REG - Syncona Limited - Third Quarter Update
06/02/2025 07:00
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RNS Number : 0876W Syncona Limited 06 February 2025
6 February 2025
Syncona Limited
Third Quarter Update
Continued focus on portfolio execution and delivering strong risk adjusted
returns to shareholders
Syncona Ltd ("Syncona"), a leading life science investor focused on creating,
building and scaling a portfolio of global leaders in life science, today
issues its quarterly update covering the period from 01 October to 31 December
2024.
Financial performance
· Net assets of £1,124.4 million (30 September 2024: £1,144.6
million), 179.4p per share (30 September 2024: 178.9p per share), a NAV per
share return of 0.3% in the quarter
· Life science portfolio valued at £779.6 million (30 September 2024:
£791.9 million), a return of (0.7)% in the quarter, with performance
predominantly driven by a decrease in Autolus' share price, partially offset
by positive foreign exchange movements
· Over the nine months to 31 December 2024, NAV per share has returned
(4.9)% with the life science portfolio generating a return of (9.5)%
· As previously announced, Syncona partially realised its holding in
Autolus, at an average price of $4.50
o Generated proceeds of £6.6 million in the quarter taking total realised
proceeds to £16.3 million
o Syncona retains a 9.9% fully diluted ownership stake in Autolus
· Capital pool of £344.8 million at 31 December 2024 (30 September
2024: £352.7 million)
Rebalanced, maturing portfolio with robust fundamentals and strong execution
in the quarter
· The Syncona Investment Management Limited (SIML) team are focused on
executing on unlocking the substantial latent value that is built into the
portfolio
· As expected, three key value inflection points with the potential to
drive significant NAV growth over time have been delivered by our later stage
companies in the quarter
o Positive 24-month data from Beacon's Phase II SKYLINE trial
o Encouraging three-month safety and efficacy data from Beacon's Phase II
DAWN study
o Spur published data from its Phase I/II trial in Gaucher disease which
reinforces the potential of its FLT201 therapy. Further confirmatory data from
the trial was released post-period end
· New clinical data published by iOnctura, showing early positive
results which support the initiation of a Phase II trial in uveal melanoma for
its lead asset roginolisib
· Post-period end Spur announced it had held a successful end-of-Phase
II meeting with the FDA, supporting the upcoming initiation of the Phase III
trial in Gaucher disease
· Our maturing portfolio expects to deliver two key value inflection
points by the end of CY2025, with a further five expected before the end of
CY2027
Disciplined capital allocation and deployment; a further £15.0 million
allocated to share buybacks following the partial realisation of Autolus
· Reflecting successful financing rounds with external investors,
capital deployment into the life science portfolio for this financial year is
expected to be below or at the lower end of our guidance of £150.0 million to
£200.0 million
· £90.0 million of capital deployed in the nine months to 31 December
2024, with no capital deployed into the strategic portfolio during the third
quarter
· In the financial year to date £310.6 million has been raised across
seven financings, including £175.5 million from leading external life science
investors 1
· Following the partial realisation of Autolus, an additional £15.0
million was allocated to the share buyback in November 2024 taking total
allocated to the share buyback to £75.0 million
- £13.7 million shares repurchased in the share buyback during the
quarter at an average 41% discount to NAV resulting in an accretion of 1.49p
to NAV per share 2
Melanie Gee, Chair of Syncona Limited, commented: "The Board remains
frustrated by the share price performance and widening discount to NAV. The
fundamentals of the portfolio are robust given the rebalancing to later stage
companies and the number of recent financings supported by third party
investors that externally validate the valuation of these portfolio companies.
The Board is confident that the portfolio is well placed to deliver strong
risk adjusted returns over time. Nonetheless given challenging broader market
conditions and headwinds in the investment companies' sector, the Board
together with SIML will continue to review options to maximise value for
shareholders over the medium term."
Chris Hollowood, CEO of Syncona Investment Management Limited, added: "The
volatility in the Autolus share price has continued to weigh on performance in
the quarter, despite its FDA approval for AUCATZYL in November 2024.
There has been continued strong execution elsewhere in our maturing portfolio
and we are pleased to see three key value inflection points delivered from
Beacon and Spur. These de-risking events validate the progress of these
companies towards delivering their future potential. We believe there is
substantial latent value in the portfolio and with an improving macro
environment for biotech, we are confident and excited by the value and impact
we can deliver by the end of 2027."
Milestones delivered in the quarter and post-period end:
Strategic life science portfolio company Capital access milestones Key value inflection points
Beacon 24-month data from its
Phase II SKYLINE trial in
XLRP
Three-month data readout from the Phase II DAWN trial in XLRP
Spur Select development candidate for GBA1 Parkinson's disease programme Data readout from its Phase I/II trial in Gaucher disease
Additional data readout from its Phase I/II trial in Gaucher disease
(post-period end)
Upcoming capital access milestones and potential key value inflection points
As Syncona builds and scales its portfolio, there are opportunities to deliver
milestones that primarily drive access to capital (capital access milestones),
and milestones that have the potential to drive significant NAV growth (key
value inflection points) 3 .
