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Avacta - interim results confirm progress

Avacta - interim results confirm progress
  • Avacta Group PLC (LON:AVCT) reported interim results to January 2019, confirming good progress on key development programmes
  • Lead immune checkpoint inhibitor programmes continue to move towards in-man clinical data in 2020
  • Major development partnership and licence agreement with LG Chem potentially worth more than US$300mln plus royalties, announced in December
  • Post-period end, the additional licensing deal with Moderna provides further validation of Avacta’s Affimer platform
  • Appointment of Jose Saro as the chief medical officer strengthens Avacta’s capabilities for evolving from pre-clinical to clinical
  • The Research and Diagnostic Reagents business reports a record sales pipeline

Avacta (LON:AVACT) reported revenues of £1.0mln, down from £1.5mln the year before, largely due to the absence of research services revenues for FTEs working on the Moderna collaboration now that assets have been transferred into their development pipeline. We expect revenues from the LG Chem deal to offset this during the remainder of 2019.

The company reported a cash outflow from operations of £2.9mln and ended the period with £11.8mln net cash following the £11.6mln fund-raise in August. We believe that Avacta can comfortably fund ongoing development programmes into 2020.

The company will be moving its year-end from July to December, meaning that the current year will be reported on the basis of a

17-month period (see table below).

The major value driver for Avacta, in our view, is the development of its proprietary Affimer technology for therapeutics, particularly in the immune-oncology (I-O) space. I-O therapeutics is a market of over US$100bn. On p2 we provide a reminder of valuations that can be realised for a pre-clinical I-O technology.

 
 
 
Full report is available via Capital Network website


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