Investment firm Syncona throws lifeline to Freeline by buying out struggling biotech

After mulling a potential buyout for a month, Freeline Therapeutics has decided that its future lies in the arms of its majority shareholder.

London-based investment firm Syncona will pay $6.50 for each remaining American depositary share of the British biotech that it doesn’t already own—equivalent to a 51% premium on the company’s share price before it first extended the offer.

The $6.50 per share is a notable upgrade on the $5 offer that Syncona initially made last month. The final deal effectively prices Freeline at $28.3 million, slightly above the $25.1 million market cap the company has been sitting on this week.

The all-cash acquisition is expected to close in the first quarter of 2024, assuming it’s signed off upon by Freeline’s other shareholders. In the meantime, Syncona has thrown the biotech a funding lifeline in the form of secured convertible debt financing worth up to $15 million to ensure the company can continue to develop its gene therapy candidate for Gaucher disease, dubbed FLT201.

“Given the compelling data that we have seen from the first two patients treated with FLT201, we are committed to advancing FLT201 as expeditiously as possible, and we believe we will be better positioned to do that as a privately held, Syncona-backed company than we could by continuing as a publicly traded company in the current environment,” Freeline CEO Michael Parini explained in this morning’s release.

Stevenage, England-based Freeline has already had to shrink its footprint via a series of layoffs over the past year as well as offloading a subsidiary and pausing work on its Fabry disease gene therapy.

The significant restructuring has left the company focused on FLT201, an adeno-associated virus gene therapy candidate for Gaucher disease, which was shown to be well tolerated in positive initial data from a phase 1/2 trial that read out last month. Freeline still continues to work on a GBA1-linked Parkinson’s disease program.

Julia Gregory, who chairs a special committee of Freeline’s board that decided on the company’s future, said the biotech had “conducted a thorough exploration and review of our financing and strategic alternatives, taking into account our need for further funding to enable operations to continue beyond the near term.”

“We are confident this negotiated transaction for Syncona to acquire Freeline and support it as a private entity is in the best interest of the company, as well as shareholders, employees and ultimately patients,” Gregory added.

Syncona CEO Chris Hollowood said that while the investment firm was “pleased with how Freeline is executing” its FLT201 program, “the company needs further funding to continue to drive FLT201 through clinical development.”

“The challenging market conditions impacting the biotech sector have presented a differentiated opportunity to support the company as a private entity,” Hollowood added. “We look forward to working with the team to deliver on its next milestones.”