TIDMSYNC
RNS Number : 2213B
Syncona Limited
10 February 2022
Syncona Limited
Third Quarter Update
Period of significant activity with $674 million raised by the
portfolio and third successful exit to date - proposed sale of
Gyroscope for up to $1.5 billion
10 February 2022
Syncona Ltd, a leading healthcare company focused on founding,
building and funding global leaders in life science, today issues
its quarterly update covering the period from 01 October to 31
December 2021.
Martin Murphy, CEO, Syncona Investment Management Limited, said:
"It has been a period of significant activity within the portfolio,
with multiple financings, further clinical progress, and our third
successful exit to date. The proposed sale of Gyroscope to Novartis
for up to $1.5 billion shows our continued ability to build
globally competitive businesses and deliver strong risk-adjusted
returns for our shareholders. Once closed, the proceeds from this
transaction will strengthen our capital base and provide us with
the flexibility to continue to fund the growth of our current
portfolio and invest in new opportunities.
We continue to see our companies attract substantive capital,
with five significant financings announced across Autolus, Quell,
Anaveon, Gyroscope[1] and Clade in the last quarter, totalling $674
million. Many of our companies are approaching clinical data
readouts in the next 12 months, and we remain confident in the
potential of our portfolio to drive value and deliver
transformational treatments to patients."
Sale of Gyroscope Therapeutics (Gyroscope) for up to $1.5
billion (GBP1.1 billion) to Novartis[2], delivers a GBP221 million
(33p per share) uplift to NAV highlighting the Syncona model in
action
-- Transaction includes $800 million (GBP591.2 million) in
upfront cash proceeds. Upfront proceeds for Syncona on closing
anticipated to be GBP326.7 million, delivering a 2.9 multiple on
cost and 53% IRR[3]
-- A further $700 million (GBP517.3 million) due on the
achievement of certain milestones, potentially delivering a further
GBP249.4 million for Syncona generating total proceeds of GBP576.1
million, a 5.1 multiple of cost
-- Period-end valuation of Gyroscope is GBP374.2 million ([4]) ,
a GBP220.7 million uplift to previous holding value (33p per
share). On closing, this valuation would deliver an estimated IRR
of 60% ([5]) , and a multiple of 3.3 of original cost. This
valuation includes the upfront proceeds and Syncona's risk adjusted
and discounted valuation of the milestone payments
-- Syncona positioned to benefit from any future
commercialisation of Gyroscope's lead programme targeting
geographic atrophy via a low single digit royalty on future sales
revenue, allowing shareholders to access the upside of product
approval
16 per cent growth in NAV in Q3; uplifts from sale of Gyroscope
and financings in Quell Therapeutics (Quell) and Anaveon partially
offset by share price movements in listed holdings
-- Net assets of GBP1,339.7 million ([6]) (30 September 2021:
GBP1,152.8 million), 199.3p per share (30 September 2021: 171.7p
per share), a NAV return of 16.1 per cent in the period and 2.9 per
cent over the nine months from 31 March 2021
-- Life science portfolio valued at GBP843.2 million[7] (30
September 2021: GBP617.9 million), a total return of 29.5 per cent
in the quarter and a 4.8 per cent total return since 31 March
2021
-- The sale of Gyroscope, and financings in Quell and Anaveon,
drive GBP257.7 million (38p per share) valuation uplift
-- Share prices of our listed portfolio companies have declined
in a period of significant market volatility, with the value of
these holdings reducing by GBP63.7 million in the quarter. Our
listed portfolio companies are funded to deliver clinical data in
CY2022
o Autolus Therapeutics (Autolus) continues to build momentum as
it approaches the data read-out from its pivotal trial in AUTO1
(obe-cel)
o Under the leadership of CEO Michael Parini, Freeline
Therapeutics (Freeline) expects to publish data across all three of
its programmes in CY2022, following the impact of COVID-19 and
operational challenges in the business
o Achilles Therapeutics (Achilles) continues to expand its
manufacturing and operational capacity as it approaches the interim
data read-out from its higher dose manufacturing process
-- Capital base of GBP496.5 million at 31 December 2021
Five significant financings announced in the period, raising a
total of $674 million of capital to further support the growing
portfolio, with $93 million (GBP69 million)[8] committed by
Syncona
-- Led a $87.0 million Series A financing with a $30.0 million
commitment to Clade Therapeutics (Clade), a next generation stem
cell therapy company
-- Blackstone Life Sciences committed up to $250.0 million to
Autolus in one of the largest private financings of a UK biotech
company
-- Co-led Quell's Series B financing of up to $156.3 million,
committing $25.0 million, with the remainder raised from global
specialist investors
-- Cornerstoned Anaveon's Series B financing of CHF 110.0
