Period of strong clinical progress, with a rebalanced portfolio continuing to attract external capital
Expected key value inflection points to the end of CY2027, give confidence in NAV growth, underpinning the path to £5 billion by 2032
Syncona Ltd, (“Syncona” or the “Company”), a leading life science investor focused on creating, building and scaling a portfolio of global leaders in life science, today announces its Interim Results for the six months ended 30 September 2024.
Financial Performance
- Net assets of £1,144.6 million (31 March 2024: £1,238.9 million), 178.9p[1] per share (31 March 2024: 188.7p per share), a NAV per share return of (5.2)%[2]
- Performance predominantly driven by a decrease in Autolus’ share price and a weakening of the US dollar, partially offset by valuation uplifts from private portfolio company financings, alongside accretive share buybacks
- Life science portfolio valued at £791.9 million[3] (31 March 2024: £786.1 million) a return of (8.8)%[4],[5]
- £90.0 million deployed[6] into the life science portfolio, with deployment guidance for the year remaining at £150-200 million
- £19.4 million of shares repurchased at an average 36.2% discount to NAV per share, resulting in an accretion of 1.59p to NAV per share[7]
- Capital pool[8] of £352.7 million at 30 September 2024 (31 March 2024: £452.8 million)
Rebalanced portfolio continues to deliver strong clinical progress and attract significant investment, providing a strong platform for growth
- Maturing strategic portfolio[9] of 14 companies, with 68.1% of its value now in clinical and late-stage clinical companies[10], following work to rebalance the portfolio over the last 24 months
- A total of £305.6 million raised across six financings which were closed in the period, including £170.5 million from leading external life science investors, broadening the financial scale of the portfolio
- Strong clinical execution across six clinical-stage companies, with one company entering the clinic and multiple data readouts delivered during the period, followed by two key value inflection points from Beacon and Spur post-period end
- Post-period end, Autolus received marketing approval from the US Food and Drug Administration (FDA) for AUCATZYL® (obe-cel), its novel CAR T-cell therapy, for the treatment of adult patients with relapsed or refractory B-cell precursor acute lymphoblastic leukaemia (r/r B-ALL)
Confidence in the path to our NAV target of £5 billion by 2032
- The Syncona team[11] believes there is substantial latent value in the portfolio and the delivery of expected key value inflection points by the end of CY2027 has the potential to drive significant NAV growth, underpinning our confidence in the path to £5 billion by 2032
- This conviction is enhanced by the work undertaken to rebalance to a more mature portfolio, the strong clinical and operational execution of the portfolio, and the milestones expected to be delivered by clinical-stage companies, notably those publishing definitive data by the end of CY2027
Partial realisation of holding in Autolus
- Syncona’s exposure to Autolus rebalanced as it transitions from development stage to a commercial biotech, in line with Syncona’s strategy of building companies to late-stage development
- 3% of the holding in Autolus sold in the period, generating proceeds of $12.6 million (£9.7 million)
- A further 5.7% sold post-period end, generating further proceeds of $8.6 million (£6.6 million)
- Following these partial realisations, Syncona retains a 9.9% fully diluted ownership stake in Autolus valued at $96.0 million (£75.3 million)[12]
Optimising returns for shareholders
- The Syncona Board continues to believe that the current share price undervalues the portfolio and its prospects and that the shares represent a compelling investment opportunity, particularly given the material discount to NAV at which the shares currently trade
- Post-period end, the Board has taken the decision to allocate an additional £15.0 million to share buybacks, recycling most of the proceeds from the partial realisation of the Autolus holding[13]
- Alongside the £20.0 million allocated to share buybacks in June 2024, this takes the total amount allocated to share repurchases to £75.0 million since the buyback was launched in September 2023, of which £46.3 million has been deployed to date[14]
- Syncona remains funded to deliver on its key value inflection points, whilst retaining capital to drive the broader strategy
Investing in the next frontier of innovation to deliver long-term growth
- £12.5 million committed to new portfolio company Slingshot Therapeutics (Slingshot), the Syncona Accelerator, focused on accumulating and developing a pipeline of early-stage development programmes
- Slingshot will efficiently advance and de-risk programmes from academic founders by providing access to high quality management, centralised development expertise, resource, funding and operational support
- This centralised structure provides Syncona with a capital efficient and de-risked way to gain more exposure to the returns available from translating highly innovative science into promising biotech assets
Platform further strengthened with the appointment of Chair of SIML
- Appointment of Kenneth Galbraith as Chair of SIML[15]. Kenneth joins the SIML Board with immediate effect, bringing 35 years of experience across biotechnology and venture capital to further support Syncona’s growth ambitions
Melanie Gee, Chair of Syncona Limited, said: “The Board remains focused on the delivery of our strategy and our ambition to progress NAV to £5 billion by 2032. The potential for significant corporate activity should come from our later-stage assets, assuming they achieve their key 2025, 2026 and 2027 clinical milestones. This is a result of the considerable work undertaken by the team over the last 24 months.
We continue to believe that there is significant future value in our portfolio. NAV growth, as a result of corporate activity, should follow the progress of clinical milestones over time. The Company has a capital allocation policy and, recognising the significant discount to NAV and balancing this against future funding requirements, the Board has decided to return £15.0 million proceeds from the partial sale of Autolus to shareholders, taking the share buyback allocation to £75.0 million. Syncona’s remaining capital is focused on driving milestones across the portfolio to deliver our strategy.”
Chris Hollowood, CEO of Syncona Investment Management Limited, commented: “The portfolio has made good clinical and operational progress in the first half of the year. There have been multiple successful financing rounds, and our later-stage companies have continued to deliver positive clinical data readouts, providing further validation of their progress and the quality of the portfolio.
Syncona has been through a period of NAV underperformance in recent years, and we are now emerging from a challenging market environment well positioned to take advantage of conditions as they improve. We are focused on delivering growth and believe that there is substantial latent value in the portfolio that is yet to be reflected in our NAV. Our maturing portfolio is in a strong position and remains funded to deliver its key value inflection points by the end of CY2027, which we believe have the potential to drive significant NAV growth.”
To listen to the audio webcast at 9:00am GMT, where management will be discussing today’s results, click on this link.
[1] Fully diluted, please refer to note 9 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] Life science portfolio return is reported net of capital invested
[6] See footnote 2
[7] Since the period end, as of 13 November 2024 a further £6.7 million of shares have been bought back at an average discount of 39.3%
[8] See footnote 2
[9] Portfolio of core life science companies where Syncona has significant shareholdings. Please refer to glossary
[10] This includes Autolus, which was a late-stage clinical company at 30 September 2024
[11] Use of “Syncona team” refers to the Syncona Investment Management Limited (SIML) team
[12] As at 12 November 2024
[13] The further £15.0 million allocated to the share buyback programme (the “Additional Buyback”) is expected to be on the same terms as announced on 29 September 2023
[14] As at 13 November 2024
[15] Kenneth Galbraith’s appointment as Chair of SIML will take effect following regulatory approval