TIDMSYNC
RNS Number : 6916G
Syncona Limited
17 November 2022
Syncona Limited
Interim Results for the six months ended 30 September 2022
Scaling for growth: building a leading European life science
investor with an ambition to grow NAV to GBP5 billion by 2032
17 November 2022
Syncona Ltd, ("Syncona" or the "Company"), a leading healthcare
company focused on creating, building and scaling a portfolio of
global leaders in life science, today announces its Interim Results
for the six months ended 30 September 2022.
Key highlights
-- Positive operational and clinical progress across the portfolio
against a challenging macro backdrop in the six-month period
-- Successful first decade of Syncona; proven ability to build
life science companies to a global standard, delivering a
portfolio IRR of 26% and 15 clinical programmes progressed
-- Growth plans outlined today for the next 10 years with ambition
to organically grow net assets to GBP5 billion
-- Announcement of key organisational changes to support growth
plans:
- Chris Hollowood is stepping up into the role of Chief Executive
Officer (CEO) of the Investment Manager, Syncona Investment
Management (SIML) ([1]) , leading the delivery of the growth
plans for the next 10 years and managing the team, alongside
creating new companies and managing portfolio companies
- Martin Murphy will be Chair of SIML and will continue sourcing
and driving the creation of new companies, alongside managing
portfolio companies
- Number of promotions across the team to Senior and Lead
Partners
-- Natural evolution of responsibilities of the senior team to
deliver growth plans for the next 10 years
Financial performance
-- Net assets of GBP1,365.9 million (31 March 2022: GBP1,309.8
million); 202.9p ([2]) per share (31 March 2022: 194.4p per
share), a NAV total return of 4.3% ([3])
-- Life science portfolio, valued at GBP602.6 million (31 March
2021: GBP524.9 million), a 3.9% return ([4])
-- Performance driven by the positive impact of foreign exchange
across the life science portfolio and capital pool, generating
an aggregate GBP112.6 million uplift to NAV ([5]) , which
more than offset the (GBP49.2 million) impact from the decline
in share prices of our listed holdings
- The decline in share prices of Syncona's listed holdings
in the six-month period has primarily been driven by challenging
macro conditions; both our public and privately held companies
have continued to make progress against key milestones
-- Capital base of GBP763.3 million (31 March 2022: GBP784.9
million), deploying GBP58.6 million of capital in the six-month
period
Positive progress across a maturing portfolio with three
companies expected to be in the clinic in the next six-months
-- Seven clinical data read-outs from the clinical portfolio
in the six months, with 12 updates expected by the end of
CY2023, notably including the first update from the Autolus
obe-cel pivotal study
-- Three companies expected to enter the clinic over the next
six months; maturing portfolio will have seven clinical-stage
companies
Identifying exciting opportunities to create world-class
companies and expand the portfolio
-- GBP16.0 million commitment to Kesmalea Therapeutics ("Kesmalea")
as part of a GBP20.0 million Series A financing alongside
Oxford Science Enterprises. Kesmalea is a small molecule drug
discovery platform founded by Dr Harry Finch, a world class
chemist and co-inventor of GSK's Serevent(TM)
-- Post period end, announcement of an all-cash tender offer
for Applied Genetic Technologies Corporation ("AGTC"), a NASDAQ
listed clinical-stage retinal gene therapy company with a
potentially best-in-class Phase II/III AAV gene therapy programme
in X-Linked Retinitis Pigmentosa (XLRP). The offer has been
unanimously recommended by AGTC's Board and values AGTC at
approximately $23.5 million (GBP20.8 million), with the potential
for up to an additional $50.0 million in contingent value
rights payable on the achievement of specified milestones.
If the transaction completes, AGTC will be Syncona's third
retinal gene therapy company
-- Further opportunities to create new companies in late-stage
diligence, diversified across domain and therapeutic areas
Scaling the portfolio to GBP5 billion in net assets by 2032
-- 2022 marks Syncona's 10th anniversary - in our first decade
we have proven our ability to build globally competitive businesses
that can deliver for patients, society and for our shareholders
-- Our fundamental model to deliver strong shareholder returns
over the next 10 years remains the same
-- We are setting out an ambition to organically grow net assets
to GBP5 billion by 2032 reflecting the potential returns available
from a maturing and expanding portfolio
-- To deliver this ambition, we are updating our 10-year rolling
targets as follows:
- Increasing the rate of new Syncona-founded companies to
three new companies per annum
- Delivering an expanded portfolio of 20-25 companies
- Aiming to deliver top quartile life science portfolio returns
-- We are also:
- Building an advisory function to enable us to provide further
support for the building and management of our portfolio
companies at a greater scale
- Continuing to evolve our financing approach to optimise
capital allocation and improve the risk and return profile
of our portfolio
-- Expanding our portfolio and optimising our financing approach
will enable us to retain sole ownership of companies to proof-of-concept
[6] on a selective basis - we believe this approach has the
potential to enable us to access the out-sized returns available
in this asset class
Evolving and leveraging the team to drive the next phase of
growth
-- The Board and senior team have reviewed the Company's organisational
structure to enable the business to scale, and to better leverage
the team to deliver our growth plans
-- Chris Hollowood is stepping up into the role of CEO of SIML
([7]) , effective 1 January 2023 and Martin Murphy will be
Chair of SIML
- Chris will lead the day-to-day management of the business,
responsible for the implementation of Syncona's strategy,
driving the 10-year growth plan, and managing the Syncona
team, whilst creating and managing portfolio companies
- Martin will be operationally involved in the business and
continue to source and drive the creation of new Syncona
companies, whilst continuing to manage existing portfolio
companies
- Martin and Chris will both be on the Investment Committee
which is responsible for investments into all new and existing
portfolio companies
- This transition will allow Syncona to continue to leverage
both Martin and Chris' significant investment experience
and track records through the Company's next stage of growth
-- In addition, Ed Hodgkin has been promoted to the role of Senior
Partner, with Magdalena Jonikas and Elisa Petris being promoted
to Lead Partners, helping to lead our Investment Partners
and Associate Partners as they take the lead role in creating,
building and scaling new companies
-- Further expansion of the team planned to support growth; will
result in an increase in cost base
Martin Murphy, CEO and Chair, Syncona Investment Management
Limited, said: "I am very proud this year to be celebrating 10
years since I co-founded Syncona, alongside the Wellcome Trust. At
foundation, we set out to change the way life science companies
were built and funded in the UK and I believe our achievements over
the last decade demonstrate the success of our approach, and the
expertise and commitment of our people.
Today, we are setting out our vision to scale Syncona over the
next 10 years which will deliver an expanded portfolio, develop
more ground-breaking medicines, organically grow our net assets to
GBP5 billion and deliver strong returns for our shareholders. As
part of these plans, I am particularly excited that Chris will be
stepping up into the role of Chief Executive Officer, whilst I will
be Chair of SIML. I look forward to working closely alongside him
to deliver on our purpose and vision for all our stakeholders. We
are investing in and building our platform for growth at an
exciting time for our industry."
Chris Hollowood, CIO of Syncona Investment Management Limited,
said: " Over the six-month period, whilst our listed holdings have
continued primarily to be impacted by market conditions, this has
been outweighed by the positive impact of foreign exchange
movements across our diversified portfolio and capital pool, with
net assets increasing by 4.3%. Syncona was set up with an evergreen
balance sheet to ensure we could navigate the market cycle and the
strength of our model has been demonstrated in the six months,
enabling us to continue to identify exciting opportunities that
become available in these challenging market conditions.
Looking ahead, the UK's scientific research base continues to be
right at the forefront of global innovation and our team continue
to see significant opportunity to create more companies based on
the hugely promising technology being developed to treat patients
in real need. To realise the potential of our strategy and model,
we have looked at how we can leverage our successes and apply the
lessons we have learnt over the last 10 years to further grow the
business. I am delighted to be stepping up into the role of CEO and
alongside Martin and the senior team, leading Syncona through its
next phase of growth as we build more global leaders in life
science, develop life changing medicines and deliver strong returns
for shareholders. The future is exciting."
Melanie Gee, Chair of Syncona Limited, said : " We have outlined
today our enhanced strategy to deliver growth for our shareholders
over the next 10 years. We are excited by the opportunity ahead of
us and look forward to continuing to leverage Martin and Chris'
leadership and expertise as they drive our maturing business
through its next stage of growth. What Syncona has achieved over
the last 10 years since Martin co-founded the business with the
Wellcome Trust, has been truly remarkable. Under his leadership the
business has grown from a start-up to a FTSE 250 listed business
that has already made a significant social contribution. Looking
ahead, we believe that the changes outlined today have the
potential to increase the impact Syncona's portfolio companies have
on patients in areas of high unmet medical need."
Outlook
Capital deployment in FY2022/3
Syncona continues to expect to deploy GBP150-250 million of
capital in FY2022/3 as we support our existing portfolio and
identify new opportunities. We have a number of opportunities to
create new companies in late-stage diligence and expect at least
one new company to be announced by the end of FY2022/3, alongside
further investment in our portfolio. Our strategic balance sheet
enables us to continue to invest and be opportunistic in
identifying exciting opportunities that become available in these
challenging market conditions.
Key upcoming milestones
Positive data generated from our clinical pipeline will be a key
driver of value and, while not without risk, we have a number of
portfolio companies approaching key clinical milestones.
-- Autolus expects to:
- Progress its FELIX pivotal study of obe-cel in r/r adult
ALL and provide initial results in Q4 CY2022; data expected
H1 CY2023. Longer-term follow-up data from the ALLCAR19
Phase I trial of obe-cel in r/r adult ALL is also expected
in Q4 CY2022
- Announce additional patients and longer-term follow-up
of obe-cel in B-NHL, longer-term follow-up data from AUTO1/22
in paediatric ALL and AUTO4 in peripheral T cell lymphoma
in Q4 CY2022
-- Achilles will provide an interim update from its ongoing
Phase I/IIa trials of its cNeT therapy in non-small cell lung
cancer (NSCLC) and melanoma at the ESMO Immuno-Oncology Annual
Congress in December 2022
-- Freeline expects to:
- Announce initial safety and efficacy data from the second
cohort in the Phase I/II dose-finding trial in Fabry disease
in H1 CY2023
- Begin dosing in the Phase I/II dose-finding trial in Gaucher
disease in Q4 CY2022, with initial safety and efficacy
data to be reported in H1 CY2023
-- Anaveon expects to publish further data from its Phase I/II
trial for its selective IL-2 agonist, ANV419, in Q3 CY2023,
following its recent data release
-- Quell expects to dose the first patient in its lead programme,
QEL-001, in H1 CY2023
-- SwanBio expects to enter the clinic with its lead SBT101
programme in adrenomyeloneuropathy (AMN) in Q4 CY2022
-- Neogene expects to enter the clinic with its NT-125 TCR therapy
in advanced solid tumours in H1 CY2023
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.
This announcement includes information that is or may be inside
information. The person responsible for arranging for the release
of this announcement on behalf of Syncona Ltd is Andrew Cossar,
General Counsel, SIML.
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.
Business review
Syncona was founded in 2012 to take a long-term approach working
with life science innovators in Europe, particularly in the UK, to
create companies with the potential to have a transformational
impact on the lives of patients. 2022 marks our 10(th) anniversary
and we believe we have demonstrated our ability to successfully
build globally competitive businesses that can deliver for
patients, society and for our shareholders.
Our team has leveraged our expertise and our strong balance
sheet to invest at scale in the world-class scientific research
base in Europe. Since our foundation we have provided GBP964.5
million of funding in creating and building 19 companies,
delivering one product to patients, and progressed 15 programmes
through clinical trials, executing three sales which returned
GBP932.7 million of proceeds, delivering a portfolio IRR of 26% and
grown NAV to GBP1.37 billion. We have made a significant
contribution to transforming the life science ecosystem in the UK
and beyond and we are excited about the opportunity that lies
ahead.
The UK's scientific research base is right at the forefront of
global innovation and our team see significant opportunity to
create more companies based on the hugely promising technology
being developed to treat patients in real need. To realise the
potential of our strategy and model, we have looked at how we can
leverage our successes and apply the lessons we have learnt over
the last 10 years to further grow the business.
Scaling the business to drive growth and optimise shareholder
returns
Our fundamental model to deliver strong shareholder returns over
the next 10 years remains the same. We will continue to create
companies around world-leading science, bringing the commercial
vision and strategy, building the team and infrastructure, and
providing scaled funding when the risk is appropriate.
