LONDON: Syncona Ltd has signed an agreement for the sale of its portfolio company Clade Therapeutics to Century Therapeutics for $45 million.
Century is a biotechnology company developing induced pluripotent stem cell (iPSC)-derived cell therapies.
Syncona committed $30 million to Clade in August 2021 alongside a syndicate of specialist investors as part of a $87 million Series A financing.
Since its foundation, Clade has made significant scientific progress.
The company requires significant capital to progress to the clinic and despite the positive scientific progress to-date as well as the potential of its technology, access to significant third-party capital has been challenging, in line with the broader market conditions for pre-clinical biotechnology companies.
Against this challenging market backdrop, Syncona has prioritised capital allocation to its assets that can deliver clinical data in the near term.
Alongside this, Syncona has also worked with its portfolio companies to widen financing syndicates, streamline pipelines and budgets, and explored creative financing solutions and consolidations.
The sale of Clade to Century is in line with this approach.
The total potential consideration of up to $45 million (£35.9 million) includes up-front consideration of $35 million (£27.9 million) in a combination of cash and shares in Century.
Future milestones have the potential of generating further consideration and if received in full will result in a further $10 million (£8.0 million) in consideration.
For its 22% ownership position in Clade, Syncona anticipates up-front consideration at closing to be $9.3 million (£7.4 million), an estimated £16.1 million write down from the 31 December 2023 valuation of £23.5 million.
Chris Hollowood, CEO of Syncona Investment Management Limited, said: “Against a challenging market backdrop over the last 18 months, Syncona has prioritised capital allocation towards assets that can achieve clinical data in the near term.
The sale of Clade to Century is in line with this approach. Since we invested in Clade in 2021, the team has made significant progress developing its differentiated pre-clinical technology.
The market conditions the company has faced have meant that it has been increasingly important for Clade to access broader capabilities and improve capital efficiency to take their technology forward.
This transaction enables this and we would like to congratulate them on this achievement.
We look forward to redeploying the proceeds and our resource in line with our capital allocation focus to maximise value for shareholders as we emerge from the current market conditions.”