Syncona taps cash mountain to pump £80m into two therapies

UK’s largest, stock market-listed life sciences fund deploys some of its £900 million cash pile into two promising start-ups developing cures for cancer and blindness.

Syncona (SYNC ), the UK’s largest, stock market-listed life sciences fund, has deployed some of its huge cash pile and pumped over £80 million into two investments.

The £1.5 billion trust was sitting on around £900 million of cash after accepting a bid for prostate cancer imaging business Blue Earth Diagnostics earlier this year.

It has now committed £35.1 million to Achilles Therapeutics, a biotech firm developing personalised cancer therapies, which Syncona funded the launch of in 2016 alongside Cancer Research Technology.

Its newest commitment to the group makes it the largest investor in a £100 million financing by Achilles, with the remainder raised from specialist global institutional investors. After the newest investment, Syncona will have a 44% stake in Achilles.

The investment will allow the healthcare firm to deliver two human proof-of-concept studies for its treatment of lung cancer and melanoma and continue expanding its manufacturing capabilities.

Martin Murphy, chief executive of Syncona Investment Management, said Achilles had made ‘strong progress’ over the past three years and he was ‘excited about its potential’.

‘There is significant opportunity for the business to develop its next generation approach to bring innovative therapies to patients in areas of high unmet need,’ he said.

Investors have seen an immediate impact of the investment, as it has translated into a £23.4 million valuation uplift in Syncona’s stake, equivalent to 3.5p per share and delivering a boost of 3.5% to the net asset value (NAV) of the portfolio.

This is good news for investors who have seen the shares slide 13% this year after two years of strong returns, with its premium over NAV more than halving since March to 20%.

Numis Securities analyst Priyesh Parmar said Achilles was now ‘well-funded’ to take its therapy into clinic in coming months.

Syncona has also invested a further £48 million inretinal gene therapy company Gyroscope Therapeutics that is treating age-related macular degeneration, which is one of the leading causes of blindness. Gyroscope’s approach is one of the first potential applications of gene therapy used outside of rare diseases. 

The trust committed the vast majority of the £50.4 million financing of the group, with the remaining money coming from Cambridge Innovation Capital, and Syncona retains an 80% stake in the business.

The investment is expected to allow the company to complete new phases of its study.

Chris Hollywood, chief investment officer at Syncona and chairman of Gyroscope, said the financing ‘further demonstrates our strategy to scale companies we have founded ambitiously so they can become global leaders in their domain’.

‘Gyroscope is an important part of Syncona’s gene therapy strategy as we seek to utilise our expertise in the area to move beyond rare diseases into more prevalent diseases and build the next generation of products,’ he said.

Parmar said after the latest funding round, Gyroscope ‘continues to be held at cost’ and has no impact on the valuation of the trust ‘which we consider appropriate given that Syncona provided the vast majority of the funding’.

 

 

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