Going forward, we plan to increase the rate of new company
creation to three per year, having previously founded one-two
companies a year, driving increased potential for growth from the
life science portfolio and helping us to build an expanded
portfolio of 20-25 companies. Growing the life science portfolio
whilst maintaining a runway of 2-3 years of capital will mean that
over time our capital pool becomes a smaller proportion of overall
NAV, driving balance sheet efficiency and optimising shareholder
returns. We will be updating our key performance indicators to
reflect this increase in company creation and have set ourselves an
ambition of growing NAV organically to GBP5.0 billion over the next
10 years, delivering an IRR of 15% over the cycle, whilst aiming to
deliver top quartile returns from the life science portfolio. This
target reflects the continued returns potentially available from a
maturing and expanded portfolio as our companies progress through
the development cycle. Reaching our stated goal of NAV of GBP5.0
billion will provide us with increased options to fund companies on
a sole basis, which we believe has the potential to deliver
out-sized returns.
To achieve this ambition, we are building and investing in our
platform today to scale the business to deliver on the significant
opportunity that lies ahead.
Enhancing organisational strength and building depth across the
business
Over the last year, the Board and SIML team have been reviewing
the Company's organisational structure, looking to scale and
leverage the Syncona team as effectively as possible to support the
expansion of the portfolio. I am delighted that, Chris Hollowood
will be stepping up into the role of CEO of SIML [8] , effective 1
January 2023, whilst I will be Chair of SIML and on the Investment
Committee. Chris and I have worked closely together for the last
decade, building Syncona to where it is today, and this is the
natural next step for the Company.
As part of this review, we have promoted Ed Hodgkin to the role
of Senior Partner, and plan to hire new Senior Partners over the
next 12-18 months. Magdalena Jonikas and Elisa Petris have also
been promoted to Lead Partners. These partners will take on the
primary role in sourcing and driving the creation of new companies.
This will support the ongoing work of our leadership team as it
manages and leads corporate activity to better support the
investment team, and the introduction of new expertise via a newly
formed advisory function to provide further support for the
building and management of our portfolio companies.
To create and launch three new companies a year requires more
pace and bandwidth and alongside these changes, we have also formed
a discrete "company launch team" within Syncona. This team's focus
will be to support our new portfolio companies in becoming
operational, allowing our investment partners to focus their time
on sourcing new opportunities once the commercial vision and
strategy for the business is set.
Improving execution through the clinic across the portfolio
A critical learning from the last 10 years has been the
importance of portfolio company execution as they drive their
products through the clinic. Syncona's hands-on operational model
is important in helping our management teams navigate this pathway
and to complement our team's expertise, our developing advisory
function will add significant operational, regulatory and clinical
expertise to the team, helping us to build further sustainability
into our model. In the past year we have appointed Lisa Bright
(Ex-President International, Intercept Pharmaceuticals) and
Gwenaelle Pemberton (ex-Head of Global Regulatory, Quality and
Safety, Gilead) as advisors. We are delighted that Lisa has
recently taken up the role of Chair of Resolution Therapeutics and
think this capability will ensure that we can support our portfolio
company management teams to optimise their path through the clinic
and navigate challenging issues as they inevitably arise in this
field.
Supporting our growth ambitions
Growing our team and expanding our advisory capabilities will
mean a modest increase to our cost base. Syncona is a self-managed
vehicle and SIML costs are managed prudently by our management team
within a budget approved by the Syncona Limited Board annually. We
take a disciplined approach to costs and to date management fees
paid by Syncona Limited have been approximately 0.8% of NAV.
Looking forward, we expect SIML costs for FY2022/3 to be in the
range of GBP12.5-13.5 million (c1% of NAV; an increase of
GBP1.8-2.7 million on FY2021/2). This increase is due to a number
of factors including compensation for senior hires and salary
increases across the team to reflect the inflationary environment.
We are investing in further expanding the team over the next 1-2
years to deliver on our updated strategy and whilst there will be
associated costs with these hires, we expect these to be
appropriate for the scale of our business and aligned with our
prudent approach to managing our cost base. To bring Syncona into
line with other self-managed investment companies, the Syncona
Limited Board is removing the management fee cap of 1.05% of NAV on
SIML's costs but will continue to approve the annual budget.
Developing financing approach to optimise capital allocation
I have previously outlined our aim to improve our approach to
financing our companies and today we set out three core financing
paths, which build on our current approach:
-- Strategic hold; fund companies on a sole basis to clinical
proof-of-concept
-- Strategic syndicated; following the launch financing, companies
will be syndicated with like-minded long-term investors and
are likely to be held privately to clinical proof-of-concept
-- Fully syndicated; companies syndicated early in their lifecycle
by bringing in significant external capital with comparatively
lower Syncona investment, to fully exploit the opportunity
Our broad network with pharma and capital providers will enable
our companies to scale appropriately whilst diversifying our source
of funding providers and increasing the level of capital available
in financing rounds for "strategic syndicated" and "fully
syndicated" companies. Our "strategic hold" approach is enabled by
our balance sheet strength and will be deployed on a selective
basis where we believe there is an opportunity to deliver out-sized
returns to shareholders by holding businesses privately on a sole
basis for longer. We believe that this financing approach will
provide our shareholders with access to a set of privately held,
high-growth life science companies where Syncona has significant
ownership positions and a number of exciting, syndicated holdings
built on the same product-focused strategy.
We also believe the increased diversification of our financing
approach will ultimately improve the portfolio's overall
risk/return profile, whilst delivering a sustainable financing
strategy and holding a greater proportion of our investments
privately through to proof-of-concept will enhance portfolio
management and drive risk-adjusted returns.
Progress in the six-month period and outlook for the second half
of the financial year
In the first half of this financial year, alongside our work on
strategy and setting a clear vision for the future, we have been
focused on supporting our companies to deliver on their plans and
where necessary, helping them navigate the challenging macro
backdrop.
We have been pleased with the progress our companies have
continued to make against their clinical and operational plans.
Whilst the 4.3% NAV growth in the six-month period has been driven
by the positive impact of foreign exchange across the portfolio and
capital pool and we have seen a continued decline in the share
prices of our listed holdings against a challenging backdrop for
listed biotech companies, we remain confident in their potential.
Across our life science portfolio, our companies continue to make
progress against key milestones. We are expecting 12 clinical
milestones by the end of CY2023, notably including the first update
from the Autolus obe-cel pivotal study. Our portfolio is well
positioned to deliver with three companies expected to enter the
clinic over the next six months.
We were pleased during the period to commit GBP16.0 million to
Kesmalea Therapeutics, in a GBP20.0 million Series A financing
alongside Oxford Science Enterprises. Kesmalea is a small molecule
company with a drug discovery platform focused on protein
homeostasis. Its founder, Dr Harry Finch, is a world-renowned
chemist and co-inventor of GSK's Serevent(TM) , and we look forward
to working alongside him and the rest of the world class founding
team as we support Kesmalea in its early development. Magdalena
Jonikas led the investment on behalf of Syncona and we are pleased
that she has joined the company's board of directors.
Post period end, we announced that we were commencing an
all-cash tender offer for AGTC, a NASDAQ-listed retinal gene
therapy company. AGTC's lead candidate, AGTC-501, is a potentially
best-in-class adeno-associated virus (AAV) gene therapy for
X-linked retinitis pigmentosa (XLRP), a disease that we know very
well from our previous investment in Nightstar Therapeutics. If the
transaction is approved, AGTC will become our third retinal gene
therapy company, further underlining our expertise in this area,
and we believe we have the model and experience to support the
company as it progresses its lead programme through Phase II/III
trials. Our strategic capital base has enabled us to execute on
exciting opportunities in challenging markets as we look to deliver
strong risk-adjusted returns for shareholders.
Our strategic balance sheet remains strong at GBP763.3 million.
We deployed GBP58.6 million in the first half and continue to
expect to deploy GBP150-250 million in this financial year to
support our existing portfolio and to create exciting new
companies. We hold 12-24 months of liquidity in cash and
treasuries, with approximately GBP200 million now also allocated to
a number of low volatility, multi asset funds with daily liquidity,
to manage inflationary risk. These funds are managed by three
separate managers, and we will continue to closely monitor the
macro environment to ensure that the capital pool is appropriately
managed moving forward. We have a number of investment
opportunities in late-stage diligence and expect at least one new
company to be announced by the end of FY2022/3 alongside further
investment in our existing portfolio.
A clear vision, purpose and long-term strategy
This is an exceptional time to be creating, building and scaling
innovative life science companies. The quality and ambition of the
individuals and ideas we see exceed those witnessed historically.
Syncona has a world-class platform, a strategy to deliver growth
over the next 10 years and most critically a clear purpose and
vision to deliver for patients and shareholders. We are excited for
the next decade.
Martin Murphy, CEO and Chair of Syncona Investment Management
Limited
Life science portfolio review
Our life science portfolio was valued at GBP602.6 million (31
March 2022: GBP524.9 million), delivering a 3.9% return in the
period with positive foreign exchange movements offsetting the
valuation impact from the decline in our listed holdings. Across
the portfolio, our life science companies have continued to make
good progress. Syncona does not believe public market conditions in
the period have had an impact on the reported valuations of our
privately held companies, reflecting our valuation policy, which
focuses on their progress and delivery against key milestones.
Clinical-stage companies
Anaveon (4.8% of NAV, 41% shareholding) - Clinical
-- Company focus: Developing a selective Interleukin 2 (IL-2)
receptor agonist, a type of protein that could enhance a patient's
immune system to respond therapeutically to cancer.
-- Financing stage: Raised CHF110 million in a Series B financing
in December 2021.
-- Clinical update : Announced new data in its ongoing Phase
I/II trial of its ANV419 therapy in patients with solid tumours.
ANV419 can deliver high levels of IL-2 to patients without
dose limiting toxicities. Of the 26 patients dosed, ANV419
demonstrated a very good safety profile as well as early signs
of potential efficacy in a heavily pre-treated population.
Further data released post period end also underlined the
deepening of tumour response with continued ANV419.
-- Regulatory update : The US Food and Drug Administration (FDA)
granted clearance for the company's Investigational New Drug
(IND) application for the Phase I/II study of ANV419 in advanced
cutaneous melanoma, allowing the company to expand its clinical
programme to the US.
-- People update : Dr Gary Phillips was appointed as Chief Business
Officer (CBO), bringing 30 years of healthcare leadership
across operations, strategy, business development and drug
development to the company, most recently from his time as
President and CEO of OrphoMed.
Autolus (2.7% of NAV, 19% shareholding) - Clinical
-- Company focus: Developing next generation programmed T cell
therapies for the treatment of cancer with a clinical pipeline
targeting haematological malignancies and solid tumours.
-- Financing stage: Listed on NASDAQ, and has a cash runway
which extends to H1 CY2024 (including anticipated milestone
payments in the relevant period from the company's strategic
collaboration with Blackstone)
-- Clinical update : New data was released by the company at
the European Hematology Association (EHA) Congress in June
2022 from AUTO1/22 in paediatric ALL, AUTO4 in T cell lymphoma
and obe-cel in a number of indications. The data reinforced
the strong safety and efficacy profile of Autolus' broader
pipeline targeting a range of B and T cell cancers, with further
data from these indications to be presented at the American
Society of Hematology (ASH) Annual Meeting in December 2022.
-- Regulatory update: The FDA granted Regenerative Medicine
Advanced Therapy (RMAT) designation for the obe-cel programme
in adult acute lymphoblastic leukaemia (ALL).
-- Commercial update : Post period end, the company announced
a collaboration with Bristol Myers Squibb, allowing access
to Autolus' proprietary RQR8 safety switch in an initial set
of selected cell therapy programmes. The company also announced
post period end that Moderna had exercised an option to license
Autolus' binders against an undisclosed immuno-oncology target,
in return for an option exercise fee and potential further
milestone payments and royalties.
Freeline (1.7% of NAV, 51% shareholding) - Clinical
-- Company focus: Developing therapies focused on liver expression
for a range of chronic systemic diseases.
-- Financing stage: Listed on NASDAQ and has a cash runway which
extends into CY2024, including anticipated proceeds from the
sale of its German subsidiary.
-- Clinical update : Announced new data from three patients
in the Phase I/II dose-confirmation B-LIEVE trial for FLT180a
in haemophilia B. Although the data published underlined the
potential of FLT180a in helping patients managing the disease,
Freeline announced post period end that it has decided to
stop further investment and focus its resources on its Fabry
and Gaucher disease programmes, which both have the potential
to be first-in-class and best-in-class therapies.
-- Post period end, the company dosed its first patient in the
second dose cohort in its MARVEL-1 trial of FLT190 in Fabry
disease, and released encouraging data from the first cohort,
which showed the drug to be well tolerated and induced durable
increases in <ALPHA>-galactosidase A (<ALPHA>-Gal A), the
key enzyme that Fabry patients suffer a deficiency from.
-- Commercial update: Post period end entered into a definitive
agreement to sell its German subsidiary to Ascend for $25
million. The transaction is expected to close in the first
quarter of 2023.
