TIDMSYNC
RNS Number : 0151S
Syncona Limited
11 November 2021
11 November 2021
Syncona Limited
Interim Results for the six months ended 30 September 2021
Continued focus on hands-on engagement with a maturing portfolio
with key milestones ahead
Key highlights
-- Net assets of GBP1,152.8 million (31 March 2021: GBP1,300.3
million), or 171.7p ([1]) per share (31 March 2021: 193.8p per
share), a NAV total return of (11.4) per cent ([2]) driven
predominantly by the decline in share prices of two of our listed
holdings, Freeline Therapeutics (Freeline) and Achilles
Therapeutics (Achilles):
o Freeline experienced operational challenges as a result of the
COVID-19 pandemic; these have now been addressed and the business
re-initiated its clinical studies
o Achilles' share price has been impacted by market sentiment
towards cell and gene therapies; Syncona's view is that the
business is performing well and executing in line with its expected
timelines
-- Continued operational progress across the portfolio, with
decisive actions taken by a number of our portfolio companies
during the period:
o Syncona CIO and Freeline Chair, Chris Hollowood closely
engaged with the Freeline Board as it updated its executive
leadership team
o Syncona CEO, Martin Murphy, took up the role of Chair of
Autolus Therapeutics (Autolus), working with its board to ensure
the company focused on the delivery of the AUTO1 (obe-cel) pivotal
study
-- Positive clinical progress across five clinical stage companies:
o Autolus: further encouraging durability data from its lead
therapeutic candidate AUTO1 for adult acute lymphoblastic leukaemia
(ALL)
o Gyroscope Therapeutics (Gyroscope): additional positive
interim data in its Phase I/II FOCUS trial for the treatment of
advanced dry age-related macular degeneration (AMD)
o Freeline: dosed second patient in its second clinical
programme for Fabry disease and post period end announced
encouraging data from the patient; enrolment begun in run-in study
for its Phase I/II dose confirmation study for Haemophilia B
o Achilles: continued to make progress in ongoing Phase I/IIa
studies in non-small cell lung cancer (NSCLC) and melanoma,
enrolling patients in a higher dose process
o Anaveon: dosed its first patient in a Phase I/II study of
ANV419, a selective interleukin-2 (IL-2) agonist with the potential
to target cancer; several patients have now been dosed in the
study
-- Next generation of companies poised to enter the clinic:
o Quell Therapeutics (Quell): continues to remain on track to
enter the clinic with its lead programme in liver transplantation
in Q1 CY2022
o SwanBio Therapeutics (SwanBio): commenced a natural history
study evaluating patients to assess the course of
adrenomyeloneuropathy (AMN), post period published encouraging
pre-clinical data for its lead programme and remains on track to
enter the clinic in CY2022
-- Continuing to deploy strategic capital base in line with deployment guidance:
o GBP50.8 million deployed in the period; capital base of
GBP534.9 million at 30 September 2021
o $30.0 million (GBP21.7 million ([3]) ) commitment into Clade
Therapeutics (Clade), a next generation stem cell-based
therapeutics business, backing a world-class operating team
alongside a syndicate of long-term investors in a $87.0 million
Series A financing, which was led by Syncona
-- Post period end: portfolio companies continuing to attract
substantive capital from leading, long-term investors and
companies; accessing $397.0 ([4]) million year to date with $30.0
million committed from Syncona
o Autolus announced a commitment of up to $250.0 million from
Blackstone Life Sciences (Blackstone): investment of $100.0 million
in equity and up to $150.0 million of product financing, of which
$50.0 million is payable on the closing of the transaction and the
remainder payable based on certain development and regulatory
milestones
o Gyroscope announced an equity investment from Sanofi of up to
$60.0 million: $40.0 million initial investment with $20.0 million
contingent on a future qualifying investment round and subject to
the satisfaction of certain closing conditions ([5]) ; investment
validates potential of their investigational gene therapy
Martin Murphy, CEO of Syncona Investment Management Limited,
said:
"Syncona has always taken a hands-on, partnership approach to
supporting our companies as they progress towards key clinical,
financial and operational milestones. This has been particularly
important in recent months when our portfolio companies have needed
to take decisive actions to address issues and adapt to specific
challenges, some of which are inherent in clinical development.
Whilst we are disappointed by the decline in NAV during the
period, we are continuing to build a diverse portfolio across the
development cycle and therapeutic areas and remain confident in our
companies' potential. The substantial capital that a number of our
companies have accessed so far this year validate the significant
opportunity ahead for them. With clinical data the key driver of
value and risk for Syncona, we believe our companies are well
positioned and on track to further validate our model and strategy
in the next 12 months with the potential for a rich seam of
data.
In addition to supporting our existing businesses, our expert
team and strategic capital base mean we will be able to continue
founding exciting companies around highly innovative science, with
the potential to make a transformational difference to the lives of
patients and deliver significant value for our shareholders."
Outlook
-- We continue to target building a diversified and sustainable
portfolio of 15-20 companies over the long term. In doing so, we
continue to expect to deploy between GBP100-175 million into our
existing companies and new opportunities this year
15 key milestones by the end of CY2022
Key milestones in calendar year 2021 (CY2021)
-- Autolus to publish initial data on the AUTO1 (obe-cel) Phase
1b portion of its pivotal trial in relapsed refractory (r/r) adult
ALL at the American Society of Haematology (ASH) in December
2021
-- Autolus to publish non-clinical and initial data on AUTO1/22
trial in paediatric ALL at ASH in December 2021
-- Freeline to publish long-term durability data from its Phase
I/II dose-finding trial for Haemophilia B at ASH in December
2021
-- Freeline to initiate trial site for Phase I/II dose-finding study in Gaucher disease Type 1
Key milestones in calendar year 2022 (CY2022):
-- Autolus expects to progress its pivotal study in AUTO1
(obe-cel) r/r adult ALL and provide a data read-out from the
primary endpoint of this programme in mid CY2022; on track to file
BLA in CY 2023
-- Autolus expects to publish initial clinical data in AUTO4 in
Peripheral T cell Lymphoma (H1 CY2022)
-- Achilles expects to provide interim data from higher dose clinical cohorts of its clonal neoantigen-reactive T-cell (cNet) therapy in NSCLC and Melanoma (H2 CY2022)
-- Gyroscope expects to report further data from its Phase I/II FOCUS trial
-- Freeline expects to progress three clinical stage programmes:
o Initiate clinical trial sites for Phase I/II dose-confirmation
study in Haemophilia B in Q1 CY2022, with interim data expected by
the end of the year
o Dose next patient in Phase I/II Fabry trial in Q1 CY2022 and
publish interim data from the programme by the end of the year
o Publish interim data from the Phase I/II Gaucher Type 1
disease programme
-- Anaveon expects to publish initial data from the Phase I/II
trial for its selective IL-2 agonist, ANV419 (Q1 CY2022);
additional data published later in CY2022
-- SwanBio expects to enter the clinic with its lead programme by end of the year
-- Quell Therapeutics (Quell) expects to enter the clinic with
its lead programme in liver transplantation, QEL-001 (Q1
CY2022)
Enquiries
Syncona Ltd
Annabel Clay/Fergus Witt
Tel: +44 (0) 20 3981 7940
FTI Consulting
Ben Atwell/Natalie Garland-Collins/Tim Stamper
Tel: +44 (0) 20 3727 1000
About Syncona:
Syncona's purpose is to invest to extend and enhance human life.
We do this by founding and building a portfolio of global leaders
in life science to deliver transformational treatments to patients
in areas of high unmet need.
Our strategy is to found, build and fund companies around
exceptional science to create a diversified portfolio of 15-20
globally leading healthcare businesses for the benefit of all our
stakeholders. We focus on developing treatments for patients by
working in close partnership with world-class academic founders and
management teams. Our balance sheet underpins our strategy enabling
us to take a long-term view as we look to improve the lives of
patients with no or poor treatment options, build sustainable life
science companies and deliver strong risk-adjusted returns to
shareholders.
Copies of this press release, a company results presentation,
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.
Strategic and operational review
While our portfolio companies continued to make both
pre-clinical and clinical progress during the period, we are
disappointed to report a decline in net assets to GBP1,152.8
million or 171.7p per share, a (11.4) ([6]) per cent return in the
six months (31 March 2021: net assets of GBP1,300.3 million, NAV
per share of 193.8p) and a decline in the life science portfolio
valuation to GBP617.9 million, a (21.3) per cent return ([7]) in
the six months (31 March 2021: GBP722.1 million, 11.8 per cent
return). Performance has been predominantly driven by the decline
in the share prices of two of our listed holdings, Achilles and
Freeline. In the case of Freeline, in addition to a softening of
broader market sentiment towards gene therapies, the COVID-19
pandemic has led to operational challenges which the company has
now addressed, whilst in the case of Achilles, there has been share
price depreciation that we believe has been driven by broader
market sentiment surrounding cell therapies, despite the business
continuing to execute in line with its expected timeline.
We remain confident and focused on long-term value creation for
our shareholders. The Syncona team has been proactive and moved
decisively to support our companies in addressing any issues that
have arisen. We believe our companies, which are built around
highly innovative science and stewarded by world-class management
teams, are well-positioned to deliver on their upcoming key
milestones.
Hands-on, active engagement with the portfolio
A core part of the Syncona model is to take a hands-on,
partnership approach to building our companies and supporting them
as they navigate the complexities and risks of clinical
development. This discipline and our strong relationships with the
management teams of our companies continued to be critical as we
navigated the last 6-12 months, where Autolus has moved to focus on
its AUTO1 programme for adult ALL and Freeline has been working to
re-initiate its clinical programmes which have been impacted by the
COVID-19 pandemic. Whilst the exact nature of the challenges our
companies have faced were impossible to predict, these types of
challenges are expected in our asset class, where assessing and
managing risk is at the core of everything we do. Our team has a
wealth of experience and expertise which means we know how to
respond to these challenges and collaborate with our portfolio
companies to support them in managing these effectively.
