REG - Syncona Limited - First Quarter Update
13/08/2024 07:00
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RNS Number : 1548A Syncona Limited 13 August 2024
13 August 2024
Syncona Limited
First Quarter Update
Strong clinical execution across a maturing portfolio that continues to
attract significant external capital
Syncona Ltd, (the "Company"), a leading life science investor focused on
creating, building and scaling a portfolio of global leaders in life science,
today announces its quarterly update covering the period from 01 April to 30
June 2024.
Chris Hollowood, CEO of Syncona Investment Management Limited, said: "Our
companies continue to execute on their clinical strategies and have attracted
substantial investment from external partners in the quarter, with Beacon and
Forcefield raising capital from high-quality investors. Despite both
financings contributing positively to performance, these uplifts have been
offset by declines in value from our quoted holdings, which have weighed on
the overall life science portfolio return.
With Anaveon entering the clinic we now have six clinical-stage companies in
our strategic portfolio of 13 companies. We are pleased with the positive
momentum across the portfolio and are particularly encouraged to see Beacon
treat the first patient in its Phase II/III registrational trial in XLRP, from
which data would form the basis of a potential regulatory filing. The work we
have undertaken to rebalance, diversify and de-risk the portfolio means a
significant amount of value is now in clinical-stage assets, and we continue
to focus on allocating capital to these opportunities and those approaching
clinical entry. All of this provides us with a platform for future growth and
we are excited about the opportunity ahead, with Syncona well placed to
deliver long-term returns for our shareholders and transformational treatments
for patients."
Financial performance in the quarter
· Net assets of £1,160.4 million (31 March 2024: £1,238.9 million),
179.4p per share (31 March 2024: 188.7p per share), a NAV per share return of
(4.9)%
o Performance predominantly driven by a decrease in Autolus' share price,
partially offset by valuation uplifts in Beacon and Forcefield, alongside a
positive return from the capital pool and accretive share buybacks
· Life science portfolio valued at £739.0 million (31 March 2024:
£786.1 million), a return of (8.3)%
· Capital pool of £421.4 million at 30 June 2024 (31 March 2024:
£452.8 million)
o £23.3 million deployed into the life science portfolio
· £11.0 million invested into the share buyback programme in the
quarter
o 9.6 million shares repurchased in the share buyback during the quarter at
an average 38.1% discount to NAV resulting in an accretion of 0.94p to NAV per
share 1
Maturing strategic portfolio 2 continues to attract significant external
investment
· Roche Venture Fund committed £10.0 million to Forcefield's Series A
financing, alongside Syncona's commitment of £20.0 million
o Syncona's holding was written up by £2.4 million (0.38p per share); a
37.6 per cent uplift to the 31 March 2024 valuation of the company
· Post-period end Beacon raised $170 million in a Series B financing,
with Syncona committing $42.5 million (£33.5 million) in a round led by
Forbion, alongside a leading global syndicate
o Syncona's holding was written up by £14.3 million (2.2p per share); a
17.9 per cent uplift to the 31 March 2024 valuation of the company 3
· Completion of the sale of Clade to Century Therapeutics for up to
$45.0 million (£35.9 million), with upfront consideration to Syncona of $9.3
million (£7.4 million)
Increased allocation to share buyback programme
· The Board of Syncona continues to view the current share price as a
compelling investment opportunity given the potential value within our
portfolio
· As announced in our FY2023/4 Annual Results in June, a further £20.0
million has been allocated to the share buyback programme taking the total
allocation to £60.0 million
· Since the commencement of the share buyback, a total of £35.4
million has been deployed to repurchase a total of 29.4 million shares, at an
average discount of 33.4% 4
Strong clinical execution from our rebalanced and diversified portfolio, where
72% of strategic portfolio value is in our six clinical-stage companies
