
In the period, £20.2 million of shares have
been repurchased at an average discount
of 35.1% to NAV per share, resulting in an
accretion of 1.61p to NAV per share in the
year. The share buyback is ongoing, with
a further £10.0 million of shares bought
back since the period end
4
.
Over the course of the year, the Syncona
team has evolved the Company’s approach
to capital allocation, moving from focusing
on having up to three years of financing
available to ensuring Syncona is positioned
to sustainably deliver capital access
milestones, and is funded to deliver key
value inflection points, which have the
potential to deliver significant NAV growth.
As our portfolio companies continue to
mature there is increased potential to access
third party capital and liquidity, allowing
for a more dynamic approach to capital
allocation. The Board believes the evolution
in our approach retains the strategic balance
sheet that underpins the delivery of
Syncona’s long-term strategy, whilst also
allowing the Company to optimise returns
for shareholders. This Capital Allocation
Policy is covered more fully in the business
review and included in full on page 8.
EMBEDDING A NEW OPERATING MODEL
During the year, the Syncona team has
expanded its senior team and embedded
a new operating model to enable the more
efficient management of people, capital
and the Syncona portfolio. As part of this
process, in April 2023 Roel Bulthuis joined as
Managing Partner and Head of Investments,
bringing over 20 years of global life science
venture capital, business development and
investment banking experience. In May
2023, John Tsai (previously CMO at Novartis)
joined as Executive Partner, with significant
clinical, pharmaceutical and leadership
experience. Effective 1 April 2024, Rolf
Soderstrom former CFO of SIML moved to
the role of Executive Partner, where he now
supports the Leadership and Investment
Teams whilst remaining on the SIML Board
and as Chair of the Valuation Committee.
Kate Butler, former Group Finance Director
of SIML and an experienced financial leader
from a career across biotech, took up the
role of CFO of SIML. Our Executive Partner
group
5
has also expanded during the year
and is well placed to support execution
at the portfolio companies as they scale.
This is an important function for the
business and supports our proactive
portfolio management approach.
Martin Murphy stepped down as Chair
of SIML after 11 years of playing an
instrumental role in building Syncona into the
business it is today. Martin’s impact on both
the Company’s trajectory and the wider
ecosystem has been remarkable, and we
are indebted to him for his dedication and
the platform he helped us to establish. The
Board is pleased with the strategic progress
Syncona has made and with how the senior
team, now led by Chris, as CEO and Interim
Chair of SIML, is operating. A recruitment
process to appoint a new permanent Chair
of SIML is ongoing. The evolution of the team
and the model are critical to the delivery
of Syncona’s ambitious plans to achieve
£5 billion of NAV by 2032.
BUILDING A SUSTAINABLE
LIFE SCIENCE ECOSYSTEM
Since 2012, Syncona has been a key part
of changing the landscape for ambitious life
science company creation in the UK. As a
direct consequence of Syncona’s actions,
many potential therapies have been taken
from academic research into the clinic on an
industrial and scalable footing. The Board and
Syncona team are passionate about shaping
a life science ecosystem that is sustainable
and provides a platform for further success.
We contribute to this in a range of ways,
including by building companies in the UK,
funding them at scale and focusing them
on product development. The Board and
Syncona team also continuously engage
with a range of stakeholders, including
Government, industry participants, life
science property developers, charities and
regulators, to enable the scaling of a dynamic
biotech cluster in which Syncona and the
companies we build can thrive.
The Board is increasingly encouraged by the
growing cross-party public policy support
for science and innovation, and increased
investment in high-growth sectors. A key
challenge in translating science from an
academic setting and developing it into
a commercial reality is accessing the
appropriate level of capital to enable a
company to scale. We are therefore highly
supportive of the ambition behind the
Mansion House reforms. The Board and
Syncona team are committed to working
alongside the signatory pension providers and
other relevant parties as these commitments
move towards tangible proposals to
provide the scale-up capital that will take
the UK’s biotech sector to the next level.
Syncona’s positive role within the
ecosystem is also aligned with our
commitment to sustainability, which is
embedded into Syncona’s investment,
portfolio management, and business
processes. I am pleased with our continued
progress in this regard, which includes SIML
becoming a signatory of the Net Zero Asset
Managers (NZAM) initiative and completing
its first UN Principles for Responsible
Investment (PRI) submission. A full overview
of our progress in and commitment to
sustainability and responsible investment
can be found in the Sustainability Report.
OUTLOOK
Macroeconomic and geopolitical
uncertainties have created a challenging
backdrop for Syncona and our portfolio.
These conditions have impacted both the
cost of capital and financing environment
in our sector. As we move into FY2024/5,
despite the ongoing macro uncertainties,
we are cautiously optimistic given the
gradual decline in inflation and potential for
interest rate cuts. We believe improvements
in the macroeconomic environment will
create more favourable conditions for
our companies to operate in.
In the last year, the Syncona team’s
operational progress and proactive
management of the portfolio has provided
a platform for future growth. A newly
embedded operating model, expanded
team, and evolved Capital Allocation Policy
underpinning our disciplined approach
to managing our balance sheet, mean
Syncona is well positioned to take advantage
of market conditions as they improve.
With three companies added to the
portfolio during the year, including one at
clinical stage, we are on track to deliver
on our 10-year targets which were set out
in November 2022:
–
Three new companies created or added
to the portfolio per year
–
This target has been updated to reflect
that we will both create companies from
highly innovative science and invest
in existing companies at clinical stage
–
Delivering three to five companies to
late-stage development where we are
significant shareholders
–
Building a portfolio of 20-25 life science
companies
The Board remains focused on overseeing
and supporting the Syncona team with
delivery of our long-term strategy to
create, build and scale a portfolio of
20-25 leading life science companies and
organically grow net assets to £5 billion by
2032. Together, the Board and Syncona
team remain committed to these targets
and to delivering medium and long-term
growth for our shareholders.
Melanie Gee
Chair
Syncona Limited
19 June 2024
STRATEGIC REPORT
SYNCONA LIMITED
ANNUAL REPORT AND ACCOUNTS 2024
05