Optimising our financing approach
In light of the performance of our listed holdings, we have also
further reviewed our approach to how our companies finance
themselves. To date, our approach to building companies has
provided them with the ability to access NASDAQ, enabling them to
access capital at an appropriate scale. We have reviewed our
experience and the varying approaches some of our companies have
taken to accessing NASDAQ, assessing where we can improve and
optimise our approach to manage the volatility that has been seen,
whilst continuing to ensure our companies are funded at scale.
Our financing approach will now involve supporting our companies
to take one of two core strategies:
-- Bringing external investors in early (before the point of
clinical validation) to provide capital at scale, ensuring Syncona
maintains a significant ownership position in the company whilst
providing the company with a broader set of supportive investors
(including the public market as an option)
-- Funding to be provided by Syncona on a sole basis to the
point of clinical validation; beyond this point, a risk-based
decision will be made as to whether to maintain sole ownership or
syndicate to external investors (including the public market as an
option)
Ken Galbraith, our Executive in Residence, who has 30 years'
experience in biotech venture capital brings critical expertise
that will be instrumental in helping us to continue to optimise our
financing approach on an ongoing basis.
We are seeking to build and expose our shareholders to the
returns that can be generated from a balanced portfolio of 15-20
companies over the long term. We believe that this financing
approach will provide our shareholders with access to a set of
privately held, high growth life science companies and a number of
exciting, listed holdings built on our product-focused
strategy.
Our strategic capital base and attracting long-term specialist
investors to fund a maturing portfolio
Syncona maintains a strategic capital base of GBP534.9 million.
We deployed GBP50.8 million in the first half, and we continue to
expect to deploy between GBP100 million and GBP175 million this
year into our existing portfolio companies and new opportunities.
Our capital base provides us with the control and flexibility to
take a long-term approach to building our companies and allows us
to fund them over the time frames required to reach late-stage
development and approval. It also provides us with the ability to
support our companies through the volatility intrinsic to
developing clinical assets, which is critical as the portfolio
matures and the number of clinical-stage companies increases. At 30
September, Syncona had GBP103.4 million of uncalled commitments, of
which GBP96.2 million is committed to life science portfolio
companies and tranched against milestones as these companies
progress their programmes through pre-clinical and clinical
development.
More broadly, our portfolio companies are continuing to attract
substantial capital from leading, long-term investors and
companies, accessing $397.0 million ([8]) year to date with $30.0
million committed from Syncona. Post period end, Gyroscope received
a commitment of up to $60.0 million from Sanofi and Autolus
attracted a commitment of up to $250.0 million from Blackstone.
These financings validate the significant opportunity ahead for our
portfolio and we think they are testament to the quality of the
businesses that we have built. They are aligned with our optimised
approach to financing companies, as we seek to take a disciplined
approach to deploying our capital, whilst supporting our companies
to access the scale of the funding they require to maximise their
ambitions and deliver value for our shareholders.
Untapped promise of cell and gene therapy remains
Our growing and maturing portfolio is heavily enriched in cell
and gene therapies and we remain excited about these fields. The
data and impact on patients in these areas continues to be
remarkable and our companies are executing against focused pathways
to deliver products in areas of high unmet medical need. We believe
there continues to be a significant commercial opportunity in these
spaces for innovative biotech companies. As development has
continued in these fields, there have been some issues identified,
namely around safety in some approaches in the gene therapy space
and managing manufacturing complexity in cell therapy. We remain
confident that industry and regulators will collaborate to support
the safe delivery of treatments in these fields, which are often
targeting areas of extreme unmet need where therapeutic options are
either limited or non-existent. The Syncona team monitors these
issues closely and we are comfortable that our companies are
navigating these risks appropriately and are continuing to strive
to deliver safe and effective treatments for patients. Now with 10
companies in these fields, we continue to facilitate their
collaboration on these issues and apply our learnings across the
portfolio.
During the period, we made an exciting new investment in a
company at the forefront of next-generation stem cell-based
medicines, leading a $87.0 million Series A financing of Clade.
Clade has been established with the aim of discovering and
delivering scalable, next-generation, induced pluripotent stem cell
(iPSC)-derived medicines. This investment further enhances
Syncona's leading position in cell therapy with a technology and
leadership team that we think is best-in-class and moreover
diversifies our cell therapy portfolio with our first extension
into the allogeneic field.
Key value inflection points ahead and significant long-term
growth potential
Looking ahead, data is the key driver of value and risk for
Syncona, and we believe our companies are well positioned and on
track to further validate our model and strategy in the next 12
months with the potential for a rich seam of data. Five of our
portfolio companies are at clinical stage, including our three
listed portfolio companies. While not without risk, we believe that
these companies can create value as they deliver their clinical
programmes and achieve their ambitions to deliver transformational
treatments to patients.
We have shown, through our sales of Blue Earth Diagnostics and
Nightstar Therapeutics, that taking a long-term approach to
ownership that focuses on taking products to approval or beyond can
deliver significant value for shareholders. Whilst we recognise
there may be continued volatility along the way, we are focused on
managing our portfolio of companies to deliver strong risk-adjusted
returns for shareholders.
Life science portfolio review ([9])
Clinical
Gyroscope (13.3% of NAV, 54% shareholding)
-- Published further positive interim data from Phase I/II FOCUS
trial in geographic atrophy secondary to AMD; continued to enrol
Phase II trials
-- Decision made early in period to postpone IPO in light of
challenging market conditions at the proposed time of launch
Gyroscope is developing gene therapy for a leading cause of
blindness, dry age-related macular degeneration (AMD), for which
there are currently no approved treatments.
The company made strong clinical progress in the half,
continuing to dose patients in its open-label Phase I/II FOCUS
trial, which is assessing safety and dose response of GT005,
Gyroscope's investigational one-time gene therapy being evaluated
for the treatment of an advanced form of dry AMD called geographic
atrophy (GA). The business announced further interim data from this
trial at the Retina Society meeting and will share limited
additional data this month at the upcoming American Academy of
Opthalmology and Retina World Congress meetings ([10]) . The data
at Retina Society showed GT005 continues to be well tolerated, with
a high proportion of the patients treated showing sustained
increases compared to baseline in levels of Complement Factor I
(CFI), a protein that regulates the complement system -
overactivity of the complement system has been linked to dry AMD.
Gyroscope expects to continue reporting additional data from FOCUS
in CY2022. Gyroscope is currently enrolling its randomised
controlled Phase II trials, HORIZON and EXPLORE, which are
assessing the safety and efficacy of GT005 for patients with
GA.
The company took the decision in May to postpone plans for its
IPO, in light of challenging market conditions at the time. We are
confident in the potential of Gyroscope and excited about the
clinical data that continues to be generated by the business. We
were pleased to announce post-period end that Sanofi, a global
biopharmaceutical company, has committed to investing up to $60.0
million in equity of Gyroscope, validating the potential of
Gyroscope's therapies and supporting their ongoing Phase II
programmes ([11]) . We believe recent Phase III data released by
Apellis, a company also targeting the complement system to treat
GA, validates the complement system as the right mechanism for
treatment but leaves room on market for an improved therapy for
patients with a disease that currently has no treatments. In this
context, we think that Gyroscope is well-positioned to deliver on
upcoming milestones.
Autolus (8.2% of NAV, 24% shareholding)
-- Published positive durability data from lead programme of
obe-cel in adult Acute Lymphoblastic Leukaemia (ALL)
-- Announced appointment of experienced biopharma leader John H.
Johnson as Chair; Edgar Braendle further strengthened senior team
as CDO
-- Post period end, commitment of up to $250 million from Blackstone
Autolus is developing next generation programmed T-cell
therapies for the treatment of cancer with a clinical pipeline
targeting haematological malignancies and solid tumours.
During the period, the company presented encouraging data at the
European Haematology Association (EHA) Congress from its lead
programme of obe-cel in relapsed/refractory (r/r) adult ALL. This
showed a stabilisation in levels of event free survival amongst
patients suffering with adult ALL between 12 and 24 months,
providing further validation of the sustained efficacy of this
treatment, as well as favourable safety data. The company continues
to progress its pivotal trial for this treatment and will deliver
primary endpoint data from the study in mid CY2022, whilst
targeting a Biologics License Application (BLA) filing in CY2023.
The company also published data related to obe-cel in r/r indolent
B cell lymphomas (IBCL), which showed that in this setting the
therapy was well tolerated and demonstrated a favourable safety
profile.
The company continues to receive accelerated pathways for its
therapies, receiving Orphan Drug designations throughout its
clinical portfolio in the period. Additionally, the company has
signed an Option and License Agreement with Moderna, granting
Moderna an exclusive license to develop and commercialise messenger
RNA (mRNA) therapies incorporating Autolus' proprietary binders in
up to four immune-oncology targets, which we believe provides
further validation of Autolus' technology.
During the period, Syncona CEO, Martin Murphy, held the role of
Chair at Autolus, working with its Board to ensure the company
remained focused on its pivotal study whilst supporting the
business. The company appointed John H. Johnson as Chair in
September, bringing a wealth of experience from across the
biopharmaceutical industry, including commercial leadership roles
at Eli Lilly & Company, ImClone, Johnson & Johnson, and
Pfizer; Martin remains a director on the company's Board. Autolus
also strengthened its executive team, with Edgar Braendle joining
as Chief Development Officer (CDO) from Sumitomo Dainippon, where
he was Chief Medical Officer (CMO) and Global Head of
Development.
