Business Update

RNS Number : 1123Q

Avacta Group PLC

24 February 2021

 

24 February 2021

Avacta Group plc

("Avacta" or "the Group")

Business Update: Significant momentum in both Diagnostics and Therapeutics Divisions

AffiDX^®, SARS-CoV-2 Lateral Flow Rapid Antigen Test generates excellent initial clinical sensitivity and specificity data

MHRA approves Clinical Trial Authorisation of first therapeutic product candidate

Avacta Group plc (AIM: AVCT), the developer of innovative cancer therapies and diagnostics based on its proprietary Affimer^® and pre|CISION^™ platforms, is pleased to provide a business update for the 12 months ended 31 December 2020 and post-period. Preliminary results for the financial year ended 31 December 2020 are expected to be released mid-April.

Dr Alastair Smith, Chief Executive Officer of Avacta Group, commented:  

"The significant progress achieved in both the Diagnostics and Therapeutics Divisions during 2020 has already enabled us to deliver major value inflection points during the first weeks of 2021.

"We are very excited by the commercial potential of our scalable, rapid coronavirus test. The recently announced clinical data strongly reflects the excellent analytical performance demonstrated in the lab and suggests that it may be, to date, the most sensitive S1 spike protein lateral flow test. We are now confidently proceeding into full clinical validation to support a CE Mark, with a potential commercial launch for professional use around the end of the first quarter of this year.

"Despite unprecedented pressures on the Diagnostics Division, we now have in place the infrastructure to support the commercial launch of this test. Importantly, we are close to completing the establishment of a complex supply chain for the scalable manufacture of the test kits and we are making timely progress in instituting a quality management system to support the required ISO13485 accreditation for medical devices.

"In line with commitments we made during the fund raise last summer, in the Therapeutics Division we expanded our in-house pre-clinical pipeline and also kept our partnered programmes moving forwards, despite the restrictions of COVID-19 safe-working.

"In December, we submitted a Clinical Trial Authorisation (CTA) to the UK's MHRA for our lead pre|CISION^™ platform drug candidate, AVA6000 Pro-doxorubicin, and I am delighted that we recently received approval from the Agency to proceed with the phase 1 study, which we expect will dose first patient around the middle of the year.

"I am very proud of the Avacta team and how they have overcome the substantial challenges presented by the pandemic and continued to progress programmes and generate significant shareholder value. I look forward to updating the market on the very exciting milestones ahead of us in due course."

Operational Highlights

Diagnostics Division

· AffiDX^® SARS-CoV-2 Lateral Flow Rapid Antigen Test shows excellent analytical sensitivity of 50 pg/ml of S1 spike protein with a read time of 20 minutes. As far the Group is aware, this is currently the most sensitive S1 spike lateral flow test available. On 16 February 2021, we announced the initial clinical evaluation of this test using anterior nasal swab samples (30 positive and 26 negative samples) which demonstrated a sensitivity of 96.7% for samples with an infectious viral load (PCR Ct value < 26) and a specificity of 100%.

· BAMS^™ SARS-CoV-2 Antigen Test clinical evaluation underway at a UK NHS hospital site. Initial performance data are encouraging and work is continuing to refine the assay protocol for use in the clinical workflow on hospital-based MALDI-TOF instruments. On 28 January 2021 we entered a collaboration agreement with Bruker Corporation to evaluate the clinical utility and commercial potential of this test.

· On 21 December 2020 we announced a licensing agreement with Astrea Bioseparations Limited ("Astrea") for the use of the Affimer platform in affinity purification applications; £0.5m upfront payment and an ongoing services revenue stream plus a royalty on future product sales by Astrea.

· The Group is in the process of establishing ISO13485 accreditation, a critical quality assurance system for a developer and legal manufacturer of diagnostic products and medical devices. The Group passed the first audit by the Group's Notified Body (BSI Group) and the final audit will occur in March 2021.

· On 8 February 2021 we established a commercial partnership with Mologic to provide Avacta with a faster route to market for the lateral flow rapid antigen test by CE marking it for professional use under Mologic's existing ISO13485 quality system. The CE mark will then be transferred to Avacta after it receives ISO13485 accreditation, which is expected by the end of March 2021.

· The collaboration with Mologic also provides initial manufacturing capacity for the lateral flow test with Global Access Diagnostics (GAD) in addition to the agreements with BBI Group, Abingdon Health and others that will provide manufacturing capabilities that can be scaled to several million tests per month.

· Strengthened and expanded diagnostics management team with the appointment of a Product Manager, Head of Product Development and Operations Director.

