Syncona : Final Results for the period ending 31 March 2023

Syncona Limited

Full Year Results for the 12 months ended 31 March 2023

Strong progress delivering evolved strategy and growth targets with four new companies added to the

portfolio

Decisive and proactive action across the portfolio against a challenging market backdrop

Small NAV decline in the year driven by decline of our listed holdings and partial write down of SwanBio

Therapeutics

15 June 2023

Syncona Ltd, (the "Company"), a leading healthcare company focused on creating, building and scaling a portfolio of global leaders in life science, today announces its Annual Results for the 12 months ended 31 March 2023.

Financial performance

• Net assets of £1,254.7 million (31 March 2022: £1,309.8 million); 186.5p per share (31 March 2022:
  194.4p1 per share), a NAV return of (4.1)%2 (31 March 2022: 0.3%)
• £177.2 million deployed3 into both new and existing portfolio companies in line with disciplined approach to capital allocation4
• Against a challenging market backdrop, the life science portfolio is valued at £604.6 million (31 March 2022: £524.9 million) delivering a (14.3)% return5
  o £28.2 million in valuation uplifts across the portfolio, including £15.9 million from deferred consideration related to Beacon Therapeutics' (Beacon) AGTC-501 potential product in X-Linked Retinitis Pigmentosa (XLRP)
  o £26.5 million gain from positive foreign exchange movements
  o Outweighed by a £77.9 million6 decline in the valuation of our listed life science holdings, driven by macro conditions as well as company specific challenges and the partial write down of our holding in SwanBio Therapeutics (SwanBio) to £58.2 million, a £51.0 million decline in value7, reflecting change in strategy to focus solely on its lead programme
  o Remaining private portfolio companies are making positive progress and are funded to their next key milestones
• Capital pool8 of £650.1 million (31 March 2022: £784.9 million)

Chris Hollowood, CEO of Syncona Investment Management, said: "Earlier this financial year, we set out an ambitious plan to organically scale the business to £5 billion of net assets within 10 years. At the heart of this is improving shareholder returns. Growing the asset base will allow us to operate our model at scale, driving balance sheet efficiency and enabling enhanced risk-adjustedreturns.

Navigating our companies through the clinical pathway to late-stage where we believe significant value can be accessed is particularly important in the current environment. In the short term, however, it is important that our strategy addresses the near-term challenges from the macroeconomic environment where there have been dramatic changes to the cost and access to capital. We have undertaken a thorough review of

1. Fully diluted, please refer to note 14 in the financial statements. Alternative performance measure, please refer to glossary
2. Alternative performance measure, please refer to glossary
3. See footnote 2
4. Gross capital deployed figure also includes impact of drawdowns into the CRT Pioneer Fund
5. See footnote 2
6. Excluding the impact of FX
7. SwanBio has been partially written down by £51.0 million; valuation also accounts for £30.6 million of capital deployed, as well as impact of convertible loan and excludes FX
8. Please see glossary for definition

the portfolio focusing our portfolio companies' pipelines on the most promising advanced assets, widening financing syndicates and executing on strategic transactions. We believe these steps balance the need to focus Syncona's capital on the assets with the potential to drive attractive risk-adjusted returns, reach late- stage development and deliver near-term growth. We will continue to grow the portfolio through the addition of the next wave of cutting-edge biotech companies which will drive the forefront of the industry in the future.

Whilst we expect conditions to improve over the medium term with valuations already improving for late- stage assets, we have taken decisive action across the portfolio to navigate the current period, take advantage of these conditions where possible and build a wave of new companies to drive longer term sustainable growth. However, the action taken across the portfolio, coupled with the challenging market environment has contributed to a reduction in net assets, with our listed companies' share prices declining and SwanBio being partially written down.

More broadly, however, we have seen positive progress across the portfolio with 16 clinical data read-outs, seven financings, and a further three post-period end, including one significant pharma investment. Syncona's portfolio is increasingly diversified with a number of near-term value drivers, particularly from our late clinical stage companies.

I am also pleased with the changes we have made to our organisational structure and the corresponding expansion of the team. The proactive approach we have taken to portfolio management combined with these improvements will provide increased resilience in the current market conditions as well as a platform to drive growth. We believe our focus on building companies to late-stage development alongside our balance sheet strength will ultimately enable us to deliver strong risk-adjusted returns for our shareholders over the long term, driving transformational impact for patients."

