Syncona Limited Syncona Limited Quarterly Update

 
TIDMSYNC 
 
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 GBP1,283.2 million, 193.1p per share[1], a total 
    return of 23.0 per cent[2] 
  * Life science portfolio, key driver of growth, valued at GBP789.4 million (62 
    per cent of net assets), a 41.8 per cent return[3] over the quarter 
  * Capital pool of GBP522.0 million (cash of GBP68.4 million and funds investments 
    of GBP453.6 million) 
  * Continued strong performance in portfolio company Blue Earth, with US unit 
    sales of Axumin of 6,000 in the period; revalued to GBP213.2 million, 
    valuation increase of GBP26.4 million driven predominantly by positive 
    foreign exchange movements 
  * Completion of two significant financing rounds in Syncona's portfolio 
    companies; an GBP85.0 million commitment to Freeline and a GBP18.1 million 
    investment in the successful IPO of Autolus. Autolus was valued at GBP275.8 
    million at 30 June, a GBP172.6 million valuation uplift in the period 
  * GBP9.8 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 GBP213.2 million at 30 June, with the valuation increase 
of GBP26.4 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 GBP18.1 million in the IPO to 
retain a stake of 33 per cent in Autolus (previously 38 per cent), which was 
valued at GBP275.8 million at 30 June 2018, a significant valuation uplift of GBP 
172.6 million to 31 March 2018 valuation. Syncona also announced a commitment 
of GBP85.0 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 GBP9.8 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 GBP10.2 million on an original investment of GBP4.0 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] GBP3.5m 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 GBP453.6 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 GBP27.9 million redeemed from 
long-only strategies and GBP13.2 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." 
 
Company        31 Mar  Net       Valuat-  30 Jun  % NAV  Valuat-     Fully    Focus area 
               2018    invest-   ion      2018           ion basis   diluted 
               Value   ment      change   value                      owner- 
               (GBPm)    (GBPm)      (GBPm)     (GBPm)                       ship 
                                                                     stake 
                                                                     (%) 
 
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          8.6     -         0.5      9.1     0.7%   Cost        80       Surgical 
Biomedical                                                                    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  -       3.5       -        3.5     0.3%   Cost        46       Therapeutics 
company 
 
Life science investments 
 
CRT Pioneer    30.8    1.0       -        31.8    2.5%   Third-party N/A 
Fund 
 
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        1.4     -         -        1.4     0.1%   Cost        100 
Collaborations 
[5] 
Time-weighted 
rate of return 
 
SUB-TOTAL      514.5   46.2      228.7[6] 789.4   61.5% 
 
Fund           465.1   (27.1)[7] 15.6     453.6   35.4% 
investments 
 
Cash           85.2    (19.1)    2.3      68.4    5.3% 
 
Dividend       -       -         (15.2)   (15.2)  (1.2%) 
 
Other net      (9.0)   -         (4.0)    (13.0)  (1.0%) 
liabilities 
 
TOTAL          1,055.8 -         227.4    1,283.2 100% 
 
Fund Investments -Top 10 funds 
 
Funds                          Strategy           Valuation (GBPm)      % 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        Equity Hedge            24.7            2.6% 
Opportunity 
 
Portland Hill                  Equity Hedge            23.0            1.8% 
 
Polar Capital Japan Alpha      Equity Long             20.4            1.6% 
 
Polygon Convertible            Equity Hedge            20.0            1.5% 
Opportunity 
 
Permira V                      Private Equity          19.6            1.7% 
 
[ENDS] 
 
Enquiries 
 
Syncona Limited Tel: [phone] 
 
Annabel Clay 
 
Tulchan Communications Tel: [phone] 
 
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. 
GBP36m increase 
 
[7] Includes: GBP27.9m redemption from long-only strategy, GBP3.5m net subscription 
into equity hedge and GBP2.7m capital return 
 
 
 
END 
 

(END) Dow Jones Newswires

August 09, 2018 02:00 ET (06:00 GMT)