Post period end, Autolus announced a commitment of up to $250.0
million from Blackstone with an investment of $100.0 million in
equity and up to $150.0 million in product financing, of which
$50.0 million is payable upon the closing of the transaction and
the remainder payable based on certain development and regulatory
milestones. In return for this strategic investment, Autolus will
pay Blackstone a capped mid-single digit royalty based on product
revenues generated from worldwide net sales of obe-cel and
potential next generation products, with Blackstone also appointing
a representative to the Autolus board of directors. Syncona is
pleased that Autolus has been able to attract a significant
investment from Blackstone, further validating the potential of its
obe-cel product and underlining the continued interest in
autologous CAR-T cell therapies from high quality investors.
The business is now very well positioned to deliver on its
upcoming clinical milestones as it moves into a pivotal trial with
its lead programme and is funded through to the primary endpoint
data from this study.
Achilles (5.6% of NAV, 27% shareholding)
-- Continued to make progress in ongoing Phase I/IIa studies in
non-small cell lung cancer (NSCLC) and Melanoma, with trials moving
to higher dose process
-- Board strengthened by addition of Julie O'Neill
-- Well-funded with cash runway through to H2 CY2023
Achilles, a clinical-stage biopharmaceutical company developing
precision T cell therapies to treat solid tumours, continued to
make good operational progress in the half.
During the period the company enrolled its first US patient in
its ongoing Phase I/IIa study in advanced non-small cell lung
cancer (NSCLC), meaning that the study is now active and enrolling
in the US, EU and UK. The company has set out its future clinical
plans for the ongoing Phase I/II studies in NSCLC and Melanoma and
expects to begin enrolment to move the trials to its higher dose,
VELOS(TM) Process 2 manufacturing by the end of CY2021. The
business has published further data from the initial lower dose
process as part of the Society for Immunotherapy of Cancer (SITC)
conference. This data, in Syncona's view, continues to support the
company's move to the higher dose process, where we expect data in
H2 CY2022.
The company also continues to expand its Board, with Julie
O'Neill, previously Executive Vice President of Global Operations
at Alexion Pharmaceuticals, joining as a non-executive director
during the period. Whilst it has seen some share price volatility
driven by broader market sentiment towards cell and gene therapies,
we remain confident in the fundamentals of Achilles, with the
company well-funded to deliver on its clinical pipeline with a cash
runway through to H2 CY2023.
Freeline (4.2% of NAV, 45% shareholding)
-- Dosed additional patient in clinical trial for FLT190 Fabry
therapy with data from the patient showing early promising
efficacy; FLT201 in Gaucher expected to initiate trial site in
CY2021
-- Announced operational changes, extending expected cash runway
into Q1 CY2023; Michael J. Parini became CEO and Executive Director
and post period end, Pamela Foulds, MD became CMO
Freeline, our gene therapy company focused on liver expression
for a range of chronic systemic diseases, continued to progress its
clinical pipeline in the period.
Freeline has now dosed its second patient in its MARVEL-1
clinical trial for its FLT190 Fabry therapy and expects to dose an
additional patient in Q1 CY2022 and publish further data in CY2022
from the trial. The data from the second patient was in Syncona's
view, highly encouraging, with the key enzyme required to treat the
disease reaching near normal levels, enabling the patient to remain
off enzyme replacement therapy more than 16 weeks post-treatment
([12]) . Whilst the patient also experienced mild and transient
myocarditis, which was closely monitored, the patient is now
stable, and the independent data monitoring committee has proposed
the third patient be dosed the same level of dose as the second
patient with increased cardiac monitoring. We look forward to
seeing further progress from this study.
In its lead FLT180a Haemophilia B programme, Freeline has begun
enrolling in its ECLIPSE run-in study for its upcoming Phase I/II
dose-confirmation trial, which is targeting the initiation of
clinical sites in Q1 CY2022. It also expects the clinical trial
site to be live for FLT201 Gaucher programme before the end of
CY2021, entering an indication in which there is currently no
approved gene therapy. This means Freeline will have three live
clinical studies by the end of CY2021, a significant milestone for
the business.
Syncona also supported a number of operational changes during
the half, with Syncona CIO and Freeline Chair, Chris Hollowood,
working closely with the Freeline Board throughout the period to
implement these. In August, Michael J. Parini became CEO and an
Executive Director, having previously served as President and Chief
Operating Officer. Michael is an experienced executive, having
previously spent time in leadership positions at both Vertex
Pharmaceuticals and Pfizer. The company also appointed a new CMO,
Pamela Foulds, MD, a proven enterprise leader with a strong
track-record of collaboration, trial design and execution in
delivering impactful therapies to patients, who has previously
worked at Aegerion Pharmaceuticals and Biogen.
Freeline undertook a thorough review of its operational plans
during the period, re-defining its strategic priorities to
accelerate value creation, with the refined plan extending its
expected cash runway by nearly two quarters into the first quarter
of CY2023. The business is also currently evaluating whether to
extend further pre-clinical work on its Haemophilia A programme. In
his role as Chair, Chris continues to work closely with the
business on these plans and we remain positive about the potential
of the company's technology to treat a wide range of systemic
diseases.
Anaveon (1.7% of NAV, 51% shareholding)
-- Initiated lead ANV419 clinical programme and making good progress dosing patients
Anaveon is 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.
The company reached a key milestone in the period, entering the
clinic in its Phase I/II study to evaluate the safety and
tolerability of its lead ANV419 programme, dosing multiple patients
in the half and executing well. The business expects to report
initial data from the trial in Q1 CY2022, with all clinical sites
having now opened and recruitment proceeding as planned. Whilst the
IL-2 space is competitive, Anaveon's technology has the potential
to show differentiation in selectivity, safety and level of
activity based on positive pre-clinical data it has published to
date which supports further development in patients with malignant
tumours.
Pre-clinical
SwanBio (5.4% of NAV, 75% shareholding)
SwanBio is a gene therapy company focused on neurological
disorders. Its lead programme is targeting the treatment of
Adrenomyeloneuropathy (AMN), a genetic neuro-degenerative disease
affecting the spine.
During the period the company initiated a natural history study
of AMN. This observational, multinational study will prospectively
evaluate patients to assess the course of the disease, providing
valuable insights for its planned clinical trial for SBT101, its
preclinical gene therapy for the treatment of AMN. Post-period end,
the company also announced encouraging pre-clinical data in SBT101
and the company remains on track to enter the clinic with this
trial in CY2022.
Quell (3.9% of NAV, 74% shareholding)
Quell has been established with the aim of developing engineered
T-regulatory (Treg) cell therapies to treat a range of conditions
such as solid organ transplant rejection, autoimmune and
inflammatory diseases.
The business continues to remain on track to begin its Phase
I/II LIBERATE trial in Q1 CY2022, having received approval of its
Clinical Trial Application (CTA) from the UK Medicines and
Healthcare products Regulatory Agency (MHRA) post period end. This
will assess the company's lead candidate QEL-001, which is designed
to prevent organ rejection in liver transplant patients. The
company is also developing its operational capabilities in
preparation for clinical entry and for the benefit of its broader
pipeline, during the period announcing that it has entered into a
collaboration with the Cell and Gene Therapy Catapult (CGTC) to
expand Quell's clinical manufacturing capabilities within one of
the CGTC's specialist large-scale manufacturing modules, with this
adding a second good manufacturing practice (GMP) facility to
Quell's operations.
The company continues to expand its team as it progresses its
operational development, hiring Dominik Hartl, formerly Therapeutic
Area Head - Translational Medicine/Biomarkers for
Autoimmunity/Transplantation/Inflammation (ATI) at the Novartis
Institutes for Biomedical Research (NIBR), as CMO in the period.
Tracey Lodie has also now joined as Chief Scientific Officer (CSO),
bringing 20 years of experience in the biopharmaceutical industry,
most recently at Gamida Cell, where she served as CSO with
responsibility for the entire cell therapy pipeline.
Purespring Therapeutics (1.6% of NAV, 84% shareholding)
Purespring was founded by Syncona in November 2020 and is one of
the first kidney focussed AAV gene therapy companies, with the
company seeking to advance gene therapies for the treatment of
chronic renal diseases currently poorly served by existing
treatments.
Over the last year, the company has been built out at scale and
at pace. During the period, they have expanded their senior team,
with world-class recruits, Dr Ronny Renfurm, formerly Group Head of
Medical Science Nephrology at Astellas joining as CMO, and Julian
Hanak, formerly Global Head of Chemistry, Manufacturing and Control
(CMC) at Nightstar, joining as CDO. The company continues to
develop its operational plans and has established fully operational
labs and offices in less than a year. Purespring also started its
CMC activities at speed and is executing upon a manufacturing
strategy that draws upon Julian's significant expertise in gene
therapy, which will be greatly enabling for Purespring's AAV
platform. On the research front, the business is making progress
towards candidate selection with three programmes in preclinical
development whilst continuing to work successfully on its
proprietary delivery to the kidney as well as its pipeline engine
FunSel ([13]) , under the world-class leadership of CEO Richard
Francis and co-founder and CSO Professor Moin Saleem.
Neogene Therapeutics (1.0% of NAV, 9% shareholding)
Neogene is developing an engineered cell therapy product for
solid tumours based on a patient's own neoantigens. The company was
founded in 2018 around the work of world-class founders, Dr Ton
Schumacher and Dr Carsten Linnemann.
Neogene continues to attract world class leaders to the company,
appointing Brent Pfeiffenberger as Chief Operating Officer during
the period. Brent was most recently senior vice president of U.S.
