Avacta Group plc (LON:AVCT), the developer of Affimer® biotherapeutics and research reagents, has today delivered its preliminary results for the 17-month period ending 31 December 2019.
Operating highlights
LG Chem partnership: progressing well and expanding to new targets
· Major therapeutics development partnership and licensing agreement with LG Chem Life Sciences (LG Chem). Potentially generating revenues for Avacta of up to $310 million, plus future royalties on product sales, the agreement included an upfront payment of $2.5 million, pre-clinical milestone payments of up to $5.5 million plus payment of Avacta’s full research costs to generate Affimer molecules for the treatment of a range of diseases.
· Excellent progress with initial target during 2019 has led to LG Chem expanding the collaboration and nominating the second and third targets for development.
Collaboration with ADC Therapeutics: partnership to develop Affimer-drug conjugates
· Collaboration agreement with ADC Therapeutics SA (Lausanne, CH) to develop Affimer-drug conjugates combining Affimer technology with ADC Therapeutics’ PBD warhead and linker technologies. Under the terms of the agreement, ADC Therapeutics will cover all Avacta’s research costs during the collaboration and Avacta will also receive certain fees, development and commercialisation milestones, as well as a royalty on sales of successfully developed products.
Partnership with Moderna Therapeutics: enters next phase as Moderna exercises commercial option
· Moderna Therapeutics Inc exercised its option to enter into an exclusive licensing agreement for Affimers against an undisclosed target; part of an ongoing research collaboration between the two companies. A future regulatory submission by Moderna for an Affimer clinical candidate would trigger the next milestone payment to Avacta.
pre|CISIONTM chemotherapy platform: significant opportunity as “chemotherapy without side effects” and in novel Affimer drug-conjugates (TMACs)
· Research collaboration and licensing agreement for chemistry developed at Tufts University Medical School has created the pre|CISION chemotherapy platform which is a new class of chemotherapies that are only activated in the tumour thereby improving the safety and tolerability of these effective anti-cancer drugs.
· Avacta’s long-term strategy to build a pipeline of novel and differentiated cancer treatments is to combine pre|CISION chemotherapies with Affimer immunotherapies in TMACs to improve the outcomes for patients who do not respond to existing immunotherapies alone.
· Completed IND-enabling studies for first pre|CISION chemotherapy candidate – AVA6000 pro-doxorubicin. The Company is aiming to begin a Phase I dose escalation clinical trial in 2020 to show that the cardiotoxicity of this $1 billion global annual revenue generic drug is significantly reduced, potentially creating a proprietary, blockbuster chemotherapy for advanced soft tissue sarcoma, as well as other cancers, and validating the pre|CISION technology in humans.
· An additional pipeline of more than ten pre|CISION chemotherapies has been established with the most advanced of these, a pre|CISION proteasome inhibitor, approximately 12 months from IND filing.
In-house Affimer therapeutic programmes: first candidate completes cell line development
· Critical milestone of selecting the first Affimer clinical candidate for first-in-human trials for the Affimer platform has been achieved. Initial GMP manufacturing steps for the AVA004-251 PD-L1 blocker clinical candidate have been successfully completed, confirming a high production yield from a routine manufacturing process.
Affimer diagnostics reagents: strong revenue growth and progress with partners towards licensing deals
· Strong growth in revenue reported at £0.8 million for Affimer diagnostics reagents business.
· Appointment of David Wilson, a diagnostics industry veteran with over 25 years of experience, as Commercial Director for Affimer diagnostics reagents.
· Excellent range of ongoing paid-for technology evaluations and Affimer services projects with high-quality, global commercial partners across significant in vitro diagnostic, pharma, biotech and bioprocessing companies with potential for licensing deals.
· Commercial licence agreed with New England Biolabs® (NEB®), a global leader in the discovery and production of enzymes for molecular biology applications. This agreement is to commercialise a product using the Affimer technology for use in both life science research and diagnostics assays.
· A proprietary pipeline of Affimer diagnostic assays aimed at accelerating licensing deals has been established, with the first two, a D-dimer and an estradiol assay, having been completed.
Financial highlights
· Initial up-front milestone payment of $2.5 million received from LG Chem Life Sciences.
· Fundraising completed in November 2019 raising gross proceeds of £9.0 million in order to progress the AVA6000 programme into clinical trials.
· Cash balances at 31 December 2019 of £8.8 million (31 July 2018: £5.2 million)
· Revenues of £5.5 million for 17-month period to 31 December 2019 (12-month period to 31 July 2018: £2.8 million)
· Operating loss of £18.0 million for 17-month period to 31 December 2019 (12-month period to 31 July 2018: £10.4 million)
· Increased R&D investment, driven by strong progress in therapeutic programmes, leading to reported loss of £15.6 million (2018: £8.8 million)
· Loss per ordinary share 13.0p (2018: 13.5p)
Post-period highlights: further therapeutic and diagnostic partnerships adding significant value to the Group
· Established a joint venture in South Korea with Daewoong Pharmaceutical Co. Ltd., (KSX: 069620), a leading Korean pharmaceutical company, to develop the next generation of cell and gene therapies, incorporating Affimer proteins to enhance the immune-modulatory effects. Avacta’s own research and development costs in relation to the joint venture will be paid for by the joint venture.
· Paul Fry appointed as Non Executive Director. Paul is Chief Financial Officer of Vectura Group plc, an industry-leading inhaled drug delivery specialist listed on the FTSE Main Market.
· Following a post-period end £5.75 million fundraising the business remains well capitalised with a £10.5 million net cash position as at the 30 April 2020.
· Collaboration with Cytiva (formerly GE Healthcare Life Sciences) to develop and manufacture a rapid test for the COVID-19 coronavirus antigen for mass population screening.
· Collaboration with Adeptrix to develop a high throughput Affimer-based antigen test to diagnose COVID-19 infection, to be used on hospitals’ existing installed base of mass spectrometers.
Dr Alastair Smith, Chief Executive Officer of Avacta Group, commented:
“Avacta has over the past few years created huge potential value for shareholders through the establishment of multiple global partnerships and a pipeline of Affimer therapeutics and diagnostics. On top of that, we have taken the therapeutics opportunity to the next level by adding the unique pre|CISION chemotherapy platform. The Company is now delivering this value to shareholders and is in a position to continue to do this in a long term and sustainable manner.
The planned phase I study of AVA6000 pro-doxorubicin in cancer patients is transformational for the Group. If the preclinical performance of this drug is recapitulated in humans, then not only will AVA6000 have the potential to become a proprietary blockbuster in its own right, but the potential of the pre|CISION platform to improve the safety of a range of chemotherapies will have been demonstrated. This is a significant and unique opportunity for the Group to address urgent clinical needs in oncology through advanced chemotherapies and in combination with Affimer immunotherapies.
The strong commercial progress in the Affimer diagnostics business unit is reflected in the number of technology evaluations and growing revenue. Very recently a spotlight has been shone on the power of the Affimer platform to generate diagnostic reagents quickly and with high specificity because of our success in generating diagnostic Affimers for the SARS-COV-2 antigen in our collaboration with Cytiva.
We are focused on building long term, sustainable growth in shareholder value based on the numerous therapeutic and diagnostic opportunities that the Group has created, including a COVID-19 rapid antigen test. I look forward very much to keeping the market up to date as we progress.”