Therapeutics Division

· The Group has continued to make good progress with both in-house and partnered programmes despite limitations on laboratory staffing due to COVID-safe working practices.

o  On 18 February 2021 the Medicines and Healthcare products Regulatory Agency (MHRA) approved the CTA for AVA6000 Pro-doxorubicin, the Group's lead pre|CISION^™ prodrug, for a phase 1, first-in-human, open label, dose-escalation and expansion study in patients with locally advanced or metastatic selected solid tumours.

§ The Group anticipates dosing first patients in mid-2021 subject to COVID-19 restrictions on hospital resources with first pharmacokinetics read-out possible before the year end.

o  On schedule to select the next pre|CISION prodrug chemotherapy clinical development candidate from the pipeline by the end of 2021. Lead programmes include AVA3996 a FAPα activated proteasome inhibitor, AVA7500 a FAPα activated platin, and AVA7000 a FAPα activated taxane.

o  Significant progress with in-house Affimer bispecific programmes towards selection of a clinical development candidate by the end of 2021. Two new programmes initiated, building on the AVA004 PD-L1 antagonist programme: AVA027, a PD-L1/TGfβ receptor trap combination and AVA028, a PD-L1/IL2 bispecific.

o  In-vivo studies of the lead TMAC programmes ongoing to support selection of a clinical development candidate from the pipeline: AVA04-VbP and a second undisclosed Affimer-VbP programme.

· On 18 August 2020 we announced the expansion of the existing multi-target collaboration and development agreement with LG Chem Life Sciences ("LG Chem") to include new programmes incorporating Avacta's Affimer XT^™ serum half-life extension system. The agreement included an undisclosed additional upfront payment, plus near-term pre-clinical milestones and longer-term clinical development milestones totalling $98.5m with additional royalties on all future Affimer XT product sales by LG Chem.

· On 7 January 2021 we announced the license agreement with Point Biopharma Inc to provide access to Avacta's pre|CISION^™ technology for the development of tumour-activated radiopharmaceuticals. The terms of the agreement include a significant, undisclosed upfront payment.

· Rapidly established a highly experienced Clinical Development Team. Appointed Neil Bell as Chief Development Officer on 11 August 2020. Additional key appointments of Head of Chemistry, Manufacturing and Controls (CMC), Head of Clinical Operations and Head of Translational Sciences will together manage an extensive outsourced network of drug development service providers.

· On 1 February 2021, AffyXell Therapeutics ("AffyXell"), the joint venture with Daewoong Pharmaceuticals ("Daewoong"), closed a series A venture capital investment of $7.3m to further develop its pipeline of next generation cell and gene therapies.

Corporate

The Group's cash position at the 31 December 2020 was £48m slightly higher than market forecasts.

This announcement contains information which, prior to its disclosure, was considered inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR).

Disclaimer: AffiDx SARS-CoV-2 Lateral Flow Rapid Antigen Test not currently for sale in the United States.

- Ends

For further information from Avacta Group plc, please contact:

Avacta Group plc	Tel: [phone]
Alastair Smith, Chief Executive Officer	www.avacta.com
Tony Gardiner, Chief Financial Officer
finnCap Ltd (Nominated Adviser and Joint Broker)	Tel: [phone]
Geoff Nash / Giles Rolls - Corporate Finance Tim Redfern - ECM	www.finncap.com
Stifel Nicolaus Europe Limited (Joint Broker)	Tel: [phone]
Nicholas Moore / Nick Adams / Fred Walsh / Ben Maddison	www.stifel.com
FTI Consulting (Financial Media and IR)	Tel: [phone]
Simon Conway / Stephanie Cuthbert	[e-mail]
Zyme Communications (Trade and Regional Media)	Tel: [phone]
Katie Odgaard	[e-mail]

About Avacta Group plc - https://www.avacta.com

Avacta Group is developing novel cancer immunotherapies and powerful diagnostics based on its two proprietary platforms - Affimer^® biologics and pre|CISION^™ tumour targeted chemotherapies.

The Affimer platform is an alternative to antibodies derived from a small human protein. Despite their shortcomings, antibodies currently dominate markets, such as diagnostics and therapeutics, worth in excess of $100bn. Affimer technology has been designed to address many of these negative performance issues, principally: the time taken to generate new antibodies and the reliance on an animal's immune response; poor specificity in many cases; their large size, complexity and high cost of manufacture.

Avacta's pre|CISION targeted chemotherapy platform releases active chemotherapy in the tumour, which limits the systemic exposure that causes damage to healthy tissues, and thereby improves the overall safety and therapeutic potential of these powerful anti-cancer treatments.