Oncology at Bristol Myers Squibb and will lead and scale the
company's global business operations. The company also welcomed Han
Lee as Chief Financial Officer (CFO), with Han joining from
Arcellx, Inc, where he served as CFO. The company is delivering on
its strategic and operational plan and remains on course to file
its CTA in the Netherlands by the end of CY2021.
Clade Therapeutics (1.0% of NAV, 23% shareholding)
Syncona made a $30 million (GBP21.7 million) commitment to Clade
Therapeutics, leading a $87.0 million (GBP62.8 million) Series A
financing in the company. Clade has been established with the aim
of discovering and delivering scalable next-generation induced
pluripotent stem cell (iPSC)-derived medicines. There is vast
potential in iPSC technology, with Clade's proprietary platform
technology enabling the "cloaking" of human pluripotent stem cells,
meaning that cells can be introduced to patients whilst being
protected from the immune system, potentially allowing for
long-term persistence and the development of next-generation stem
cell-based medicine.
The business is led by a world-class operational team with Dr.
Chad Cowan, scientific co-founder of CRISPR Therapeutics and former
Associate Professor at Harvard University in the Department of Stem
Cell and Regenerative Biology holding the role of Chief Executive,
and Dr. Jim Glasheen, a co-founder of Atlanta Therapeutics and
former general partner at Technology Partners Venture Capital,
serving as Clade's Executive President and Chief Business Officer.
Also participating in the round were specialist investors including
LifeSci Ventures, Emerson Collective, and global biopharma leader
Bristol Myers Squibb. This investment marks an expansion by Syncona
into next generation stem cell-based therapeutics. The first
tranche of $15.0 million (GBP10.8 million) ([14]) has been invested
by Syncona (equal to current holding value) and Syncona will have a
22.6 per cent stake in the business at the point all current
commitments are invested.
Syncona CEO Martin Murphy will be joining the Board of the
company whilst Syncona Partner Michael Kyriakides will act as a
Board observer as it moves to the next phase in its
development.
Resolution Therapeutics (0.6% of NAV, 79% shareholding)
Resolution is a cell therapy company investigating the use of
the restorative effect of macrophages in the treatment of end stage
liver disease.
During the period the company expanded its Board, with Lisa
Bright joining as a non-executive director, bringing 30 years'
experience in biopharma, most recently on the executive team at
Intercept Pharmaceuticals Inc. Resolution continues to progress
development of its engineered macrophage cell therapy, with the
ongoing academic MATCH 2 trial of non-engineered autologous
macrophages in liver cirrhosis completing recruitment during the
period.
Drug discovery:
OMass (1.9% of NAV, 49% shareholding)
OMass is a biotechnology company identifying small molecules
against highly validated target ecosystems such as membrane
proteins or intracellular complexes. The company's unique
technology platform comprises of novel biochemistry techniques,
next generation native mass spectrometry and custom chemistry. The
company has now selected a pipeline of five candidates, with a
focus on immunological and orphan diseases. OMass' lead programme,
MC2, is targeting orphan endocrine diseases and is expected to
enter lead optimisation stage in the near future.
Life Science Investments:
Beyond our core portfolio of 12 life science companies, we have
a small number of life science investments. Post period end,
Cambridge Epigenetix (CEGX), a life sciences tools and analytics
company, raised $88.0 million in a Series D financing led by
Temasek. Given Syncona's relatively low ownership stake in the
business, we regard our holding in CEGX as an investment. In this
context, we remain supportive of the business but did not
participate in the financing round. We are, however, delighted that
they have been able to attract high quality investors to provide
further funding as they seek to deliver on their strategy, with
this financing a validation of the company's potential. The
financing round has resulted in a GBP15.4 million uplift to
Syncona's previous holding value in the company.
Next key milestones for clinical programmes at 30 September
2021
Autolus - cell therapy / oncology
AUTO1 / Adult Initial data on the Phase 1b portion of the pivotal
ALL trial to be presented at ASH in December CY2021.
Progress pivotal study and provide primary endpoint
data in mid CY2022.
------------------------------------------------------------------
AUTO1/22 / paediatric Publish clinical data in at ASH in December 2021.
ALL
------------------------------------------------------------------
AUTO4 - T cell Publish clinical data in H1 CY2022.
Lymphoma
------------------------------------------------------------------
Freeline - gene therapy / systemic diseases
Haemophilia Publish long-term durability data from Phase I/II
B dose-finding trial at ASH in December 2021.
Initiate clinical trial sites for Phase I/II dose-confirmation
study in Haemophilia B in Q1 CY2022, with interim
data expected by the end of the year
------------------------------------------------------------------
Fabry disease Dose next patient in Q1 CY2022 and publish interim
data from the programme in CY2022.
------------------------------------------------------------------
Gaucher Initiate clinical site for Phase I/II dose-finding
study in Q4 CY2021 and publish interim data from
the programme in CY2022.
------------------------------------------------------------------
Gyroscope - gene therapy / retinal diseases
FOCUS - Phase Expect to report further data in CY2022.
I/II open-label;
Geographic Atrophy
------------------------------------------------------------------
Achilles - cell therapy / oncology
Non-small cell Dosing patients in higher dose cNet therapy in first
lung cancer half of CY2022, interim data expected H2 CY2022.
------------------------------------------------------------------
Melanoma Dosing patients in higher dose cNet therapy in first
half of CY2022, interim data expected H2 CY2022.
------------------------------------------------------------------
Anaveon - biologics
Selective IL-2 Data in Phase I/II ANV419 study to be published
agonist Q1 CY2022; additional data to be published in CY2022.
----------------------------------------------------------------
Next key milestones for pre-clinical programmes at 30 September
2021
SwanBio - gene therapy / neurological diseases
Adrenomyeloneuropathy Expect to enter the clinic in CY2022.
(AMN)
--------------------------------------------------
Quell - cell therapy / autoimmune diseases
Liver transplant Phase I/II initiation of lead programme targeting
liver transplant; well-placed for clinical entry
in this programme in Q1 CY2022.
--------------------------------------------------
Life science valuation table:
Company 31 Mar Net Valuation FX 30 Sep % of Valuation Fully Focus
2021 investment change movement 2021 Group basis diluted area
in the NAV ([15]) owner-ship
period ([16]) stake
([17])
----------- ---------- --------- ------- ------- ---------- ----------- --------------
(GBPm) (GBPm) (GBPm) (GBPm) (GBPm) (%)
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Portfolio
Companies
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Clinical
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Gyroscope 150.1 - - 3.4 153.5 13.3 PRI 54 Gene therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Autolus 81.2 - 11.6 2.1 94.9 8.2 Quoted 24 Cell therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Achilles 133.1 - (70.4) 1.4 64.1 5.6 Quoted 27 Cell therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Freeline 167.9 - (121.0) 1.1 48.0 4.2 Quoted 45 Gene therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Anaveon 18.5 - - 0.7 19.2 1.7 Cost 51 Immunoncology
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Pre-Clinical
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Quell 35.1 10.1 - - 45.2 3.9 Cost 74 Cell therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
SwanBio 53.7 7.6 - 1.5 62.8 5.4 Cost 75 Gene therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Purespring 3.9 14.6 - - 18.5 1.6 Cost 84 Gene Therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Neogene 11.0 - - 0.4 11.4 1.0 Cost 9 Cell Therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Clade - 10.8 - 0.4 11.2 1.0 Cost 23 Cell Therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Resolution 7.4 - - - 7.4 0.6 Cost 79 Cell therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Drug
discovery
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
OMass 16.4 5.1 - - 21.5 1.9 Cost 49 Therapeutics
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Life Science
Investment
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
CRT Pioneer Adj Third
Fund 36.6 (1.1) - - 35.5 3.1 Party 64 Oncology
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
CEGX 1.5 15.4 - 16.9 1.5 PRI 9 Epigenetics
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Adaptimmune 5.3 - (0.1) 0.1 5.3 0.5 Quoted 1 Cell therapy
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Forcefield 0.4 2.1 - - 2.5 0.2 Cost 82 Biologics
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Total Life
Science
Portfolio 722.1 49.2 (164.5) 11.1 617.9 53.7
------- ----------- ---------- --------- ------- ------- ---------- ----------- --------------
Board activity
We are announcing today that Nigel Keen is to retire as a
Non-Executive Director with effect from 31(st) December 2021. Nigel
co-founded Syncona Partners in 2012 with Syncona CEO, Martin Murphy
and the Wellcome Trust and has been actively involved since, first
as Chairman of Syncona Partners and then as a non-executive
Director with Syncona Limited and Chairman of Syncona Investment
Management Limited. He has made an invaluable contribution to the
whole business over the last nine years as Syncona has grown from
GBP200m of commitments at foundation in 2012 to GBP1.1bn of net
assets today and retires as a Non-Executive Director with the
Company well positioned for the next stage of its development.
As previously announced at annual results, Nicholas Moss will
also step down as Non-Executive Director on 31(st) December 2021
after serving nine years on the Board. Nicholas has been working to
enable a smooth transition of responsibilities over the last five
months. From 1(st) January 2022 Virginia Holmes will take over the
role of Senior Independent Director and Gian Piero Reverberi will
take over the role of Chair of the Remuneration Committee. We would
also like to thank Nicholas for his contribution and counsel to
Syncona over nine years, including serving as Senior Independent
Director, Audit Committee Chair, and Remuneration Committee
Chair.
As set out in our Annual Report, the Board continues to seek to
recruit further high-quality Directors and has undertaken a global
recruitment search to seek new Directors with US-based life science
experience. We expect to announce an appointment to the Board in
the near future.
