• NAV per Share: Down 5.2% in the half-year, impacted by quoted holdings.
• Life Science Portfolio Value: Decreased by 8.8% in the half-year.
• Capital Deployment: GBP90 million deployed into the life science portfolio.
• Uplift from Private Financings: GBP25 million.
• Share Buyback Commitment: Further GBP15 million committed.
• Capital Pool: GBP352.7 million at the end of September.
• Capital Raised: GBP305.6 million in the period, with GBP170.5 million from third-party investors.
• Capital Deployment Guidance: GBP150 million to GBP200 million for the year.

• Warning! GuruFocus has detected 2 Warning Sign with LSE:SYNC.

Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Syncona Ltd (LSE:SYNC) has successfully rebalanced its portfolio towards late-stage clinical companies, which are hitting key value inflection points.
• The company has attracted significant third-party capital for its portfolio companies, evidencing the quality and potential of its investments.
• Autolus, a portfolio company, received approval for its novel CAR T-cell therapy, marking a significant achievement in the biotech sector.
• Syncona Ltd (LSE:SYNC) has committed an additional GBP15 million to a share buyback, demonstrating confidence in its portfolio and future prospects.
• The company has largely completed building its team, including the appointment of Ken Galbraith as Chair of SIML, enhancing its leadership strength.

Negative Points

• Net Asset Value (NAV) per share decreased by 5.2% in the half-year, primarily due to underperformance in quoted holdings.
• The life science portfolio value declined by 8.8% during the period, reflecting challenges in the biotech market.
• Autolus' share price declined by 43% over the period, highlighting the volatility in biotech stocks.
• The company faced capital-intensive challenges and delays in manufacturing cell therapies, impacting returns.
• Despite improvements, the financing markets remain challenging, affecting capital access for biotech companies.

Q & A Highlights

Q: What makes the PI3K delta inhibitor from iOnctura exciting, given the historical challenges with this class of drugs? A: Roel Bulthuis, Managing Partner, explained that the iOnctura molecule was developed to be a safe modulator of PI3K delta, focusing on avoiding the toxic effects seen in previous inhibitors. John Tsai, Executive Partner, added that the allosteric modulation of the drug avoids off-target effects, leading to a better safety profile and efficacy, particularly in uveal melanoma, where there is significant unmet need.

Q: How does the Slingshot initiative differ from Syncona's usual business model? A: Roel Bulthuis explained that Slingshot allows Syncona to explore single molecule opportunities that may not yet justify building a full company around. This approach provides flexibility to develop these assets and decide later whether to expand them into standalone companies or continue as single molecule opportunities.

Q: With the market improving, is Syncona done with reconfiguring its portfolio towards later-stage assets? A: Christopher Hollowood, CEO, stated that while the portfolio is now more balanced across stages, Syncona remains open to adding new opportunities that improve risk-adjusted returns. The focus is on maintaining a trajectory across all stages, ensuring future clinical companies are being built today.

Q: Why did Syncona sell part of its stake in Autolus before approval, and are there plans to sell more before commercialization? A: Christopher Hollowood explained that approval was not seen as a major re-rating event due to its high probability. The decision to sell was part of a disciplined approach to portfolio rebalancing, considering the different risk profile of a commercial launch compared to product development.

Q: What is Syncona's strategy for gene therapies, considering challenges like pricing and reimbursement? A: Christopher Hollowood highlighted the importance of distinguishing between different types of gene therapies. Syncona focuses on therapies with significant clinical impact or those addressing unmet needs, like Spur's therapy for Gaucher's disease, which offers a one-time treatment compared to ongoing enzyme replacement therapy, thus providing a strong commercial proposition.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.