Shares in Syncona top the this morning, back flirting with turn-of-the-month record highs. This comes after confirmation that it will IPO (in the US, today) one of its portfolio companies, Autolus Therapeutics (AUTL: T-cell cancer treatments), at the very top end of the  $15-17 offer range. The IPO (22% stake sale) will generate $150m proceeds for AUTL and boosts the value of SYNC’s shareholding by a significant 80%. SYNC will retain a 33.8% stake, having agreed to invest $24m in the IPO, maintaining the long-term interest it favours in its holdings.

Also trading higher by 3.5% on this news is Neil Woodford’s Patient Capital investment vehicle (WPCT) which thankfully owns a 15.9% stake in AUTL. Having had a tough time of it recently, dented by a series of unfortunate profit warnings, he announces some rare good news with the IPO boosting the value of his investment in the company by 51%, a valuable 3.2p increase on Thursday’s NAV. This also vindicates his preference for early-stage investing, although he likely needs several more of these to make up for the pain his shareholders have had to endure (shares -24% since April 2015 IPO; -27% since July 2017 highs; volatile 2018).

However, these valuation increases are paper profits only. The fate of one therapeutics company’s shares does not necessarily have read-across to other, but sceptics may point to SYNC’s other recent US IPO – Nightstar Therapuetics. Its shares may well have popped from its IPO price of $14 to close at $24 (+71%) when it listed late last September, but they have since fallen back to trade below $15 since last December, only recently breaking higher after a favourable FDA response.

But SYNC shares haven’t been bothered in the slightest; +130% since late 2012’s IPO, accelerating since January 2017, and +33% since the Nightstar IPO in-spite of the latter’s troubled post-listing performance. More in the pipeline?

Mike van Dulken, Head of Research, 22 Jun 2018