Leveraging expert capital sources to fund companies to deliver key milestones

• Portfolio companies raised £394.3 million during the year with Syncona committing £176.9 million o £230.5 million of funding in the year raised by late-stage assets Beacon and Autolus
  Therapeutics (Autolus)
• Seven financings during the year and a further three post-period end9
  o Includes a significant pharma investment from AstraZeneca in Quell Therapeutics (Quell) o Portfolio companies funded to deliver next key milestones
• Neogene Therapeutics (Neogene) sold to AstraZeneca, the fourth sale of a Syncona portfolio company, taking total potential sales proceeds generated from the portfolio to £1.2 billion10

Addition of four new companies to the portfolio; acquiring a late-stage asset and investing in early- stage science alongside strategic partners

• Acquired a late-stage asset in Applied Genetics Technologies Corporation (AGTC) for an initial investment of $23.3 million
  o As part of the transaction, Syncona is set to benefit from any future commercialisation of the lead asset AGTC-501 via a "deferred consideration" which provides the right to a mid-single digit percentage of future income from sales and licensing
• Creation of retinal gene therapy, Beacon, with two pre-clinical programmes including one in-licensed from the University of Oxford
• Combination of Beacon with AGTC in a £96.0 million Series A financing alongside strategic partner Oxford Science Enterprises (OSE)
  o Focuses capital on late-stage opportunities, leverages operating synergies and enables combined cost savings

1. Post period end financings include $12.0 million additional commitment to SwanBio, along with OMass additional investment from BPC and Quell-AstraZeneca collaboration
2. Since 2012, includes potential full receipt of milestones from sales of Gyroscope and Neogene

• Investment in Kesmalea Therapeutics (Kesmalea), a small molecule drug discovery platform, and Mosaic Therapeutics (Mosaic), an oncology therapeutics company, alongside strategic co-investors OSE and Cambridge Innovation Capital (CIC), maintaining the core Syncona model whilst diversifying financial risk

Decisive and proactive action across the portfolio to navigate a challenging market backdrop

• Post-periodend, SwanBio has taken the strategic decision to focus on its lead programme, SBT101 in adrenomyeloneuropathy (AMN)
  o Syncona continues to believe in the potential impact of gene therapy to treat patients with
  AMN
  o The Company has provided further funding to enable the business to generate safety data from the initial dose cohort of the SBT101 programme
  o In parallel, given that the financing environment for early-stage companies remains challenging, Syncona will be working with the company to explore all financing and strategic options for the business
• Freeline Therapeutics (Freeline) has taken the decision to prioritise the development of its FLT201 Gaucher programme and implemented operational efficiencies to extend its cash runway to Q2 CY2024

Strong clinical and operational progress across the portfolio

• 16 clinical data read-outs and five clinical trials commenced including two companies entering the clinic:
  o Autolus announced that it had met its primary endpoint in its FELIX pivotal study for its lead obe-cel therapy and is approaching the filing of a Biologics License Application (BLA) in H2 CY2023
  o Beacon's lead Phase II programme in XLRP has orphan drug designations from both the US
  Food and Drug Administration (FDA) and the European Commission, with 12-month data from the trial expected in H2 CY2023
  o SwanBio dosed first patient in its lead programme SBT101 post period end
• Positive operational progress with key milestones achieved:
  o Key senior hires made across the portfolio, including CEO appointments of industry leaders at new companies Mosaic (Brian Gladsden) and Beacon (David Fellows)
  o Post-period end Autolus opened its Nucleus manufacturing facility to prepare for the commercial launch of obe-cel

Significant progress delivering on updated targets and evolved strategy

• 10-yearrolling targets updated at Interim Results, to reflect aim to build an expanded portfolio and deliver enhanced shareholder returns:
  o Create three new companies per annum, expanding the portfolio to 20-25 companies o Deliver a 15% IRR through the cycle, targeting top quartile life science returns
  o Grow the life science portfolio to drive balance sheet efficiency to ensure capital can be allocated to drive growth with the capital pool becoming a smaller proportion of NAV over time
• Good progress on evolving the team and operational model to deliver scale:
  o Chris Hollowood took up role of CEO of Syncona Investment Management Limited (SIML), with Martin Murphy moving to SIML Chair, as of 1 January 2023
  o Roel Bulthuis joined as Managing Partner and Head of Investments of SIML in April 2023, bringing over 20 years of life science venture capital, business development and investment banking experience
  o Ed Hodgkin promoted to Managing Partner with Elisa Petris and Magdalena Jonikas promoted to Lead Partner

1. Established "Launch Team", to support portfolio companies operationalise and "Executive and Advisory Group" to improve execution at portfolio companies

1. John Tsai (previously Chief Medical Officer at Novartis) joined as Executive Partner post-

period end, bringing significant clinical, pharmaceutical and leadership experience

