Syncona Limited Quarterly Update
Syncona Limited
Quarterly Update
9 August 2018
Syncona Ltd, a leading healthcare company focused on investing in and building global leaders in life science, today issues its quarterly update covering the period from 1 April 2018 to 30 June 2018.
Financial and Operational highlights for the three months ending 30 June
- Net assets increased to £1,283.2 million, 193.1p per share[1], a total return of 23.0 per cent[2]
- Life science portfolio, key driver of growth, valued at £789.4 million (62 per cent of net assets), a 41.8 per cent return[3] over the quarter
- Capital pool of £522.0 million (cash of £68.4 million and funds investments of £453.6 million)
- Continued strong performance in portfolio company Blue Earth, with US unit sales of Axumin of 6,000 in the period; revalued to £213.2 million, valuation increase of £26.4 million driven predominantly by positive foreign exchange movements
- Completion of two significant financing rounds in Syncona’s portfolio companies; an £85.0 million commitment to Freeline and a £18.1 million investment in the successful IPO of Autolus. Autolus was valued at £275.8 million at 30 June, a £172.6 million valuation uplift in the period
- £9.8 million commitment to a new Syncona portfolio company, which employs a novel technology platform to enable drug discovery in small molecule and antibody areas, bringing the number of life science portfolio companies to nine
Life science portfolio delivers strong financial and operational progress
Syncona’s life science portfolio made continued strong progress during the quarter. Blue Earth Diagnostics (Blue Earth), our PET imaging agent company, demonstrated continued momentum in sales of its prostate cancer imaging diagnostic, Axumin, which sold 6,000 doses during the quarter, up from 5,000 in the previous quarter. The business, which is profitable, continues to make good progress rolling the product out across the United States, the key product market. It was valued at £213.2 million at 30 June, with the valuation increase of £26.4 million driven predominantly by positive foreign exchange movements.
Syncona closed two significant financing rounds and a new addition to its portfolio. Autolus, our T cell immunotherapy company, completed its initial public offering (IPO) on NASDAQ. Syncona invested £18.1 million in the IPO to retain a stake of 33 per cent in Autolus (previously 38 per cent), which was valued at £275.8 million at 30 June 2018, a significant valuation uplift of £172.6 million to 31 March 2018 valuation. Syncona also announced a commitment of £85.0 million to Freeline, its clinical stage AAV gene therapy company focused on liver expression for chronic systemic diseases.
In addition, Syncona made a commitment of £9.8 million[4] to a new portfolio company which uses a novel technology platform to enable the discovery of therapeutics acting at targets in the cell membrane. The technology, which has been developed by the company’s world-leading academic founder, offers the potential to address previously intractable small molecule and antibody drug targets. Syncona has a 46 per cent stake in this early stage business and has been working with the company to define its business plan and strategic direction. Further information will be provided in due course.
Immediately following the period end, Syncona also sold its entire holding in NASDAQ-listed Endocyte (ECYT). The exit resulted in Syncona crystallising a total realised gain of £10.2 million on an original investment of £4.0 million, generating value from a therapeutic area in which Syncona has deep domain expertise.
[1] Fully diluted
[2] Including 2.3p dividend paid in July 2018
[3] Time-weighted rate of return
[4] £3.5m of this commitment was paid in July
Fund investments continue to perform well and provide strong capital base
At 30 June 2018, fund investments were valued at £453.6 million, (35 per cent of net assets), having generated a return of 4.0 per cent[5] over the quarter. These investments continue to provide a liquid pool of capital which is productively deployed and available to support investment in Syncona’s life science portfolio. The portfolio of fund investments continues to transition away from more directional long-only funds towards strategies more suited to our current investment parameters, with a further £27.9 million redeemed from long-only strategies and £13.2 million invested into hedged strategies during the quarter.
Martin Murphy, CEO, Syncona Investment Management Limited, said:
“We have continued to deliver strong performance across the business and have seen life science increase to 62 per cent of our portfolio. Our continued progress demonstrates the success of our differentiated model, which combines a hands-on, partnership approach to building innovative healthcare companies with a long-term investment perspective and access to a deep pool of capital.