million, committing CHF 35.0 million, alongside a leading
international investor syndicate
-- Prior to the proposed sale to Novartis, Sanofi committed to
invest up to $60.0 million in equity of Gyroscope
Continued clinical and operational progress made by our
portfolio companies
-- Autolus
o Relapsed refractory (r/r) adult acute lymphoblastic leukaemia
(ALL) - presented positive new durability data in the Phase I
ALLCAR19 study of obe-cel and initial safety and response data from
the Phase Ib portion of the pivotal FELIX study which is consistent
with that already seen from ALLCAR19
o Reported positive data from its broader pipeline, including
AUTO1/22 in paediatric ALL and the ALLCAR19 extension study in r/r
B cell non-Hodgkin's lymphoma (B-NHL)
-- Freeline
o Haemophilia B - positive data presented from long-term
follow-up study of Phase I/II B-AMAZE dose-finding trial of
FLT180a. First trial site has now been initiated in the Phase I/II
B-LIEVE dose-confirmation trial of FLT180a, one quarter ahead of
latest guidance
o Fabry disease - encouraging new data from ongoing Phase I/II
MARVEL-1 dose-finding clinical trial of FLT190
o Gaucher disease - U.S. Food and Drug Administration (FDA)
clearance of Investigational New Drug Application for FLT201 for
Gaucher disease Type 1, post period end
o Freeline has streamlined its operations and rationalised its
pipeline, including discontinuing its pre-clinical haemophilia A
programme - these changes have resulted in the company extending
its cash runway by an additional quarter to Q2 CY2023
-- Achilles presented data at the Society for Immunotherapy of
Cancer Annual Meeting demonstrating the ability to detect,
quantify, and track patient-specific cNeTs and generate higher cNeT
doses from its VELOS(TM) Process 2 manufacturing
-- Quell's Clinical Trial Application for the first clinical
trial of its lead Treg cell therapy candidate, QEL-001, has been
approved by the UK Medicines and Healthcare products Regulatory
Agency
-- Anaveon has now recruited patients in multiple clinical sites
for its Phase I/II trial for its selective IL-2 agonist, ANV419
-- Post period end, SwanBio Therapeutics' (SwanBio)
Investigational New Drug application for its lead SBT101 programme
was cleared by the FDA
People updates across Syncona and the portfolio
-- Continued appointment of healthcare leaders within the portfolio
o Freeline appointed Pamela Foulds, MD as Chief Medical Officer
(CMO). Pamela has over 20 years' experience and served as CMO at
Auregen BioTherapeutics and Aegerion Pharmaceuticals
o Post period end, Freeline appointed Henning R. Stennicke, PhD,
as Chief Scientific Officer. Henning brings over 25 years'
experience in scientific research and leadership, including 20
years in various leadership positions at Novo Nordisk
o Neogene Therapeutics (Neogene) appointed Raphaël Rousseau,
M.D., Ph.D. as CMO. Raphaël brings more than 20 years' experience
in oncology drug development, including engineered T cell
therapies
o Post period end, Autolus announced that its senior vice
president of finance, Dr Lucinda Crabtree, will succeed Andrew J
Oakley as Chief Financial Officer on 31 March 2022
-- Dr Julie Cherrington and Dr Cristina Csimma appointed as
Non-Executive Directors to the Syncona Limited Board; both joined
the Board on 1 February 2022
-- As previously announced, Nigel Keen and Nicholas Moss stepped
down from the Board on 31 December 2021
-- Post period end, Kenneth Galbraith stepped down from his role
of Executive in Residence at Syncona to become Chair and Chief
Executive Officer of Zymeworks, a NASDAQ listed biotech company, of
which he was previously a Board member between 2009 and 2013
Key upcoming milestones in calendar year 2022 (CY2022)
-- Autolus expects to
o Progress its pivotal study in AUTO1 (obe-cel) r/r adult ALL
and provide a data read-out from this programme in CY2022; on track
to file BLA in CY2023
o Publish initial clinical data in AUTO4 in peripheral T cell
lymphoma (H1 CY2022)
o Publish initial clinical data in AUTO1/22 in paediatric ALL
(H1 CY2022)
-- Achilles expects to provide interim data from higher dose
clinical cohorts of its cNeT therapy in NSCLC and melanoma (H2
CY2022)
-- Freeline expects to progress three clinical stage programmes
o Complete dosing of first dose cohort and publish interim data
from Phase I/II dose-confirmation study in haemophilia B (H1
CY2022)
o Dose next patient in Phase I/II Fabry trial (Q1 CY2022) and
publish interim data (H1 CY2022)
o Dose first two patients in Phase I/II Gaucher disease Type 1
programme (H1 CY2022) and publish interim data (Q3 CY2022)
-- Anaveon expects to publish initial data from the Phase I/II
trial for its selective IL-2 agonist, ANV419 in April; additional
data published later in CY2022
-- Quell expects to enter the clinic with its lead programme in
liver transplantation, QEL-001 (Q1 CY2022)
-- SwanBio expects to enter the clinic with its lead programme in the middle of CY2022
-- Closing of the proposed sale of Gyroscope to Novartis,
subject to customary closing conditions including regulatory
