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Avacta well-cashed and on track to begin clinical trial of first Affimer therapeutic next year

The first Affimer-based therapeutic is PD-L1 is a potential cancer treatment that helps the immune system to identify and attack cancer cells
Affimers have both therapeutic and non-therapeutic uses

Avacta Group PLC (LON:AVCT) remains on track to begin a Phase I clinical trial of its first Affimer therapeutic candidate next year.

Affimers are small, engineered proteins that are capable of binding specific molecular targets, in a similar way to antibodies.

READ: Avacta says partner Moderna takes collaboration to next level

The proteins are smaller, quicker to manufacture and easier to format than antibodies, but they maintain antibody-like biologic activity when binding a target.

Avacta thinks the technology has both therapeutic and non-therapeutic applications.

The AIM company is already using Affimers to develop various potential cancer treatments, while other companies pay to use the technology in their research and diagnostics.

Avacta has selected a PD-L1 inhibitor as the first Affimer-based potential cancer therapeutic that it is taking through the clinic.

PD-L1 is a checkpoint protein that essentially provides a cloak for the cancer cells, helping them to evade detection by the immune system.

Start dosing in Q4 2020

The company is soon to start manufacturing its PD-L1 inhibitor – called AVA004-251 – which will then allow it to file a clinical trial application, asking regulators to let it test the drug on humans.

That filing is expected to happen in late 2020 and the plan is to start dosing the first patients in a Phase I dose escalation study in the final quarter of next year.

“The group remains focused on the key objective of first-time-in-human data for the Affimer therapeutic programme and growing a profitable Affimer reagents business,” said chief executive Alastair Smith.

“First-time-in-human data is a significant value inflection point for the technology and a major de-risking point from a deal-making perspective. The group remains on track, to a tight schedule, to dose first patients in late 2020.”

Plenty of cash in the bank

For the six months ended 31 January, Avacta recorded revenues of £1.0mln (H1 18: £1.5mln), although the new licensing deal with LG Chem will boost second-half numbers.

Unsurprisingly, R&D costs rose to £2.4mln (H1 18: £1.5mln) in the period, which meant operating losses climbed to £5.9mln (H1 18: £4.5mln).

Thanks to an £11.6mln fundraise in August, cash on hand totalled £11.8mln at the end of January (H1 18: £5.2mln).

In a note to clients, analysts at ‘house’ broker finnCap commented: “Significant progress continues to be made in non-therapeutic applications that include at least two in-house diagnostic assay development programmes with further licences expected in 2019.”

But, they added: “The share price performance belies the scientific progress made during the period.”

finnCap repeated its unchanged 125p price target on Avacta shares which in late morning trading were trading at 34.5p.

 -- Adds analyst comment, share price --

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