determining a suitable range to sensitise the fair value of the unlisted
life science portfolio, Management note the achievement or not of value
enhancing milestones as being a key source of estimation uncertainty. Such
activities and resulting data emanating from the life science companies can be
the key trigger for fair value changes and typically involve financing events
which crystallise value at those points in time. The range of 18% (2021: 18%)
identified by Management reflects their estimate of the range of reasonably
possible valuations over the next financial year, taking into account the
position of the portfolio as a whole. Key technical milestones considered by
Management and that typically trigger value enhancement (or deterioration if
not achieved) include the generation of substantial clinical data.
The Company has analysed the impact of the COVID-19 pandemic on the private
life science companies and does not consider that any COVID-19 revaluations
are required, however the final impact of the pandemic is not yet certain and
may have effects on the portfolio companies that have not been anticipated.
The Company has assessed the current impact of the war in Ukraine on the
private life science companies and does not consider that any revaluations are
required as a result, however the final impact of the war is not yet certain
and may have effects on the portfolio companies that have not been
anticipated.
The fair value of the milestone payments is inherently difficult to calculate
with the value being dependent on contingent events. To this end the valuation
is determined using a DCF model where the key unobservable inputs are the
probability of the contingent events occurring and the discount rate applied
in order to generate a present value of the asset. The accounting policy for
the milestone payments is described in note 2 and the fair value is detailed
in note 19.
In determining a suitable range to sensitise the fair value of the milestone
payments Management note varying sources of publicly available information for
relevant probabilities of success that could be applied to the DCF in order to
generate differing valuations. The range of £42 million - £54 million by
Management reflects their estimate of a range of reasonably possible
valuations as at 31 March 2022.
The CRT Pioneer Fund is invested in early-stage life science projects and
companies. A market value can be difficult to determine for assets of this
nature. The Company values its interest in the CRT Pioneer Fund by reference
to the valuation provided by the manager of that fund, adjusted to reflect the
Company's view on certain of the key valuation inputs. Sensitivity to a 48%
(31 March 2021: 23%) movement in the valuation of the CRT Pioneer Fund is
included in note 19 being the identified range of other alternative valuations
of this asset.
As at the year end, none (31 March 2021: none) of the Partnership's underlying
investments have imposed restrictions on redemptions. However, underlying
managers often have the right to impose such restrictions. The Directors
believe it remains appropriate to estimate their fair values based on NAV as
reported by the administrators of the relevant investments.
Where investments held by the Partnership can be subscribed to, the Directors
believe that such NAV represents fair value because subscriptions and
redemptions in the underlying investments occur at these prices at the
Consolidated Statement of Financial Position date, where permitted.
The share based payment charge is determined using an externally generated
model in accordance with IFRS 2 using a probability-weighted expected returns
methodology. Additional details regarding the key inputs into the valuation
are stated in note 2.
4. INVESTMENT IN SUBSIDIARIES AND ASSOCIATES
The Company meets the definition of an investment entity in accordance with
IFRS 10. Therefore, with the exception of the General Partner, the Company
does not consolidate its subsidiaries and indirect associates, but rather
recognises them as financial assets at fair value through profit or loss.
Direct interests in subsidiaries
Subsidiary Principal place Principal activity 2022 2021
of business % interest((1)) % interest((1))
Syncona GP Limited Guernsey General Partner 100% 100%
Syncona Holdings Limited Guernsey Portfolio management 100% 100%
Syncona Investments LP Incorporated Guernsey Portfolio management 100% 100%
((1)) Based on undiluted issued share capital and excluding the MES issued by
Syncona Holdings Limited (see note 12).
There are no significant restrictions on the ability of subsidiaries to
transfer funds to the Company.
Indirect interests in subsidiaries and associates
Indirect Subsidiaries Principal place Immediate parent Principal activity 2022
of business % interest((1))
Syncona Discovery Limited UK Syncona Investments LP Inc Portfolio management 100%
Syncona Portfolio Limited Guernsey Syncona Holdings Limited Portfolio management 100%
Syncona IP Holdco Limited UK Syncona Portfolio Limited Portfolio management 100%
Syncona Investment Management Limited UK Syncona Holdings Limited Portfolio management 100%
SIML Switzerland AG Switzerland SIML Portfolio management 100%
SwanBio Therapeutics Limited United States Syncona Portfolio Limited Gene therapy 76%
Purespring Therapeutics Limited UK Syncona Portfolio Limited Gene therapy 76%
Forcefield Therapeutics Limited UK Syncona Portfolio Limited Gene therapy 76%
Resolution Therapeutics Limited UK Syncona Portfolio Limited Cell therapy 73%
Freeline Therapeutics Holdings plc UK Syncona Portfolio Limited Gene therapy 61%
OMass Therapeutics Limited UK Syncona Portfolio Limited Small molecule 53%
Indirect associates Principal place Immediate parent Principal activity 2022
of business % interest((1))
Quell Therapeutics Limited UK Syncona Portfolio Limited Cell therapy 44%
Anaveon AG Switzerland Syncona Portfolio Limited Biologics 41%
Azeria Therapeutics Limited UK Syncona Portfolio Limited In voluntary liquidation 34%
Achilles Therapeutics plc UK Syncona Portfolio Limited Cell therapy 27%
Autolus Therapeutics plc UK Syncona Portfolio Limited Cell therapy 21%
((1)) Based on undiluted issued share capital and excluding the MES issued by
Syncona Holdings Limited (see note 12).
Indirect Subsidiaries Principal place Immediate parent Principal activity 2021
of business % interest((1))
Syncona Discovery Limited UK Syncona Investments LP Inc Portfolio management 100%
Syncona Portfolio Limited Guernsey Syncona Holdings Limited Portfolio management 100%
Syncona IP Holdco Limited UK Syncona Portfolio Limited Portfolio management 100%
Syncona Investment Management Limited UK Syncona Holdings Limited Portfolio management 100%
Quell Therapeutics Limited UK Syncona Portfolio Limited Cell therapy 83%
SwanBio Therapeutics Limited United States Syncona Portfolio Limited Gene therapy 76%
Resolution Therapeutics Limited (formerly Syncona Collaboration (E) Limited) UK Syncona Portfolio Limited Cell therapy 66%
Purespring Therapeutics Limited UK Syncona Portfolio Limited Gene therapy 65%
Gyroscope Therapeutics Limited UK Syncona Portfolio Limited Gene therapy 59%
Freeline Therapeutics Holdings plc UK Syncona Portfolio Limited Gene therapy 53%
Anaveon AG Switzerland Syncona Portfolio Limited Biologics 50%
OMass Therapeutics Limited UK Syncona Portfolio Limited Small molecule 49%
Forcefield Therapeutics Limited UK Syncona Portfolio Limited Gene therapy 47%
Indirect associates Principal place Immediate parent Principal activity 2021
of business % interest((1))
Azeria Therapeutics Limited UK Syncona Portfolio Limited In voluntary liquidation 34%
Autolus Therapeutics plc UK Syncona Portfolio Limited Cell therapy 28%
Achilles Therapeutics plc UK Syncona Portfolio Limited Cell therapy 27%
5. TAXATION
The Company and the General Partner are exempt from taxation in Guernsey under
the provisions of The Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989
and have both paid an annual exemption fee of £1,200 (31 March 2021:
£1,200).
