News & Views
Takeover set to spur ocular therapies to marketplace
Jan 05 2022
Gyroscope Therapeutics Holdings, a portfolio company of life sciences investment trust Syncona Ltd, has been acquired by Novartis for up to $1.5 billion (£1.1 billion) on a cash and debt free basis, with an upfront payment of $800 million (£604 million) and up to $700 million (£528 million) potentially due upon the achievement of certain customary milestones related to clinical development, regulatory approvals and reimbursement.
Co-founded in 2016, Gyroscope has been building technical and personnel expertise in ocular gene therapies through discovery, research, drug development, a manufacturing platform and surgical delivery capabilities. With nearly 200 employees, the company is executing on its Phase II clinical trials for the treatment of geographic atrophy (GA) secondary to age-related macular degeneration (AMD), having generated positive clinical data in its Phase I/II FOCUS trial.
The transaction is anticipated to result in cash proceeds of £334 million for Syncona's holding in Gyroscope, representing a £180 million uplift (27p per share) to the previous valuation, a 3.0 multiple on its original cost of £113 million and an internal rate of return (IRR) of 55%5. A potential £255 million achievable through future milestone payments, represents total proceeds of £589 million, (a 5.2 multiple on original cost) along with the possibility of a future royalty payment was not discounted.
Chris Hollowood, Chief Investment Officer of Syncona Investment Management Limited, said: “In five and a half years, enabled by collaborations with four leading UK universities, we have taken Gyroscope from a concept to a potential treatment for geographic atrophy secondary to AMD, a leading cause of blindness with no approved therapies. Gyroscope is now an international company with world-class management, positive clinical data, proprietary surgical and manufacturing platforms, and a team of nearly 200 people. The structure of the transaction will provide us with ongoing exposure to Gyroscope’s development and the potential for significant additional returns, subject to certain milestones. We look forward to seeing Gyroscope fulfil its potential during the next phase of its growth with Novartis, who have an extensive track record in gene therapy and ophthalmology and are ideally placed to complete the journey of taking this transformational therapy to patients.
This transaction marks the third sale of a portfolio company by Syncona over the last three years, strengthening its capital base for further development and investment opportunities.
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