Audit tender update
As disclosed in the Group's 2020 and 2021 Annual Report, the
Company's Audit Committee intended to carry out a competitive audit
tender during FY2020/21 or FY2021/22. The tender process was
carried out during the first half of the current financial year and
following a recommendation from the Audit Committee, the Board have
approved that Deloitte LLP be proposed for re-appointment as its
external auditor for FY2022/23. A resolution to approve their
appointment will be proposed to shareholders at the Company's AGM
in 2022. Further details of the tender process will be provided in
the Report of the Audit Committee in the 2022 Annual Report.
Supplementary information
-- GBP832 million invested in life science portfolio since foundation in 2012
Syncona Generations of portfolio Multiple
companies
Syncona Generation 1: Autolus, 3.2x [18]
Blue Earth Diagnostics and
Nightstar
----------
Syncona Generation 2: Freeline,
Gyroscope and Achilles 0.8x
----------
Syncona Generation 3: OMass, 1.0x [19]
Resolution, SwanBio, Quell
and Anaveon
----------
Syncona Generation 4: Purespring,
Clade and Neogene 1.0x
----------
Managing risk and uncertainty around the disclosure of clinical
trial data in open-label trials
Currently, our portfolio companies are progressing 12 clinical
trials, 10 of which are open-label trials. These trials represent
both a significant opportunity and risk for each company and for
Syncona.
Open label trials 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.
However, 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.
Our portfolio companies may decide or be required to announce
publicly interim clinical trial data, for example where the company
or researchers connected with it are presenting at a scientific
conference, and we will generally also issue a simultaneous
announcement about that clinical trial data. We would also 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. We would not generally expect to otherwise announce our
assessment of interim clinical data in an ongoing trial, although
we review all such data to enable us to comply with our legal
obligations under the EU Market Abuse Regulation or otherwise.
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 2021:
https://www.synconaltd.com/media/ftofwusb/6295-syn-ar21-21-06-28-lo.pdf.
These include:
Enterprise risks:
- People in the Syncona team
- Access to capital
- Strategy and governance
- COVID-19
Portfolio risks:
- Early-stage investments
- Clinical trial and regulatory approval
- Commercialisation
- People in portfolio companies
- Capital pool
Operational risks:
- Systems and controls
Going Concern
The Company has an indefinite life. The net assets held by the
Group and within investment entities controlled by the Group
currently consist of securities and cash amounting to GBP1,152.8
million (31 March 2021: GBP1,300.3 million) of which 41.23 per cent
(31 March 2021: 41.89 per cent) are readily realisable in three
months in normal market conditions, and liabilities including
uncalled commitments to underlying investments and funds amounting
to GBP103.4 million (31 March 2021: GBP115.5 million).
The Group has considered the implications of the COVID-19
pandemic on the Group and each of its portfolio companies. Given
the experience of the past year the Group has concluded that the
impact will vary from investment to investment, with delays in
certain programmes of work (expected to be three to six months in
the majority of cases) and potential associated additional capital
requirements. This remains consistent with the assessment made on
31 March 2021. The Group has taken account of the COVID-19 pandemic
in the valuation of its investments as at period end.
Given the Group's capital pool of GBP534.9 million on 30
September 2021 the Directors consider that the Group has adequate
financial resources to continue its operations, including existing
commitments to its investments and additional capital requirements
identified in the review, for 12 months following the approval of
the Condensed Consolidated Financial Statements. Hence, the
Directors believe, having considered the impact of COVID-19, 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
Virginia Holmes, Non-Executive Director
Rob Hutchinson, Non-Executive Director
Kemal Malik, Non-Executive Director
Nicholas Moss, Non-Executive Director
Nigel Keen, Non-Executive Director
Gian Piero Reverberi, Non-Executive Director
INDEPENT REVIEW REPORT TO SYNCONA LIMITED
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 2021 which comprises the Condensed
Consolidated Statement of Comprehensive Income, Condensed
Consolidated Statement of Financial Position, Condensed
Consolidated Statement of Changes in Net Assets Attributable to
Holders of Ordinary Shares, Condensed Consolidated Statement of
Cash Flows and 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.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, 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.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with 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.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 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. 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.
Conclusion
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 2020 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. 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
St Peter Port, Guernsey
10 November 2021
SYNCONA LIMITED
UNAUDITED GROUP PORTFOLIO STATEMENT
As at 30 September 2021
% of % of % of
Group NAV Group NAV Group NAV
Fair value 30 September Fair value 30 September Fair value 31 March
GBP'000 2021 GBP'000 2020 GBP'000 2021
Life science
portfolio
Life science
companies
Achilles Therapeutics
plc 64,099 5.6 72,413 5.3 133,127 10.2
Anaveon AG 19,245 1.7 - - 18,575 1.4
Autolus Therapeutics
plc 94,926 8.2 143,705 10.5 81,180 6.2
Cambridge Epigenetics
Limited 16,913 1.5 - - - -
Freeline Therapeutics
Holdings plc 48,035 4.2 227,248 16.6 167,902 12.9
Gyroscope Therapeutics
Holdings plc 153,504 13.3 81,975 6.0 150,062 11.5
Omass Therapeutics
Limited 21,563 1.9 - - 16,436 1.3
Purespring Therapeutics
Limited 18,500 1.6 - - - -
Quell Therapeutics
Limited 45,171 3.9 - - 35,069 2.7
SwanBio Therapeutics
Limited 62,792 5.4 32,974 2.4 53,689 4.1
Companies of
less than 1%
of NAV 37,587 3.2 72,515 5.4 29,526 2.4
Total life science
companies (1) 582,335 50.5 630,830 46.2 685,566 52.7
CRT Pioneer Fund
(2) 35,523 3.1 35,761 2.6 36,576 2.8
Total life science
portfolio (3) 617,858 53.6 666,591 48.8 722,142 55.5
---------- ------------- ---------- ------------- ---------- ----------
Capital pool
investments
UK treasury bills 362,865 31.5 479,999 35.1 344,862 26.5
Legacy funds 77,070 6.7 87,457 6.4 72,366 5.6
Total capital
pool investments
(2) 439,935 38.2 567,456 41.5 417,228 32.1
---------- ------------- ---------- ------------- ---------- ----------
Other net assets
Cash and cash
equivalents (4) 112,396 9.8 165,639 12.1 199,833 15.4
Charitable donations (2,061) (0.2) (2,393) (0.2) (4,710) (0.4)
Other assets
and liabilities (15,378) (1.4) (30,543) (2.2) (34,204) (2.6)
Total other net
assets 94,957 8.2 132,703 9.7 160,919 12.4
---------- ------------- ---------- ------------- ---------- ----------
Total NAV of
the Group 1,152,750 100.0 1,366,750 100.0 1,300,289 100.0
========== ============= ========== ============= ========== ==========
(1) The fair value of Syncona Holdings Limited amounting to
GBP802,272,987 is comprised of investments in life science
companies of GBP582,334,992, investments in Syncona Investment
Management Limited of GBP5,793,776, other net assets of
GBP218,609,656 in Syncona Portfolio Limited and other net
liabilities of GBP4,465,437 in Syncona Holdings Limited.
(2) The fair value of the investment in Syncona Investments LP
Incorporated amounting to GBP363,719,588 is comprised of the
investment in the capital pool investments of GBP439,935,066, the
investment in the CRT Pioneer Fund of GBP35,523,330 cash of
GBP103,871,577 and other net liabilities of GBP215,610,385.
(3) The life science portfolio of GBP617,858,322 (30 September
2020: GBP666,591,246, 31 March 2021: GBP722,142,341) consists of
life science investments totalling GBP582,334,992 (30 September
2020: GBP630,829,763, 31 March 2021: GBP685,566,309) held by
Syncona Holdings Limited and the CRT Pioneer Fund of GBP35,523,330
(30 September 2020: GBP35,761,483, 31 March 2021: GBP36,576,032)
held by Syncona Investments LP Incorporated.
(4) Cash amounting to GBP578,591 (30 September 2020: GBP548,029,
31 March 2021: GBP13,916) is held by Syncona Limited. The remaining
GBP111,816,947 (30 September 2020: GBP165,090,943, 31 March 2021:
GBP199,819,232) 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 2021
Unaudited Unaudited
six months six months Audited
to to year
30 September 30 September to 31 March
Notes Revenue Capital 2021 2020 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income
Other income 17,114 - 17,114 12,865 19,934
Total investment
income 17,114 - 17,114 12,865 19,934
------- --------- ------------- ------------- ------------
Net (losses)/gains
on financial assets
at fair value through
profit or loss 5 - (162,884) (162,884) 122,823 58,605
Total (losses)/gains - (162,884) (162,884) 122,823 58,605
------- --------- ------------- ------------- ------------
Expenses
Charitable donations 6 2,061 - 2,061 2,393 4,710
General expenses 42 - 42 13,376 20,671
Total expenses 2,103 - 2,103 15,769 25,381
------- --------- ------------- ------------- ------------
(Loss)/profit for
the period 15,011 (162,884) (147,873) 119,919 53,158
Taxation - - - - -
(Loss)/profit for
the period after
tax 15,011 (162,884) (147,873) 119,919 53,158
======= ========= ============= ============= ============
(Loss)/earnings per
Ordinary Share 9 2.26p (24.48)p (22.22)p 18.06p 8.00p
======= ========= ============= ============= ============
(Loss)/earnings per
Diluted Share 9 2.24p (24.31)p (22.07)p 17.86p 7.93p
======= ========= ============= ============= ============
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 (loss)/profit 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 unaudited
Condensed Consolidated Financial Statements.