The General Partner is incorporated and a tax resident in Guernsey, its
corporate affairs being managed solely in Guernsey. Having regard to the
non-UK tax residence of the General Partner and the Company, and on the basis
that the Partnership is treated as transparent for UK and Guernsey tax
purposes and that the Partnership's business is an investment business and not
a trade, no UK tax will be payable on either the General Partner's or the
Company's shares of Partnership profit (save to the extent of any UK
withholding tax on certain types of UK income such as interest).
Some of the Group's underlying investments may be liable to tax, although the
tax impact is not expected to be material to the Group, and is included in the
fair value of the Group's investments.
6. INCOME
The Group's income relates to cash transfers from the Partnership which are
used for paying costs and dividends of the Group.
During the year, income received from the Partnership amounted to £25,390,625
(31 March 2021: £19,933,644) of which £4,249,836 (31 March 2021:
£4,710,217) remained receivable as at 31 March 2022. The receivable reflects
the charitable donations of the Group. Refer to note 8.
7. NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
The net (losses)/gains on financial assets at fair value through profit or
loss arise from the Group's holdings in the Holding Company and Partnership.
Note 2022 2021
£'000 £'000
Net (losses)/gains from:
The Holding Company 7.a 22,019 60,551
The Partnership 7.b (28,717) (1,946)
(6,698) 58,605
7.a Movements in the Holding Company:
2022 2021
£'000 £'000
Expenses (90) (89)
Movement in unrealised gains on life science investments at fair value through 22,109 60,640
profit or loss
Net gains on financial assets at fair value through profit or loss 22,019 60,551
7.b Movements in the Partnership:
2022 2021
£'000 £'000
Investment income 23 117
Rebates and donations 409 18
Other income - 53
Expenses (229) (273)
Realised gains on financial assets at fair value through profit or loss 13,716 33,479
Movement in unrealised losses on financial assets at fair value through profit (19,185) (10,740)
or loss
Gains/(losses) on foreign currency 1,940 (4,666)
Gains on financial assets at fair value through profit or loss (3,326) 17,988
Distributions (25,391) (19,934)
Net losses on financial assets at fair value through profit or loss (28,717) (1,946)
8. CHARITABLE DONATIONS
For the years ended 31 March 2022 and 31 March 2021, the Group has agreed to
make a donation to charity of 0.35% of the total NAV of the Group calculated
on a monthly basis, 0.15% to be donated to The Institute of Cancer Research
and 0.20% to be donated to The Syncona Foundation, and these donations are
made by the General Partner.
During the year, charitable donations expense amounted to £4,249,836 (31
March 2021: £4,710,217). As at 31 March 2022, £4,249,836 (31 March 2021:
£4,710,217) remained payable. Refer to note 13.
9. GENERAL EXPENSES
2022 2021
£'000 £'000
Share based payments (7,304) 10,561
Investment management fees 10,699 8,177
Directors' remuneration 419 386
Auditor's remuneration 141 143
Other expenses 1,650 1,404
5,605 20,671
Auditor's remuneration includes audit fees in relation to the Group of
£105,000 (31 March 2021: £87,500). Total audit fees paid by the Group and
the Syncona Group Companies for the year ended 31 March 2022 totalled
£210,000 (31 March 2021: £187,000). Additional fees paid to the auditor were
£38,000 (31 March 2021: £30,000) which relates to work performed at the
interim review of £30,000 (31 March 2021: £23,000) and other non-audit fees
of £8,000 (31 March 2021: £7,000).
Further details of the share based payments can be found in note 12.
10. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Note 2022 2021
£'000 £'000
The Holding Company 10.a 980,282 956,279
The Partnership 10.b 342,950 371,667
1,323,232 1,327,946
The Holding Company and the Partnership are the only two investments held
directly by the Group and as such the reconciliation of movement in
investments has been presented separately for each below.
10.a The net assets of the Holding Company
2022 2021
£'000 £'000
Cost of the Holding Company's investment at the start of the year 494,810 493,310
Purchases during the year - 1,500
Cost of the Holding Company's investments at the end of the year 494,810 494,810
Net unrealised gains on investments at the end of the year 489,984 465,891
Fair value of the Holding Company's investments at the end of the year 984,794 960,701
Other current liabilities (4,512) (4,422)
Financial assets at fair value through profit or loss at the end of the year 980,282 956,279
10.b The net assets of the Partnership
2022 2021
£'000 £'000
Cost of the Partnership's investments at the start of the year 418,472 682,750
Purchases during the year 835,375 1,075,333
Sales during the year (923,659) (1,340,000)
Return of capital (9,070) (33,090)
Net realised gains on disposals during the year 13,716 33,479
Cost of the Partnership's investments at the end of the year 334,834 418,472
Net unrealised gains on investments at the end of the year 16,147 35,332
Fair value of the Partnership's investments at the end of the year 350,981 453,804
Cash and cash equivalents 475,786 189,440
Other net current liabilities (483,817) (271,577)
Financial assets at fair value through profit or loss at the end of the year 342,950 371,667
11. TRADE AND OTHER RECEIVABLES
2022 2021
£'000 £'000
Due from related parties (see note 16) 5,462 5,736
Charitable donation receivable from related party 4,250 4,710
Prepayments 166 -
9,878 10,446
12. SHARE BASED PAYMENTS
Share based payments are associated with awards of MES in the Holding Company,
relevant details of which are set out in note 2.
The total cost recognised within general expenses in the Consolidated
Statement of Comprehensive Income is shown below:
2022 2021
£'000 £'000
Charge related to revaluation of the liability for cash settled share awards (7,304) 10,561
Total (7,304) 10,561
Amounts recognised in the Consolidated Statement of Financial Position,
representing the carrying amount of liabilities arising from share based
payments transactions are shown below:
2022 2021
£'000 £'000
Share based payments - current 9,388 8,836
Share based payments - non-current 8,459 23,505
Total 17,847 32,341
When a participant elects to realise vested MES by sale of the MES to the
Company, half of the proceeds (net of anticipated taxes) will be settled in
shares of the Company, with the balance settled in cash.
The fair value of the MES is established using an externally developed model
as set out in note 2. Vesting is subject only to the condition that employees
must remain in employment at the vesting date. Each MES is entitled to share
equally in value attributable to the Holding Company above the applicable base
line value at the date of award, provided that the applicable hurdle value of
15% or 30% growth in the value of the Holding Company above the base line
value at the date of award has been achieved.