The Group comprises two divisions: The therapeutics development activities are based in Cambridge, UK and the Group is generating near-term revenues from Affimer reagents for diagnostics, bioprocessing and research, through a separate diagnostics business unit based in Wetherby, UK.

Avacta's Diagnostics Division works with partners world-wide to develop bespoke Affimer reagents for third party products. The Group is also developing an in-house pipeline of Affimer-based diagnostic assays including the AffiDX^™ SARS-CoV-2 Lateral Flow Rapid Antigen Test and a BAMS^™ SARS-CoV-2 Assay in partnership with Adeptrix Inc.

Avacta's Therapeutics Division is addressing a critical gap in current cancer treatment - the lack of a durable response to current immunotherapies experienced by most patients. By combining its two proprietary platforms the Group is building a wholly owned pipeline of novel cancer therapies deigned to be effective for all cancer patients. In 2021 Avacta will commence a phase 1 first-in-human, open label, dose-escalation and expansion study of AVA6000 Pro-doxorubicin, the Group's lead pre|CISION^™ prodrug, in patients with locally advanced or metastatic selected solid tumours.

Avacta has established drug development partnerships with pharma and biotech, including a research collaboration with Moderna Therapeutics Inc., a multi-target deal with LG Chem worth up to $400m, a joint venture in South Korea with Daewoong Pharmaceutical focused on cell and gene therapies incorporating Affimer immune-modulators, a partnership with ADC Therapeutics to develop Affimer-drug conjugates and a collaboration with Point Biopharma to develop radiopharmaceuticals based on the pre|CISION^™ platform. Avacta continues to actively seek to license its proprietary platforms in a range of therapeutic areas.

To register for news alerts by email go to www.avacta.com/investor-news-email-alerts

Business Update

Diagnostics Division

AffiDX^™ SARS-CoV-2 Lateral Flow Rapid Antigen Test for Potential Mass Deployment

During the past year Avacta, in conjunction with its partners, has made exciting progress in the development of its Affimer based, SARS-CoV-2 lateral flow rapid antigen test. Laboratory studies indicate that it may be the most sensitive S1 spike protein lateral flow test available [to date]. Furthermore, recently announced data from initial clinical samples has shown a sensitivity of 96.7% for patient samples with an infectious viral load, and specificity of 100%. On the basis of these excellent data, the Group is now progressing to a full clinical validation with a larger number of patient samples to CE mark the test for professional use, aiming to bring the test to market in Europe around the end of the first quarter of this year.

The test uses Affimer binders to the SARS-CoV-2 spike protein and is capable of identifying individuals with infectious viral loads using an anterior nasal swab sample. Such a test is suitable for mass deployment to identify those people who are likely to infect others so that they can isolate and reduce the spread of the infection.

LFTs are a complement, not a replacement for PCR testing

How a diagnostic test is used, called the "Intended Use Case", is extremely important and it must be adhered to in order to avoid a test being used inappropriately. A rapid antigen test with high specificity and good sensitivity can be used effectively to identify the majority of people with a high viral load that makes them infectious so that they can isolate themselves. Frequent testing, at least once every few days and ideally daily, is important so that as soon as the viral load of an infected person becomes high enough to be infectious that person is identified.

The first challenge in developing a clinically useful rapid coronavirus test for mass population screening is to understand what viral load should be considered infectious.

Patient samples can be characterised in a number of ways but the most common are:

· Genome copies per millilitre (i.e. how many copies of the virus RNA are present in a millilitre of sample).

· Plaque forming units (pfu) per millilitre (i.e. how many viable viruses that can infect cells and multiply are present in a millilitre of sample). The number of pfu/ml and genomes/ml are different because there is RNA present in samples that is not assembled into viable virus particles. (i.e. the genomes per ml is higher than the pfu per ml). These two measures of infection vary in a way which has not yet been fully characterised but there is probably between 10 - 10,000 more genomes/ml than pfu/ml in a sample.

· Cycle time (Ct), which is the number of amplification cycles of PCR required to detect the virus (i.e. a low Ct value means that the person has higher viral load because it took fewer amplification cycles to become detectable). Ct values vary between different PCR tests, and even between different laboratories running the same test, so this should also be taken into account.

