Listed life sciences company in bid to raise up to £9m
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Wetherby-based life sciences business Avacta Group has today announced fundraising to acquire proceeds of up to £9m.
And the company has released its unaudited interim results for the 12 months ended 31 July 2019. The results record revenues of £4.1m (£2.8m FY18), which were above expectation due to an up-front milestone payment of $2.5m from LG Chem Life Sciences.
Avacta also reported an operating loss of £11.2m (£10.4m FY18) due to significant investment in research and development increasing to £5.9m (£3.8m FY18). Increased R&D investment led to a reported loss of £9.7m (£8.8m FY18). The business recorded cash balances of £6.5m (£5.2m 31 July 2018).
Avacta develops Affimer biotherapeutics and reagents. Affimers are binding proteins, which can be applied to treat illnesses when and where antibodies and aptamers are unable to.
Avacta intends to raise up to £9m by issuing 59,777,013 new ordinary shares at a price of 15p per share. If successful, this will enable the company to deliver the phase one clinical trial of the drug AVA6000 pro-doxorubicin, continue to advance its Affimer immunotherapy pipeline with partners and deliver further commercial progress for therapeutics and diagnostics.
Outlining its highlights for the period, the firm said it had signed a major license agreement with LG Chem Life Sciences, potentially worth over $300m, which included the upfront payment of $2.5m.
Avacta also established a research collaboration and licensing agreement to access technology for tumour targeting drugs developed at Tufts University Medical School, Boston. Avacta is combining this tumour targeting platform with Affimer immunotherapies, designed to improve outcomes for patients who do not respond to existing immunotherapies.
Chief executive officer Alastair Smith said: “I am delighted to report that the collaboration and license deal established with Professor Bill Bachovchin of Tufts University Medical School is progressing well. The opportunity to test the tumour targeting chemistry in the clinic as early as next year is well ahead of schedule and could be game-changing for Avacta.
“Doxorubicin is a $1bn drug despite severe cardiotoxicity issues that limits its effectiveness. In the case of Avacta’s improved version of this drug, AVA6000 pro-Doxorubicin that is based on the Tufts technology, we have seen a dramatic improvement in safety in pre-clinical animal models.
“If we see a similar reduction in cardiotoxicity in humans in the planned phase one clinical trial of AVA6000 in 2020, then there is the potential for a major license deal that could generate a transformational, non-dilutive, upfront payment of tens of millions of dollars.
“This funding would support all our other programmes. For this reason, we are prioritising this programme with respect to use of the proceeds of today’s successful placing.”