The fair value of awards made in the year ended 31 March 2022 was £2,883,500
(31 March 2021: £2,907,000). This represents 8,238,571 new MES issued (31
March 2021: 5,902,624). An award was made on 15 July 2021 at 35p per MES.
The number of MES outstanding are shown below:
2022 2021
Outstanding at the start of the year 43,873,239 41,937,713
Issued 8,238,571 5,902,624
Realised (7,253,638) (3,953,906)
Lapsed (2,576,050) (13,192)
Outstanding at the end of the year 42,282,122 43,873,239
Weighted average remaining contractual life of outstanding MES, years 1.20 1.24
Vested MES as at the year end 31,293,486 38,502,646
Realisable MES as at the year end 11,478,050 9,625,668
As at 31 March 2022, if all MES were realised, the number of shares issued in
the Company as a result would increase by 6,880,057 (31 March 2021:
6,177,787). The undiluted per share value of net assets attributable to
holders of Ordinary Shares would fall from £1.97 to £1.94 (31 March 2021:
£1.96 to £1.94) if these shares were issued.
13. PAYABLES
2022 2021
£'000 £'000
Charitable donations payable 4,250 4,710
Management fees payable 1,048 600
Other payables 400 466
5,698 5,776
14. SHARE CAPITAL
A. Authorised Share Capital
The Company is authorised to issue an unlimited number of shares, which may
have a par value or no par value. The Company is a closed-ended investment
company with an unlimited life.
As the Company's shares have no par value, the share price consists solely of
share premium and the amounts received for issued shares are recorded in share
capital in accordance with The Companies (Guernsey) Law, 2008.
2022 2021
£'000 £'000
Ordinary Share Capital
Balance at the start of the year 767,999 767,999
Balance at the end of the year 767,999 767,999
2022 2021
Shares Shares
Ordinary Share Capital
Balance at the start of the year 664,580,417 663,665,537
Share based payment shares issued during the year 2,153,171 914,880
Balance at the end of the year 666,733,588 664,580,417
The Company has issued one Deferred Share to The Syncona Foundation for £1.
B. Capital reserves
Gains and losses recorded on the realisation of investments, realised exchange
differences, unrealised gains and losses recorded on the revaluation of
investments held as at the year end and unrealised exchange differences of a
capital nature are transferred to capital reserves.
C. Earnings/(loss) per share
The calculations for the earnings/(loss) per share attributable to the
Ordinary Shares of the Company are based on the following data:
2022 2021
Earnings for the purposes of earnings per share £8,838,000 £53,158,000
Basic weighted average number of shares 666,108,284 664,314,726
Basic revenue earnings per share 2.3p (0.8)p
Basic capital (loss)/earnings per share (1.0)p 8.8p
Basic earnings per share 1.3p 8.0p
Diluted weighted average number of shares 672,988,341 670,492,513
Diluted revenue earnings per shares 2.3p (0.8)p
Diluted capital (loss)/earnings per share (1.0)p 8.7p
Diluted earnings per share 1.3p 7.9p
2022 2021
Issued share capital at the start of the year 664,580,417 663,665,537
Weighted effect of share issues
Share based payments 1,527,867 649,189
Potential share based payment share issues 6,880,057 6,177,787
Diluted weighted average number of shares 672,988,341 670,492,513
D. NAV per share
2022 2021
Net assets for the purposes of NAV per share £1,309,840,518 £1,300,287,998
Ordinary Shares in issue 666,733,588 664,580,417
NAV per share 196.5p 195.7p
Diluted number of shares 673,613,645 670,758,204
Diluted NAV per share 194.4p 193.9p
15. DISTRIBUTION TO SHAREHOLDERS
The Company may pay a dividend at the discretion of the Directors.
During the year ended 31 March 2022, the Company did not declare or pay a
dividend (31 March 2021: £Nil was paid in relation to the year ended 31 March
2020). The Directors believe that it is not appropriate for the Company to pay
a dividend.
The Company is not declaring a 2022 dividend.
16. RELATED PARTY TRANSACTIONS
The Group has various related parties; life sciences investments held by the
Holding Company, the Investment Manager, the Company's Directors and The
Syncona Foundation.
Life science investments
The Group makes equity investments in some life science investments where it
retains control. The Group has taken advantage of the investment entity
exception as permitted by IFRS 10 and has not consolidated these investments,
but does consider them to be related parties.
During the year, the total amount invested in life science investments which
the Group controls was £62,765,311 (31 March 2021: £145,075,244).
The Group makes other equity investments where it does not have control but
may have significant influence through its ability to participate in the
financial and operating policies of these companies, therefore the Group
considers them to be related parties.
During the year, the total amount invested in life science investments in
which the Group has significant influence was £46,592,768 (31 March 2021:
£29,767,748).
Commitments of milestone payments to the life science investments are
disclosed in note 20.
During the year, SIML charged the life science investments a total of
£222,406 in relation to Director's fees (31 March 2021: £188,965).
Investment Manager
SIML, an indirectly held subsidiary of the Company, is the Investment Manager
of the Group.
For the year ended 31 March 2022, SIML was entitled to receive an annual fee
of up to 1.05% of the Company's NAV (31 March 2021: 1.05%) per annum.
2022 2021
£'000 £'000
Amounts paid to SIML 10,699 8,177
Amounts owed to SIML in respect of management fees totalled £1,047,525 as at
31 March 2022 (31 March 2021: £599,519).
During the year, SIML received fees from the Group's portfolio companies of
£615,342 (31 March 2021: £305,819).
Company Directors
As at the year end, the Company had seven Directors, all of whom served in a
non-executive capacity. Rob Hutchinson also serves as a Director of the
General Partner.
Thomas Henderson resigned as a Director of the Company with effect from 3
August 2021.
Nicholas Moss resigned as a Director of the Company with effect from 31
December 2021. He retained his Directorship of the General Partner, the
Holding Company and Syncona Portfolio Limited.
Nigel Keen retired as a Director of the Company and Chairman of the Investment
Manager with effect from 31 December 2021. He received fees of £102,575 (31
March 2021: £133,430) from the Investment Manager, in respect of his services
to the Investment Manager.
Julie Cherrington and Cristina Csimma were appointed as Directors of the
Company with effect from 1 February 2022.
Directors' remuneration for the years ended 31 March 2022 and 31 March 2021,
excluding expenses incurred, and outstanding Directors' remuneration as at the
end of the year, are set out below.
2022 2021
£'000 £'000
Directors' remuneration for the year 419 386
Payable at end of the year - -
Shares held by the Directors can be found in the Report of the Remuneration
Committee. The directors of Syncona Limited together hold 0.04% (31 March
2021: 1.24%) of the Syncona Limited voting shares.
