SYNC Syncona Limited

13 August 2024

Syncona Limited

First Quarter Update

Strong clinical execution across a maturing portfolio that continues to attract significant external capital

Syncona Ltd, (the "Company"), a leading life science investor focused on creating, building and scaling a portfolio of global leaders in life science, today announces its quarterly update covering the period from 01 April to 30 June 2024.

Chris Hollowood, CEO of Syncona Investment Management Limited, said: "Our companies continue to execute on their clinical strategies and have attracted substantial investment from external partners in the quarter, with Beacon and Forcefield raising capital from high-quality investors. Despite both financings contributing positively to performance, these uplifts have been offset by declines in value from our quoted holdings, which have weighed on the overall life science portfolio return.

With Anaveon entering the clinic we now have six clinical-stage companies in our strategic portfolio of 13 companies. We are pleased with the positive momentum across the portfolio and are particularly encouraged to see Beacon treat the first patient in its Phase II/III registrational trial in XLRP, from which data would form the basis of a potential regulatory filing. The work we have undertaken to rebalance, diversify and de-risk the portfolio means a significant amount of value is now in clinical-stage assets, and we continue to focus on allocating capital to these opportunities and those approaching clinical entry. All of this provides us with a platform for future growth and we are excited about the opportunity ahead, with Syncona well placed to deliver long-term returns for our shareholders and transformational treatments for patients."

Financial performance in the quarter

·    Net assets of £1,160.4 million (31 March 2024: £1,238.9 million), 179.4p per share (31 March 2024: 188.7p per share), a NAV per share return of (4.9)%

o  Performance predominantly driven by a decrease in Autolus' share price, partially offset by valuation uplifts in Beacon and Forcefield, alongside a positive return from the capital pool and accretive share buybacks

·    Life science portfolio valued at £739.0 million (31 March 2024: £786.1 million), a return of (8.3)%

·    Capital pool of £421.4 million at 30 June 2024 (31 March 2024: £452.8 million)

o  £23.3 million deployed into the life science portfolio

·    £11.0 million invested into the share buyback programme in the quarter

o  9.6 million shares repurchased in the share buyback during the quarter at an average 38.1% discount to NAV resulting in an accretion of 0.94p to NAV per share[1]

Maturing strategic portfolio[2] continues to attract significant external investment

·    Roche Venture Fund committed £10.0 million to Forcefield's Series A financing, alongside Syncona's commitment of £20.0 million

o  Syncona's holding was written up by £2.4 million (0.38p per share); a 37.6 per cent uplift to the 31 March 2024 valuation of the company

·    Post-period end Beacon raised $170 million in a Series B financing, with Syncona committing $42.5 million (£33.5 million) in a round led by Forbion, alongside a leading global syndicate

o  Syncona's holding was written up by £14.3 million (2.2p per share); a 17.9 per cent uplift to the 31 March 2024 valuation of the company[3]

·    Completion of the sale of Clade to Century Therapeutics for up to $45.0 million (£35.9 million), with upfront consideration to Syncona of $9.3 million (£7.4 million)

Increased allocation to share buyback programme

·    The Board of Syncona continues to view the current share price as a compelling investment opportunity given the potential value within our portfolio

·    As announced in our FY2023/4 Annual Results in June, a further £20.0 million has been allocated to the share buyback programme taking the total allocation to £60.0 million

·    Since the commencement of the share buyback, a total of £35.4 million has been deployed to repurchase a total of 29.4 million shares, at an average discount of 33.4%[4]

Strong clinical execution from our rebalanced and diversified portfolio, where 72% of strategic portfolio value is in our six clinical-stage companies

Moving towards being on the market

·    Autolus presented positive longer-term follow-up and additional data from the pivotal Phase Ib/II FELIX study of obe-cel in relapsed/refractory (r/r) adult B-cell acute lymphoblastic leukaemia (ALL) at the American Society of Clinical Oncology (ASCO) Annual Meeting. The company also had its Marketing Authorisation Application (MAA) accepted by the European Medicines Agency (EMA) for obe-cel