-- People update: Appointed Paul Schneider as Chief Financial
Officer, bringing more than 20 years' experience in biopharmaceutical
companies, most recently at Exo Therapeutics, where he was
Senior Vice President, Finance and Operations.
Achilles (1.6% of NAV, 25% shareholding) - Clinical
-- Company focus: Developing precision T cell therapies targeting
clonal neoantigens to treat solid tumours.
-- Financing stage: Listed on NASDAQ and has a cash runway which
extends to Q2 CY2025.
-- Clinical update: The company dosed its first patient in its
higher dose cohort for its trial in non-small cell lung cancer
(NSCLC), underlining the potential of the company's updated
manufacturing process as it approaches the release of the
first data from its higher dose process in December 2022.
-- People update: Appointed James Taylor as CBO, bringing 25
years of deal making expertise across pharmaceutical and biotechnology
businesses, most recently at Sosei Heptares where he was CBO.
Pre-clinical stage companies
SwanBio (7.7% of NAV, 80% shareholding) - Pre-clinical
-- Company focus : Developing gene therapies to target neurological
disorders; lead programme is targeting the treatment of adrenomyeloneuropathy,
a genetic neuro-degenerative disease affecting the spine.
-- Financing stage: Raised $56 million in a Series B financing
in May 2022.
-- Clinical update: During the period the company presented
preclinical data from its lead SBT101 programme in AMN, supporting
its dosing strategy for its upcoming Phase I/II clinical trial,
which is expected to dose its first patient in Q4 CY2022.
Quell (7.0% of NAV, 39% shareholding) - Pre-clinical
-- Company focus: Developing engineered T-regulatory (Treg)
cell therapies to treat a range of conditions such as solid
organ transplant rejection, autoimmune and inflammatory diseases.
-- Financing stage: Raised $156 million in a Series B financing
in November 2021.
-- Clinical update: The company expects to dose the first patient
in its Phase I/II lead programme targeting liver transplant
in H1 CY2023.
-- Commercial update: Entered a strategic collaboration with
Cellistic(TM) to develop an induced pluripotent stem cell
(iPSC) derived allogeneic T regulatory cell therapy platform,
providing Quell with the opportunity to potentially develop
off-the-shelf treatments across a range of diseases caused
by the dysregulation of the immune system.
Purespring (2.6% of NAV, 83% shareholding) - Pre-clinical
-- Company focus: Developing gene therapies for the treatment
of chronic renal diseases which are currently poorly served
by existing treatments.
-- Financing stage: Purespring raised GBP45 million in a Series
A financing in 2020
-- Commercial update: Announced a licensing agreement with SwanBio,
allowing access to FunSel, Purespring's proprietary gene therapy
search engine, further underlining the benefits that can be
drawn from collaboration across the Syncona platform.
-- People update: Strengthened scientific leadership with the
appointment of Dr Alice Brown as Chief Scientific Officer,
bringing more than a decade of experience working in advanced
therapies in biotech and large pharma, most recently as VP
Research and VP Gene Engineering at GammaDelta Therapeutics.
Resolution (1.7% of NAV, 77% shareholding) - Pre-clinical
-- Company focus: Developing macrophage cell therapies to treat
diseases characterised by life-threatening inflammatory organ
damage.
-- Financing stage: Raised a further GBP10 million in an extension
of its GBP26.6 million Series A financing in April 2022.
-- Commercial update: Announced a research collaboration with
panCELLA which provides Resolution with access to its hypo-immunogenic
iPSC technology, allowing the company to progress the development
of its allogeneic macrophage programme.
-- People update: Strengthened and expanded its board with Syncona
Commercial Advisor Lisa Bright taking up the role of Chair
and Altavant Sciences CEO Dr Bill Symonds also joining as
a non-executive. The company also appointed Dr Amol Ketkar
as Chief Development Officer, who brings over 25 years of
experience in pharmaceutical development, most recently through
21 years spent at GSK.
Neogene (1.3% of NAV, 8% shareholding) - Pre-clinical
-- Company focus: Developing an engineered cell therapy product
for solid tumours based on a patient's own neoantigens.
-- Financing stage: Announced a $110 million Series A financing
in November 2020.
-- Clinical update: Announced approval of the company's Clinical
Trial Application (CTA) by the Dutch regulatory authority
for the Phase I trial of its T cell receptor therapy in solid
tumours, which is expected in the clinic in H1 CY2023.
Clade (1.0% of NAV, 16% shareholding) - Pre-clinical
-- Company focus: Discovering and delivering scalable next-generation
iPSC derived medicines.
-- Financing stage: Raised $87 million in a Series A financing
in August 2020.
-- People update: Continuing to make progress in building out
its team and pre-clinical pipeline under the leadership of
CEO Chad Cowan (co-founder of Sana Biotechnology and CRISPR
Therapeutics) and CBO Jim Glasheen (co-founder Atlanta Therapeutics).
OMass (3.2% of NAV, 34% shareholding) - Drug Discovery
-- Company focus: Developing small molecule drugs to treat rare
diseases and immunological conditions.
-- Financing stage: Raised GBP75.5 million in a Series B financing
in April 2022.
-- Clinical update: Post period end announced a joint publication
in Nature Chemistry with co-founder Professor Dame Carol Robinson's
team at Oxford University, underlining some of the key benefits
of OMass' OdyssION(TM) platform in searching for new drugs
against inadequately drugged and previously intractable targets.
-- People update: Announced the appointment of Dr John Roffey
as Vice President, Head of Medicinal Chemistry. Dr Roffey
has joined OMass' leadership team and brings over 20 years
of drug discovery experience across biotech and pharmaceuticals,
including taking multiple candidate drugs into late-stage
clinical development.
Life Science Investments
-- Forcefield Therapeutics (Forcefield) announced its official
company launch during the period. Forcefield has been founded
on the innovative science of Professor Mauro Giacca, a leading
figure in cardiovascular disease and co-founder of Syncona
portfolio company Purespring. The company's technology seeks
to protect heart function by limiting the loss of cardiomyocytes
following myocardial infarction (heart attacks).
-- Syncona committed $1.0 million in seed financing to Tier 1
Bio, an early-stage biologics opportunity.
-- Cambridge Epigenetix (CEGX) named Peter Froman as CEO, with
Peter joining the company from NASDAQ listed PacBio, where
he served as Chief Commercial Officer.
Next key milestones for clinical programmes at 30 September
2022
Autolus - cell therapy / oncology
Obe-cel - adult ALL Initial results from pivotal FELIX study in
obe-cel in r/r adult ALL expected in Q4 CY2022;
data expected in H1 CY2023. Longer-term follow
up from the ALLCAR19 Phase I trial of r/r adult
ALL is also expected in Q4 CY2022
----------------------------------------------------
Obe-cel - B-NHL Additional patients and longer-term follow
up data expected in Q4 CY2022
----------------------------------------------------
AUTO1/22 - paediatric Longer-term follow-up data expected in Q4 CY2022
ALL
----------------------------------------------------
AUTO4 in peripheral Longer-term follow-up data expected in Q4 CY2022
T cell lymphoma
----------------------------------------------------
Achilles - cell therapy / oncology
cNeT - non-small Interim update from ongoing Phase I/IIa trials
cell lung cancer of cNeT therapy at ESMO IO in December 2022
----------------------------------------------------
cNeT - melanoma Interim update from ongoing Phase I/IIa trials
of cNeT therapy at ESMO IO in December 2022
----------------------------------------------------
Freeline - gene therapy / systemic diseases
FLT190 - Fabry disease In the second cohort of the Phase I/II dose-finding
trial in Fabry disease, initial safety and
efficacy data is expected in H1 CY2023
----------------------------------------------------
FLT201 - Gaucher Dosing in the Phase I/II dose-finding trial
disease Type 1 in Gaucher disease is expected in Q4 CY2022,
with initial safety and efficacy data expected
to be reported in H1 CY2023
----------------------------------------------------
Anaveon - biologics
ANV419 - multiple Following data released at a conference in
tumour types November 2022, further data in Phase I/II study
of selective IL-2 agonist now expected in Q3
CY2023
----------------------------------------------------
Next milestones for pre-clinical programmes as at 30 September
2022
Quell - cell therapy / autoimmune diseases
QEL-001 - liver transplant Expects to dose the first patient in Phase
I/II lead programme targeting liver transplant
in H1 CY2023
------------------------------------------------
SwanBio - gene therapy / neurological diseases
SBT101 - adrenomyeloneuropathy Expects to enter the clinic with lead programme
(AMN) targeting AMN in Q4 CY2022
------------------------------------------------
Neogene - TCR cell therapy
NT-125 - advanced Expects to enter clinic with TCR therapy in
solid tumours H1 CY2023
------------------------------------------------
Financial review
Company NAV Net Valuation FX NAV % of Valuation Fully Focus
31 Mar investment change movement 30 Sep Group basis diluted area
2022 in the 2022 NAV ([9]) owner-ship
period ([10]) stake
([11])
----------- ---------- --------- -------- ------ ---------- ----------- ------------
(GBPm) (GBPm) (GBPm) (GBPm) (GBPm) (%)
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Portfolio
Companies
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Clinical
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Anaveon 59.8 - - 6.0 65.8 4.8% PRI 40.7% Biologics
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Cell
Autolus 62.0 - (30.2) 5.6 37.4 2.7% Quoted 18.9% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Gene
Freeline 32.3 - (12.3) 3.5 23.5 1.7% Quoted 51.3% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Cell
Achilles 24.8 - (5.7) 3.3 22.4 1.6% Quoted 24.5% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Pre-Clinical
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Gene
SwanBio 75.1 15.6 0.7 14.3 105.7 7.7% Cost 79.9% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Cell
Quell 81.4 - - 14.4 95.8 7.0% PRI 39.0% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Gene
Purespring 18.5 16.6 - - 35.1 2.6% Cost 82.9% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Cell
Resolution 10.4 12.6 - - 23.0 1.7% Cost 77.4% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Cell
Neogene 14.5 - - 2.6 17.1 1.3% Cost 7.9% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Cell
Clade 11.4 - - 2.0 13.4 1.0% Cost 16.4% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Small
Kesmalea - 4.0 - - 4.0 0.3% Cost 37.1% molecule
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Drug
discovery
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Small
OMass 34.7 9.0 - - 43.7 3.2% PRI 34.4% molecule
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Life Science
Investment
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Gyroscope
milestone Gene
payments 49.8 - - 8.8 58.6 4.3% DCF therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Adj
CRT Pioneer Third
Fund 28.2 (1.2) 5.0 - 32.0 2.3% Party 64.1% Oncology
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
CEGX 17.3 - - 3.1 20.4 1.5% PRI 5.5% Epigenetics
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Forcefield 2.5 - - - 2.5 0.2% Cost 86.3% Biologics
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Cell
Adaptimmune 2.2 - (1.0) 0.1 1.3 0.1% Quoted 0.8% therapy
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Tier 1 Bio - 0.8 - 0.1 0.9 0.1% Cost 4.9% Biologics
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Total Life
Science
Portfolio 524.9 57.4 (43.5) 63.8 602.6 44.1%
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Capital
pool 784.9 (68.5) (1.9) 48.8 763.3 55.9%
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
TOTAL 1,309.8 1,365.9 100%
---------------------------------- ----------- ---------- --------- -------- ------ ---------- ----------- ------------
Supplementary information
- GBP964.5 million deployed in life science portfolio since
foundation
- 26% IRR and 1.6x multiple on cost across the whole portfolio
Company Cost (GBPm) Value (GBPm) Multiple IRR
Existing portfolio companies
Autolus GBP124.0 GBP37.4 0.3 -26%
------------- --------------- --------- -----
Freeline GBP183.1 GBP23.5 0.1 -53%
------------- --------------- --------- -----
Achilles GBP60.7 GBP22.4 0.4 -27%
------------- --------------- --------- -----
SwanBio GBP90.7 GBP105.7 1.2 8%
------------- --------------- --------- -----
OMass GBP35.4 GBP43.7 1.2 12%
------------- --------------- --------- -----
Anaveon GBP39.9 GBP65.8 1.6 33%
------------- --------------- --------- -----
Quell GBP61.4 GBP95.8 1.6 27%
------------- --------------- --------- -----
Resolution GBP23.0 GBP23.0 1.0 0%
------------- --------------- --------- -----
PureSpring GBP35.1 GBP35.1 1.0 0%
------------- --------------- --------- -----
Neogene GBP14.3 GBP17.0 1.2 0%
------------- --------------- --------- -----
Clade GBP10.8 GBP13.4 1.2 21%
------------- --------------- --------- -----
Kesmalea GBP4.0 GBP4.0 1.0 0%
------------- --------------- --------- -----
Realised companies
Gyroscope GBP113.1 GBP383.9 [12] 3.4 57%
------------- --------------- --------- -----
Nightstar GBP56.4 GBP255.8 4.5 71%
------------- --------------- --------- -----
Blue Earth GBP35.3 GBP351.0 9.9 83%
------------- --------------- --------- -----
Azeria GBP6.5 GBP2.1 0.3 -58%
------------- --------------- --------- -----
Investments
Unrealised investments GBP53.1 GBP57.1 1.1 2%
------------- --------------- --------- -----
Realised investments GBP17.7 GBP23.1 1.3 25%
------------- --------------- --------- -----
Total GBP964.5 GBP1,559.9 1.6 26%
------------- --------------- --------- -----
Approach to disclosing portfolio company information
Our model is to create companies around world-leading science,
bringing the commercial vision and strategy, building the team and
infrastructure and providing scaled funding.