Moving towards being on the market
· Autolus presented positive longer-term follow-up and additional data
from the pivotal Phase Ib/II FELIX study of obe-cel in relapsed/refractory
(r/r) adult B-cell acute lymphoblastic leukaemia (ALL) at the American Society
of Clinical Oncology (ASCO) Annual Meeting. The company also had its Marketing
Authorisation Application (MAA) accepted by the European Medicines Agency
(EMA) for obe-cel
· Beacon treated its first patient in the Phase II/III registrational
VISTA trial 5 , which will further assess the effect of AGTC-501 on vision and
other symptoms of X-Linked Retinitis Pigmentosa (XLRP)
Moving towards publishing definitive data
· Resolution presented further data at the EASL Congress from its
academic study (MATCH II) which supports the significant potential of
macrophage cell therapy treatment for end-stage liver disease. The company
also received approval from the UK Medicines and Healthcare products
Regulatory Agency (MHRA) to commence the Phase I/II EMERALD study for its lead
candidate RTX001, with this study expected to initiate in H2 CY2024
· Post-period end Spur completed enrolment in its Phase I/II trial in
Gaucher disease and selected a single low dose infusion of FLT201 for its
Phase III trial, expected to start in CY2025
o The dose selection was based on encouraging data which demonstrated
compelling efficacy signals, alongside a favourable safety and tolerability
profile
o Spur also published data from its Parkinson's disease research programme,
the company's first pipeline expansion into more prevalent chronic
debilitating diseases
· Post-period end iOnctura expanded its clinical trial programme for
its lead pipeline asset, roginolisib, to non-small cell lung cancer, via
clinical collaboration agreements with the ETOP IBCSG Partners Foundation and
GSK
Moving towards publishing emerging efficacy data
· Quell presented positive safety data from is study of QEL-001 in
liver transplant patients and is advancing the therapy's development into the
efficacy cohort of the LIBERATE Phase I/II trial
· Post-period end Anaveon entered the clinic with its Phase I/II trial
of ANV600, the company's next generation compound, in line with prior guidance
Outlook
Capital deployment
Syncona continues to anticipate that deployment into the portfolio and
pipeline in the financial year to 31 March 2025 will be £150-200 million.
This excludes the capital allocated to the share buyback programme.
Upcoming capital access milestones and potential key value inflection points
As we build and scale our companies, there are opportunities to deliver
milestones that drive access to capital (capital access milestones) and
milestones that we believe have the potential to drive significant NAV growth
(key value inflection points 6 ).
· 10 capital access milestones across the portfolio by the end of
CY2026, with eight expected by the end of CY2025
· Eight key value inflection points by the end of CY2026, each of which
has the potential to drive significant NAV growth, including two before the
end of CY2024. Syncona is funded to deliver on all of the portfolio's
potential key value inflection points
· These capital access milestones and key value inflection points
are not without risk
Updates to milestones since FY2023/4 Annual Results
· Anaveon initiated its Phase I/II trial of ANV600, a potential capital
access milestone
· There have been no other milestone changes since the Annual Results
announcement
Strategic life science portfolio company Next expected capital access milestones Syncona team view of potential key value inflection points
Moving towards being on the market
Autolus H2 CY2024 CY2025
- Initial data from Phase I trial in SLE - Commercial traction following US launch of obe-cel, dependent on
FDA regulatory approval
H2 CY2024
- Commence the US commercial launch of obe-cel, dependent on
anticipated FDA regulatory approval in November
Beacon CY2025 H2 CY2024
- Initial data from its Phase II DAWN trial in XLRP - 24-month data from its Phase II SKYLINE trial in XLRP
CY2026
- Data readout from its Phase II/III registrational VISTA trial in
XLRP
Moving towards publishing definitive data
iOnctura CY2024 CY2026
- Initiation of Phase II trial in uveal melanoma - Data readout from its Phase II trial in uveal melanoma