· Seven key value inflection points expected by the end of CY2027,
including two expected before the end of CY2025. These have the potential to
drive significant NAV growth. Syncona is funded to deliver on all of the
portfolio's key value inflection points
· Nine capital access milestones across the portfolio expected by the
end of CY2026, with seven expected by the end of CY2025
· These capital access milestones and key value inflection points are
not without risk
Strategic life science portfolio company Next expected capital access milestones Syncona team view of expected key value inflection points
On the market
Autolus H1 CY2025 CY2025
- Initial data from Phase I trial in SLE 4 - Commercial traction following US launch of AUCATZYL(®) (obe-cel),
after FDA approval
Moving towards being on the market
Beacon H1 CY2025 (new) CY2026
- Six-month data readout from the Phase II DAWN trial in XLRP - Data readout from its Phase II/III pivotal VISTA trial in XLRP
Moving towards publishing definitive data
iOnctura H1 CY2025 (delayed from H2 CY2024) CY2026
- Initiation of Phase II trial in uveal melanoma - Data readout from its Phase II trial in uveal melanoma
Spur H1 CY2025 CY2027
- Initial safety readout in higher dose cohort from its Phase I/II - Completion of the pivotal stage of its Phase III trial in Gaucher
trial in AMN disease
H2 CY2025
- Initiation of Phase III trial in Gaucher disease
CY2026 (new)
- Initiation of Phase I/II trial in Parkinson's disease
Resolution H1 CY2025 (delayed from 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 ANV600
Purespring CY2026
- Initiation of Phase I/II trial in complement-mediated kidney
disease
OMass H2 CY2025 (updated from CY2026)
- Initiation of Phase I trial of its MC2 programme
Life science portfolio valuations 5
30 Sep 2024 Net investment in the period Valuation FX movement 31 Dec 2024 % of Group NAV Valuation Fully diluted owner-ship stake 9 Focus area
change Basis(( 6 )),(( 7 )),(( 8 ))
(£m) (£m) (£m) (£m) (£m) (%)
Strategic portfolio companies
On the market
Autolus 83.4 (6.6) (27.4) 4.7 54.1 4.8 Quoted 9.9 Cell therapy
Late-stage clinical
Beacon 113.0 - 0.4 7.8 121.2 10.8 PRI 41.5 Gene therapy
Clinical
Spur 157.5 - 0.8 - 158.3 14.1 Cost 82.9 Gene therapy
Quell 80.0 - - 5.5 85.5 7.6 PRI 33.7 Cell therapy
Anaveon 35.9 - - (0.1) 35.8 3.2 PRI 36.9 Biologics
iOnctura 25.0 - - (0.2) 24.8 2.2 PRI 21.9 Small molecules
Pre-clinical
Resolution 63.6 - - - 63.6 5.6 Cost 82.6 Cell therapy
Purespring 51.2 - - - 51.2 4.6 PRI 38.1 Gene therapy
OMass 49.7 - - - 49.7 4.4 PRI 28.9 Small molecules
Kesmalea 20.0 - - - 20.0 1.8 Cost 59.7 Small molecules
Yellowstone 16.5 - - - 16.5 1.5 Cost 60.9 Biologics
Mosaic 15.0 - - - 15.0 1.3 Cost 76.6 Small molecules
Forcefield 10.6 - - - 10.6 0.9 PRI 62.6 Biologics
Slingshot 5.6 - - - 5.6 0.5 Cost 100.0 Accelerator
Portfolio milestone payments
Neogene milestone payment 4.1 - 0.1 0.4 4.6 0.4 DCF Cell therapy
Clade milestone payment 0.7 - - - 0.7 0.1 DCF Cell therapy
Syncona investments
CRT Pioneer Fund 33.1 - - - 33.1 2.9 Adj Third Party 64.1 Oncology
Biomodal 17.0 0.0 0.0 1.2 18.2 1.6 PRI 5.5 Epigenetics
Achilles 8.5 0.0 1.5 0.1 10.1 0.9 Quoted 22.7 Cell therapy
Century 10 1.5 0.0 (0.6) 0.1 1.0 0.1 Quoted 1.4 Cell therapy
Total Life Science Portfolio 791.9 (6.6) (25.2) 19.5 779.6 69.3
Capital pool 352.7 (15.6) 2.4 5.3 344.8 30.7
TOTAL 1,144.6 1,124.4 100.0
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.
Notes
About Key Value Inflection Points
A key value inflection point is a material de-risking event for a portfolio
company that has the potential to drive significant NAV growth for Syncona,
for example by increasing the possibility of a realisation event, such as
M&A. These milestones can also enable companies to access significant
capital including through financings and IPOs, which may take place at
valuation uplifts and underpin progression to a subsequent key value
inflection point which has the potential to drive greater value. M&A or
capital access is unlikely to occur immediately following a key value
inflection point.
About Capital Access Milestones
A capital access milestone is a de-risking event for a portfolio company that
is expected to enable access to capital, which underpins progression towards a
company's next milestone. It is less likely that a capital access milestone
will drive significant NAV growth for Syncona, for example by increasing the
possibility of a realisation event, such as M&A.
1 Includes additional EUR 6.0 million (£5.0 million) commitment during the
period from XGEN to iOnctura's Series B financing
2 Since the period end, as of 5 February 2025, a further £3.9 million of
shares have been bought back at an average discount of 46.0%
3 Definitions of capital access milestones and key value inflection points
can be found in the notes section
4 Most recent public guidance
5 Portfolio valuations reflect Syncona's total interest in a company or
investment
6 Primary input to fair value of equity holding
7 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
8 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
9 Percentage holding reflects Syncona's ownership stake at the point full
current commitments are invested
10 Syncona received shares in Century as part of the agreement to acquire
Clade
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