When we create or invest in a portfolio company, or when a
portfolio company completes an external financing or other
transaction, we may announce that transaction. Our decision on
whether (and when) to announce a transaction depends on a number of
factors including the commercial preferences of the portfolio
company. We would make an announcement where we consider that a
transaction is material to our shareholders' understanding of our
portfolio, whether as a result of the amount of the commitment, any
change in valuation or otherwise.
In addition, our portfolio companies are regularly progressing
clinical trials. These trials represent both a significant
opportunity and risk for each company, and may be material for
Syncona.
In many cases, data from clinical trials is only available at
the end of the trial. However, a number of our portfolio companies
carry out open label trials, which are clinical studies in which
both the researchers and the patients are aware of the drug being
given. In some cases, the number of patients in a trial may be
relatively small. Data is generated as each patient is dosed with
the drug in a trial and is collected over time as results of the
treatment are analysed and, in the early stages of these studies,
dose-ranging studies are completed. Because of the trial design,
clinical data in open label trials is received by our portfolio
companies on a frequent basis. Individual data points need to be
treated with caution, and it is typically only when all or
substantially all of the data from a trial is available and can be
analysed that meaningful conclusions can be drawn from that data
about the prospect of success or otherwise of the trial. In
particular it is highly possible that early developments (positive
or negative) in a trial can be overtaken by later analysis with
further data as the trial progresses.
We would expect to announce our assessment of the results of a
trial at the point we conclude on the data available to us that it
has succeeded or failed, unless we conclude it is not material to
our shareholders' understanding of our portfolio. We would not
generally expect to announce our assessment of interim clinical
data in an ongoing trial, other than in the situation where the
portfolio company announces interim clinical trial data, in which
case we will generally issue a simultaneous announcement unless we
believe the data is not materially different from previously
announced data.
In all cases we will comply with our legal obligations, under
the Market Abuse Regulation or otherwise, in determining what
information to announce.
Principal risks and uncertainties
The principal risks and uncertainties facing the Company for the
second half of the financial year are substantially the same as
those disclosed in the Report and Accounts for the year ended 31
March 2022:
https://www.synconaltd.com/media/a2tc0qhx/6723-syn-ar22-web-22-06-28-1.pdf.
These include:
Business model risks:
-Scientific theses fail
-Clinical development doesn't deliver a commercially viable
product
-Portfolio concentration to platform technology
-Concentration risk and binary outcomes
Financing risks:
- Not having capital to invest
- Private/public markets don't value or fund our companies when
we need to access them
- Capital pool losses or illiquidity
Operational execution risks:
-Reliance on small Syncona team
-Systems and controls failures
Portfolio company operational risks:
-Unable to build high quality teams in portfolio companies
-Unable to execute business plans
Going concern
The Condensed Consolidated Financial Statements are prepared on
a going concern basis. The net assets held by the Group and within
investment entities controlled by the Group currently consist of
securities and cash amounting to GBP1,365.9 million (30 September
2021: GBP1,152.8 million, 31 March 2022 GBP1,309.8 million) of
which GBP739.0 million (30 September 2021: GBP475.3 million, 31
March 2022: GBP764.7 million) are readily realisable within three
months in normal market conditions, and liabilities including
uncalled commitments to underlying investments and funds amounting
to GBP74.0 million (30 September 2021: GBP103.4 million, 31 March
2022: GBP88.5 million).
Given the Group's capital pool of GBP763.3 million (30 September
2021: GBP534.9 million, 31 March 2022: GBP784.9 million) the
Directors consider that the Group has adequate financial resources
to continue its operations, including existing commitments to its
investments and planned additional capital expenditure for 12
months following the approval of the Condensed Consolidated
financial statements. The Directors also continue to monitor the
potential future impact of COVID-19, the war in Ukraine and the
ever changing macro environment on the Group. Hence, the Directors
believe that it is appropriate to continue to adopt the going
concern basis in preparing the Condensed Consolidated Financial
Statements.
Statement of Directors' Responsibilities
The directors confirm that to the best of their knowledge:
a) the condensed set of interim financial statements have been
prepared in accordance with IAS 34 'Interim Financial Reporting',
as adopted by the European Union;
b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
and their impact during the first six months and description of
principal risks and uncertainties for the remaining six months of
the year); and
c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
The Directors of Syncona Limited are:
Melanie Gee, Chair
Julie Cherrington, Non-Executive Director
Cristina Csimma, Non-Executive Director
Virginia Holmes, Non-Executive Director
Rob Hutchinson, Non-Executive Director
Kemal Malik, Non-Executive Director
Gian Piero Reverberi, Non-Executive Director
INDEPENT REVIEW REPORT TO SYNCONA LIMITED
Conclusion
We have been engaged by the Company to review the condensed set
of financial statements
in the half-yearly financial report for the six months ended 30
September 2022 which comprises
the Condensed Consolidated Statement of Comprehensive Income,
the Condensed
Consolidated Statement of Financial Position, the Condensed
Consolidated Statement of
Changes in Net Assets Attributable to Holders of Ordinary
Shares, the Condensed Consolidated
Statement of Cash Flows and the related notes 1 to 14. We have
read the other information
contained in the half-yearly financial report and considered
whether it contains any apparent
misstatements or material inconsistencies with the information
in the condensed set of
financial statements.
Based on our review, nothing has come to our attention that
causes us to believe that the
condensed set of financial statements in the half-yearly
financial report for the six months
ended 30 September 2022 is not prepared, in all material
respects, in accordance with United
Kingdom adopted International Accounting Standard 34 and the
Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements
(UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of
the Entity" issued by the Financial Reporting Council for use in
the United Kingdom (ISRE (UK)
2410). A review of interim financial information consists of
making inquiries, primarily of
persons responsible for financial and accounting matters, and
applying analytical and other
review procedures. A review is substantially less in scope than
an audit conducted in
accordance with International Standards on Auditing (UK) and
consequently does not enable
us to obtain assurance that we would become aware of all
significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the
Company are prepared in
accordance with the International Financial Reporting Standards
(IFRSs) as adopted by the
European Union. The condensed set of financial statements
included in this half-yearly
financial report has been prepared in accordance with
International Accounting Standard 34,
"Interim Financial Reporting" as adopted by the European
Union.
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as
described in the Basis for Conclusion section of this report,
nothing has come to our attention
to suggest that the directors have inappropriately adopted the
going concern basis of
accounting or that the directors have identified material
uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in
accordance with ISRE (UK)
2410; however future events or conditions may cause the entity
to cease to continue as a going
concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly
financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct
Authority.
In preparing the half-yearly financial report, the directors are
responsible for assessing the
group's ability to continue as a going concern, disclosing as
applicable, matters related to going
concern and using the going concern basis of accounting unless
the directors either intend to
liquidate the company or to cease operations, or have no
realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly financial report, we are
responsible for expressing to the Company
a conclusion on the condensed set of financial statements in the
half-yearly financial report.
Our Conclusion, including our Conclusion Relating to Going
Concern, are based on procedures
that are less extensive than audit procedures, as described in
the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the Company in accordance with
ISRE (UK) 2410. Our work has
been undertaken so that we might state to the company those
matters we are required to state
to it in an independent review report and for no other purpose.
To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone
other than the company, for our
review work, for this report, or for the conclusions we have
formed.
Deloitte LLP
Statutory Auditor
St Peter Port, Guernsey
16 November 2022
SYNCONA LIMITED
UNAUDITED GROUP PORTFOLIO STATEMENT
As at 30 September 2022
% of % of % of
Group Group Group
NAV 30 NAV 30 NAV 31
Fair value September Fair value September Fair value March
GBP ' GBP ' GBP '
000 2022 000 2021 000 2022
Life science
portfolio
Life science
companies
Achilles Therapeutics
plc 22 , 432 1.6 64 , 099 5.6 24 , 810 1.9
Anaveon AG 65 , 752 4.8 19 , 245 1.7 59 , 818 4.6
Autolus Therapeutics
plc 37 , 411 2.7 94 , 926 8.2 61 , 979 4.7
Cambridge Epigenetix
Limited 20 , 402 1.5 16 , 913 1.5 17 , 345 1.3
Freeline Therapeutics
Holdings plc 23 , 548 1.7 48 , 035 4.2 32 , 277 2.5
Gyroscope Therapeutics
Limited - - 153 , 504 13.3 - -
Neogene Therapeutics
Inc 17 , 010 1.2 - - - -
Omass Therapeutics
Limited 43 , 712 3.2 21 , 563 1.9 34 , 712 2.7
Purespring Therapeutics
Limited 35 , 100 2.6 18 , 500 1.6 18 , 500 1.4
Quell Therapeutics
Limited 95 , 761 7.0 45 , 171 3.9 81 , 416 6.2
Resolution Therapeutics
Limited 23 , 027 1.7 - - - -
SwanBio Therapeutics
Limited 105 , 731 7.7 62 , 792 5.4 75 , 103 5.7
Companies of
less than 1%
of NAV 22 , 149 1.8 37 , 587 3.2 40 , 929 3.1
Total life science
companies (1) 512 , 035 37.5 582 , 335 50.5 446 , 889 34.1
CRT Pioneer Fund
(2) 32 , 004 2.3 35 , 523 3.1 28 , 183 2.2
Milestone payments 58 , 576 4.3 - - 49 , 802 3.8
Total life science
portfolio (3) 602 , 615 44.1 617 , 858 53.6 524 , 874 40.1
---------- ---------- ---------- ---------- ---------- -------
Capital pool
investments
UK treasury bills 311 , 180 22.8 362 , 865 31.5 179 , 984 13.7
Multi asset funds 97 , 599 7.1 - - - -
Credit investment
fund 96 , 559 7.1 - - 99 , 489 7.6
Legacy funds 33 , 954 2.5 77 , 070 6.7 39 , 857 3.1
Total capital
pool investments
(2) 539 , 292 39.5 439 , 935 38.2 319 , 330 24.4
---------- ---------- ---------- ---------- ---------- -------
Other net assets
Cash and cash
equivalents (4) 233 , 639 17.1 112 , 396 9.8 485 , 223 37.0
Charitable donations (2 , 340) (0.2) (2 , 061) (0.2) (4 , 250) (0.3)
Other assets
and liabilities (7 , 303) (0.5) (15 , 378) (1.4) (15 , 336) (1.2)
Total other
net assets 223 , 996 16.4 94 , 957 8.2 465 , 637 35.5
---------- ---------- ---------- ---------- ---------- -------
Total NAV of 1 , 365 1 , 152 1 , 309
the Group , 903 100.0 , 750 100.0 , 841 100.0
========== ========== ========== ========== ========== =======
(1) The fair value of Syncona Holdings Limited amounting to GBP1
, 052 , 679 , 941 (30 September 2021: GBP802 , 272 , 987 , 31 March
2022: GBP980 , 282 , 165) is comprised of investments in life
science companies of GBP570 , 610 , 737 (30 September 2021: GBP582
, 334 , 992 , 31 March 2022: GBP446 , 888 , 721) investments in
Syncona Investment Management Limited of GBP5 , 855 , 456 (30
September 2021: GBP5 , 793 , 776 , 31 March 2022: GBP5 , 822 , 250)
other net assets of GBP480 , 770 , 227 (30 September 2021: GBP218 ,
609 , 656 , 31 March 2022: GBP482 , 281 , 565) in Syncona Portfolio
Limited and other net liabilities of GBP4 , 556 , 479 (30 September
2021: GBP4 , 465 , 437 , 31 March 2022: GBP4 , 511 , 919) in
Syncona Holdings Limited.
(2) The fair value of the investment in Syncona Investments LP
Incorporated amounting to GBP319 , 259 , 220 (30 September 2021:
GBP363 , 719 , 588 , 31 March 2022: GBP342 , 949 , 949) is
comprised of the investment in the capital pool investments of
GBP539 , 293 , 325 (30 September 2021: GBP439 , 935 , 066 , 31
March 2022: GBP319 , 330 , 598) , the investment in the CRT Pioneer
Fund of GBP32 , 004 , 458 (30 September 2021: GBP35 , 523 , 330 ,
31 March 2022: GBP28 , 183 , 492) cash of GBP216 , 555 , 373 (30
September 2021: GBP103 , 871 , 577 , 31 March 2022: GBP475 , 786 ,
299) and other net liabilities of GBP468 , 593 , 936 (30 September
2021: GBP215 , 610 , 385 , 31 March 2022: GBP480 , 350 , 440).
