Neogene to be acquired by AstraZeneca
Syncona Limited
Neogene to be acquired by AstraZeneca
29 November 2022
· Agreement reached for Neogene Therapeutics to be acquired by AstraZeneca for up to $320 million (£266 million [1] ) with an upfront cash payment of $200 million (£166 million) and up to $120 million (£100 million) in cash potentially due in both contingent, milestones-based and non-contingent consideration
· Syncona's ownership position in Neogene is 8% [2] with upfront cash proceeds for Syncona at closing anticipated to be £16 million, a 1.1 multiple of original cost and 5% IRR [3]
· Future milestones have the potential of generating further proceeds; if received in full Syncona's share of proceeds are anticipated to be a further £6 million, taking total proceeds to £22 million, a 1.6 multiple of original cost
· Sale of Neogene strengthens the capital pool, enhancing ability to fund companies in the portfolio to deliver next key milestones and exciting pipeline of opportunities
Syncona Ltd, a leading healthcare company focused on creating, building and scaling global leaders in life science, today announces that an agreement has been reached to sell its portfolio company Neogene Therapeutics, Inc. ("Neogene"), a biotechnology company pioneering the discovery, development and manufacturing of next-generation T cell receptor therapies, to AstraZeneca plc ("AstraZeneca"), a global, science-led biopharmaceutical company, for up to $320 million (£266 million) on a cash and debt free basis, with an upfront payment of $200 million (£166 million) and up to $120 million (£100 million) potentially due in both contingent, milestones-based and non-contingent consideration.
Syncona co-led the Series A financing of Neogene in 2020, alongside global specialist investors. The company was founded in 2019 around the work of founders, Dr Ton Schumacher and Dr Carsten Linnemann, and has been developing an engineered cell therapy product for solid tumours based on a patient's own neoantigens. The business has developed from a scientific concept to a rapidly growing company and is well positioned to progress products through the clinic.
On closing, the transaction is anticipated to result in cash proceeds of £16 million for Syncona's holding in Neogene, a 1.1 multiple on Syncona's original cost of £14 million and an internal rate of return (IRR) of 5%. In addition, the sale of Neogene will potentially generate a further £6 million of proceeds for Syncona, through future milestone payments, which if received would take total proceeds to £22 million, a 1.6 multiple on original cost.
On closing, this will mark the fourth sale of a Syncona portfolio company over the last four years, generating total potential proceeds of up to £1.2 billion, assuming full receipt of milestones from the sales of Neogene and Gyroscope, an aggregate 5.6 multiple of cost [4] .
Martin Murphy, Chief Executive Officer and Chair of Syncona Investment Management Limited, said: "In the two years since we invested in Neogene, the company has built out an excellent team and made strong operational progress, in an exciting, high potential area of cell therapy where it remains complex to manufacture and deliver products in routine practice. The business is well positioned to progress its products through the clinic, and we believe AstraZeneca, with deep expertise in oncology, is ideally placed to realise the company's goal to bring cell therapies to patients with solid tumours.
I would like to pass my congratulations to CEO Carsten Linnemann and the broader management team and wish them well in their future endeavours working within AstraZeneca.
Against a challenging market backdrop, we are delighted that we will receive £16 million in proceeds from the sale of Neogene, which we look forward to re-deploying into our portfolio companies as they continue to scale and into our strong pipeline of exciting new opportunities."
Transaction Terms
AstraZeneca will acquire all outstanding equity of Neogene Therapeutics for a total consideration of up to $320m, on a cash and debt free basis. This will include an initial payment of $200m on deal closing, and a further $120m in both contingent, milestones-based and non-contingent consideration.
The transaction is expected to close in the first quarter of 2023, subject to customary closing conditions and regulatory clearances. Upon completion of the transaction, Neogene will operate as a wholly owned subsidiary of AstraZeneca, with operations in Amsterdam, The Netherlands, and Santa Monica, California, USA.
[ENDS]
Copies of this press release and other corporate information can be found on the company website at: www.synconaltd.com
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.
Enquiries
Syncona Ltd
Annabel Clark / Fergus Witt
Tel: +44 (0) 20 3981 7940
FTI Consulting
Ben Atwell / Natalie Garland-Collins / Julia Bradshaw / 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 and building companies to deliver transformational treatments to patients in areas of high unmet need.
Our strategy is to create, build and scale companies around exceptional science to create a diversified portfolio of 20-25 globally leading healthcare businesses, across development stage and therapeutic areas, for the benefit of all our stakeholders. We focus on developing treatments for patients by working in close partnership with world-class academic founders and 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.
[1] FX rates taken at 28 November 2022
[2] Syncona holding of Neogene is 7.9% on a fully diluted basis; initial proceeds to Syncona take into account preference rights on shares and the exercise of options/incentive shares in Neogene
[3] Based on FX rates taken at 28 November 2022
[4] On closing of the transaction, the four sales will have generated up-front cash proceeds of £948 million, at an aggregate 4.3 multiple of cost
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