SYNCONA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2021
Unaudited Unaudited Audited
30 September 30 September 31 March
Notes 2021 2020 2021
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Financial assets at fair value
through profit or loss 7 1,165,993 1,391,333 1,327,946
Current assets
Bank and cash deposits 579 548 14
Trade and other receivables 5,522 7,930 10,446
Total assets 1,172,094 1,399,811 1,338,406
------------- ------------- -----------
LIABILITIES AND EQUITY
Non-current liabilities
Share based payments 8 11,658 20,117 23,505
Current liabilities
Share based payments 8 6,558 9,581 8,836
Payables 1,128 3,363 5,776
Total liabilities 19,344 33,061 38,117
------------- ------------- -----------
EQUITY
Share capital 9 767,999 767,999 767,999
Capital reserves 374,263 601,365 537,147
Revenue reserves 10,488 (2,614) (4,857)
Total equity 1,152,750 1,366,750 1,300,289
------------- ------------- -----------
Total liabilities and equity 1,172,094 1,399,811 1,338,406
------------- ------------- -----------
Total net assets attributable
to holders of Ordinary Shares 1,152,750 1,366,750 1,300,289
============= ============= ===========
Number of Ordinary Shares in
Issue 9 666,733,588 664,580,417 664,580,417
------------- ------------- -----------
Net assets attributable to
holders of Ordinary Shares
(per share) 9 GBP1.73 GBP2.06 GBP1.96
------------- ------------- -----------
Diluted NAV (per share) 9 GBP1.72 GBP2.03 GBP1.94
============= ============= ===========
The unaudited Condensed Consolidated Financial Statements were
approved on 10 November 2021.
The accompanying notes are an integral part of the unaudited
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 2021
Share Capital Revenue
Notes capital reserves reserves Total
GBP'000 GBP'000 GBP'000 GBP'000
As at 31 March 2020 (audited) 767,999 478,542 - 1,246,541
Total comprehensive income
for the period - 122,823 (2,904) 119,919
Transactions with shareholders:
Share based payments - - 290 290
As at 30 September 2020
(unaudited) 767,999 601,365 (2,614) 1,366,750
======== ========= ========= =========
Total comprehensive loss
for the period - (64,218) (2,543) (66,761)
Transactions with shareholders:
Share based payments - - 300 300
As at 31 March 2021 (audited) 767,999 537,147 (4,857) 1,300,289
======== ========= ========= =========
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
(unaudited) 767,999 374,263 10,488 1,152,750
======== ========= ========= =========
The accompanying notes are an integral part of the unaudited
Condensed Consolidated Financial Statements.
SYNCONA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 30 September 2021
Unaudited Unaudited
six months six months
to to Audited year
30 September 30 September to 31 March
Notes 2021 2020 2021
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
(Loss)/profit for the period (147,873) 119,919 53,158
Adjusted for:
(Gains)/losses on financial
assets at fair value through
profit or loss 5 162,884 (122,823) (58,605)
Movement in share based payment
provision (14,722) 4,262 6,374
------------- ------------- ------------
Operating cash flows before
movements in working capital 289 1,358 927
Decrease/(increase) in other
receivables 4,924 1,201 (1,315)
(Decrease)/increase in other
payables (4,648) (2,028) 385
------------- ------------- ------------
Net cash generated from/(used
in) operating activities 565 531 (3)
------------- ------------- ------------
Net increase/(decrease) in
cash and cash equivalents 565 531 (3)
Cash and cash equivalents at
the beginning of the period 14 17 17
------------- ------------- ------------
Cash and cash equivalents at
the end of the period 579 548 14
============= ============= ============
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 unaudited
Condensed Consolidated Financial Statements.
SYNCONA LIMITED
CONDENSED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
For the period ended 30 September 2021
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").
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 2021 and shall form the basis
of the 2022 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 found,
build and fund companies in innovative areas of healthcare,
consists of financial information reported at the Group level. The
Capital pool is fundamental to the delivery of the Group's strategy
and performance 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 2021,
which have been prepared in accordance with International Financial
Reporting Standards ("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 10 November 2021. 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
predominantly of securities and cash amounting to GBP1,152.8
million (30 September 2020: GBP1,366.8 million, 31 March 2021:
GBP1,300.3 million) of which 41.23% (30 September 2020: 53.6%, 31
March 2021: 41.89%) are readily realisable within three months in
normal market conditions, and liabilities including uncalled
commitments to underlying investments and funds amounting to
GBP103.4 million (30 September 2020: GBP87.1 million, 31 March
2021: GBP115.5 million).
Given the experience of the past year the Group has concluded
that the impact of the COVID-19 pandemic on each investment and the
portfolio company will vary with delays in certain programmes of
work (expected to be 3 to 6 months in the majority of cases) and
potential associated additional capital requirements. This remains
consistent with the assessment made at 31 March 2021. The Group has
taken account of the COVID-19 pandemic in the valuation of its
investments at the period end. Given the Group's capital pool of
GBP534.9 million (30 September 2020: GBP700.1 million, 31 March
2021: GBP578.2 million) the Directors consider that the Group has
adequate financial resources to continue its operations, including
existing commitments to its investments and additional capital
requirements identified in the review, for 12 months following the
approval of the financial statements. Hence, the Directors believe,
having considered the impact of COVID--19, 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 2021, 30
September 2020 and 31 March 2021, 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 2021.
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 life science investments, the investment in
the CRT Pioneer Fund, the Partnership's private equity investments
(legacy funds) 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
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. The Company has analysed the impact of the
COVID-19 pandemic on the portfolio companies through a bottom-up
review and does not consider that any COVID-19 revaluations are
required, however the final impact of the pandemic is not yet
certain and may have effects on the portfolio companies that have
not been anticipated. Accordingly, the amounts ultimately realised
may differ from the fair value and these differences may be
material. The accounting policy for all investments is described in
note 2 of the Annual Report and Accounts and the fair value of all
investments is described in note 12. Sensitivity to a 25% movement
in the valuation of private company investments is included in note
12. The range of 25% (September 2020: 20% March 2021: 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 and that typically
trigger value enhancement (or deterioration if not achieved)
include the generation of substantial clinical data.
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 2021 2020 2021
% interest % interest % interest
Subsidiary of business Principal 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 31 March
Principal
place 2021 2020 2021
Principal % interest % interest % interest
Indirect subsidiaries of business Immediate 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 Investment United Syncona Holdings Portfolio
Management Limited Kingdom Limited management 100% 100% 100%
Forcefield Therapeutics United Syncona Portfolio
Limited Kingdom Limited Gene therapy 86% -% 47%
SwanBio Therapeutics United Syncona Portfolio
Limited States Limited Gene therapy 76% 83% 76%
Purespring Therapeutics United Syncona Portfolio
Limited Kingdom Limited Gene therapy 76% -% 65%
Quell Therapeutics United Syncona Portfolio
Limited Kingdom Limited Cell therapy 73% 74% 83%
Resolution Therapeutic
Limited (formerly
Syncona Collaboration United Syncona Portfolio
(E) Limited) Kingdom Limited Cell therapy 66% 37% 66%
Gyroscope Therapeutics United Syncona Portfolio
Holdings plc Kingdom Limited Gene therapy 59% 81% 59%
Freeline Therapeutics United Syncona Portfolio
Holdings plc Kingdom Limited Gene therapy 53% 52% 53%
Omass Therapeutics United Syncona Portfolio
Limited Kingdom Limited Small molecule 51% 49% 49%
Syncona Portfolio
Anaveon AG Switzerland Limited Biologics 50% 41% 50%
Indirect interests in associates
Unaudited Unaudited Audited
30 September 30 September 31 March
Principal
place 2021 2020 2021
Principal % interest % interest % interest
Indirect associates of business Immediate parent activity (1) (1) (1)
Azeria Therapeutics United Syncona Portfolio In voluntary
Limited Kingdom Limited liquidation 34% 34% 34%
Autolus Therapeutics United Syncona Portfolio
plc Kingdom Limited Cell therapy 27% 27% 28 %
Clade Therapeutics United Syncona Portfolio
Inc States Limited Cell therapy 20% -% -%
Achilles Therapeutics
plc (formerly Achilles United Syncona Portfolio
Therapeutics Limited) Kingdom Limited Cell therapy 27% 51% 27%
(1) Based on undiluted issued share capital and excluding the
Management Equity Shares ("MES") issued by Syncona Holdings Limited
(see note 8).
5. NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH
PROFIT OR LOSS
The net (losses)/gains 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
to to Audited year
30 September 30 September to 31 March
Notes 2021 2020 2021
GBP'000 GBP'000 GBP'000
Net (losses)/gains from:
The Holding Company 5.a (154,936) 124,232 60,551
The Partnership 5.b (7,948) (1,409) (1,946)
(162,884) 122,823 58,605
============= ============= ============
5.a Movements in the Holding Company:
Unaudited Unaudited
six months six months
to to Audited year
30 September 30 September to 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Expenses (44) (45) (89)
Movement in unrealised (losses)/gains
o n life science i n vestments
at fair value through profit or
loss (154,892) 124,277 60,640
Net (losses)/gains on financial
assets at fair value through profit
or loss (154,936) 124,232 60,551
============= ============= ============
5.b Movements in the Partnership:
Unaudited Unaudited
six months six months
to to Audited year
30 September 30 September to 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Investment income 11 55 117
Rebates and donations 225 (11) 18
Other income - - 53
Expenses (120) (141) (273)
Realised (losses)/gains on financial
assets at fair value through profit
or loss (690) 6,235 33,479
Movement in unrealised gains/(losses)
on financial assets at fair value
through profit or loss 8,818 7,073 (10,740)
Gains/(losses) on foreign currency 922 (1,755) (4,666)
------------- ------------- ------------
Gains on financial assets at fair
value through profit or loss 9,166 11,456 17,988
Distributions (17,114) (12,865) (19,934)
------------- ------------- ------------
Net losses on financial assets
at fair value through profit or
loss (7,948) (1,409) (1,946)
============= ============= ============
6. CHARITABLE DONATIONS
For the year ended 31 March 2022, 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, 0.15% to be donated to
The Institute of Cancer Research and 0.20% to be donated to The
Syncona Foundation, and these donations are made by the General
Partner. There were no changes in the percentages from 30 September
2020 and 31 March 2021.