1. Ken Galbraith (previously CEO and Chair at multiple biotechs) re-joinedpost-period end as Executive Partner bringing significant operational, financing and investment experience

Improving balance sheet efficiency for shareholders with publication of Capital Return Policy

• Syncona anticipates that shareholder returns will predominantly be driven by long-term capital appreciation
• To support our strategy, we aim to maintain three years of financing runway to fund our portfolio and our target of three new companies per annum
• If, in the event of realisations, the Company's capital pool increases significantly in excess of three year forward capital deployment guidance, and subject to an assessment of investment opportunities at the time, the Board would look to return capital to shareholders
• We will consider all forms of distribution mechanisms for capital returns, taking into account various factors including the market conditions at the time

Outlook

Capital deployment and pipeline in FY2023/4

Our balance sheet enables us to continue to invest and be opportunistic in identifying exciting opportunities, as well as support our existing portfolio through a disciplined approach. We expect to deploy £150-200 million of capital in FY2023/4. The UK continues to have a world class scientific research base, and we see a significant opportunity to found new companies across a range of modalities and therapeutic areas.

Diversified portfolio with seven clinical companies and 10 data read-outs expected by the end of the financial year, including from two late clinical companies

Positive data generated from our clinical pipeline will be a key driver of value and, while not without risk, our late-stage clinical companies have the potential to deliver significant value over the next financial year.

Late clinical companies

• Autolus expects to:
  o Progress its pivotal study in obe-cel in r/r adult ALL, with further long-term follow up data in H2 CY2023 and a BLA filing with the FDA expected in H2 CY2023
  o Announce further data from obe-cel in r/r B-NHL and CLL, obe-cel in Primary CNS, AUTO1/22 in paediatric ALL and AUTO4 in peripheral T cell lymphoma in H2 CY2023
• Beacon expects to release 12-month data from its Phase II trial in XLRP in H2 CY2023

Clinical companies

• Anaveon expects to:
  O Announce further data in its Phase I/II dose finding trial of ANV419 in solid tumours in H2 CY2023
  o Publish initial data from its Phase I/II trials of ANV419 in metastatic melanoma and multiple myeloma in CY2024
• Achilles expects to provide further data from the higher dose clinical cohorts of the Phase I/IIa clinical trials of its cNeT therapy in NSCLC and melanoma in Q4 CY2023
• Quell expects to dose the first patient in its lead programme, QEL-001, in H2 CY2023
• SwanBio expects to have dosed the initial cohort in its Phase I/II AMN programme in H2 CY2023

• Freeline expects to report initial data in the Phase I/II dose-finding trial in Gaucher disease in H2 CY2023

Enquiries

Syncona Ltd

Annabel Clark / Fergus Witt

Tel: [phone]

FTI Consulting

Ben Atwell / Natalie Garland-Collins / Tim Stamper

Tel: [phone]

About Syncona

Syncona's purpose is to invest to extend and enhance human life. We do this by creating and building companies to deliver transformational treatments to patients in areas of high unmet need.

Our strategy is to create, build and scale companies around exceptional science to create a diversified portfolio of 20-25 globally leading life science businesses, across development stage, modality and therapeutic areas, for the benefit of all our stakeholders. We focus on developing treatments for patients by working in close partnership with world-class academic founders and management teams. Our balance sheet underpins our strategy enabling us to take a long-term view as we look to improve the lives of patients with no or poor treatment options, build sustainable life science companies and deliver strong risk-adjusted returns to shareholders.

This announcement includes information that is or may be inside information. The person responsible for arranging for the release of this announcement on behalf of Syncona Ltd is Andrew Cossar, General Counsel, SIML.

Copies of this press release and other corporate information can be found on the company website at: www.synconaltd.com

Forward-looking statements - this announcement contains certain forward-looking statements with respect to the portfolio of investments of Syncona Limited. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. In particular, many companies in the Syncona Limited portfolio are conducting scientific research and clinical trials where the outcome is inherently uncertain and there is significant risk of negative results or adverse events arising. In addition, many companies in the Syncona Limited portfolio have yet to commercialise a product and their ability to do so may be affected by operational, commercial and other risks.

Life science portfolio valuations

Company

	Net	Valuation	FX
31 Mar	investm
2022	ent in	change	movement

31 Mar

2023

• of Group
  NAV

Valuati

on

basis11

,12,13

Fully

diluted owner-

Focus

area

1. Primary input to fair value
2. The basis of valuation is stated to be "Cost", this means the primary input to fair value is capital invested (cost) which is then calibrated in accordance with our Valuation Policy
3. The basis of valuation is stated to be "PRI", this means the primary input to fair value is price of recent investment which is then calibrated in accordance with our Valuation Policy