The Syncona Foundation
Charitable donations are made by the Company to The Syncona Foundation. The
Syncona Foundation was incorporated in England and Wales on 17 May 2012 as a
private company limited by guarantee, with exclusively charitable purposes and
holds the Deferred Share in the Company. The amount donated to The Syncona
Foundation during the year ended 31 March 2022 was £2,691,553 (31 March
2021: £2,632,809).
Other related parties
As at 31 March 2022, the Company has a receivable from the Partnership,
Holding Company and Syncona Portfolio Limited amounting to £15,409 (31 March
2021: £106,981), £5,431,409 (31 March 2021: £5,489,048) and £15,409 (31
March 2021: £137,246), respectively.
17. FINANCIAL INSTRUMENTS
In accordance with its investment objectives and policies, the Group holds
financial instruments which at any one time may comprise the following:
- securities and investments held in accordance with the investment
objectives and policies;
- cash and short-term receivables and payables arising directly from
operations; and
- derivative instruments including forward currency contracts.
The financial instruments held by the Group are comprised principally of the
investments in the Holding Company and the Partnership.
Details of the Group's significant accounting policies and methods adopted,
including the criteria for recognition, the basis of measurement and the basis
on which income and expenses are recognised, in respect of its financial
assets and liabilities are disclosed in note 2.
2022 2021
£'000 £'000
Financial assets at fair value through profit or loss
The Holding Company 980,282 956,279
The Partnership 342,950 371,667
Total financial assets at fair value through profit or loss 1,323,232 1,327,946
Financial assets measured at amortised cost
Bank and cash deposits 276 14
Other financial assets 9,878 10,446
Total financial assets measured at amortised cost 10,154 10,460
Financial liabilities at fair value through profit or loss
Provision for share based payments (17,847) (32,341)
Total financial liabilities at fair value through profit or loss (17,847) (32,341)
Financial liabilities measured at amortised cost
Other financial liabilities (5,698) (5,776)
Total financial liabilities measured at amortised cost (5,698) (5,776)
Net financial assets 1,309,841 1,300,289
The financial instruments held by the Group's underlying investments are
comprised principally of life science investments, hedge, equity, credit,
long-term alternative investment funds, short-term UK treasury bills and cash.
The table below analyses the carrying amounts of the financial assets and
liabilities held by the Holding Company by category as defined in IFRS 9 (see
note 2).
2022 2021
£'000 £'000
Financial assets at fair value through profit or loss
Investment in subsidiaries 984,794 960,701
Total financial assets at fair value through profit or loss 984,794 960,701
Financial assets measured at amortised cost((1))
Current assets 947 1,088
Financial liabilities measured at amortised cost((1))
Current liabilities (5,459) (5,510)
Net financial assets of the Holding Company 980,282 956,279
The table below analyses the carrying amounts of the financial assets and
liabilities held by the Partnership by category as defined in IFRS 9.
2022 2021
£'000 £'000
Financial assets at fair value through profit or loss
Listed investments 279,473 344,862
Unlisted investments 39,857 72,366
Investment in subsidiaries 31,651 36,576
Total financial assets at fair value through profit or loss 350,981 453,804
Financial assets measured at amortised cost((1))
Current assets 476,586 189,913
Financial liabilities measured at amortised cost((1))
Current liabilities (484,617) (272,050)
Net financial assets of the Partnership 342,950 371,667
((1)) Has a fair value which does not materially differ to amortised cost
Capital risk management
The Group's objectives when managing capital include the safeguarding of the
Group's ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
The Group does not have externally-imposed capital requirements.
The Group may incur indebtedness for the purpose of financing share
repurchases or redemptions, making investments (including as bridge finance
for investment obligations), satisfying working capital requirements or to
assist in payment of the charitable donation, up to a maximum of 20% of the
NAV at the point of obtaining debt. The Group may utilise gearing for
investment purposes if, at the time of incurrence, it considers it prudent and
desirable to do so in light of prevailing market conditions. There is no
limitation on indebtedness being incurred at the level of the underlying
investments.
18. FINANCIAL RISK MANAGEMENT AND ASSOCIATED RISKS
Financial risk management
The Group is exposed to a variety of financial risks as a result of its
activities. These risks include market risk (including market price risk,
foreign currency risk and interest rate risk), credit risk and liquidity risk.
These risks have existed throughout the year and the Group's policies for
managing them are summarised below.
The risks below do not reflect the risks of the underlying investment
portfolios of certain of the financial assets at fair value through profit or
loss. The Group has significant indirect exposure to a number of risks through
the underlying portfolios of the investment entities. There is no mechanism to
control these risks without considerably prejudicing return objectives.
Due to the lack of transparency in certain underlying assets in particular
certain of those held by the Partnership it is not possible to quantify or
hedge the impact of these risks on the portfolio as each investment entity may
have complex and changing risk dynamics that are not easily observable or
predictable. These risks will include interest, foreign exchange and other
market risks which are magnified by gearing in some, not many cases, resulting
in increased liquidity and return risk.
Syncona Limited
Syncona Limited is exposed to financial risks through its investments in the
Holding Company and the Partnership. The risks and policies for managing them
are set out in the following sections.
The Holding Company
Market price risk
The Holding Company invests in early stage life science companies that
typically have limited products in development, any problems encountered in
development may have a damaging effect on that company's business and the
value of the investment.
This is mitigated by the employment of highly experienced personnel and the
performance of extensive due diligence prior to investment.
Foreign currency risk
Foreign currency risk represents the potential losses or gains on the life
science investments future income streams and the potential losses or gains on
investments made in United States Dollars ("USD") and Swiss Francs ("CHF") by
the Holding Company's underlying investments.
The following tables present the Holding Company's assets and liabilities in
their respective currencies, converted into the Group's functional currency.
CHF USD GBP 2022
Total
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss 59,818 370,772 554,204 984,794
Cash and cash equivalents - - 297 297
Receivables - - 650 650
Payables - - (5,459) (5,459)
Total 59,818 370,772 549,692 980,282
CHF USD GBP 2021
Total
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss 18,582 487,421 454,698 960,701
Cash and cash equivalents - - 438 438
Receivables - - 650 650
Payables - - (5,510) (5,510)
Total 18,582 487,421 450,276 956,279
Foreign currency sensitivity analysis
The following table details the sensitivity of the Holding Company's NAV to a
10% change in the £ exchange rate against the USD and CHF with all other
variables held constant. The sensitivity analysis percentage represents the
Investment Manager's assessment, based on the foreign exchange rate movements
over the relevant period and of a reasonably possible change in foreign
exchange rates.