(3) The life science portfolio of GBP602 , 615 , 195 (30
September 2021: GBP617 , 858 , 322 , 31 March 2022: GBP524 , 873 ,
761) consists of life science investments totalling GBP512 , 034 ,
843 (30 September 2021: GBP582 , 334 , 992 , 31 March 2022: GBP446
, 888 , 721) , milestone payments on the sale of a subsidiary of
GBP58 , 575 , 894 (30 September 2021: GBPNil 31 March 2022 GBP49 ,
801 , 548) held by Syncona Holdings Limited and the CRT Pioneer
Fund of GBP32 , 004 , 458 (30 September 2021: GBP35 , 523 , 330 ,
31 March 2022: GBP28 , 183 , 492) held by Syncona Investments LP
Incorporated.
(4) Cash amounting to GBP14 , 351 (30 September 2021: GBP578 ,
591 , 31 March 2022: GBP275 , 902) is held by Syncona Limited. The
remaining GBP233 , 624 , 884 (30 September 2021: GBP111 , 816 , 947
, 31 March 2022: GBP484 , 947 , 557) is held by its subsidiaries
other than portfolio companies ( " Syncona Group Companies " ).
Cash held by Syncona Group Companies other than Syncona GP Limited
is not shown in Syncona Limited ' s Condensed Consolidated
Statement of Financial Position since it is included within
financial assets at fair value through profit or loss.
See note 1 for a description of Syncona Holdings Limited and
Syncona Investments LP Incorporated.
SYNCONA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 September 2022
Unaudited Unaudited
six months six months Audited
to to year
30 September 30 September to 31 March
Notes Revenue Capital 2022 2021 2022
GBP ' GBP '
000 000 GBP ' 000 GBP ' 000 GBP ' 000
Investment income
Other income 17 , 929 - 17 , 929 17 , 114 25 , 391
Total investment
income 17 , 929 - 17 , 929 17 , 114 25 , 391
-------- -------- ------------- ------------- ------------
Net gains/(losses)
on financial assets
at fair value through
profit or loss 5 - 47 , 552 47 , 552 (162 , 884) (6 , 698)
Total gains/(losses) - 47 , 552 47 , 552 (162 , 884) (6 , 698)
-------- -------- ------------- ------------- ------------
Expenses
Charitable donations 6 2 , 340 - 2 , 340 2 , 061 4 , 250
General expenses 7 , 495 - 7 , 495 42 5 , 605
Total expenses 9 , 835 - 9 , 835 2 , 103 9 , 855
-------- -------- ------------- ------------- ------------
Profit/(loss) for
the period 8 , 094 47 , 552 55 , 646 (147 , 873) 8 , 838
Taxation - - - - -
Profit/(loss) for
the period after
tax 8 , 094 47 , 552 55 , 646 (147 , 873) 8 , 838
======== ======== ============= ============= ============
Earnings/(loss) per
Ordinary Share 9 1.22p 7.11p 8.33p (22.22)p 1.33p
======== ======== ============= ============= ============
Earnings/(loss) per
Diluted Share 9 1.21p 7.07p 8.28p (22.07)p 1.31p
======== ======== ============= ============= ============
The total columns of this statement represent the Group ' s
Condensed Consolidated Statement of Comprehensive Income , prepared
in accordance with International Financial Reporting Standards ( "
IFRS " ) as adopted by the European Union.
The profit/(loss) for the period is equivalent to the " total
comprehensive profit/(loss) " as defined by International
Accounting Standards ( " IAS " ) 1 " Presentation of Financial
Statements " . There is no other comprehensive profit/(loss) as
defined by IFRS.
All the items in the above statement derive from continuing
operations.
The accompanying notes are an integral part of the Condensed
Consolidated Financial Statements.
SYNCONA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2022
Unaudited Unaudited Audited
30 September 30 September 31 March
Notes 2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
ASSETS
Non-current assets
Financial assets at fair value 1 , 371 , 1 , 165 , 1 , 323 ,
through profit or loss 7 939 993 232
Current assets
Bank and cash deposits 14 579 276
Trade and other receivables 5 , 723 5 , 522 9 , 878
1 , 377 , 1 , 172 , 1 , 333 ,
Total assets 676 094 386
------------- ------------- ---------
LIABILITIES AND EQUITY
Non-current liabilities
Share based payments 8 846 11 , 658 8 , 459
Current liabilities
Share based payments 8 9 , 523 6 , 558 9 , 388
Payables 1 , 404 1 , 128 5 , 698
Total liabilities 11 , 773 19 , 344 23 , 545
------------- ------------- ---------
EQUITY
Share capital 9 767 , 999 767 , 999 767 , 999
Capital reserves 578 , 001 374 , 263 530 , 449
Revenue reserves 19 , 903 10 , 488 11 , 393
1 , 365 , 1 , 152 , 1 , 309 ,
Total equity 903 750 841
------------- ------------- ---------
1 , 377 , 1 , 172 , 1 , 333 ,
Total liabilities and equity 676 094 386
------------- ------------- ---------
Total net assets attributable 1 , 365 , 1 , 152 , 1 , 309 ,
to holders of Ordinary Shares 903 750 841
============= ============= =========
Number of Ordinary Shares in 669 , 329 666 , 733 666 , 733
Issue 9 , 324 , 588 , 588
------------- ------------- ---------
Net assets attributable to
holders of Ordinary Shares
(per share) 9 GBP2.04 GBP1.73 GBP1.96
------------- ------------- ---------
Diluted NAV (per share) 9 GBP2.03 GBP1.72 GBP1.94
============= ============= =========
The unaudited Condensed Consolidated Financial Statements were
approved on 16 November 2022.
The accompanying notes are an integral part of the Condensed
Consolidated Financial Statements.
SYNCONA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
ATTRIBUTABLE TO HOLDERS OF ORDINARY SHARES
For the period ended 30 September 2022
Share Capital Revenue
Notes capital reserves reserves Total
GBP ' 000 GBP ' 000 GBP ' 000 GBP ' 000
As at 31 March 2021 1 , 300
(audited) 767 , 999 537 , 147 (4 , 857) , 289
Total comprehensive loss
for the period - (162 , 884) 15 , 011 (147 , 873)
Transactions with shareholders:
Share based payments - - 334 334
As at 30 September 2021 1 , 152
(unaudited) 767 , 999 374 , 263 10 , 488 , 750
========= =========== ========= ===========
Total comprehensive income
for the period - 156 , 186 525 156 , 711
Transactions with shareholders:
Share based payments - - 380 380
As at 31 March 2022 1 , 309
(audited) 767 , 999 530 , 449 11 , 393 , 841
========= =========== ========= ===========
Total comprehensive income
for the period - 47 , 552 8 , 094 55 , 646
Transactions with shareholders:
Share based payments - - 416 416
As at 30 September 2022 1 , 365
(unaudited) 767 , 999 578 , 001 19 , 903 , 903
========= =========== ========= ===========
The accompanying notes are an integral part of the Condensed
Consolidated Financial Statements.
SYNCONA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 30 September 2022
Unaudited Unaudited
six months six months Audited
to to year
30 September 30 September to 31 March
Notes 2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Cash flows from operating
activities
Profit/(loss) for the period 55 , 646 (147 , 873) 8 , 838
Adjusted for:
(Gains)/losses on financial
assets at fair value through
profit or loss 5 (47 , 552) 162 , 884 6 , 698
Non-cash movement in share
based payment provision (8 , 217) (14 , 722) (15 , 764)
------------- ------------- ------------
Operating cash flows before
movements in working capital (123) 289 (228)
Decrease in other receivables 4 , 155 4 , 924 568
Decrease in other payables (4 , 294) (4 , 648) (78)
------------- ------------- ------------
Net cash generated (used in)/from
operating activities (262) 565 262
------------- ------------- ------------
Net (decrease)/increase in
cash and cash equivalents (262) 565 262
Cash and cash equivalents at
the beginning of the period 276 14 14
------------- ------------- ------------
Cash and cash equivalents at
the end of the period 14 579 276
============= ============= ============
Cash held by the Company and Syncona Group Companies is
disclosed in the Group Portfolio Statement.
The accompanying notes are an integral part of the Condensed
Consolidated Financial Statements.
SYNCONA LIMITED
CONDENSED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
For the period ended 30 September 2022
1. GENERAL INFORMATION
Syncona Limited (the " Company " ) is incorporated in Guernsey
as a registered closed-ended investment company. The Company ' s
Ordinary Shares were listed on the premium segment of the London
Stock Exchange ( " LSE " ) on 26 October 2012 when it commenced its
business.
The Company makes its life science investments through Syncona
Holdings Limited (the " Holding Company " ) , a subsidiary of the
Company. The Company maintains its capital pool through Syncona
Investments LP Incorporated (the " Partnership " ) in which the
Company is the sole limited partner. The general partner of the
Partnership is Syncona GP Limited (the " General Partner " ) , a
wholly-owned subsidiary of the Company. Syncona Limited and Syncona
GP Limited are collectively referred to as the " Group " .
Syncona Investment Management Limited ( " SIML " ) , a
subsidiary , was appointed as the Company ' s Alternative
Investment Fund Manager ( " Investment Manager " ).
The investment objective and policy is set out in the Directors
' Report within the Annual Report and Accounts for the year ended
31 March 2022.
2. ACCOUNTING POLICIES
The accounting policies applied in these interim accounts are
the same as those applied by the Group in its Annual Report and
Accounts for the year ended 31 March 2022 and shall form the basis
of the 2023 Annual Report and Accounts. No new standards that have
become effective in the period have had a material effect on the
Group ' s financial statements.
Information reported to the Board (the Chief Operating Decision
Maker ( " CODM " )) for the purpose of allocating resources and
monitoring performance of the Group ' s overall strategy to create
, build and scale around exceptional science , consists of
financial information reported at the Group level. The capital pool
is fundamental to the delivery of the Group ' s strategy and
performance and is reviewed by the CODM only to the extent this
enables the allocation of those resources to support the Group ' s
investment in life science companies. There are no reconciling
items between the results contained within this information and
amounts reported in the financial statements. IFRS requires
operating segments to be identified on the basis of the internal
financial reports that are provided to the CODM , and as such the
Directors present the results of the Group as a single operating
segment.
Statement of compliance
The Condensed Consolidated Financial Statements have been
prepared in accordance with IAS 34 " Interim Financial Reporting "
as adopted by the European Union , and should be read in
conjunction with the Annual Report and Accounts for the year ended
March 2022 , which have been prepared in accordance with IFRS as
adopted by the European Union , and are in compliance with The
Companies (Guernsey) Law 2008. The financial information in these
interim accounts was approved by the Board and authorised for issue
on 16 November 2022. The financial information is unaudited but has
been subject to a review by the Group ' s independent auditor.
Basis of preparation
The Condensed Consolidated Financial Statements have been
prepared under the historical cost basis , except for investments
held at fair value through profit or loss , which have been
measured at fair value.
Going concern
The Condensed Consolidated Financial Statements are prepared on
a going concern basis. The net assets held by the Group and within
investment entities controlled by the Group currently consist of
securities and cash amounting to GBP1 , 365.9 million (30 September
2021: GBP1 , 152.8 million , 31 March 2022 GBP1 , 309.8 million) of
which GBP739.0 million (30 September 2021: GBP475.3 million , 31
March 2022: GBP764.7 million) are readily realisable within three
months in normal market conditions , and liabilities including
uncalled commitments to underlying investments and funds amounting
to GBP74.0 million (30 September 2021: GBP103.4 million , 31 March
2022: GBP88.5 million).
Given the Group ' s capital pool of GBP763.3 million (30
September 2021: GBP534.9 million , 31 March 2022: GBP784.9 million)
the Directors consider that the Group has adequate financial
resources to continue its operations , including existing
commitments to its investments and planned additional capital
expenditure for 12 months following the approval of the Condensed
Consolidated financial statements. The Directors also continue to
monitor the potential future impact of COVID-19 , the war in
Ukraine and the ever changing macro environment on the Group. Hence
, the Directors believe that it is appropriate to continue to adopt
the going concern basis in preparing the Condensed Consolidated
Financial Statements.
Basis of consolidation
The Group ' s Condensed Consolidated Financial Statements
consist of the financial statements of the Company and the General
Partner.
