Syncona (SYNC ) is hoping a refocus on later-stage life sciences assets will be a cure for poor performance that included the near halving in the value of its SwanBio stake.

Full-year results for the year to the end of March reported a 4.1% decline in net asset value to 187p per share against a ‘challenging market backdrop’. Falls in the listed investments within the £983m fund dragged the life sciences portion of the portfolio 14% lower to be valued at £605m.

Autolus, which creates cell therapies for cancer patients, gene therapy group Freeline, and cancer treatment provider Achilles Therapeutics – all of which are Nasdaq listed – wiped £78m off Syncona’s value as their share prices faltered in the sell-off in growth stocks. Added to this was a £51m partial write-down of neurological gene therapy company SwanBio, which saw its value almost halve to £58m.

Syncona Investment Management chief executive Chris Hollowood said he still believes in SwanBio’s gene therapy for adrenomyeloneuropathy, which causes problems in the spine and muscles.

‘SwanBio’s management team has taken the strategic decision to restructure the pipeline and have chosen to focus on its lead programme,’ Hollowood said.

‘As part of our valuation process, we have recognised that the company is now driving forward one programme, rather than a pipeline of programmes.’

He said Syncona will ‘work closely’ with SwanBio as it generates data from its tests but noted the challenging financing environment means SwanBio has ‘not executed a third-party financing to date’.

‘We are, therefore, working on a range of financing and strategic options for the company in parallel,’ said Hollowood.

The struggles faced by early-stage companies such as SwanBio have led Hollowood to reassess the fund’s strategy, and he is now ‘navigating our companies through the clinical pathway to late-stage where we believe significant value can be accessed’.

SwanBio was not the only investment that created a ‘difficult decision’ for Hollowood, who noted that he has also been working with the management of Freeline to ‘streamline its pipeline of programmes, executing the sale of its manufacturing facility and focusing on its Gaucher programme where it has a potential first-mover advantage’.

He ploughed cash into Autolus as part of a $163.9m financing and the business is now funded into 2025 as it approaches the file date with the US Food and Drug Administration for its obe-cel therapy later this year, which Hollowood said is a ‘key milestone’.

Within this difficult funding environment for life sciences, there have been some bright spots, including the sale of Neogene to AstraZeneca (AZN) for up to £261m, marking the fourth sale of a Syncona company in the past four years.

Hollowood said late-stage companies are starting to attract the interest of big pharma and ‘assets with strong clinical data [are] being acquired at attractive multiples’.

He said valuations for late-stage companies are also improving and the fund has seen progress across the portfolio, with ‘16 clinical data read-outs, seven financings, and a further three post-period end, including one significant pharma investment’.

Hollowood said changes to the fund have provided ‘increased resilience in the current market conditions as well as a platform to drive growth’.

‘We believe our focus on building companies to late-stage development alongside our balance sheet strength will ultimately enable us to deliver strong risk-adjusted returns for our shareholders over the long term, driving transformational impact for patients,’ he said.