2022 2022 2021 2021
USD CHF USD CHF
£'000 £'000 £'000 £'000
10% increase 35,663 6,646 66,922 2,064
10% decrease (29,179) (5,438) (54,754) (1,689)
Interest rate risk
Interest rate risk is negligible in the Holding Company as minimal cash and no
debt is held.
Liquidity risk
Liquidity risk is the risk that the financial commitments made by the Holding
Company are not able to be met as they fall due. The Holding Company holds
minimal cash and has no access to debt and instead relies on liquidity from
the Partnership. The liquidity risk associated with the Partnership is set out
in the Partnership section below.
The table below details the Holding Company's liquidity analysis for its
financial assets and liabilities.
>3 to 12 >12 months 2022
months Total
£'000 £'000 £'000
Financial assets at fair value through profit or loss - 984,794 984,794
Cash and cash equivalents 297 - 297
Receivables - 650 650
Payables (37) (5,422) (5,459)
Total 260 980,022 980,282
Percentage 0.0% 100.0% 100.0%
>3 to 12 >12 months 2021
months Total
£'000 £'000 £'000
Financial assets at fair value through profit or loss - 960,701 960,701
Cash and cash equivalents - 438 438
Receivables - 650 650
Payables (89) (5,421) (5,510)
Total (89) 956,368 956,279
Percentage 0.0% 100.0% 100.0%
The Partnership
Market price risk
The overall market price risk management of each of the fund holdings of the
Partnership is primarily driven by their respective investment objectives. The
Investment Manager assesses the risk in the Partnership's fund portfolio by
monitoring exposures, liquidity, and concentrations of the underlying funds'
investments, in the context of the historic and current volatility of their
asset classes, and the Investment Manager's risk appetite. The maximum risk
resulting from financial instruments is generally determined by the fair value
of underlying funds. The overall market exposure as at 31 March 2022 and 31
March 2021 is shown in the Consolidated Statement of Financial Position.
The financial instruments are sensitive to market price risk; any increase or
decrease in market price will have an equivalent effect on the market value of
the financial instruments.
Foreign currency risk
Foreign currency risk represents the potential losses or gains the Partnership
may suffer through holding foreign currency assets in the face of foreign
exchange movements. The Partnership's treatment of currency transactions is
set out in note 2 to the Consolidated Financial Statements under "Translation
of foreign currency" and "Forward currency contracts". Currency risk exists in
the underlying investments, the analysis of which is not feasible.
The investments of the Partnership are denominated in USD, Euro ("EUR"), and
GBP. The Partnership's functional and presentation currency is £; hence, the
Consolidated Statement of Financial Position may be significantly affected by
movements in the exchange rates between the foreign currencies previously
mentioned. The Investment Manager may manage exposure to EUR and USD movements
by using forward currency contracts to hedge exposure to investments in EUR
and USD-denominated share classes.
The following tables present the Partnership's assets and liabilities in their
respective currencies, converted into the Group's functional currency.
2022
USD EUR GBP Total
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss 3,899 27,418 319,664 350,981
Cash and cash equivalents 354,553 28 121,205 475,786
Trade and other receivables 2 - 798 800
Payables (334,998) - (145,369) (480,367)
Distributions payable - - (4,250) (4,250)
23,456 27,446 292,048 342,950
2021
USD EUR GBP Total
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss 7,785 57,259 388,760 453,804
Cash and cash equivalents 51,207 14 138,219 189,440
Trade and other receivables - - 473 473
Payables - - (267,340) (267,340)
Distributions payable - - (4,710) (4,710)
58,992 57,273 255,402 371,667
Foreign currency sensitivity analysis
The following table details the sensitivity of the Partnership's NAV to a 10%
change in the GBP exchange rate against the USD and EUR with all other
variables held constant. The sensitivity analysis percentage represents the
Investment Manager's assessment, based on the foreign exchange rate movements
over the relevant period and of a reasonably possible change in foreign
exchange rates.
2022 2022 2021 2021
USD EUR USD EUR
£'000 £'000 £'000 £'000
10% increase 2,355 2,745 5,686 4,683
10% decrease (2,355) (2,745) (5,686) (4,683)
The above includes the effect of the Group's hedging strategy.
Interest rate risk
Interest receivable on bank deposits or payable on bank overdrafts are
affected by fluctuations in interest rates, however the effect is not expected
to be material. All cash balances receive interest at variable rates. Interest
rate risk may exist in the Partnership's underlying investments, the analysis
of which is impractical due to the lack of visibility over the underlying
information required to perform this analysis within the Partnership's
investments.
Credit risk
Credit risk in relation to listed securities transactions awaiting settlement
is managed through the rules and procedures of the relevant stock exchanges.
In particular, settlements for transactions in listed securities are effected
by the Citco Custody (UK) Limited (the "Custodian") which acts as the
custodian of the partnership's assets, on a delivery against payment or
receipt against payment basis. Transactions in unlisted securities are
affected against binding subscription agreements. Credit risk may exist in the
Partnership's underlying fund investments, the analysis of which is
impractical due to the lack of visibility over the underlying information
required to perform this analysis within the Partnerships investments.
The Partnership invests in short-term UK treasury bills and considers the
associated credit risk to be negligible.
The principal credit risks for the Partnership are in relation to deposits
with banks. The securities held by the Custodian are held in trust and are
registered in the name of the Partnership. Citco is "non-rated", however, the
Investment Manager takes comfort over the credit risk of Citco as they have
proven to rank amongst the "Best in Class" and "Top rated" in the recognised
industry survey carrying a global presence and over 40 years of experience in
the provision of custodian and other services to their clients and the hedge
fund industry. The credit risk associated with debtors is limited to other
receivables.
Liquidity risk
The Partnership is exposed to the possibility that it may be unable to
liquidate certain of its assets as it otherwise deems advisable as the
Partnership's underlying funds or their managers may require minimum holding
periods and restrictions on redemptions. Further, there may be suspension or
delays in payment of redemption proceeds by underlying funds or holdbacks of
redemption proceeds otherwise payable to the Partnership until after the
applicable underlying fund's financial records have been audited. Therefore,
the Partnership may hold receivables that may not be received by the
Partnership for a significant period of time, may not accrue any interest and
ultimately may not be paid to the Partnership. As at 31 March 2022, no (31
March 2021: Nil) suspension from redemptions existed in any of the
Partnership's underlying investments.
The Partnership invests in short-term UK treasury bills and considers the
associated liquidity risk to be negligible.
The table below details the Partnership's liquidity analysis for its financial
assets and liabilities. The table has been drawn up based on the undiscounted
net cash flows on the financial assets and liabilities that settle on a net
basis and the undiscounted gross cash flows on those financial assets and
liabilities that require gross settlement.
