Life sciences firm seeks to raise more than £31m

Wetherby-based healthcare group, Avacta, is raising more money from both new and existing retail investors.

Subject to shareholder approval at its General Meeting on 18 March 2024, the business will issue 10,896,948 ordinary shares at a price of 50 pence per ordinary share in connection with the REX offer.

Avacta explains the REX offer was limited to an aggregate value of £6.8m and received total applications in excess of this amount.

The group says it has determined only to allocate REX offer shares to existing Avacta retail shareholders and therefore a total of about £5.4m (equating to 10,896,948 REX offer shares) is expected to be raised by the REX retail offer.

At the end of last month, Avacta, which is developing innovative cancer drugs, confirmed it had raised £25.7m in a heavily-discounted placing to fund further research into one of its key programmes.

Today, the firm says 27,520,485 ordinary shares have been issued in connection with the Firm Placing and Direct Subscription.

Conditional on shareholder approval at the General Meeting 2024, 34,776,072 ordinary shares will be issued in connection with the REX offer and the Conditional Placing, resulting in a total of 62,296,557 new ordinary shares being issued in the Firm Placing, Conditional Placing, Direct Subscription and REX offer, raising total gross proceeds of around £31.1m. 

Alastair Smith, chief executive, said: “The recent placing aimed to raise approximately £20m to support the continued clinical development of AVA6000, the first of Avacta’s pre|CISION^TM peptide drug conjugates capable of targeting a chemotherapy to the tumour to spare healthy tissue.

“Without additional funds in excess of £20m, the company would not have been able to progress any of its pre-clinical pipeline, which we believe will drive significant future shareholder value well beyond AVA6000.

“Despite the difficult circumstances surrounding the placing we therefore believe it is in the company’s and shareholders’ best interests to raise sufficient funds to both progress AVA6000 and the broader pipeline.

“However, we have limited the allocation under this REX Retail offer to existing shareholders only, in order to minimise further dilution at this price.

“This financing has brought several new high-quality institutions onto the share register including a large European healthcare specialist fund and, subject to the outcome of the general meeting, it provides Avacta with funding to both advance AVA6000 through the clinic as well as developing exciting pre-clinical assets which we look forward to detailing later this year.”