The results of the General Partner during the period are
consolidated in the Condensed Consolidated Statement of
Comprehensive Income from the effective date of incorporation and
is consolidated in full. The financial statements of the General
Partner are prepared in accordance with United Kingdom ( " United
Kingdom " ) Accounting Standards under Financial Reporting Standard
101 " Reduced Disclosure Framework " . Where necessary ,
adjustments are made to the financial statements of the General
Partner to bring the accounting policies used in line with those
used by the Group. During the periods and year ended 30 September
2022 , 30 September 2021 and 31 March 2022 , no such adjustments
have been made. All intra-group transactions , balances and
expenses are eliminated on consolidation.
Entities that meet the definition of an investment entity under
IFRS 10 " Consolidated Financial Statements " are held at fair
value through profit or loss in accordance with IFRS 9 " Financial
Instruments " . The Company , the Partnership and the Holding
Company meet the definition of Investment Entities. The General
Partner does not meet the definition of an Investment Entity and is
therefore consolidated.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS , ESTIMATES AND
ASSUMPTIONS
The preparation of the interim results requires management to
make judgements , estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets , liabilities , income and expenses at the reporting date.
However , uncertainties about these assumptions and estimates , in
particular relating to underlying investments of private equity
investments and life science investments could result in outcomes
that require a material adjustment to the carrying value of the
assets or liabilities in future periods.
In preparing these interim results , the significant judgements
made by management in applying the Group ' s accounting policies
and the key sources of estimation uncertainty were the same as
those applied to the Annual Report and Accounts for the year ended
31 March 2022.
The key critical accounting judgement is the basis for
determining the fair value of life science investments. Further
information can be found in note 3 of the Annual Report and
Accounts.
The key sources of estimation uncertainty are the valuation of
the Holding Company ' s investments in privately held life science
companies and milestone assets on the sale of a subsidiary , the
investment in the CRT Pioneer Fund , the Partnership ' s private
equity investments and the valuation of the share based payment
liability.
The inputs and assumptions which result in estimation
uncertainty when determining the valuation of the share based
payment liability are described in note 2 of the Annual Report and
Accounts. Sensitivity of the share based payment liability to
reasonably possible changes in these inputs is not currently
material to the financial statements as a whole.
The unquoted investments within the life science portfolio are
very illiquid. Many of the companies are early stage investments
and privately owned. Accordingly , a market value can be difficult
to determine. The primary inputs used by the Company to determine
the fair value of investments in privately held life science
companies are the cost of the capital invested and PRI , adjusted
to reflect the achievement or otherwise of milestones or other
factors. The accounting policy for all investments is described in
note 2 and the fair value of all investments is described in note
12.
In determining a suitable range to sensitise the fair value of
the unlisted life science portfolio , Management note the
achievement or not of value enhancing milestones as being a key
source of estimation uncertainty. Such activities and resulting
data emanating from the life science companies can be the key
trigger for fair value changes and typically involve financing
events which crystallise value at those points in time. The range
of 17% (30 September 2021: 25% , 31 March 2022: 18%) identified by
Management reflects their estimate of the range of reasonably
possible valuations over the next financial year , taking into
account the position of the portfolio as a whole. Key technical
milestones considered by Management that typically trigger value
enhancement (or deterioration if not achieved) include the
generation of substantial clinical data.
The Company has assessed the current impact of the war in
Ukraine and the current macroeconomic environment on the private
life science companies and does not consider that any revaluations
are required as a direct result , however the final impact of the
war is not yet certain and may have effects on the portfolio
companies that have not been anticipated.
4. INVESTMENT IN SUBSIDIARIES AND ASSOCIATES
The Company meets the definition of an investment entity in
accordance with IFRS 10. Therefore , with the exception of the
General Partner (which provides investment related service to the
Group) , the Company does not consolidate its subsidiaries and
indirect associates , but rather recognises them as financial
assets at fair value through profit or loss.
Direct interests in subsidiaries
Unaudited Unaudited Audited
30 September 30 September 31 March
Principal
place 2022 2021 2022
Principal % interest % interest % interest
Subsidiary of business activity (1) (1) (1)
Syncona GP Limited Guernsey General Partner 100% 100% 100%
Syncona Holdings
Limited Guernsey Portfolio management 100% 100% 100%
Syncona Investments
LP Incorporated Guernsey Portfolio management 100% 100% 100%
There are no significant restrictions on the ability of
subsidiaries to transfer funds to the Company.
Indirect interests in subsidiaries
Unaudited Unaudited Audited
30 September 30 September 30 March
Principal
place 2022 2021 2022
Immediate Principal % interest % interest % interest
Indirect Subsidiaries of business parent activity (1) (1) (1)
Syncona Discovery United Syncona Investments Portfolio
Limited Kingdom LP Incorporated management 100% 100% 100%
Syncona Portfolio Syncona Holdings Portfolio
Limited Guernsey Limited management 100% 100% 100%
Syncona IP Holdco United Syncona Portfolio Portfolio
Limited Kingdom Limited management 100% 100% 100%
Syncona IP Holdco United Syncona Portfolio Portfolio
(2) Limited Kingdom Limited management 100% -% -%
Syncona Investment United Syncona Holdings Portfolio
Management Limited Kingdom Limited management 100% 100% 100%
SIML Switzerland Portfolio
AG Switzerland SIML management 100% -% 100%
United Syncona Portfolio Portfolio
SPL 123 Limited Kingdom Limited management 100% -% -%
Purespring Therapeutics United Syncona Portfolio
Limited Kingdom Limited Gene therapy 86% 76% 76%
Resolution Therapeutic United Syncona Portfolio
Limited Kingdom Limited Cell therapy 85% 66% 73%
Forcefield Therapeutics United Syncona Portfolio
Limited Kingdom Limited Gene therapy 81% 86% 76%
SwanBio Therapeutics United Syncona Portfolio
Limited States Limited Gene therapy 77% 76% 76%
Freeline Therapeutics United Syncona Portfolio
Holdings plc Kingdom Limited Gene therapy 58% 53% 61%
Gyroscope Therapeutics United Syncona Portfolio
Limited Kingdom Limited Gene therapy -% 59% -%
Indirect interests in associates
Unaudited Unaudited Audited
30 September 30 September 30 March
Principal
place 2022 2021 2022
Indirect interests Immediate Principal % interest % interest % interest
in associates of business parent activity (1) (1) (1)
Quell Therapeutics United Syncona Portfolio
Limited Kingdom Limited Cell therapy 43% 73% 44%
Syncona Portfolio
Anaveon AG Switzerland Limited Biologics 42% 50% 41%
Kesmalea Therapeutics United Syncona Portfolio
Limited Kingdom Limited Small molecule 41% -% -%
OMass Therapeutics United Syncona Portfolio
Limited Kingdom Limited Small molecule 38% 51% 53%
Azeria Therapeutics United Syncona Portfolio Involuntary
Limited Kingdom Limited liquidation 34% 34% 34%
Achilles Therapeutics United Syncona Portfolio
plc Kingdom Limited Cell therapy 27% 27% 27%
Autolus Therapeutics United Syncona Portfolio
plc Kingdom Limited Cell therapy 21% 27% 21%
(1) Based on undiluted issued share capital and excluding the
Management Equity Shares ( " MES " ) issued by Syncona Holdings
Limited (see note 8).
5. NET GAINS/(LOSSES) ON FINANCIAL ASSETS AT FAIR VALUE THROUGH
PROFIT OR LOSS
The net gains/(losses) on financial assets at fair value through
profit or loss arise from the Group ' s holdings in the Holding
Company and Partnership.
Unaudited Unaudited
six months six months Audited
to to year to 31
30 September 30 September March
Notes 2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Net gains/(losses) from:
The Holding Company 5.a 71 , 241 (154 , 936) 22 , 019
The Partnership 5.b (23 , 689) (7 , 948) (28 , 717)
47 , 552 (162 , 884) (6 , 698)
============= ============= ===========
5.a Movements in the Holding Company:
Unaudited Unaudited
six months six months Audited
to to year
30 September 30 September to 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Expenses (45) (44) (90)
Movement in unrealised gains/(losses)
o n life science i n vestments
at fair value through profit or
loss 71 , 286 (154 , 892) 22 , 109
Net gains/(losses) on financial
assets at fair value through profit
or loss 71 , 241 (154 , 936) 22 , 019
============= ============= ============
5.b Movements in the Partnership:
Unaudited Unaudited
six months six months Audited
to to year
30 September 30 September to 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Investment income 61 11 23
Rebates and donations 155 225 409
Expenses (128) (120) (229)
Realised gains/(losses) on financial
assets at fair value through profit
or loss 9 , 958 (690) 13 , 716
Movement in unrealised gains/(losses)
on financial assets at fair value
through profit or loss 8 , 903 8 , 818 (19 , 185)
(Losses)/gains on foreign currency (24 , 709) 922 1 , 940
------------- ------------- ------------
(Losses)/gains on financial assets
at fair value through profit or
loss (5 , 760) 9 , 166 (3 , 326)
Distributions (17 , 929) (17 , 114) (25 , 391)
------------- ------------- ------------
Net losses on financial assets
at fair value through profit or
loss (23 , 689) (7 , 948) (28 , 717)
============= ============= ============
6. CHARITABLE DONATIONS
For the year ended 31 March 2023 , the Group agreed to make a
donation to charity of 0.35% of the total net asset value ( " NAV "
) of the Group calculated on a monthly basis , 0.35% to be donated
to The Syncona Foundation , and these donations are made by the
General Partner. This is a change to the percentages from 30
September 2021 and 31 March 2022 where 0.15% was donated to the
Institute of Cancer Research and 0.20% was donated to the Syncona
Foundation.
During the period , charitable donations expense amounted to
GBP2 , 340 , 240 (30 September 2021: GBP2 , 060 , 805 , 31 March
2022: GBP4 , 249 , 836 ). As at 30 September 2022 , GBP2 , 340 ,
240 (30 September 2021: GBP2 , 060 , 805 , 31 March 2022: GBP4 ,
249 , 836 ) remained payable.
7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Audited
Unaudited Unaudited year
30 September 30 September 31 March
Notes 2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
1 , 052 ,
The Holding Company 7.a 680 802 , 273 980 , 282
The Partnership 7.b 319 , 259 363 , 720 342 , 950
1 , 371 , 1 , 165 , 1 , 323 ,
939 993 232
============= ============= =========
7.a The net assets of the Holding Company
Audited
Unaudited Unaudited year
30 September 30 September 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Cost of the Holding Company ' s
investment at the start of the
period 494 , 810 494 , 810 494 , 810
Purchases during the period - - -
Cost of the Holding Company ' s
investments at the end of the period 494 , 810 494 , 810 494 , 810
Net unrealised gains on investments
at the end of the period 562 , 426 311 , 928 489 , 984
------------- ------------- ---------
Fair value of the Holding Company
' s investments at the end of the 1 , 057 ,
period 236 806 , 738 984 , 794
Other current liabilities (4 , 556) (4 , 465) (4 , 512)
Financial assets at fair value
through profit or loss at the end 1 , 052 ,
of the period 680 802 , 273 980 , 282
============= ============= =========
7.b The net assets of the Partnership
Audited
Unaudited Unaudited year
30 September 30 September 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Cost of the Partnership ' s investments
at the start of the period 334 , 834 418 , 472 418 , 472
1 , 336 ,
Purchases during the period 789 363 , 641 835 , 375
(1 , 122
Sales during the period , 471) (344 , 872) (923 , 659)
Return of capital (8 , 271) (1 , 527) (9 , 070)
Net realised gains/(losses) on
disposals during the period 9 , 958 (690) 13 , 716
------------- ------------- -----------
Cost of the Partnership ' s investments
at the end of the period 550 , 839 435 , 024 334 , 834
Net unrealised gains on investments
at the end of the period 25 , 050 44 , 150 16 , 147
------------- ------------- -----------
Fair value of the Partnership '
s investments at the end of the
period 575 , 889 479 , 174 350 , 981
Cash and cash equivalents 216 , 555 103 , 872 475 , 786
Other net current liabilities (473 , 185) (219 , 326) (483 , 817)
Financial assets at fair value
through profit or loss at the end
of the period 319 , 259 363 , 720 342 , 950
============= ============= ===========
8. SHARE BASED PAYMENTS
Share based payments are associated with awards of MES in the
Holding Company , relevant details of which are set out in note 2
of the Annual Report and Accounts for the year ended 31 March
2022.
The total cost recognised within general expenses in the
Condensed Consolidated Statement of Comprehensive Income is shown
below:
Unaudited Unaudited
six months six months Audited
to to year
30 September 30 September to 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Charge related to revaluation of
the liability for cash settled
share awards (1 , 585) (5 , 665) (7 , 304)
Total (1 , 585) (5 , 665) (7 , 304)
============= ============= ============
Amounts recognised in the Condensed Consolidated Statement of
Financial Position , representing the carrying amount of
liabilities arising from share based payments transactions are
shown below:
Audited
Unaudited Unaudited year
30 September 30 September 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Share based payments - current 9 , 523 6 , 558 9 , 388
Share based payments - non-current 846 11 , 658 8 , 459
Total 10 , 369 18 , 216 17 , 847
============= ============= =========
When a participant elects to realise vested MES by sale of the
MES to the Company , half of the proceeds (net of anticipated
taxes) will be settled in shares of the Company , with the balance
settled in cash.
