Jefferies sees Syncona Limited (LSE:SYNC) trading at a near-43% discount to its estimated diluted net asset value, and the investment bank's analysts reckon the life sciences investor may need a clinical breakthrough or portfolio deal to unlock stronger performance.
The broker, which rates the share as a ‘buy’, said Syncona's fourth-quarter weakness was driven by a fall in Autolus’s share price and a write-down to Kesmalea, partially offset by its stake in Beacon Therapeutics.
And, after marking Autolus to market following the year-end, adjusting for foreign exchange weakness and accruing for costs and charitable donations, Jefferies puts diluted NAV at 169.8p. Against a last closing price of 96.90p, that leaves the shares on a 42.9% discount.
The bank, meanwhile, noted that Kesmalea was marked down by around 54%, with analysts pointing to “advanced third-party interest from potential investors and amidst challenging private biotech market conditions for early-stage companies”. In practical terms, the broker said the write-down reflected a longer timeline to an eventual clinical stage.
The wider issue is timing. Jefferies noted that public biotech equities rebounded over the past year, but private valuations tend to lag. Whether that comes through in Syncona’s NAV remains uncertain, given the portfolio’s concentration and specialist nature.
“As such, a positive clinical readout and/or M&A for a portfolio company is the most likely driver of a higher NAV, in our view,” the broker said.
Syncona deployed only £11 million during the quarter, all into Spur, with no material distributions. Jefferies noted that the company continues to point to eight key value inflexion points across the portfolio, with four due in calendar 2026 and four in calendar 2028.
Its balance sheet remains substantial, with £198.3 million available for investment at the end of March, equivalent to 19.1% of NAV and including £46.1 million in cash.
Jefferies also flagged Syncona’s ongoing work to raise a private fund, saying such a vehicle could matter for shareholders by broadening access to capital for portfolio companies and potentially creating a mechanism to roll interests into the fund at NAV.
