Home » News » FTSE 250 » Syncona Limited Delivered excellent financial and operational performance
Syncona Limited

Syncona Limited Delivered excellent financial and operational performance

Syncona Limited (LON:SYNC), today announced Interim Results for the six months ended 30 September 2018.

Life science companies continue to drive strong returns and increase in NAV

· Net assets at 30 September 2018 of £1,394.0 million; 208.1p[1] per share, a total return of 32.5 per cent[2]

· Life science portfolio, valued at £945.7 million (68 per cent of net assets), a 62.6[3] per cent return over the six months

· £94.3m net investment into life science during the half year; expect investment for the financial year to be at the top end of guidance of £75 million to £150 million

· Capital pool[4] supporting life science investment of £448.3 million (cash of £41.8[5] million and fund investments of £406.5 million)

Excellent financial and operational performance

· Blue Earth Diagnostics (Blue Earth), our PET imaging agent company, valuation increased by £44.8 million as the business continues to make strong progress following its move into profitability, with over 28,000 patients dosed since launch in late 2016 and £35.0 million of revenues during the six months, up from £23.5 million in the prior six month period

· Autolus, our T cell immunotherapy company, completed a $172.2 million IPO on NASDAQ in June 2018, with Syncona investing $24.0 million, retaining a 32.7 per cent stake, which was valued at £319.9 million at 30 September, a gain of £216.7 million over the six months

· £68.7 million increase in our holding in Nightstar, our gene therapy company targeting inherited forms of blindness following a 43% appreciation of its share price. The business raised $82.0 million in a placement of shares in September 2018. Syncona invested $18.0 million in the share placing, retaining a 38.3 per cent stake in the business, in line with our strategy of supporting our companies over the long-term

· In June 2018 we announced an £85.0 million Series B financing commitment by Syncona to Freeline, our gene therapy company focused on liver expression for chronic systemic diseases; and have an 80% stake in the business

· £9.8 million new commitment to OMass Therapeutics in a £14.0 million Series A financing. OMass is a biopharmaceutical company using structural mass spectrometry to discover novel medicines which Syncona believes represents a unique platform to transition to therapeutic development.

Strong clinical progress across our companies

· Post period end, Freeline reported initial positive data from the first two patients in its Phase 1/2 trial in Haemophilia B. Professor Amit Nathwani will present results from this trial at the annual meeting of the American Society of Haematology (ASH) in December 2018

· Autolus also announced that it will present one oral and two poster presentations related to its AUTO3 and AUTO5 programs at ASH

· Nightstar reported positive proof-of-concept data in its Phase 1/2 trial in XLRP. Its pivotal trial in Choroideremia commenced during the period, with the company also receiving Regenerative Medicine Advanced Therapy (RMAT) Designation from the FDA, an expedited programme for the advancement and approval of products

Outlook – continued momentum across our companies and rich opportunity for further investments

We enter the second half with strong momentum across our portfolio. Our companies continue to advance their business plans, strong pipeline of clinical programmes and preclinical product candidates. We believe they are well placed to continue to execute their clinical and regulatory processes, although such processes are not without risk.

We have a high-level of conviction in the fundamentals of our companies and are focused on working with them closely. As we have done over the first half with Nightstar, Autolus and Freeline, we expect to continue to fund our companies through the next stages of their development cycle.

We now have a portfolio of nine companies, eight of which were founded by Syncona. We continue to see exciting new opportunities in cell and gene therapy, an area where we are strategically positioned with a leading platform and deep domain expertise. We believe that the arrival of this new wave of therapies is an important technological shift and will provide the potential to treat previously intractable diseases. We also continue to evaluate opportunities more broadly across a range of therapeutic areas and modalities where we believe we can found, build and fund companies around exceptional science in areas of high unmet medical need and support these companies through their development cycle with the ultimate goal of delivering transformational treatments to patients.

As we look forward, we expect investment to be at the top end of our guidance of £75 million to £150 million in this financial year as we continue to fund our existing companies and add new companies to our portfolio.

Martin Murphy, CEO, Syncona Investment Management Limited, said:

“Our differentiated model of founding, building and funding businesses has continued to gain momentum across the business in the first half. We have delivered excellent financial and operational performance, which has translated into strong NAV progression.

“We have a high-quality portfolio of companies, a leading position in cell and gene therapy, and a strategic pool of capital, which underpins our ability to continue to build global leaders in life science to achieve our ambition of delivering transformational treatments to patients and capture superior returns for shareholders.”

Valuation movements in the six months (£m):

Company

31 Mar 2018

Value (£m)

Net invest-

ment

(£m)

Valuat-

ion change

(£m)

30 Sep 2018 value (£m)

% NAV

Valuat-

ion basis

Fully diluted owner-

ship

stake (%)

Focus area

Life science companies

Established

Blue Earth

186.8

44.8

231.6

17

rDCF

89

Advanced diagnostics

Maturing

Autolus

85.1

18.1

216.7

319.9

23

Quoted

33

Cell therapy

Nightstar

124.5

13.8

68.7

207.0

15

Quoted

            38

Gene therapy

Freeline

36.0

57.5

93.5

7

Cost

80

Gene therapy

Developing

Gyroscope

11.0

11.0

1

Cost

78

Gene therapy

Orbit Biomedical

8.6

0.7

9.3

1

Cost

80

Surgical devices

Achilles

6.6

1.7

8.3

1

Cost

69

Cell therapy

SwanBio

4.9

0.4

5.3

0

Cost

72

Gene therapy

OMass Therapeutics

3.5

3.5

0

Cost

46

Therapeutics

Life science investments

CRT Pioneer Fund

30.8

2.0

32.8

2

Adjusted Third-party

N/A

CEGX

9.8

(3.3)

6.5

0

Adjusted PRI

Endocyte

9.0

(13.9)

4.9

0

Quoted

Adaptimmune

11.6

4.0

       15.6

1

Quoted

Syncona Collaborations

1.4

         1.4

0

Cost

SUB-TOTAL

514.5

94.3

336.9

945.7

68

Fund investments

465.1

(81.8)

23.2

406.5

29

Cash

85.2

31.3

(17.7)

98.8

7

Other net liabilities

(9.0)

(43.8)

(4.2)

(57.0)

(4)

TOTAL

1,055.8

338.2

1,394.0

100