Spur H2 CY2024 H2 CY2024
- Select development candidate for GBA1 Parkinson's disease - Data readout from its Phase I/II trial in Gaucher disease
programme
H1 CY2025
- Initial safety readout in higher dose cohort from its Phase I/II
trial in AMN
CY2025
- Initiation of Phase III trial in Gaucher disease
Resolution H2 CY2024 CY2026
- Initiation of Phase I/II trial in end stage liver disease - Data readout from its Phase I/II trial in end stage liver disease
Moving towards publishing emerging efficacy data
Quell CY2025
- Data readout from its Phase I/II trial in liver transplantation
Anaveon CY2026
- Data readout from its Phase I/II trial of its next generation
asset ANV600
Purespring CY2026
- Initiation of Phase I/II trial in complement mediated kidney
disease
OMass CY2026
- Initiation of Phase I trial of its MC2 programme
Valuation movements in the quarter
Company Net investment in the period Valuation FX movement 30 Jun 2024 % of Group NAV Valuation Fully diluted owner-ship stake Focus area
31 Mar 2024 change basis(( 7 )),(( 8 )),(( 9 ))
(£m) (£m) (£m) (£m) (£m) (%)
Strategic portfolio companies
Late-stage clinical
Beacon 80.3 5.3 14.3 - 99.9 8.6% PRI 65.3% Gene therapy
Autolus 169.5 - (76.7) (0.5) 92.3 8.0% Quoted 12.6% Cell therapy
Clinical
Spur 135.6 0.8 0.4 - 136.8 11.8% Cost 78.1% Gene therapy
Quell 84.7 - - (0.1) 84.6 7.3% PRI 33.7% Cell therapy
Anaveon 35.7 - - 3.1% PRI 36.9% Biologics
0.1 35.8
iOnctura 25.6 - - (0.2) 25.4 2.2% Cost 23.0% Small molecules
Pre-clinical
Resolution 50.0 - 0.2 50.2 4.3% Cost 81.6% Cell therapy
-
Purespring 45.3 - 0.2 - 45.5 3.9% Cost 77.1% Gene therapy
OMass 43.7 - - - 43.7 3.8% PRI 32.7% Small molecules
Yellowstone 1.0 15.5 - - 16.5 1.4% Cost 57.7% Biologics
Kesmalea 12.0 - - - 12.0 1.0% Cost 62.2% Small molecules
Forcefield 6.5 - 0.9% PRI 62.6% Biologics
1.7 2.4 10.6
Mosaic 7.3 - - - 7.3 0.6% Cost 52.4% Small molecules
Portfolio milestones and deferred consideration
Beacon deferred consideration 14.4 - 0.4 - 14.8 1.3% DCF - Gene therapy
Neogene milestone payment 2.2 - 0.1 - 2.3 0.2% DCF - Cell therapy
Clade milestone payment 0.0 0.7 - - 0.7 0.1% DCF - Cell therapy
Syncona investments
CRT Pioneer Fund 33.9 (0.9) - - 33.0 2.8% Adj Third Party 64.1% Oncology
Biomodal 18.0 - - - 18.0 1.6% PRI 5.5% Epigenetics
Achilles - (3.8) (0.1) 7.1 0.6% Quoted 24.5% Cell therapy
11.0
Century 10 0.0 4.3 (1.8) - 2.5 0.2% Quoted 1.4% Cell therapy
Clade 9.4 (9.4) - - 0.0 0.0% Sold - Cell therapy
Total Life Science Portfolio 786.1 18.0 (64.3) (0.8) 739.0 63.7%
Capital pool 452.8 421.4 36.3%
TOTAL 1,238.9 1,160.4 100%
Enquiries
Syncona Ltd
Natalie Garland-Collins / Fergus Witt
Tel: +44 (0) 20 3981 7940
FTI Consulting
Ben Atwell / 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
creating, building and scaling companies to deliver transformational
treatments to patients in areas of high unmet need.
We aim to build and maintain a diversified portfolio of 20-25 globally leading
life science businesses, across development stage, modality and therapeutic
area, for the benefit of all our stakeholders. We focus on developing
treatments that deliver patient impact by working in close partnership with
world-class academic founders and experienced 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.
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.
Syncona Limited seeks to achieve returns over the long term. Investors should
seek to ensure they understand the risks and opportunities of an investment in
Syncona Limited, including the information in our published documentation,
before investing.
1 Since the period end, as of 9 August 2024, a further £4.1 million of
shares have been bought back at an average discount of 33.2%
2 Portfolio of core life science companies where Syncona has significant
shareholdings.
3 FX rate taken as at 30 June 2024
4 As at 9 August 2024
5 The UK's MHRA and the EU's EMA have accepted the VISTA study design as
being pivotal
6 Key value inflection points across the portfolio also have the potential
to enable capital access
7 Primary input to fair value
8 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
9 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
10 Syncona received shares in Century as part of the agreement to acquire
Clade
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