Shares in life sciences investor Syncona closed 5.5 per cent higher today after it announced the sale of its London-based gene therapy portfolio company Gyroscope Therapeutics to Novartis for up to £1.1bn.
In one of the UK biotech industry’s biggest cash exits to date, Swiss pharmaceutical giant Novartis will pay £604m now for Gyroscope, and up to a further £528m, subject to future milestones such as regulatory approvals and clinical development.
Gyroscope was co-founded by Syncona five years ago with academics from four UK universities, and now has nearly 200 employees.
It specialises in ocular gene therapy, developing treatment for eye conditions, and is currently in the midst of phase two clinical trials for the treatment of geographic atrophy, an age-related degenerative disease with no current approved treatments.
FTSE 250-listed investor Syncona said that as well as the proceeds from the cash exit, it will also benefit in future from any commercialisation of Gyroscope’s lead programme, thanks to a low single digit royalty on future sales revenue.
In the third sale of a portfolio company in the last three years, Syncona said the upfront proceeds will enable it to further expand its portfolio of investments and financially support them as they scale.
The deal is expected to deliver cash proceeds of £334m for Syncona’s holding in Gyroscope, which represents a £180m – or 27p per share – uplift on its previous valuation, and an internal rate of return of 55 per cent.
It could also generate a further £255 million for Syncona through the future milestone payments, taking the total proceeds to up to £589m.