During the period, charitable donations expense amounted to
GBP2,060,805 (30 September 2020: GBP2,392,865, 31 March 2021:
GBP4,710,217 ). As at 30 September 2021, GBP2,060,805 (30 September
2020: GBP2,392,865, 31 March 2021: GBP4,710,217 ) remained
payable.
7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Unaudited Unaudited Audited year
30 September 30 September 31 March
Notes 2021 2020 2021
GBP'000 GBP'000 GBP'000
The Holding Company 7.a 802,273 1,019,129 956,279
The Partnership 7.b 363,720 372,204 371,667
1,165,993 1,391,333 1,327,946
============= ============= ============
7.a The net assets of the Holding Company
Unaudited Unaudited Audited year
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Cost of the Holding Company's investment
at the start of the period 494,810 493,310 493,310
Purchases during the period - 1,500 1,500
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 311,928 528,696 465,891
------------- ------------- ------------
Fair value of the Holding Company's
investments at the end of the period 806,738 1,023,506 960,701
Other current liabilities (4,465) (4,377) (4,422)
Financial assets at fair value
through profit or loss at the end
of the period 802,273 1,019,129 956,279
============= ============= ============
7.b The net assets of the Partnership
Unaudited Unaudited Audited year
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Cost of the Partnership's investments
at the start of the period 418,472 682,750 682,750
Purchases during the period 363,641 677,160 1,075,333
Sales during the period (344,872) (810,000) (1,340,000)
Return of capital (1,527) (6,073) (33,090)
Net realised (losses)/gains on
disposals during the period (690) 6,235 33,479
------------- ------------- ------------
Cost of the Partnership's investments
at the end of the period 435,024 550,072 418,472
Net unrealised gains on investments
at the end of the period 44,150 53,145 35,332
------------- ------------- ------------
Fair value of the Partnership's
investments at the end of the period 479,174 603,217 453,804
Cash and cash equivalents 103,872 156,640 189,440
Other net current liabilities (219,326) (387,653) (271,577)
Financial assets at fair value
through profit or loss at the end
of the period 363,720 372,204 371,667
============= ============= ============
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
2021.
The total cost recognised within general expenses in the
Condensed Consolidated Statement of Comprehensive Income is shown
below:
Unaudited Unaudited
six months six months
to to Audited year
30 September 30 September to 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Charge related to revaluation of
the liability for cash settled
share awards (5,665) 8,541 10,561
Total (5,665) 8,541 10,561
============= ============= ============
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:
Unaudited Unaudited Audited year
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Share based payments - current 6,558 9,581 8,836
Share based payments - non-current 11,658 20,117 23,505
Total 18,216 29,698 32,341
============= ============= ============
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
2021. Key inputs described in note 2 of the Annual Report and
Accounts have been determined based on internally generated data as
at 30 September 2021. 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
2021 was GBP2,710,500 (30 September 2020: GBP2,656,000, 31 March
2021: GBP2,907,000 ). An award was made on 15 July 2021 at 35p per
MES.
The number of MES outstanding are shown below:
Unaudited Unaudited Audited year
30 September 30 September 31 March
2021 2020 2021
Outstanding at the start of the
period 43,873,239 41,937,713 41,937,713
Issued 7,744,257 5,400,902 5,902,624
Realised (7,253,638) (3,953,906) (3,953,906)
Lapsed (1,153,546) - (13,192)
Outstanding at the end of the period 43,210,312 43,384,709 43,873,239
============= ============= ============
Weighted average remaining unvested
life of outstanding MES, years 1.57 1.60 1.24
Vested MES at the end of the period 40,761,540 25,051,692 38,502,646
Realisable MES at the end of the
period 10,190,406 8,114,801 9,625,668
As at 30 September 2021, if all MES were realised, the number of
shares issued in the Company as a result would increase by
4,621,710 (30 September 2020: 7,463,741, 31 March 2021: 6,177,787).
The undiluted per share value of net assets attributable to holders
of Ordinary Shares would fall from GBP1.73 to GBP1.72 if these
shares were issued (30 September 2020: GBP2.06 to GBP2.03, 31 March
2021: GBP1.96 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
2021 2020 2021
GBP'000 GBP'000 GBP'000
Ordinary share capital
Balance at the start of the period 767,999 767,999 767,999
Scrip dividend shares issued during
the period - - -
Balance at the end of the period 767,999 767,999 767,999
============= ============= =========
Unaudited Unaudited Audited
30 September 30 September 31 March
2021 2020 2021
Shares Shares Shares
Ordinary share capital
Balance at the start of the period 664,580,417 663,665,537 663,665,537
Share based payment shares issued
during the period 2,153,171 914,880 914,880
Balance at the end of the period 666,733,588 664,580,417 664,580,417
============= ============= ===========
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 earnings/(loss) per share attributable
to the Ordinary Shares of the Company are based on the following
data:
Unaudited Unaudited
six months six months
to to Audited year
30 September 30 September to 31 March
2021 2020 2021
(Loss)/earnings for the purposes
of (loss)/earnings per share GBP(147,873,000) GBP119,919,000 GBP53,158,000
Basic weighted average number of
shares 665,486,396 664,050,487 664,314,726
Basic revenue earnings/(loss) per
share 2.26p (0.44)p (0.8)p
Basic capital (loss)/earnings per
share (24.48)p 18.50p 8.8p
Basic (loss)/earnings per share (22.22)p 18.06p 8.0p
Diluted weighted average number
of shares 670,108,106 671,514,228 670,492,513
Diluted revenue earnings/(loss)
per share 2.24p (0.43)p (0.8)p
Diluted capital (loss)/earnings
per share (24.31)p 18.30p 8.7p
Diluted (loss)/earnings per share (22.07)p 17.86p 7.9p
9.d NAV per share
Unaudited Unaudited Audited
30 September 30 September 31 March
2021 2020 2021
Net assets for the purposes of
NAV per share GBP1,152,750,142 GBP1,366,749,584 GBP1,300,287,998
Ordinary Shares in issue 666,733,588 664,580,417 664,580,417
NAV per share 172.9 205.7p 195.7p
Diluted number of shares 671,355,298 672,044,158 670,758,204
Diluted NAV per share 171.7 203.4p 193.9p
10. DISTRIBUTION TO SHAREHOLDERS
The Company may pay a dividend at the discretion of the
Board.
During the period ended 30 September 2021, the Company did not
declare or pay a dividend (30 September 2020: nil, 31 March 2021:
nil ).
11. RELATED PARTY TRANSACTIONS
The Group has various related parties: life sciences 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 with control was GBP39,668,846 (30 September 2020:
GBP55,501,037, 31 March 2021: GBP145,075,244).
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. The total amounts included for investments where the Group
has significant influence are set out below:
During the period, the total amount invested in life science
investments with significant influence was GBP10,835,801 (30
September 2020: GBP11,384,489, 31 March 2021: GBP29,767,748).
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 GBP105,464 (30 September 2020: GBP77,668, 31 March 2021:
GBP188,965) in relation to Director's fees and other fees of
GBP184,450 (30 September 2020: GBPnil, 31 March 2021:
GBP116,854).
Investment Manager
SIML, an indirectly held subsidiary of the Company, is the
Investment Manager of the Group.
For the period ended 30 September 2021 SIML was entitled to
receive an annual fee of up to 1.05% (30 September 2020: 1.05%, 31
March 2021: 1.05%) of the Company's NAV at the previous year end
per annum.
Unaudited Unaudited
six months six months
to to Audited year
30 September 30 September to 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Amounts paid to SIML 5,223 4,029 8,177
============= ============= ============
During the period, SIML received fees from portfolio companies
of GBP259,914 (30 September 2020: GBP77,668, 31 March 2021:
GBP305,819).
Company Directors
At the period end, the Company had seven Directors, all of whom
served in a Non-Executive capacity. The Directors Nicholas Moss and
Rob Hutchinson also serve as Directors of the General Partner.
Thomas Henderson resigned as Director of the Company with effect
from 3 August 2021.
Nigel Keen is Chairman of the Investment Manager and receives a
fee of GBP136,764 per annum (30 September 2020: GBP132,205, 31
March 2021: GBP133,430), payable by the Investment Manager, in
respect of his services to the Investment Manager.
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
to to Audited year
30 September 30 September to 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Directors' remuneration for the
period 210 235 386
============= ============= ============
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 2021 was GBP2,091,553 (30 September
2020: GBP2,632,809, 31 March 2021: GBP2,632,809).
