Syncona (SYNC)

Syncona (LON:SYNC) founds, builds, and funds life science companies, seeking to build a relatively concentrated/high conviction portfolio of up to 15-20 companies. It aims to invest at a very early stage, partnering with academics and takes a long-term approach, seeking to maintain a majority equity stake over a company’s development. SYNC has the flexibility to run winners, such that the portfolio can be very concentrated.

The majority of SYNC’s companies will be located in the UK or Europe, which the managers see as rich ground for life science innovation and enabling for their operationally intensive, partnership approach to building portfolio companies. A key part of the strategy is that SYNC aims to start investments small (which reduces the financial risk) and add to investments as businesses progress and ‘de-risk’.

Since 2016, SYNC has had some strong successes. The portfolio is currently dominated by two listed holdings (Freeline and Autolus), with one other holding (Achilles) having announced it intends to float. In the interim results presentation, the managers highlighted three companies that were approaching the start of clinical trials: Quell, SwanBio and Anaveon, which represents the springboard for value accretion (assuming the trials are successful).

Given a majority of the portfolio companies are expected to absorb capital for the foreseeable future, one of SYNC’s core strengths is its balance sheet. Of total assets of c. £1.3bn, around 43% represented by cash.