Within 1 >1 to 3 >3 to 12 >12 months 2022((1))
month months months Total
£'000 £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss 279,473 - - 71,508 350,981
Cash and cash equivalents 475,786 - - - 475,786
Trade and other receivables 800 - - - 800
Payables (480,367) - - - (480,367)
Distributions payable - (4,250) - - (4,250)
Total 275,692 (4,250) - 71,508 342,950
Percentage 80.3% (1.2)% 0.0% 20.9% 100.0%
Within 1 >1 to 3 >3 to 12 >12 months 2021((1))
month months months Total
£'000 £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss 70,001 259,861 15,000 108,942 453,804
Cash and cash equivalents 189,440 - - - 189,440
Trade and other receivables 473 - - - 473
Payables (267,340) - - - (267,340)
Distributions payable - (4,710) - - (4,710)
Total (7,426) 255,151 15,000 108,942 371,667
Percentage (2.0)% 68.7% 4.0% 29.3% 100.0%
((1)) The liquidity tables above reflect the anticipated cash flows assuming
notice was given to all underlying investments as at 31 March 2022 and 31
March 2021 and that all UK treasury bills are held to maturity. They include a
provision for "audit hold back" which most hedge funds can apply to full
redemptions and any other known restrictions the managers of the underlying
funds may have placed on redemptions. Where there is currently no firm
indication from the underlying manager on the expected timing of the receipt
of redemption proceeds, the relevant amount is included in the ">12 months"
category. The liquidity tables are therefore conservative estimates.
19. FAIR VALUE MEASUREMENT
IFRS 13 "Fair Value Measurement" requires the Group to establish a fair value
hierarchy that prioritises the inputs to valuation techniques used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to unobservable inputs (Level 3
measurements). The three levels of the fair value hierarchy under IFRS 13 are
set as follows:
- Level 1 Quoted prices (unadjusted) in active markets for identical assets or
liabilities;
- Level 2 Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability either directly (that is, as prices) or
indirectly (that is, derived from prices) or other market corroborated inputs;
and
- Level 3 Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs).
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement. For this purpose, the
significance of an input is assessed against the fair value measurement in its
entirety. If a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that measurement is a
Level 3 measurement. Assessing the significance of a particular input to the
fair value measurement requires judgement, considering factors specific to the
asset or liability.
The determination of what constitutes "observable" requires significant
judgement by the Group. The Group considers observable data to be market data
that is readily available, regularly distributed or updated, reliable and
verifiable, and provided by independent sources that are actively involved in
the relevant market.
The following table presents the Group's financial assets and liabilities by
level within the valuation hierarchy as at 31 March 2022 and 31 March 2021:
2022
Level 1 Level 2 Level 3 Total
Assets £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss:
The Holding Company - - 980,282 980,282
The Partnership - - 342,950 342,950
Total assets - - 1,323,232 1,323,232
2021
Level 1 Level 2 Level 3 Total
Assets £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss:
The Holding Company - - 956,279 956,279
The Partnership - - 371,667 371,667
Total assets - - 1,327,946 1,327,946
The investments in the Holding Company and the Partnership are classified as
Level 3 investments due to the use of the unadjusted NAV of the subsidiaries
as a proxy for fair value, as detailed in note 2. The subsidiaries hold some
investments valued using techniques with significant unobservable inputs as
outlined in the sections that follow.
The underlying assets of the Partnership and the Holding Company are shown
below.
The following table presents the Holding Company's financial assets by level
within the valuation hierarchy as at 31 March 2022 and 31 March 2021:
Asset type Level 31 March 2022 31 March 2021 Valuation technique Significant unobservable inputs Impact on
£'000 £'000 valuation
£'000
Listed investments 1 121,226 387,514 Publicly available share bid price as at statement of financial position n/a n/a
date
SIML 3 5,822 5,752 Net Assets of SIML Carrying value of assets and liabilities determined in accordance with +/- £291
generally accepted accounting principles, without adjustment. A sensitivity of
5% of the NAV of SIML is applied.
Milestone payments 3 49,802 - Discounted Cash Flow The main unobservable inputs consist of the assigned probability of milestone PoS: +/- £5,889
success and the discount rate used.
Discount rate: £7,558
Calibrated PRI((1)) 3 325,662 296,497 Calibrated PRI The main unobservable input is the quantification of the progress investments +/- £58,619
make against internal financing and/or corporate milestones where appropriate.
A reasonable shift in the fair value of the investment would be +/-18%.
Adjusted price of latest funding round((2)) 3 - 1,555 Price of latest funding round adjusted by Management The main unobservable input was the potential value returned in various exit +/- 274
scenarios and the weighting between these scenarios. A reasonable shift in the
Fair Value of the investment was +/-18%.
((1)) Valuation made by reference to price of recent funding round unadjusted
following adequate consideration of current facts and circumstances.
((2)) Valuation made by reference to price of recent funding round adjusted
following adequate consideration of current facts and circumstances.
The following table presents the movements in Level 3 investments of the
Holding Company for the years ended 31 March 2022 and 31 March 2021:
Life Other SIML 2022 2021
science asset Total Total
investments
£'000 £'000 £'000 £'000 £'000
Opening balance 298,052 - 5,752 303,804 363,476
Purchases during the year 107,817 - - 107,817 151,014
Sales during the year (325,837) - - (325,837) (3,017)
Gains on financial assets at fair value through profit or loss 245,630 49,802 70 295,502 37,827
Transfer from Level 3 - - - - (245,496)
Closing balance 325,662 49,802 5,822 381,286 303,804
The net gains for the year included in the Consolidated Statement of
Comprehensive Income in respect of Level 3 investments in the Holding Company
held as at the year end amounted to £295,502,000 (2021: £37,827,000).
During the year, there were no movements from Level 3 to Level 1 (31 March
2021: £245,495,636) or between Level 2 and Level 1 (31 March 2021: £nil)
The following table presents the Partnership's financial assets by level
within the valuation hierarchy as at 31 March 2022 and 31 March 2021:
Asset type Level 31 March 2022 31 March 2021 Valuation technique Significant unobservable inputs Impact on
£'000 £'000 valuation
£'000
UK treasury bills 1 179,984 344,862 Publicly available price as at statement of financial position date n/a n/a
Capital pool investment fund - Credit funds 2 99,489 - Valuation produced by fund administrator. Inputs into fund components are from n/a n/a
observable inputs
Legacy funds - Unlisted fund investments 2 - 26,098 Valuation produced by fund administrator. Inputs into fund components are from n/a n/a
observable inputs
Legacy funds - 3 39,857 46,268 Valuation produced by fund administrator The main unobservable input include the assessment of the performance of the +/- £3,986
underlying fund by the fund administrator. A reasonable possible shift in the
Long-term unlisted investments fair value of the instruments would be +/-10%.
Investment in Subsidiary 3 28,183 36,576 Valuation produced by fund administrator and adjusted by Management Unobservable inputs include the fund managers assessment of the performance of +/- £13,528
the underlying investments and adjustments made to this assessment to generate
the deemed fair value. A reasonable possible shift in the fair value of the
instruments would be +/-48%.