approvals, is expected in Q1 CY2022
Valuation movements in the quarter
Company 30 Net Valuation FX 31 Dec % of Valuation Fully Focus
Sep investment change movement 2021 Group basis diluted area
2021 in the NAV ([9]) owner-ship
period (, [10]) stake
, ([11])
----------- ---------- --------- ------- ------ ------------- ----------- -------------
(GBPm) (GBPm) (GBPm) (GBPm) (GBPm) (%)
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Portfolio
Companies
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Clinical
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Expected
sales
Gyroscope 153.5 - 225.4 -4.7 374.2 27.9 proceeds[12] 48 Gene therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Autolus 94.9 - -19.3 -0.7 74.9 5.6 Quoted 20 Cell therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Anaveon 19.2 20.3 19.2 - 58.7 4.4 PRI 38 Biologics
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Achilles 64.1 - -22.4 -0.7 41.0 3.1 Quoted 27 Cell therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Freeline 48.0 - -20.0 -0.6 27.4 2.0 Quoted 45 Gene therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Pre-Clinical
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Quell 45.2 10.2 18.5 - 0.7 73.2 5.5 PRI 37 Cell therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
SwanBio 62.8 - 0.2 -0.3 62.7 4.7 Cost 75 Gene therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Purespring 18.5 - - - 18.5 1.4 Cost 84 Gene therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Neogene 11.4 2.9 - -0.2 14.1 1.1 Cost 9 Cell therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Clade 11.2 - - - 0.1 11.1 0.8 Cost 23 Cell therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Resolution 7.4 - - - 7.4 0.6 Cost 81 Cell therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Drug
discovery
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
OMass 21.5 - - - 21.5 1.6 Cost 49 Therapeutics
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Life Science
Investment
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
CRT Pioneer Adj Third
Fund 35.5 -0.1 - - 35.4 2.6 Party 64 Oncology
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
CEGX 16.9 - - -0.1 16.8 1.3 PRI 6 Epigenetics
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Adaptimmune 5.3 - - 1.5 - 3.8 0.3 Quoted 1 Cell therapy
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Forcefield 2.5 - - - 2.5 0.2 Cost 82 Biologics
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Total Life
Science
Portfolio 617.9 33.3 200.1 -8.1 843.2 63.1
------- ----------- ---------- --------- ------- ------ ------------- ----------- -------------
Enquiries
Syncona Ltd
Natalie Garland-Collins / Fergus Witt
Tel: +44 (0) 7714 916615
FTI Consulting
Ben Atwell / 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 founding and building companies to deliver
transformational treatments to patients in areas of high unmet
need.
Our strategy is to found, build and fund companies around
exceptional science to create a diversified portfolio of 15-20
globally leading healthcare businesses 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.
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.
[1] Prior to the proposed sale to Novartis, Sanofi committed to
invest up to $60.0 million in equity of Gyroscope
[2] Completion of the transaction is subject to customary
closing conditions. Novartis and Gyroscope will continue to operate
as separate and independent companies until closing
[3] All FX rates related to the Gyroscope transaction taken as
at 31 December 2021
[4] Includes the upfront proceeds and Syncona's risk adjusted
and discounted valuation of the milestone payments (valued at
GBP47.5 million)
[5] On total upfront proceeds (including net cash) and an
estimate based on a risk adjusted and discounted valuation of the
milestone payments, calculated as at 31 December 2021. Following
completion Syncona will continue to value milestones on a quarterly
basis
[6] Net assets include estimated up front proceeds from the sale
of Gyroscope and Syncona's risk adjusted and discounted valuation
of the milestone payments (valued at GBP47.5 million)
[7] Life science portfolio valuation includes period-end
valuation of Gyroscope of GBP374.2 million. This includes the
upfront proceeds and Syncona's risk adjusted and discounted
valuation of the milestone payments (valued at GBP47.5 million)
[8] FX rate as at 31 December 2021
[9] Primary input to fair value
[10] The basis of valuation is stated to be "Cost", this means
the primary input to fair value is capital invested (cost) which is
then calibrated in accordance with our Valuation Policy
[11] The basis of valuation is stated to be "PRI", this means
the primary input to fair value is price of recent investment which
is then calibrated in accordance with our Valuation Policy
[12] Includes the upfront proceeds and Syncona's risk adjusted
and discounted valuation of the milestone payments (valued at
GBP47.5 million)
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END
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