Investor’s cash injections help biotech firms thrive
SYNCONA is a British life sciences firm with a difference. America boasts many examples of multi-billion dollar biotech businesses that have created new drugs and brought them to market. In the UK, most biotech firms vanish without trace or are sold to larger rivals before their products achieve commercial success, largely because they lack long-term funds.
Syncona aims to bridge that gap. The group was set up to create and invest in companies whose products will transform patients’ lives. Unlike most of its UK peers, however, Syncona intends to retain significant stakes in these businesses until their products are approved – and it has the firepower to do so.
Syncona has a stock market valuation of £1.4billion and the Wellcome Trust has a 37 per cent stake. The shares are 210½p and should rise this year and beyond.
Syncona was founded in 2012, after a discussion between life sciences investor Martin Murphy and Sir William Castell, former chairman of the Wellcome Trust. Both were keen to find a way to fund biotech firms for the long term – not simply to advance the UK industry but also because firms become far more valuable once their products have been fully approved by regulators.
Syncona has investments in seven enterprises, one of which, Nightstar Therapeutics, has already been listed on the US Nasdaq market, where it is valued at £290 million. Nightstar intends to help patients suffering from rare inherited eye diseases, while other firms in the Syncona portfolio cover conditions from prostate cancer to haemophilia.
Over time, Murphy hopes to build a portfolio of 20 companies, retaining sizeable stakes in each. He also pulled off a strategic deal last year, merging with the £500 million Battle Against Cancer Investment Trust. Set up by City philanthropists in 2012 this delivers low-risk returns to investors and donates to charity. Midas verdict: Syncona was founded five years ago and has already achieved considerable success. It is likely to deliver further substantial growth, and the Wellcome Trust’s presence on the share register is reassuring. At 210½p, these shares are a long-term buy. Traded on: Main Market Ticker: SYNC Contact: synconaltd.com or 020 7611 2031