During the year ended 31 March 2022, there were no movements from Level 1 to
Level 2 (31 March 2021: £Nil) or between other Levels in the fair value
hierarchy.
Assets classified as Level 2 investments are primarily underlying funds
fair-valued using the latest available NAV of each fund as reported by each
fund's administrator, which are redeemable by the Group subject to necessary
notice being given. Included within the Level 2 investments above are
investments where the redemption notice period is greater than 90 days. Other
assets within the level 2 investments are daily traded credit funds priced
using the latest market price equivalent to their NAV. Such investments have
been classified as Level 2 because their value is based on observable inputs.
The Group's liquidity analysis is detailed in note 18.
Assets classified as Level 3 long-term unlisted investments are underlying
funds which are not traded or available for redemption. The fair value of
these assets is derived from quarterly statements provided by each fund's
administrator.
The following table presents the movements in Level 3 investments of the
Partnership for the year ended 31 March 2022:
Investment in Capital pool 2022 2021
Subsidiary investment Total Total
£'000 £'000 £'000 £'000
Opening balance 36,576 46,268 82,844 92,980
Purchases 1,832 760 2,592 5,748
Return of capital - (9,070) (9,070) (34,491)
(Losses)/gains on financial assets at fair value through profit or loss (6,757) 1,899 (4,858) 18,607
Closing balance 31,651 39,857 71,508 82,844
The net (losses)/gains for the year included in the Consolidated Statement of
Comprehensive Income in respect of Level 3 investments of the Partnership held
as at the year end amounted to £4,857,645 (31 March 2021: £18,607,213
gains).
20. COMMITMENTS AND CONTINGENCIES
The Group had the following commitments as at 31 March 2022:
2022 2021
Uncalled Uncalled
commitment commitment
£'000 £'000
Life science portfolio
Milestone payments to life science companies 82,617 106,854
CRT Pioneer Fund 3,424 4,888
Capital pool investments 2,429 3,751
Total 88,470 115,493
There were no contingent liabilities as at 31 March 2022 (March 2021: nil).
The commitments are expected to fall due in the next 36 months.
21. SUBSEQUENT EVENTS
These Consolidated Financial Statements were approved for issuance by the
Directors on 15 June 2022. Subsequent events have been evaluated until 14 June
2022.
Since the statement of financial position date share price movements resulted
in a decrease in value of the listed life science investments of £37.1
million as at 14 June 2022.
The Directors continue to monitor the Group's assets and strategy in light of
the latest market events including inter alia, the war in Ukraine,
inflationary and interest rate rises, and COVID-19 impacts. At the date of
signing they are not aware of any direct or immediate post year end impacts
that materially affect the financial statements.
Post year end the Group invested £9 million in the OMass Series B and $19
million in the SwanBio Series B, with £13 million invested in Resolution as
part of the existing Series A financing. In addition $400 million was invested
in US treasury bills.
GLOSSARY
AAV IRR
Adeno-associated virus - a non-enveloped virus that can be engineered to Internal Rate of Return.
deliver DNA to target cells.
Life science portfolio
ALL
The underlying investments in this segment are those whose activities focus on
Acute lymphocytic leukaemia - a cancer of the bone marrow and blood in which actively developing products to deliver transformational treatments to
the body makes abnormal white blood cells. patients.
CAGR Life science portfolio return
Compound Annual Growth Rate.
See alternative performance measures below.
Capital deployed/deployment Lymphocytes
Follow-on investment in our portfolio companies and investment in new
Specialised white blood cells that help to fight infection.
companies during the year. See alternative performance measures below.
Lymphoma
Capital pool/Capital base
A type of cancer that affects lymphocytes and lymphocyte producing cells in
Capital pool investments plus cash less other net liabilities. the body.
Capital pool investments Macrophages
The underlying investments consist of cash and cash equivalents, including
A form of white blood cell and the principal phagocytic (cell engulfing)
short-term (1 and 3 month) UK treasury bills, listed fund investments and components of the immune system.
legacy fixed term funds.
Mass Spectrometry
CAR-T therapy
A technique used by which chemical substances are identified by the sorting of
Chimeric antigen receptor T-cell therapy - a type of immunotherapy which gaseous ions in electric fields according to their mass-to-charge ratios.
reprogrammes a patient's own immune cells to fight cancer.
Melanoma
Cell therapy
A serious form of skin cancer that begins in cells known as melanocytes.
A therapy which introduces new, healthy cells into a patient's body, to
replace those which are diseased or missing. MES
Management Equity Shares.
CNS
Central nervous system - a part of the body's nervous system comprised of the mRNA
brain and spinal cord.
Messenger ribonucleic acid (RNA).
Companies Law Net Asset Value, Net Assets or NAV
Companies (Guernsey) Law 2008.
Net Asset Value ("NAV") is a measure of the value of the Company, being its
assets - principally investments made in other companies and cash and cash
Company equivalents held - minus any liabilities.
Syncona Limited.
NAV per share
CRT Pioneer Fund
See alternative performance measures below.
The Cancer Research Technologies Pioneer Fund LP. The CRT Pioneer Fund is
managed by Sixth Element Capital and invests in oncology focused assets. NAV total return
See alternative performance measures below.
Fabry disease
A rare genetic disease resulting from a deficiency of the enzyme NSCLC
alpha-galactosidase A, leading to dysfunctional lipid metabolism and abnormal Non-small cell lung cancer - the most common form of lung cancer.
glycolipid deposits.
NZAM
Gaucher disease The Net Zero Asset Managers (NZAM) initiative is an international group of
A genetic disorder in which a fatty substance called glucosylceramide asset managers who are committed to supporting the goal of net zero greenhouse
accumulates in macrophages in certain organs due to the lack of functional gas emissions by 2050 or sooner.
GCase enzyme.
Partnership
General Partner Syncona Investments LP Incorporated.
Syncona GP Limited.
SIML
Gene therapy Syncona Investment Management Limited
A therapy which seeks to modify or manipulate the expression of a gene in
order to treat or cure disease. Syncona Group companies
The Company and its subsidiaries other than those companies within the life
Group science portfolio.
Syncona Limited and Syncona GP Limited are collectively referred to as the
"Group". Syncona team
The team of SIML, the Company's Investment Manager.
Haemophilia B
A genetic disorder caused by missing or defective Factor IX that can result in T cell
dangerously low levels of the essential clotting protein.
A type of lymphocyte white blood cell, which forms part of the immune system
and develops from stem cells in the bone marrow.
Holding Company
Syncona Holdings Limited. TCFD
The Task Force on Climate-related Financial Disclosures (TCFD). First
ICR published in 2017, the TCFD recommendations act as a framework for assessing
The Institute of Cancer Research. the physical and transition risks companies are exposed to from climate change
and the transition to a green economy.
