Spin-out deal strengthens Avacta
AVACTA, the Yorkshire university science spin-out company, today announced the acquisition of another spin-out which specialises in veterinary testing.
The deal for Reactivlap, which could be worth up to £5m, will see York-based Avacta make an initial payment of only £80,000 made up of 4.4m of its shares while it will pay 30% and 100% of the revenues that the firm achieves in the second and third years respectively following the acquisition.
Reactivlab has developed a range of veterinary diagnostic tests which University of Leeds spin-out Avacta believes fit well with its own operations developing detection and analysis technology and services aimed at the animal health sectors as well as the pharmaceutical, healthcare, security and industrial sectors.
Reactivlab was spun out of the University of Glasgow’s world leading Veterinary School by its founder Professor David Eckersall to develop acute-phase protein (APP) tests for veterinary healthcare and it made a pre-tax loss of £142,596 on revenues of £142,079 in the year to July 31, 2009 while it had a cash balance of £83,000 in its December management accounts.
APPs are a class of proteins whose concentrations in the blood change as part of the immune and inflammatory response to a wide range of problems such as infections, diabetes, hypertension and cardiovascular disease and already widely used in human healthcare, they are increasingly being applied in animal healthcare.
Avacta said it is in a position to immediately commercialise the APP tests through Avacta Animal Health’s diagnostic testing laboratory services.
Alastair Smith, chief executive of Avacta Group, commented: “Naturally we are delighted to be bringing Reactivlab under the Avacta Animal Health umbrella. The combination of Reactivlab’s established tests and world leading expertise in veterinary acute phase protein testing, with Avacta Animal Health’s ability to commercialise veterinary tests, places us in a strong position to lead the growth in APP testing in this market.
“We believe that this will lead to substantial commercial and clinical value from a huge untapped marketplace. One only has to look at the human market in APP testing to see the potential for the veterinary application of these tests.
“The acquisition of Reactivlab is the next step in a well defined strategy of in-house product development and acquisitions to grow the Avacta Group as a leading provider of innovative life sciences support products and services aimed at two high value markets – drug development and healthcare.”