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 2021, 30 September 2020 and 31 March 2021:
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
Total assets - - 1,165,993 1,165,993
======= ======= ========= =========
30 September 2020 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 - - 1,019,129 1,019,129
The Partnership - - 372,204 372,204
Total assets - - 1,391,333 1,391,333
======= ======= ========= =========
31 March 2021 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 - - 956,279 956,279
The Partnership - - 371,667 371,667
Total assets - - 1,327,946 1,327,946
======= ======= ========= =========
The investments in the Holding Company and the Partnership are
classified as Level 3 investments due to the use of the unadjusted
net asset value 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 following table presents the Holding Company's investments
by level within the valuation hierarchy as at 30 September 2021, 30
September 2020 and 31 March 2021:
Asset type Level Unaudited Unaudited Audited Valuation Significant Impact
30 September 30 September 31 March technique unobservable on
2021 2020 2021 inputs valuation
GBP'000 GBP'000 GBP'000 GBP'000
Publicly
available
share price
as at balance
Listed investments 1 212,344 379,457 387,514 sheet date n/a n/a
----- ------------- ------------- --------- -------------- ------------------ -------------
The main
unobservable
input is the
quantification
of the progress
investments
make against
internal
financing and/or
corporate
milestones
Calibrated where appropriate.
price of A reasonable shift
recent investment in the Fair Value
("PRI") Calibrated of the investment
(1) 3 369,991 249,818 296,497 PRI would be +/-25%. +/- GBP92,498
----- ------------- ------------- --------- -------------- ------------------ -------------
Carrying value of
assets and
liabilities
determined in
accordance
with generally
accepted
accounting
Unadjusted principles,
net assets without
SIML 3 5,794 5,721 5,752 of SIML adjustment. +/- GBP288
----- ------------- ------------- --------- -------------- ------------------ -------------
(1) Valuation made by reference to price of recent funding
round, which may be equal to cost, unadjusted following adequate
consideration of current facts and circumstances.
During the period, there were no movements from Level 1 to Level
2 (30 September 2020: nil, 31 March 2021: nil). During the period,
there were no movements from Level 3 to Level 1 (30 September 2020:
GBP150,722,983, 31 March 2021: GBP150,722,983 and GBP94,772,653
).
The following table presents the movements in Level 3
investments of the Holding Company for the period ended 30
September 2021:
Unaudited Unaudited Audited
Life six months six months year to
science to 30 September to 30 September 31 March
investments SIML 2021 2020 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening balance 298,052 5,752 303,804 363,476 363,476
Transfer (from)/to
Level 3 - - - (150,723) (245,496)
Purchases 50,455 - 50,455 49,743 151,014
Sales - - - - (3,017)
Gains on financial
assets at fair value
through profit or loss 21,485 41 21,526 (5,402) 37,827
------------ ------- ---------------- ---------------- ---------
Closing balance 369,992 5,793 375,785 257,094 303,804
============ ======= ================ ================ =========
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 GBP21,526,000 (30 September 2020: GBP52,149,874 gain,
31 March 2021: GBP37,827,000 gain).
The following table presents the Partnership's investments by
level within the valuation hierarchy as at 30 September 2021, 30
September 2020 and 31 March 2021:
Level Unaudited Unaudited Audited Valuation Significant Impact
30 September 30 September 31 March technique unobservable on valuation
2021 2020 2021 inputs GBP'000
GBP'000 GBP'000 GBP'000
Publicly
available
price at
UK treasury balance sheet
bills 1 362,865 479,999 344,862 date n/a n/a
----- ------------- ------------- --------- ------------------- ------------------- -------------
Valuation
produced
by fund
administrator.
Legacy funds Inputs into
- fund components
Unlisted are from
fund observable
investments 2 26,643 26,356 26,098 inputs n/a n/a
----- ------------- ------------- --------- ------------------- ------------------- -------------
The main
unobservable
input include the
assessment of the
performance of the
underlying fund by
the fund
administrator.
A reasonable
Legacy funds possible
- Valuation shift in the Fair
Long-term produced Value of the
unlisted by fund instruments
investments 3 50,427 61,101 46,268 administrator would be +/-10%. +/- GBP5,043
----- ------------- ------------- --------- ------------------- ------------------- -------------
Unobservable inputs
include the fund
managers assessment
of the performance
of the underlying
investments and
adjustments
made to this
assessment
to generate the
deemed
fair value. A
Valuation reasonable
produced possible shift in
by fund the Fair Value of
administrator the instruments
CRT Pioneer and adjusted would
Fund 3 35,523 35,761 36,576 by management be +/-23%. +/- GBP3,552
----- ------------- ------------- --------- ------------------- ------------------- -------------
During the period ending 30 September 2021, there were no
movements from Level 1 to Level 2 (30 September 2020: nil, 31 March
2021: nil).
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 Limited Partnership's
administrator. The Group does not have transparency over the inputs
of this valuation.
The following table presents the movements in Level 3
investments of the Partnership for the six months to 30 September
2021, the six months to 30 September 2020 and the year to 31 March
2021:
Unaudited Unaudited
six months six months Audited
Capital to to year to
CRT Pioneer pool 30 September 30 September 31 March
Fund investment 2021 2020 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening balance 36,575 46,269 82,844 92,980 92,980
Purchases 542 445 987 2,372 5,748
Return of capital (1,594) - (1,594) (6,073) (34,491)
(Losses)/gains on financial
assets at fair value
through profit or loss - 7,429 7,429 7,583 18,607
Closing balance 35,523 54,143 89,666 96,862 82,844
=========== =========== ============= ============= =========
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
GBP7,429,000 (30 September 2020: GBP7,583,968 gain, 31 March 2021:
GBP18,607,213 gain).
13. COMMITMENTS AND CONTINGENCIES
The Group had the following commitments as at 30 September 2021,
30 September 2020 and 31 March 2021:
Unaudited Unaudited Audited year
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Life science portfolio
Milestone payments to life science
companies 96,162 76,233 106,854
CRT Pioneer Fund 4,521 6,948 4,888
Capital pool investment 2,760 3,959 3,751
------------- ------------
Total 103,443 87,140 115,493
============= ============= ============
There were no contingent liabilities as at 30 September 2021 (30
September 2020: nil, 31 March 2021: nil). 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 Board on 10 November 2021.
On 5 October 2021, SIML incorporated a 100% owned subsidiary,
SIML Switzerland AG.
GLOSSARY
Company Syncona Limited
Capital pool/Capital Capital pool investments plus cash plus less
base other net liabilities.
The underlying investments consist of cash
and cash equivalents, including short-term
(1, 3, and 6 month) UK treasury bills and
Capital pool investments legacy fixed term funds.
Company Syncona Limited.
The Cancer Research Technologies Pioneer
Fund LP. The CRT Pioneer Fund is managed
by Sixth Element Capital and invests in oncology
CRT Pioneer Fund focused assets.
General Partner Syncona GP Limited.
Syncona Limited and Syncona GP Limited are
Group collectively referred to as the "Group".
Holding Company Syncona Holdings Limited.
Investment Manager Syncona Investment Management Limited.
IRR Internal Rate of Return.
The underlying investments in this segment
are those whose activities focus on actively
developing products to deliver transformational
Life science portfolio treatments to patients.
Gross Life Science portfolio return for 30
September 2021: (21.3) per cent; 30 September
2020, 24.8 per cent; 31 March 2021: 11.8
per cent.
This is calculated as the valuation change
Li fe s cien ce portfol including FX movement as a % of the opening
io retu rn Life Science portfolio value.
A Opening Life Science Portfolio 722.14
---------------------------------------------------------------------- ---------
B Net deployed capital 49.18
---------------------------------------------------------------------- ---------
C Valuation movement (153.46)
---------------------------------------------------------------------- ---------
D Closing Life Science Portfolio 617.86
---------------------------------------------------------------------- ---------
Life Science Portfolio Life science portfolio total return
Return Calculation (C/A) (21.3%)
------------------------------------------- ---------
MES Management Equity Shares.
Net asset value ("NAV") is a measure of the
value of the company, being its assets -
principally investments made in other companies
Net asset value, net and cash and cash equivalents held - minus
assets or NAV any liabilities.
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 expressed as pence per
share. NAV takes account of dividends payable
NAV per share on the ex-dividend date.
NAV total return ("NAVTR") is the measure
of how the net asset value 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 the shareholders
NAV total return in the year.
Opening NAV per fully diluted share
(note 9) 193.9
---------------------------------------------------------------------- ---------
Closing NAV per fully diluted share
(note 9) 171.7
---------------------------------------------------------------------- ---------
Movement (22.2)
---------------------------------------------------------------------- ---------
Dividend paid in the period (note 10) -
-------------------------------------------- ---------
Total movement (22.2)
---------------------------------------------------------------------- ---------
Total movement/opening NAV per fully
NAVTR calculation diluted share (11.4)%
------------------------------------------- ---------
Partnership Syncona Investments LP Incorporated.
A Simple Rate of Return is the method used
Return for return calculations.
SIML Syncona Investment Management Limited.
The Company and its subsidiaries other than
Syncona Group Companies those companies within the life science portfolio.
The Foundation distributes funds to a range
of charities, principally those involved
The Syncona Foundation in the areas of life science and health care.
Total Shareholder Return Movement in share price plus dividends.
[1] Fully diluted , please refer to note 9 in the condensed
consolidated financial statements
[2] Alternative performance measure , please refer to
glossary
[3] FX rate for initial investment as at 11 August 2021, the
date of initial investment
[4] Includes Clade Series A financing
[5] Syncona holding will continue to be valued at Price of
Recent Investment in line with the Series C financing round and
IPEV guidelines
[6] Alternative performance measure, refer to glossary
[7] Alternative performance measure, refer to glossary
[8] See footnote 4
[9] Syncona shareholdings reported as fully diluted
[10] Details of the data presented at the Retina Society meeting
are available on the Gyroscope website . Details of the data
presented at the American Academy of Opthalmology (AAO) and Retina
World Congress (RWC) meetings will also be available on the
Gyroscope website and RWC websites 13 November and 21 November
respectively.
[11] See footnote 5
[12] Data cut-off date of 6 October 2021
[13] Purespring's unbiased in-vivo screening platform which
comprehensively screens for protective factors that could have
applications across several kidney diseases
[14] FX rate taken on date of initial investment
[15] Primary input to fair value
[16] 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
[17] 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
[18] Includes capital invested in CEGX and write off of 14MG
[19] Includes write off of Azeria
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