The fair value of MES has been established using an externally
developed model , which is consistent with that used as at 31 March
2022. Key inputs described in note 2 of the Annual Report and
Accounts have been determined based on internally generated data as
at 30 September 2022. Vesting is subject only to the condition that
employees must remain in employment at the vesting date. Each MES
is entitled to share equally in value attributable to the Holding
Company above the applicable base line value at the date of award
provided that the applicable hurdle value of 15% or 30% growth in
the value of the Holding Company above the base line value at the
date of award has been achieved.
The fair value of awards made in the period ended 30 September
2022 was GBP2 , 529 , 130 (30 September 2021: GBP2 , 710 , 500 , 31
March 2022: GBP2 , 883 , 500 ). An award was made on 14 July 2022
at 27p per MES.
The number of MES outstanding are shown below:
Audited
Unaudited Unaudited year
30 September 30 September 31 March
2022 2021 2022
Outstanding at the start of the 42 , 282 43 , 873 43 , 873
period , 122 , 239 , 239
9 , 325 , 7 , 744 , 8 , 238 ,
Issued 006 257 571
(7 , 762 (7 , 253 (7 , 253
Realised , 846) , 638) , 638)
(1 , 153 (2 , 576
Lapsed (15 , 203) , 546) , 050)
43 , 829 43 , 210 42 , 282
Outstanding at the end of the period , 079 , 312 , 122
============= ============= =========
Weighted average remaining unvested
life of outstanding MES , years 1.65 1.57 1.20
48 , 179 40 , 761 31 , 293
Vested MES at the end of the period , 285 , 540 , 486
Realisable MES at the end of the 11 , 786 10 , 190 11 , 478
period , 343 , 406 , 050
As at 30 September 2022 , if all MES were realised , the number
of shares issued in the Company as a result would increase by 4 ,
024 , 467 (30 September 2021: 4 , 621 , 710 , 31 March 2022: 6 ,
880 , 057). The undiluted per share value of net assets
attributable to holders of Ordinary Shares would fall from GBP2.04
to GBP2.03 if these shares were issued (30 September 2021: GBP1.73
to GBP1.72 , 31 March 2022: GBP1.97 to GBP1.94).
9. SHARE CAPITAL
9.a Authorised share capital
The Company is authorised to issue an unlimited number of shares
, which may or may not have a par value. The Company is a
closed-ended investment company with an unlimited life.
As the Company ' s shares have no par value , the share price
consists solely of share premium and the amounts received for
issued shares are recorded in the share capital in accordance with
The Companies (Guernsey) Law , 2008.
Unaudited Unaudited Audited
30 September 30 September 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Ordinary share capital
Balance at the start of the period 767 , 999 767 , 999 767 , 999
Balance at the end of the period 767 , 999 767 , 999 767 , 999
============= ============= =========
Unaudited Unaudited Audited
30 September 30 September 31 March
2022 2021 2022
Shares Shares Shares
Ordinary share capital
666 , 733 664 , 580 664 , 580
Balance at the start of the period , 588 , 417 , 417
Share based payment shares issued 2 , 595 , 2 , 153 , 2 , 153 ,
during the period 736 171 171
669 , 329 666 , 733 666 , 733
Balance at the end of the period , 324 , 588 , 588
============= ============= =========
No cash consideration is paid in relation to the issue of share
based payment shares.
The Company has issued one Deferred Share to The Syncona
Foundation for GBP1.
9.b Capital reserves
Gains and losses recorded on the realisation of investments ,
realised exchange differences , unrealised gains and losses
recorded on the revaluation of investments held at the period end
and unrealised exchange differences of a capital nature are
transferred to capital reserves.
9.c Earnings/(Loss) per share
The calculations for the (loss)/earnings per share attributable
to the Ordinary Shares of the Company are based on the following
data:
Unaudited Unaudited
six months six months Audited
to to year
30 September 30 September to 31 March
2022 2021 2022
Earnings/(loss) for the purposes GBP55 , 646 GBP(147 , GBP8 , 838
of earnings/(loss) per share , 000 873 , 000) , 000
Basic weighted average number of 667 , 825 665 , 486 666 , 108
shares , 783 , 396 , 284
Basic revenue earnings per share 1.22p 2.26p 2.3p
Basic capital earnings/(loss) per
share 7.11p (24.48)p (1.0)p
Basic earnings/(loss) per share 8.33p (22.22)p 1.3p
Diluted weighted average number 671 , 850 670 , 108 672 , 988
of shares , 250 , 106 , 341
Diluted revenue earnings per shares 1.21p 2.24p 2.3p
Diluted capital earnings/(loss)
per share 7.07p (24.31)p (1.0)p
Diluted earnings/(loss) per share 8.28p (22.07)p 1.3p
9.d NAV per share
Unaudited Unaudited Audited
30 September 30 September 31 March
2022 2021 2022
Net assets for the purposes of GBP1 , 365 GBP1 , 152 GBP1 , 309
NAV per share , 903 , 347 , 750 , 142 , 840 , 518
669 , 329 666 , 733 666 , 733
Ordinary Shares in issue , 324 , 588 , 588
NAV per share 204.1p 172.9p 196.5p
673 , 353 671 , 355 673 , 613
Diluted number of shares , 791 , 298 , 645
Diluted NAV per share 202.9p 171.7p 194.4p
10. DISTRIBUTION TO SHAREHOLDERS
The Company may pay a dividend at the discretion of the
Board.
During the period ended 30 September 2022 , the Company did not
declare or pay a dividend (30 September 2021: GBPnil , 31 March
2022: GBP nil ).
11. RELATED PARTY TRANSACTIONS
The Group has various related parties: life science investments
held by the Holding Company , the Investment Manager , the Company
' s Directors and The Syncona Foundation.
Life science investments
The Group makes equity investments in some life science
investments where it retains control. The Group has taken advantage
of the investment entity exception as permitted by IFRS 10 and has
not consolidated these investments , but does consider them to be
related parties. The total amounts included for investments where
the Group has control are set out below:
During the period , the total amount invested in life science
investments which the Group controls was GBP44 , 824 , 695 (30
September 2021: GBP39 , 668 , 846 , 31 March 2022: GBP62 , 765 ,
311).
The Group makes other equity investments where it does not have
control but may have significant influence through its ability to
participate in the financial and operating policies of these
companies , therefore the Group considers them to be related
parties.
During the period , the total amount invested in life science
investments in which the Group has significant influence was GBP12
, 999 , 998 (30 September 2021: GBP10 , 835 , 801 , 31 March 2022:
GBP46 , 592 , 768).
Commitments of milestone payments to the life science
investments are disclosed in note 13.
During the period , SIML charged the life science investments a
total of GBP99 , 213 (30 September 2021: GBP105 , 464 , 31 March
2022: GBP222 , 406) in relation to Director ' s fees and other fees
of GBP330 , 538 (30 September 2021: GBP184 , 450 , 31 March 2022:
GBPnil).
Investment Manager
SIML , an indirectly held subsidiary of the Company , is the
Investment Manager of the Group.
For the period ended 30 September 2022 , SIML was entitled to
receive an annual fee of up to 1.05% (30 September 2021: 1.05% , 31
March 2022: 1.05%) of the Company ' s NAV at the previous year end
per annum.
Unaudited Unaudited
six months six months Audited
to to year
30 September 30 September to 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Amounts paid to SIML 5 , 474 5 , 223 10 , 699
============= ============= ============
Amounts owed to SIML in respect of management fees totalled GBP1
, 145 , 213 (30 September 2021: GBP845 , 110 , 31 March 2022: GBP1
, 047 , 525).
During the period , SIML received fees from the Group portfolio
companies of GBP285 , 551 (30 September 2021: GBP259 , 914 , 31
March 2022: GBP615 , 342).
Company Directors
At the period end , the Company had seven Directors , all of
whom served in a non-executive capacity. Rob Hutchinson also serves
as a Director of the General Partner.
Directors ' remuneration for the periods and year ended ,
excluding expenses incurred , and outstanding Directors '
remuneration as at the end of the year , are set out below.
Unaudited Unaudited
six months six months Audited
to to year
30 September 30 September to 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Directors ' remuneration for the
period 247 210 419
============= ============= ============
Payable at end of the period - - -
============= ============= ============
The Syncona Foundation
Charitable donations are made by the Company to The Syncona
Foundation. The Syncona Foundation was incorporated in England and
Wales on 17 May 2012 as a private company limited by guarantee ,
with exclusively charitable purposes and holds the Deferred Share
in the Company. The amount donated to The Syncona Foundation during
the period ended 30 September 2022 was GBP2 , 428 , 478 (30
September 2021: GBP2 , 091 , 553 , 31 March 2022: GBP2 , 691 ,
553).
12. FAIR VALUE MEASUREMENT
IFRS 13 " Fair Value Measurement " requires the Group to
establish a fair value hierarchy that prioritises the inputs to
valuation techniques used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3
measurements). The three levels of the fair value hierarchy under
IFRS 13 are set as follows:
-- Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities ;
-- Level 2 Inputs other than quoted prices included within Level
1 that are observable for the asset or liability either directly
(that is , as prices) or indirectly (that is , derived from prices)
or other market corroborated inputs ; and
-- Level 3 Inputs for the asset or liability that are not based
on observable market data (that is , unobservable inputs).
The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair
value measurement. For this purpose , the significance of an input
is assessed against the fair value measurement in its entirety. If
a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs , that
measurement is a Level 3 measurement. Assessing the significance of
a particular input to the fair value measurement requires judgement
, considering factors specific to the asset or liability.
The determination of what constitutes " observable " requires
significant judgement by the Group. The Group considers observable
data to be market data that is readily available , regularly
distributed or updated , reliable and verifiable , and provided by
independent sources that are actively involved in the relevant
market.
The following table presents the Group ' s financial assets and
liabilities by level within the valuation hierarchy as at 30
September 2022 , 30 September 2021 and 31 March 2022:
30 September 2022 Level 1 Level 2 Level 3 Total
Assets (unaudited) GBP ' 000 GBP ' 000 GBP ' 000 GBP ' 000
Financial assets at fair
value through profit or loss:
1 , 052 1 , 052
The Holding Company - - , 680 , 680
The Partnership - - 319 , 259 319 , 259
1 , 371 1 , 371
Total assets - - , 939 , 939
========= ========= ========= =========
30 September 2021 Level 1 Level 2 Level 3 Total
Assets (unaudited) GBP ' 000 GBP ' 000 GBP ' 000 GBP ' 000
Financial assets at fair
value through profit or loss:
The Holding Company - - 802 , 273 802 , 273
The Partnership - - 363 , 720 363 , 720
1 , 165 1 , 165
Total assets - - , 993 , 993
========= ========= ========= =========
31 March 2022 Level 1 Level 2 Level 3 Total
Assets (audited) GBP ' 000 GBP ' 000 GBP ' 000 GBP ' 000
Financial assets at fair
value through profit or loss:
The Holding Company - - 980 , 282 980 , 282
The Partnership - - 342 , 950 342 , 950
1 , 323 1 , 323
Total assets - - , 232 , 232
========= ========= ========= =========
The investments in the Holding Company and the Partnership are
classified as Level 3 investments due to the use of the unadjusted
NAV of the subsidiaries as a proxy for fair value. The subsidiaries
hold some investments valued using techniques with significant
unobservable inputs as outlined in the sections that follow.
The underlying assets of the Holding Company and Partnership are
shown below.
The following table presents the Holding Company ' s investments
by level within the valuation hierarchy as at 30 September 2022 ,
30 September 2021 and 31 March 2022:
Asset type Level 30 September 30 September 31 March Valuation Significant unobservable Impact
2022 2021 2022 technique inputs on
GBP GBP GBP valuation
' 000 ' 000 ' 000 GBP
' 000
Publicly
available
share price
as at statement
of financial
Listed 84 , 212 , 121 , position
investments 1 716 344 226 date n/a n/a
----- ------------ ------------ -------- ---------------- ------------------------ ----------
Carrying value of
assets and
liabilities determined
in accordance
with generally accepted
accounting
principles , without
adjustment. A
sensitivity of 5%
Net assets of the NAV of SIML
SIML 3 5 , 855 5 , 794 5 , 822 of SIML is applied. +/- GBP293
----- ------------ ------------ -------- ---------------- ------------------------ ----------
PoS:
The main unobservable +/-
inputs GBP6
consist of the assigned , 927
probability of Discount
Discounted milestone success rate:
Milestone 58 , 49 , Cash and the discount GBP10
payments 3 576 - 802 Flow rate used. , 207
----- ------------ ------------ -------- ---------------- ------------------------ ----------
The main unobservable
input is the
quantification of
the progress
investments make
against internal
financing and/or
corporate
milestones where
Calibrated appropriate. A
price reasonable shift
of recent in the Fair Value
investment of
( " PRI 427 , 369 , 325 , Calibrated the investment would +/- GBP72
" ) (1) 3 319 991 662 PRI be +/-17%. , 644
----- ------------ ------------ -------- ---------------- ------------------------ ----------
(1) Valuation made by reference to price of recent funding round
unadjusted following adequate consideration of current facts and
circumstances.
