Syncona’s results for the 12 months ended 31 March 2023 are lacklustre. The company reports an NAV total return of -4.1% for the period, which follows on from an equally disappointing figure last year. The share price has fallen by about 7.6% and is currently back at levels seen in 2017. In the face of more difficult conditions, the focus has been on deploying capital where Syncona believes that there is a differentiated opportunity to fund companies to milestones close to late-stage development.
The statement says that there were £28.2m of valuation uplifts across the portfolio, including £15.9m from deferred consideration related to Beacon Therapeutics’ AGTC-501 potential product in X-Linked Retinitis Pigmentosa, and a £26.5m gain from positive foreign exchange movements. However, this was outweighed by a £77.9m decline in the valuation of its listed life science holdings (blamed on macroeconomic conditions as well as company specific challenges) and the partial write down of SwanBio Therapeutics by £51m to £58.2m.
SwanBio decided to focus on its lead programme, SBT101 in adrenomyeloneuropathy (AMN), and Syncona provided further funding to enable the business to generate safety data from the initial dose cohort of the SBT101 programme. SwanBio expects to have dosed the initial cohort in its Phase I/II AMN programme in the second half of this year.
Uninvested cash fell to £650.1m from £784.9m. Syncona expects to deploy £150–200m of this over 2023/24. Running costs are rising.
Portfolio
Portfolio companies raised £394.3m during the year with Syncona committing £176.9m. £230.5m of this was raised by “late-stage” assets Beacon (retinal gene therapy, with two pre-clinical programmes including one in-licensed from the University of Oxford) and Autolus Therapeutics. There was also a significant pharma investment from AstraZeneca in Quell Therapeutics (which we reported recently). ·
Neogene Therapeutics was sold to AstraZeneca, the fourth sale of a Syncona portfolio company, taking total potential sales proceeds generated from the portfolio to £1.2bn.
Four new companies were added to the portfolio, including a late-stage asset in Applied Genetics Technologies Corporation (AGTC) for an initial investment of $23.3m (as part of the transaction, Syncona would benefit from any future commercialisation of the lead asset AGTC-501 via a “deferred consideration” which provides the right to a mid-single digit percentage of future income from sales and licensing). Beacon was then combined with AGTC in a £96.0m Series A financing alongside strategic partner Oxford Science Enterprises (OSE).
Other investments were in Kesmalea Therapeutics, a small molecule drug discovery platform, and Mosaic Therapeutics, an oncology therapeutics company, alongside strategic co-investors OSE and Cambridge Innovation Capital (CIC).
Freeline Therapeutics has taken the decision to prioritise the development of its FLT201 Gaucher programme and expects to report initial data in the Phase I/II dose-finding trial in Gaucher disease in the second half of 2023.
Overall, across its portfolio Syncona expects to see 10 data read-outs from trials expected by the end of the financial year, including from two late clinical companies. [That could be a driver of a recovery in Syncona’s NAV, but – as the statement says – this is not without risk.]
SYNC : Disappointing numbers from Syncona