·    Beacon treated its first patient in the Phase II/III registrational VISTA trial[5], which will further assess the effect of AGTC-501 on vision and other symptoms of X-Linked Retinitis Pigmentosa (XLRP)

Moving towards publishing definitive data

·    Resolution presented further data at the EASL Congress from its academic study (MATCH II) which supports the significant potential of macrophage cell therapy treatment for end-stage liver disease. The company also received approval from the UK Medicines and Healthcare products Regulatory Agency (MHRA) to commence the Phase I/II EMERALD study for its lead candidate RTX001, with this study expected to initiate in H2 CY2024

·    Post-period end Spur completed enrolment in its Phase I/II trial in Gaucher disease and selected a single low dose infusion of FLT201 for its Phase III trial, expected to start in CY2025

o  The dose selection was based on encouraging data which demonstrated compelling efficacy signals, alongside a favourable safety and tolerability profile

o  Spur also published data from its Parkinson's disease research programme, the company's first pipeline expansion into more prevalent chronic debilitating diseases

·    Post-period end iOnctura expanded its clinical trial programme for its lead pipeline asset, roginolisib, to non-small cell lung cancer, via clinical collaboration agreements with the ETOP IBCSG Partners Foundation and GSK

Moving towards publishing emerging efficacy data

·    Quell presented positive safety data from is study of QEL-001 in liver transplant patients and is advancing the therapy's development into the efficacy cohort of the LIBERATE Phase I/II trial

·    Post-period end Anaveon entered the clinic with its Phase I/II trial of ANV600, the company's next generation compound, in line with prior guidance

Outlook

Capital deployment

Syncona continues to anticipate that deployment into the portfolio and pipeline in the financial year to 31 March 2025 will be £150-200 million. This excludes the capital allocated to the share buyback programme.

Upcoming capital access milestones and potential key value inflection points

As we build and scale our companies, there are opportunities to deliver milestones that drive access to capital (capital access milestones) and milestones that we believe have the potential to drive significant NAV growth (key value inflection points[6]).

·    10 capital access milestones across the portfolio by the end of CY2026, with eight expected by the end of CY2025

·    Eight key value inflection points by the end of CY2026, each of which has the potential to drive significant NAV growth, including two before the end of CY2024. Syncona is funded to deliver on all of the portfolio's potential key value inflection points

·      These capital access milestones and key value inflection points are not without risk

Updates to milestones since FY2023/4 Annual Results

·    Anaveon initiated its Phase I/II trial of ANV600, a potential capital access milestone

·    There have been no other milestone changes since the Annual Results announcement

Valuation movements in the quarter

Enquiries

Syncona Ltd

Natalie Garland-Collins / Fergus Witt

Tel: +44 (0) 20 3981 7940

FTI Consulting

Ben Atwell / Tim Stamper

Tel: +44 (0) 20 3727 1000

About Syncona

Syncona's purpose is to invest to extend and enhance human life. We do this by creating, building and scaling companies to deliver transformational treatments to patients in areas of high unmet need.

We aim to build and maintain a diversified portfolio of 20-25 globally leading life science businesses, across development stage, modality and therapeutic area, for the benefit of all our stakeholders. We focus on developing treatments that deliver patient impact by working in close partnership with world-class academic founders and experienced management teams. Our balance sheet underpins our strategy, enabling us to take a long-term view as we look to improve the lives of patients with no or poor treatment options, build sustainable life science companies and deliver strong risk-adjusted returns to shareholders.

Forward-looking statements - this announcement contains certain forward-looking statements with respect to the portfolio of investments of Syncona Limited. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. In particular, many companies in the Syncona Limited portfolio are conducting scientific research and clinical trials where the outcome is inherently uncertain and there is significant risk of negative results or adverse events arising. In addition, many companies in the Syncona Limited portfolio have yet to commercialise a product and their ability to do so may be affected by operational, commercial and other risks.

Syncona Limited seeks to achieve returns over the long term. Investors should seek to ensure they understand the risks and opportunities of an investment in Syncona Limited, including the information in our published documentation, before investing.