Just recently, Synklino completed a Series A raise of EUR 29.8 million to advance clinical trials of its drug candidate for the treatment of Cytomegalovirus (CMV). We asked the CEO, Thomas Kledal, how Synklino managed to get a pension fund to invest in the company.
How did you get PKA on board and what is the history behind that process?
We have been in dialogue with PKA and Maj Invest for a while and it turned out that we were a perfect fit for the new Life Science and Green Tech venture fund.
In your opinion, why did the pension funds see potential in Synklino? What made you especially attractive to them?
We believe that Synklino is an interesting investment opportunity for long-term investors as we have the potential to disrupt the current treatment of chronic viral diseases. So, we have the right foundation for business. In addition to that, we have wanted to do it the right way from the beginning. We have our things in order regarding governance, financial reporting, etc. But beyond that, we also have a management that can execute and a sensible valuation that makes a compelling case for new investors to jump on board.
What are the benefits and drawbacks of having a pension fund and private actors as investors compared to having venture capitalists?
One of the benefits of getting the pension fund on board is that it verifies the company’s commercial potential. The larger investment companies have the resources to check our governance and valuation, which gives other investors peace of mind about their investments. All types of investors have their place and justification as shareholders in early life-science companies. Still, pension funds invest larger sums of money, which demands a certain level of maturity of the company. On the other hand, private investors typically invest smaller sums of money and do not have the ability or wish to familiarize themselves with the complex technology. This duality of investors means that you must learn to communicate with life-science specialists and generalists from the get-go.
Not much time has passed since you last raised several million in funding. What is the reason behind raising even more money already? Was it always the plan?
During our financing round in November 2021, we spoke to many investors, which enabled us to further strengthen our capital resources and thus runway, meaning we can now reach several milestones in our pipeline before raising money again. We are profoundly happy about this situation, given the current uncertainty in the market.
What does this investment round mean for Synklino’s future? What can it facilitate?
With the new capital, we can take Synklino to new heights. We can prepare and initiate clinical studies in organs and patients simultaneously with SYN002, which gives us more opportunities to execute on significant and value-enhancing milestones within a short timeframe. At the same time, it increases our pull for new employees and provides flexibility regarding future opportunities.
Considering your own experience so far, what piece of advice would you give to other biotech entrepreneurs?
It’s a bit of a cliche – but put together the best team you can. Invest all you can in the right team. The team’s importance cannot be overstated. By having an experienced and competent team, you can optimize your business- and development plan, ensure good governance for the board and owners, attract more capable employees and establish the necessary business processes. It will give you a head-start compared to other start-ups. The valuation is also essential for bioentrepreneurs. You should set realistic expectations and prioritize long-term goals instead of short-term optimization. That will make it easier to attract the needed capital later.
How do you manage your investor relations when you have such a broad portfolio of investors? Is it difficult?
No, it is not difficult. In many ways, we use the same communications strategies as publicly listed companies. We recently sent out our impressive 2021 annual report, which offers good insights into our technology, markets and development plans. We supplement the annual report with quarterly updates and other news that we send out to all shareholders simultaneously.