Full Year Results for the 12 months ended 31 March 2024

Proactive management to rebalance the portfolio over the last 18 months, with capital prioritised towards our most promising companies and assets, providing a platform for future growth

 

Investment in three highly innovative new portfolio companies, including one at clinical stage

 

Portfolio diversified across therapeutic area and modality, and weighted towards clinical and late-stage clinical companies

 

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 Annual Results for the 12 months ended 31 March 2024.

 

Chris Hollowood, CEO of Syncona Investment Management Limited, said: “During the year, we have had a resolute focus on proactively managing our portfolio and a rigorous approach to capital allocation to maximise value in challenging market conditions. Against this backdrop, we have delivered a resilient financial performance, underpinned by strong execution across the portfolio. In parallel we have added three exciting and highly innovative new companies to the portfolio that can further drive medium and long-term growth.

 

In November 2022, we set out 10-year targets and our ambition to organically grow net assets to £5 billion. Since then, we have made significant progress in rebalancing the portfolio to provide a platform for future growth. Our maturing strategic portfolio of 13 companies expects to deliver eight key value inflection points with the potential to drive significant NAV growth by the end of 2026, including two in the next six months.

 

We are excited about the opportunity ahead. We continue to see compelling value in our shares and, having allocated £40 million to the share buyback in the year, have today allocated a further £20 million to the programme.  We remain focused on driving NAV growth for shareholders and delivering transformational impact for patients.”

 

Financial performance

 

• Net assets of £1,238.9 million (31 March 2023: £1,254.7 million), 188.7p^[1] per share (31 March 2023: 186.5p per share), a NAV per share return of 1.2%^[2] in the year (31 March 2023: (4.1)%):

o    Positive returns from our life science portfolio and capital pool, enhanced by accretive share buybacks

• Life science portfolio valued at £786.1 million[3] (31 March 2023: £604.6 million), a return of 2.2%[4] in the year (31 March 2023: (14.3)%), with uplifts from Autolus offset by partial write-downs of Anaveon and Clade and the write-off of Gyroscope milestones payments
• Capital pool^[5] of £452.8 million at 31 March 2024 (31 March 2023: £650.1 million)
• £20.2 million out of announced £40.0 million invested into the share buyback:

o   16.5 million shares repurchased at an average 35.1% discount to NAV resulting in an accretion of 1.61p to NAV per share[6]

• £172.2 million deployed[7] into the life science portfolio, within our guidance for the year

 

Proactive management of a maturing strategic portfolio[8]

 

·       Proactive management to ensure that our companies have a path forward to reach late-stage clinical development, where we believe significant value can be accessed

·       Ongoing focus on widening financing syndicates to provide broader financial scale: 

o   Autolus completed a public offering of $350 million

o   Supporting portfolio companies to bring in aligned co-investors to expand syndicates 

·       Portfolio company budgets streamlined and capital deployment focused on most promising assets:

o   Anaveon took the strategic decision to focus on its next-generation compound, ANV600

·       Explored strategic transactions and creative financing solutions:

o   Autolus signed a strategic collaboration and received an equity investment from BioNTech for upfront aggregate proceeds of $250 million

o   Quell entered into a cell therapy collaboration with AstraZeneca focused on autoimmune diseases, for which it received $85 million upfront, in a deal potentially worth over $2 billion[9]

o   Beacon announced the sale of its manufacturing facility post-period end to Ascend Advanced Therapeutics; transaction includes a long-term partnership with Beacon to continue to manufacture its products

·       Portfolio company consolidations and M&A:

o   Market conditions presented a differentiated opportunity to take Freeline private, after which the company acquired SwanBio to create Spur, a new company with a consolidated adeno-associated virus (AAV) gene therapy pipeline

o   Post-period end an agreement was reached for Clade to be acquired by Century Therapeutics for up to $45.0 million (£35.9 million), with upfront consideration to Syncona of $9.3 million (£7.4 million)

 

Continued focus on rigorous capital allocation to maximise value

 

·       Focus on allocating capital to clinical opportunities and assets that are approaching clinical entry, with 86.1% of capital deployed towards these assets in the period

·       Syncona’s view is that the current share price represents a compelling investment opportunity given the potential value within our portfolio

·       As part of Syncona’s focus on, and review of, capital allocation in the year, the Board took the decision to launch a share buyback programme of up to £40.0 million in September 2023:

o   Post-period end a further £20.0 million has been allocated to the share buyback programme

 

71.1% of strategic portfolio value in clinical-stage companies 

 

·       Significant work to rebalance the portfolio, prioritising capital towards the most promising companies and assets, and providing a platform for future growth

·       Maturing strategic portfolio of 13 companies, with five clinical-stage companies of which two are late-stage

·       Strong clinical, financial and operational execution across the portfolio, including nine financings and strategic transactions, 15 clinical data readouts and multiple senior leadership appointments

 

Investment in three highly innovative new companies to underpin medium and long-term growth, including one clinical-stage asset

 

