Syncona confident in portfolio despite fall in NAV

13th Aug 2024 11:57

(Sharecast News) - Life science investor Syncona reported significant developments in its portfolio during its first quarter on Tuesday, despite a slight decline in net assets.

The FTSE 250 company said it continued to attract substantial external capital and achieve critical clinical milestones across its maturing portfolio.

During the quarter, Syncona's net assets decreased to £1.16bn, down from £1.24bn as of 21 March, reflecting a 4.9% decline in net asset value per share.

The drop was put down to a decrease in the share price of Autolus, partially offset by valuation increases in Beacon and Forcefield, as well as gains from the capital pool and share buybacks.

It said its life science portfolio was valued at £739m, representing an 8.3% return.

Syncona deployed £23.3m into its life science portfolio and invested £11m in its share buyback programme, repurchasing 9.6 million shares at an average 38.1% discount to net asset value, resulting in a slight accretion to net asset value per share.

The firm said its strategic portfolio continued to mature, attracting significant external investments.

Notably, the Roche Venture Fund committed £10m to Forcefield's series A financing round, and Beacon raised $170m in a series B round, with Syncona contributing $42.5m.

Post-period, Syncona completed the sale of Clade to Century Therapeutics, receiving $9.3m upfront.

The company said it also increased its allocation to the share buyback programme by £20m, bringing the total to £60m, as the board viewed the current share price as a compelling investment opportunity.

Clinically, Syncona said its portfolio companies were making substantial progress.

Autolus reported positive data from its pivotal phase 1b and 2 study for obe-cel in B-cell acute lymphoblastic leukaemia, and Beacon initiated a Phase two and three trial for its X-Linked Retinitis Pigmentosa treatment.

Additionally, Resolution and Spur advanced their clinical trials for liver disease and Gaucher disease, respectively.

Looking ahead, Syncona said it planned to deploy £150m to £200m into its portfolio by March next year, excluding share buybacks.

The company said it was focussed on achieving key capital access milestones and value inflection points, which were expected to drive significant net asset value growth by the end of 2026.

Syncona said it remained well-funded to support its portfolio's growth and deliver on its potential milestones.

"Our companies continue to execute on their clinical strategies and have attracted substantial investment from external partners in the quarter, with Beacon and Forcefield raising capital from high-quality investors," said Chris Hollowood, chief executive officer of Syncona Investment Management.

"Despite both financings contributing positively to performance, these uplifts have been offset by declines in value from our quoted holdings, which have weighed on the overall life science portfolio return.

"With Anaveon entering the clinic we now have six clinical-stage companies in our strategic portfolio of 13 companies."

Hollowood said the company was "pleased" with the positive momentum across the portfolio, and was "particularly encouraged" to see Beacon treat the first patient in its phase two and three registrational trial in XLRP, from which data would form the basis of a potential regulatory filing.

"The work we have undertaken to rebalance, diversify and de-risk the portfolio means a significant amount of value is now in clinical-stage assets, and we continue to focus on allocating capital to these opportunities and those approaching clinical entry.

"All of this provides us with a platform for future growth and we are excited about the opportunity ahead, with Syncona well placed to deliver long-term returns for our shareholders and transformational treatments for patients."

At 1137 BST, shares in Syncona were down 0.83% at 117.02p.

Reporting by Josh White for Sharecast.com.