Immunotherapy
A type of therapy that uses substances to stimulate or suppress the immune The Syncona Foundation
system to help the body fight cancer, infection, and other diseases.
The Foundation distributes funds to a range of charities, principally those
involved in the areas of life science and healthcare.
Investment Manager
Syncona Investment Management Limited. UN PRI
The United Nations (UN) Principles for Responsible Investment (PRI) is a
iPSC technology network of investors, who commit to working to promote sustainable investment.
Induced pluripotent stem cells (iPSCs) are a type of pluripotent stem cell
which can be generated directly from mature cells (such as those of the skin Viral vectors
or blood).
A modified version of a virus which is designed to deliver genetic material to
cells.
ALTERNATIVE PERFORMANCE MEASURES
Capital deployed
With reference to the life science portfolio valuation table this is
calculated as follows:
ANet investment in the period £(203.0)m
adjusted for:
BGyroscope proceeds £325.8m
CCRT Pioneer fund distributions £0.4m
Total Capital deployed (A+B+C) £123.2m
Life science portfolio return
Gross life science portfolio return for 2022 0.8 per cent; 2021 11.8 per cent.
This is calculated as follows:
AOpening life science portfolio £722.1m
Net investment in the period £(203.0)m
BValuation movement £5.9m
Closing life science portfolio £524.9m
Life science portfolio return (B/A) 0.8%
NAV per share
NAV per share is calculated by dividing net assets by the number of shares in
issue adjusted for dilution by the potential share based payment share issues.
NAV takes account of dividends payable on the ex-dividend date. This is
calculated as follows:
ANAV for the purposes of NAV per share £1,309,840,518
BOrdinary shares in issue (note 14) 666,733,588
CDilutive shares 6,880,057
DFully diluted number of shares (B+C) 673,613,645
NAV per share (p) (A/D) 194.4
NAV total return
NAV total return ("NAVTR") is a measure of how the NAV per share has performed
over a period, considering both capital returns and dividends paid to
shareholders. NAVTR is calculated as the increase in NAV between the beginning
and end of the period, plus any dividends paid to shareholders in the year.
This is calculated as follows:
AOpening NAV per fully diluted share (note 14): 193.9p
BClosing NAV per fully diluted share (note 14): 194.4p
CMovement (B-A) 0.5p
DDividend paid in the year (note 15): 0.0p
ETotal movement (B+C-A) 0.5p
NAV Total Return (E/A) 0.3%
Life science portfolio return
Gross life science portfolio return for 2022 0.8 per cent; 2021 11.8 per cent.
This is calculated as follows:
A Opening life science portfolio £722.1m
Net investment in the period £(203.0)m
B Valuation movement £5.9m
Closing life science portfolio £524.9m
Life science portfolio return (B/A) 0.8%
NAV per share
NAV per share is calculated by dividing net assets by the number of shares in
issue adjusted for dilution by the potential share based payment share issues.
NAV takes account of dividends payable on the ex-dividend date. This is
calculated as follows:
A NAV for the purposes of NAV per share £1,309,840,518
B Ordinary shares in issue (note 14) 666,733,588
C Dilutive shares 6,880,057
D Fully diluted number of shares (B+C) 673,613,645
NAV per share (p) (A/D) 194.4
NAV total return
NAV total return ("NAVTR") is a measure of how the NAV per share has performed
over a period, considering both capital returns and dividends paid to
shareholders. NAVTR is calculated as the increase in NAV between the beginning
and end of the period, plus any dividends paid to shareholders in the year.
This is calculated as follows:
A Opening NAV per fully diluted share (note 14): 193.9p
B Closing NAV per fully diluted share (note 14): 194.4p
C Movement (B-A) 0.5p
D Dividend paid in the year (note 15): 0.0p
E Total movement (B+C-A) 0.5p
NAV Total Return (E/A) 0.3%
1 (#_ftnref1) Fully diluted, please refer to note 14 in the financial
statements. Alternative performance measure, please refer to glossary
2 (#_ftnref2) Alternative performance measure, please refer to glossary
(( 3 (#_ftnref3) )) See footnote 2
(( 4 (#_ftnref4) )) Life science portfolio return takes into consideration
upfront cash proceeds of £325.8m from the sale of Gyroscope to Novartis, as
well as the £49.8m valuation of the discounted risk-adjusted milestone
payments
5 (#_ftnref5) Alternative performance measure, please refer to glossary
6 (#_ftnref6) All IRR and multiple on cost figures are calculated on a gross
basis, reflects original Syncona Partners capital invested where applicable
7 (#_ftnref7) Includes sales of Blue Earth, Nightstar and Gyroscope,
reflects original Syncona Partners capital invested where applicable. Includes
upfront proceeds from sale of Gyroscope. All IRR and multiple on cost figures
are calculated on a gross basis
8 (#_ftnref8) FX rates taken at receipt of funds from the transaction
9 (#_ftnref9) FX rates taken at receipt of funds from the transaction
10 (#_ftnref10) See footnote 6
11 (#_ftnref11) See footnote 7
12 (#_ftnref12) See footnote 6
13 (#_ftnref13) FX rate taken at 31 March 2022
14 (#_ftnref14) As at 31 March 2022
15 (#_ftnref15) At 31 March 2022
16 (#_ftnref16) Investment announced by company post period end
17 (#_ftnref17) Primary input to fair value
18 (#_ftnref18) The basis of valuation is stated to be "Cost", this means
the primary input to fair value is capital invested (cost) which is then
calibrated in accordance with our Valuation Policy
19 (#_ftnref19) The basis of valuation is stated to be "PRI", this means the
primary input to fair value is price of recent investment which is then
calibrated in accordance with our Valuation Policy
20 (#_ftnref20) Fully diluted ownership increases to 80 per cent post the
Series B financing in May 2022
21 (#_ftnref21) Fully diluted ownership reduces to 31 per cent post the
Series B financing in April 2022
22 (#_ftnref22) Syncona's risk-adjusted and discounted valuation of the
milestone payments from the sale of Gyroscope Therapeutics
23 (#_ftnref23) Includes sales of Blue Earth, Nightstar and Gyroscope,
closures of 14MG and Azeria. All IRR and multiple on cost figures are
calculated on a gross basis, reflects original Syncona Partners capital
invested where applicable
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR GPUCAQUPPPGARecent news on Syncona
See all newsREG - Syncona Limited - Transaction in Own Shares
AnnouncementREG - Syncona Limited - Transaction in Own Shares
AnnouncementREG - Syncona Limited - Transaction in Own Shares
AnnouncementREG - Syncona Limited - Transaction in Own Shares
AnnouncementREG - Syncona Limited - Transaction in Own Shares
Announcement