The following table presents the movements in Level 3
investments of the Holding Company for the period ended 30
September 2022:
Unaudited Unaudited Audited
Life six months six months six months
science Other to 30 September to 30 September to 30 March
investments asset SIML 2022 2021 2022
GBP ' GBP ' GBP ' GBP ' GBP ' GBP '
000 000 000 000 000 000
Opening balance 325 , 662 49 , 802 5 , 822 381 , 286 303 , 804 303 , 804
Purchases during
the period 58 , 635 - - 58 , 635 50 , 455 107 , 817
Sales during (325 ,
the period - - - - - 837)
Gains on financial
assets at fair
value through
profit or loss 43,022 8 , 774 33 51 , 829 21 , 526 295 , 502
Closing balance 427 , 319 58 , 576 5 , 855 491 , 750 375 , 785 381 , 286
============ ======== ======= ================ ================ ============
The net gain for the period included in the Condensed
Consolidated Statement of Comprehensive Income in respect of Level
3 investments of the Holding Company held at the period end
amounted to GBP51 , 829 , 000 (30 September 2021: GBP21 , 526 , 000
gain , 31 March 2022: GBP295 , 502 , 000 ).
During the period , there were no movements from Level 3 to
Level 1 (30 September 2021: nil , 31 March 2022: nil) or between
Level 2 and Level 1 (30 September 2021: GBPnil , 31 March 2022:
GBPnil ).
The following table presents the Partnership ' s investments by
level within the valuation hierarchy as at 30 September 2022 , 30
September 2021 and 31 March 2022:
Level Unaudited Unaudited Audited Valuation Significant Impact
30 September 30 September 31 March technique unobservable on valuation
2022 2021 2022 inputs GBP
GBP GBP GBP ' 000
' 000 ' 000 ' 000
Publicly
available
share price
at statement
of financial
UK treasury 311 , 362 , 179 , position
bills 1 180 865 984 date n/a n/a
----- ------------- ------------- --------- ----------------- ----------------- -------------
Valuation
produced
by fund
administrator.
Inputs into
fund
Capital components
pool investment are from
fund-Credit 96 , 99 , observable
funds 2 559 - 489 inputs n/a n/a
----- ------------- ------------- --------- ----------------- ----------------- -------------
Valuation
produced
by fund
administrator.
Inputs into
fund
Capital components
Pool Investment are from
fund - Multi 48 , observable
asset funds 2 156 - - inputs. n/a n/a
----- ------------- ------------- --------- ----------------- ----------------- -------------
Valuation
produced
by
fund
administrator.
Inputs into
Legacy funds fund
- components
unlisted are from
fund 26 , observable
investments 2 - 643 - inputs n/a n/a
----- ------------- ------------- --------- ----------------- ----------------- -------------
The main
unobservable
input
include the
assessment
of the
performance of
the
underlying
assets by the
fund
administrator. A
fair reasonable
shift
in the Fair
Capital Valuation Value of the
pool investment produced instruments
fund - Multi 49 , by fund would be +/- 5
asset fund 3 444 - - administrator +/- 11% , 439
----- ------------- ------------- --------- ----------------- ----------------- -------------
The main
unobservable
input
include the
assessment
of the
performance of
the
underlying fund
by the fund
administrator.
A
reasonable
possible
Legacy funds shift in the Fair
- Valuation Value of the
Long-term produced instruments
unlisted 33 , 50 , 39 , by fund would be +/-
investments 3 954 427 857 administrator +/-11%. 3 , 735
----- ------------- ------------- --------- ----------------- ----------------- -------------
Unobservable
inputs
include the
fund managers
assessment
of the
performance of
the
underlying
investments and
adjustments
made
to this
assessment
Valuation to generate the
produced deemed fair
by value.
fund A reasonable
administrator possible shift in
Investment and the Fair Value of
in adjusted the +/-
CRT Pioneer 32 , 35 , 28 , by instruments would 10 ,
Fund 3 004 523 183 management be +/-34%. 881
----- ------------- ------------- --------- ----------------- ----------------- -------------
During the period ending 30 September 2022 , there were no
movements from Level 1 to Level 2 (30 September 2021: nil , 31
March 2022: nil) or between other levels in the fair value
hierarchy.
Assets classified as Level 2 investments are underlying funds
fair-valued using the latest available NAV of each fund as reported
by each fund ' s administrator , which are redeemable by the Group
subject to necessary notice being given. Included within the Level
2 investments above are investments where the redemption notice
period is greater than 90 days. Such investments have been
classified as Level 2 because their value is based on observable
inputs.
Assets classified as Level 3 long-term unlisted investments are
underlying Limited Partnerships which are not traded or available
for redemption. The fair value of these assets is derived from
quarterly statements provided by each fund ' s administrator.
The following table presents the movements in Level 3
investments of the Partnership for the six months to 30 September
2022 , the six months to 30 September 2021 and the year to 31 March
2022:
Unaudited Unaudited
six months six months Audited
Capital to to year to
Investment pool 30 September 30 September 31 March
in Subsidiary investment 2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000 GBP ' 000 GBP ' 000
Opening balance 31 , 651 39 , 857 71 , 508 82 , 844 82 , 844
Purchases during the
period - 50 , 353 50 , 353 987 2 , 592
Return of capital - (8 , 271) (8 , 271) (1 , 594) (9 , 070)
Gains/(losses) on financial
assets at fair value
through profit or loss 4 , 945 1 , 459 6 , 404 7 , 429 (4 , 858)
Closing balance 36 , 596 83 , 398 119 , 994 89 , 666 71 , 508
============== =========== ============= ============= =========
The net gain for the period included in the Condensed
Consolidated Statement of Comprehensive Income in respect of Level
3 investments of the Partnership held at the period end amounted to
GBP6 , 404 , 000 (30 September 2021: GBP7 , 429 , 000 gain , 31
March 2022: GBP4 , 857 , 645 loss ).
13. COMMITMENTS AND CONTINGENCIES
The Group had the following commitments as at 30 September 2022
, 30 September 2021 and 31 March 2022:
Audited
Unaudited Unaudited year
30 September 30 September 31 March
2022 2021 2022
GBP ' 000 GBP ' 000 GBP ' 000
Life science portfolio
Milestone payments to life science
companies 68 , 993 96 , 162 82 , 617
CRT Pioneer Fund 3 , 268 4 , 521 3 , 424
Capital pool investment 1 , 760 2 , 760 2 , 429
------------- ---------
Total 74 , 021 103 , 443 88 , 470
============= ============= =========
There were no contingent liabilities as at 30 September 2022 (30
September 2021: GBPnil , 31 March 2022: GBPnil). The commitments
are expected to fall due in the next 36 months.
14. SUBSEQUENT EVENTS
These Condensed Consolidated Financial Statements were approved
for issuance by the Directors on 16 November 2022. Subsequent
events have been evaluated until 16 November 2022.
Post period end further investment of $9.6m was made into
SwanBio as part of the existing Series B financing.
A new portfolio company , Alliance Holdco Limited , was
established , and a commitment to invest $23.5m in its shares was
made to it to enable it to purchase 100% of the share capital of
Applied Genetic Technologies Corporation (subject to the
stockholders of that company tendering sufficient shares to enable
the transaction to close).
ALTERNATIVE PERFORMANCE MEASURES
Capital deployed
With reference to the life science
portfolio valuation table this is calculated
as follows:
A Net investment in the period GBP57.4m
Adjusted for
--------
B Net distributions from CRT
Pioneer Fund GBP1.2m
--------
Total Capital deployed (A+B) GBP58.6m
--------
Life science portfolio return
Gross life science portfolio return
for September 2022 3.9 per cent ; March
2022 0.8 per cent. This is calculated
as follows:
A Opening life science portfolio GBP524.9m
Net investment in the period GBP57.4m
---------
B Valuation movement GBP20.3m
---------
Closing life science portfolio GBP602.6m
---------
Life science portfolio return
(B/A) 3.9%
---------
NAV per share
NAV per share is calculated by dividing
net assets by the number of shares
in issue adjusted for dilution by the
potential share based payment share
issues. NAV takes account of dividends
payable on the ex-dividend date. This
is calculated as follows:
A NAV for the purposes of GBP1 , 365
NAV per share , 903 , 347
B Ordinary shares in issue 669 , 329
(note 14) , 324
------------
4 , 024 ,
C Dilutive shares 467
------------
D Fully diluted number of 673 , 353
shares (B+C) , 791
------------
NAV per share (p) (A/D) 202.9
------------
NAV total return
NAV total return ( " NAVTR " ) is a
measure of how the NAV per share has
performed over a period , considering
both capital returns and dividends
paid to shareholders. NAVTR is calculated
as the increase in NAV between the
beginning and end of the period , plus
any dividends paid to shareholders
in the year. This is calculated as
follows:
A Opening NAV per fully diluted
share (note 9): 194.4p
B Closing NAV per fully diluted
share (note 9): 202.9p
------
C Movement (B-A) 8.5p
------
D Dividend paid in the year
(note 10): -
------
E Total movement (C+D) 8.5p
------
NAV Total Return (E/A) 4.3%
------
All alternative performance measures
are calculated using non-rounded figures
GLOSSARY
Company Syncona Limited
Capital deployed "See Alternative Performance Measures"
Capital pool/Capital Capital pool investments plus cash plus less
base other net liabilities.
Capital pool investments The underlying investments consist of cash
and cash equivalents , including short-term
(1 , 3 , and 6 month) UK treasury bills,
and a number of credit, multi-asset and legacy
fixed term funds.
Company Syncona Limited.
CRT Pioneer Fund The Cancer Research Technologies Pioneer
Fund LP. The CRT Pioneer Fund is managed
by Sixth Element Capital and invests in oncology
focused assets.
General Partner Syncona GP Limited.
Group Syncona Limited and Syncona GP Limited are
collectively referred to as the " Group "
.
Holding Company Syncona Holdings Limited.
Investment Manager Syncona Investment Management Limited.
IRR Internal Rate of Return.
Life science portfolio The underlying investments in this segment
are those whose activities focus on actively
developing products to deliver transformational
treatments to patients.
Li fe s cien ce portfol
io retu rn " See Alternative Performance Measures "
MES Management Equity Shares.
Net asset value , net Net asset value ( " NAV " ) is a measure
assets or NAV of the value of the Company , being its assets
- principally investments made in other companies
and cash and cash equivalents held - minus
any liabilities.
NAV per share " See Alternative Performance Measures "
NAV total return " See Alternative Performance Measures "
Partnership Syncona Investments LP Incorporated.
Return A Simple Rate of Return is the method used
for return calculations.
SIML Syncona Investment Management Limited.
Syncona Group Companies The Company and its subsidiaries other than
those companies within the life science portfolio.
The Syncona Foundation The Foundation distributes funds to a range
of charities , principally those involved
in the areas of life science and healthcare.
Valuation Policy The Group's investments in life science companies
are, in the case of quoted companies, valued
based on bid prices in an active market as
at the reporting date.
In the case of the Group's investments in
unlisted companies, the fair value is determined
in accordance with the International Private
Equity and Venture Capital ("IPEV") Valuation
Guidelines. These may include the use of
recent arm's length transactions (Price of
Recent Investment or PRI), Discounted Cash
Flow ("DCF") analysis and earnings multiples
as valuation techniques. Wherever possible,
the Group uses valuation techniques which
make maximum use of market-based inputs.
[1] Subject to regulatory approval from the FCA
[2] Fully diluted, please refer to note 9 in the financial
statements. Alternative performance measure, please refer to
glossary
[3] Alternative performance measure, please refer to
glossary
([4]) See footnote 3
[5] 36% of the capital pool is now held in foreign denominated
currencies
[6] Syncona view: company has generated a maturing clinical data
set that validates its investment thesis
[7] See footnote 1
[8] See footnote 1
[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] Including the NPV of the Gyroscope milestones
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END
IR UNARRURUAAUA
(END) Dow Jones Newswires
November 17, 2022 02:00 ET (07:00 GMT)
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