·       Invested €30 million (£25.7 million) as part of a Series B financing of iOnctura, a clinical-stage oncology company developing innovative therapies for neglected and hard-to-treat cancers

·       Committed £16.5 million in a Series A financing of Yellowstone, a new biologics company which is pioneering soluble bispecific T-cell receptor (TCR)-based therapies to unlock a new class of cancer therapeutics

·       Syncona committed to a Series A financing in Forcefield, a company we had previously seed funded, which is a pioneer of best-in-class therapeutics aiming to revolutionise the treatment of heart attacks via protection of cardiomyocytes. Alongside our £20.0 million commitment to Forcefield’s Series A, post-period end Roche Venture Fund committed a further £10.0 million to the financing valuing Syncona’s holding in Forcefield at £8.9 million, a 38% uplift to the 31 March 2024 value[10]

 

A platform to respond to improving market conditions

 

• Expanded senior team and embedded a new operating model to better support the delivery of Syncona’s ambitious plans to achieve £5 billion of NAV by 2032:

o   Roel Bulthuis joined as Managing Partner and Head of Investments

o   John Tsai, previously Chief Medical Officer (CMO) at Novartis, joined as Executive Partner

o   Kate Butler, former Group Finance Director of SIML, took up the role of Chief Financial Officer (CFO), with former CFO, Rolf Soderstrom moving to the role of Executive Partner

o   Post-period end Harriet Gower Isaac was appointed Head of People

 

Outlook

 

Market conditions have been challenging. However, value is returning to late-stage clinical assets and financing conditions are beginning to improve in the private markets. We continue to proactively manage our maturing portfolio to drive our companies to late-stage clinical development and are resolutely focused on delivering the 11 capital access milestones and eight key value inflection points that are mapped against our NAV Growth Framework. We have a strong pipeline of new investment opportunities based on highly innovative science, across therapeutic area, modality and stage of development, from company creation to clinical stage.

 

Syncona is well positioned with a well-funded portfolio, strong balance sheet, newly embedded operating model, experienced team and clear strategy to take advantage of market conditions as they improve. We have rebalanced the portfolio, prioritising capital towards the most promising companies and assets, and have preserved value in a challenging market. We are excited about the opportunity ahead to achieve our 2032 targets. The financial year has started with positive momentum and we remain focused on driving NAV growth for shareholders whilst delivering transformational impact for patients.

 

Capital deployment

 

Syncona anticipates that deployment into the portfolio and pipeline in the financial year to 31 March 2025 will be £150-200 million.

 

Upcoming capital access milestones and potential key value inflection points[11]

 

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[12]).

 

• 11 capital access milestones across the portfolio by the end of CY2026, with nine expected by the end of CY2025

• Eight key value inflection points, each of which has the potential to drive significant NAV growth by the end of CY2026, including two in the next six months. 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
•  

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 -          Initial data from Phase I trial in SLE   H2 CY2024 -          Commence the US commercial launch of obe-cel, dependent on anticipated FDA regulatory approval in November	CY2025 -          Commercial traction following US launch of obe-cel, dependent on FDA regulatory approval
Beacon	CY2025 -          Initial data from its Phase II DAWN trial in XLRP	H2 CY2024 -          24-month data from its Phase II SKYLINE trial in XLRP   CY2026 Data readout from its Phase II/III registrational VISTA trial in XLRP[13]
Moving towards publishing definitive data
iOnctura	CY2024 -          Initiation of Phase II trial in uveal melanoma	CY2026 Data readout from its Phase II trial in uveal melanoma
Spur[14]	H2 CY2024 Select development candidate for GBA1 Parkinson’s 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	H2 CY2024 -          Data readout from its Phase I/II trial in Gaucher disease
Resolution	H2 CY2024 -          Initiation of Phase I/II trial in end stage liver disease	CY2026 -          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	H2 CY2024 -          Initiation of Phase I/II trial of ANV600, the company’s next generation compound	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

 

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.

 

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[1] Fully diluted, please refer to note 14 in the financial statements. Alternative performance measure, please refer to glossary

[2] Alternative performance measure, please refer to glossary

[3] See footnote 2

[4] See footnote 2

[5] See footnote 2

[6] Since the period end, as of 19 June 2024, a further £10.0 million of shares have been bought back at an average discount of 38.8%

[7] See footnote 2                                                                                                                                   

[8] Portfolio of core life science companies where Syncona has significant shareholdings. Please refer to glossary

[9] Contingent on successfully reaching development and commercial milestones, plus tiered royalties

[10] The change in valuation in Forcefield is not included in the 31 March 2024 valuation of the company

[11] The evolved terminology “potential key value inflection points” refers to the same portfolio milestones that were defined as “potential value inflection points” at our FY2023/4 Interim Results in November 2023. This terminology reflects their role in potentially driving significant NAV growth

[12] Key value inflection points across the portfolio also have the potential to enable capital access

[13] The UK's MHRA and the EU's EMA have accepted the VISTA study design as being pivotal

[14] Capital access milestones and potential key value inflection points relate to programmes formerly being progressed by Freeline and SwanBio