“This is an important period for Syncona as our portfolio companies progress through clinical trials. There remains much to do as we work to support these businesses to become global leaders in their fields and deliver transformational treatments to patients.â€
| Company | 31 Mar 2018 Value (£m) |
Net invest- ment (£m) |
Valuat- ion change (£m) |
30 Jun 2018 value (£m) | % NAV | Valuat- ion basis |
Fully diluted owner- ship stake (%) |
Focus area |
| Life science portfolio companies | ||||||||
| Established | ||||||||
| Blue Earth | 186.8 | - | 26.4 | 213.2 | 16.6% | rDCF | 89 | Advanced diagnostics |
| Maturing | ||||||||
| Autolus | 85.1 | 18.1 | 172.6 | 275.8 | 21.5% | Quoted | 33 | Cell therapy |
| Nightstar | 124.5 | - | 23.4 | 147.9 | 11.5% | Quoted | 42 | Gene therapy |
| Freeline | 36.0 | 27.5 | - | 63.5 | 4.9% | Cost | 80 | Gene therapy |
| Developing | ||||||||
| Gyroscope | 11.0 | - | - | 11.0 | 0.9% | Cost | 78 | Gene therapy |
| Orbit Biomedical | 8.6 | - | 0.5 | 9.1 | 0.7% | Cost | 80 | Surgical devices |
| Achilles | 6.6 | - | - | 6.6 | 0.5% | Cost | 69 | Cell therapy |
| SwanBio | 4.9 | - | 0.3 | 5.2 | 0.4% | Cost | 72 | Gene therapy |
| New portfolio company | - | 3.5 | - | 3.5 | 0.3% | Cost | 46 | Therapeutics |
| Life science investments | ||||||||
| CRT Pioneer Fund | 30.8 | 1.0 | - | 31.8 | 2.5% | Third-party | N/A | |
| CEGX | 9.8 | - | 0.6 | 10.4 | 0.8% | PRI | 9 | |
| Endocyte | 9.0 | (3.9) | 4.9 | 10.0 | 0.8% | Quoted | 1 | |
| Syncona Collaborations [5] Time-weighted rate of return |
1.4 | - | - | 1.4 | 0.1% | Cost | 100 | |
| SUB-TOTAL | 514.5 | 46.2 | 228.7[6] | 789.4 | 61.5% | |||
| Fund investments | 465.1 | (27.1)[7] | 15.6 | 453.6 | 35.4% | |||
| Cash | 85.2 | (19.1) | 2.3 | 68.4 | 5.3% | |||
| Dividend | - | - | (15.2) | (15.2) | (1.2%) | |||
| Other net liabilities | (9.0) | - | (4.0) | (13.0) | (1.0%) | |||
| TOTAL | 1,055.8 | - | 227.4 | 1,283.2 | 100% | |||
Fund Investments -Top 10 funds
| Funds | Strategy | Valuation (£m) | % NAV |
| SFP Value Realization Fund | Equity Long | 43.0 | 3.1% |
| Polar UK Absolute Equity Fund | Equity Hedge | 39.2 | 3.1% |
| Maga Smaller Companies UCITS | Equity Hedge | 33.4 | 2.6% |
| AKO Global UCITS Fund | Equity Hedge | 31.8 | 2.4% |
| Sinfonietta | Non-Equity Hedge | 26.4 | 2.0% |
| Polygon European Equity Opportunity | Equity Hedge | 24.7 | 2.6% |
| Portland Hill | Equity Hedge | 23.0 | 1.8% |
| Polar Capital Japan Alpha | Equity Long | 20.4 | 1.6% |
| Polygon Convertible Opportunity | Equity Hedge | 20.0 | 1.5% |
| Permira V | Private Equity | 19.6 | 1.7% |
[ENDS]
Enquiries
Syncona Limited Tel: +44 (0) 20 7611 2010
Annabel Clay
Tulchan Communications Tel: +44 (0) 207 353 4200
Martin Robinson/Lisa Jarrett-Kerr
About Syncona:
Syncona is a leading FTSE250 healthcare company focused on investing in and building global leaders in life science. Our vision is to deliver transformational treatments to patients in truly innovative areas of healthcare while generating superior returns for shareholders.
We seek to partner with the best, brightest and most ambitious minds in science to build globally competitive businesses.
We take a long-term view, underpinned by a deep pool of capital, and are established leaders in gene and cell therapy. We focus on delivering dramatic efficacy for patients in areas of high unmet need.
Copies of this press release and other corporate information can be found on the company website at: www.synconaltd.com
[6] Includes: update of rDCF model, change in quoted share prices and foreign currency exchange rates; impact of change in foreign currency exchange rates c.£36m increase
[7] Includes: £27.9m redemption from long-only strategy, £3.5m net subscription into equity hedge and £2.7m capital return
Latest directors dealings
- 9 hours ago Savannah Energy
- 10 hours ago Buccaneer Energy PLC
- 11 hours ago Savannah Energy
- 11 hours ago Carclo
- 11 hours ago Schroder Japan Growth Fund