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The Wages of Syncona is... Likely to be Loot from a Winner Somewhere Down the Line

By Malcolm Stacey | Thursday 12 October 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello Share Chewers. Let’s have a peak at a relative newcomer to the stock market. This one is an investor in biotech companies. And it has the rare distinction of being supported by the famous Welcome Foundation, which has nearly four tenths of the company.

The name of the company is Syncona (SYNC). It has a highflier for its big boss, a scientist called Martin Murphy. He knows all about the thrilling biotech world having been a biochemist.

There are at least five biotech companies in Syncona’s bag. It’s hard to know how likely these companies are to score in the famously up-and-down world of biotechnology. I have more than five such companies in my personal portfolio. And I would not dare to forecast how successful any of them are likely to be in finding great cures and therapies. But I expect if just one of them hits the big time, I would be as happy as pigs in muck.

Syncona is injecting large sums into its chosen biotech outfits. One of them, Blue Earth Diagnostics, has already flogged a big medical breakthrough to America. This enables a doctor to spot cancers by imaging molecules (No, I don’t really knows what that means, either. But Martin Murphy, the biochemist obviously has faith in the system).

As you can imagine, Syncona’s share price has rocketed. It’s up 40% so far this year. But support of the mighty Welcome Foundation alone is enough to support my humble view that the story is far from over. The NAV is now £1 billion. But investors have increased the value to £1.2 billion. However, we are talking about future medical advances here, in an ageing world ever more dependent on hospitals.

Syncona wants to build its portfolio to about 20 bio companies. It’s reasonable to suppose at least some of them will bring in the sheaves. And a big medical advance which gets a licence is like striking gold.

Now, the Punter’s Return beckons.

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