A reasonable assumption, based upon the growing combined understanding of SARS-CoV-2 and COVID-19, is that a person is infectious and likely to infect others if their viral load is > 10,000 genomes/ml (i.e. approximately > 100 pfu/ml and Ct < 25). According to recently published data from the Liverpool Covid Smart Pilot[1], a viral load of < 10,000 genome/ml leads to a likelihood of infecting others of around 10%. Therefore, at this low end of the infectious range the risk of infecting others appears to be quite low. Whereas the risk of a person with a viral load ~1,000,000 genome copies/ml is around 50%. Highly infectious people can have viral loads > 100,000,000 genome copies/ml.

With all this in mind, for a rapid antigen test to have clinical utility (and therefore sustainable commercial value) it should be able to detect SARS-CoV-2 viral load of a few hundred pfu/ml, or Ct of 25 or below, or >10,000 genomes/ml. Clearly, the lower the detection limit the better, and a test must be able to achieve this limit of detection in real patient samples and not just in contrived "clean" laboratory samples.

Laboratory testing suggests that the AffiDX^™ SARS-CoV-2 Lateral Flow Rapid Antigen Test could be the most sensitive spike antigen test so far available

The AffiDX^™ SARS-CoV-2 Lateral Flow Rapid Antigen Test detects the SARS-CoV-2 S1 spike protein and has an analytical limit of detection (LOD) in nasal swab samples of 50 pg/ml. This can be achieved with a visual read time of 10 minutes. The test line is clearer if a longer read time is used, therefore a read time of 20 minutes has been adopted as the standard for this test.

How does this analytical sensitivity translate into pfu/ml of virus which is the clinically relevant measure? Avacta has established this relationship using Avacta's research ELISA for S1 protein and inactivated virus provided by Public Health England (Porton Down, UK). Using this safe form of the virus, we have shown that an analytical LOD of 50pg/ml corresponds to the amount of S1 spike protein in a virus sample containing 500 pfu/ml.

A significant proportion of the development time of the AffiDX^®SARS-CoV-2 Lateral Flow Rapid Antigen Test has been focused on achieving this level of sensitivity in human saliva and nasal swab clinical samples. The development work has been carried out in-house and with our development partners using saliva and anterior nasal swab samples taken from healthy volunteers to which the S1 spike protein has subsequently been added to known concentrations to generate a contrived clinical sample. The key challenge in developing the test has been to get these complex human fluids to flow properly in the device and to eliminate false positive results arising from unknown material in nasal samples and saliva. This has been achieved through detailed studies evaluating a range of different additives to the lateral flow test and sample extraction buffer for both nasal and saliva samples. The Group announced in Q4 2020 that it would focus on anterior nasal sampling because of the variability of saliva samples, although the test works with both sample types. The UK Department of Health and Social Care has also recently focused on nasal and other swab samples rather than saliva.

In summary, the AffiDX^® SARS-CoV-2 Lateral Flow Rapid Antigen Test has excellent analytical sensitivity (LOD) of 50 pg/ml S1 spike protein, which appears sensitive enough to detect the lowest viral loads of relevance to the Intended Use Case, with a read time of 20 minutes. As far the Group is aware, this is the most sensitive S1 spike lateral flow test available.

The analytical specificity of the Affimer reagents has been reported previously with no cross-reactivity with the S1 spike proteins from closely related coronaviruses: MERS-CoV S1, SARS-CoV-1 S1, HC0V-229E S1, HCoV-HKU1 S1, HCoV-NL63 S1 or HCoV-OC43 S1.

The test detects the D641G mutant of the original coronavirus and the Group expects that the test will also detect the newer coronavirus variants. Work is ongoing with Public Health England to confirm this.

Initial clinical evaluation of AffiDx^™ SARS-CoV-2 Lateral Flow Rapid Antigen Test

The clinical performance of a diagnostic test cannot simply be inferred from the analytical performance because of the complex pathology of diseases which control the amount of a biomarker that is available in a sample when added to the test. In the case of COVID-19, there is a complex series of biological processes that determine how much of the virus spike protein is actually present in the anterior (front) part of the nose to be picked up on a swab and then released into a buffer to be added to the lateral flow test strip. A clinical evaluation of the test is the only way to determine whether it is capable of identifying infectious individuals.

The initial evaluation of Avacta's lateral flow rapid antigen test with clinical samples has been carried out at two sites, one in EU and one in the UK using patient samples with viral loads confirmed by PCR. 30 positive samples were tested with Ct values of 26 and below, with half of those in the range 22-26, and the lateral flow test identified 29/30 of these correctly as positive. This indicates a clinical sensitivity of 96.7% for samples with a Ct value below 26. Importantly, out of a total of 26 negative samples tested with the lateral flow device, the test correctly identified all 26 as negative, giving a clinical specificity of 100%. High specificity is critical for a lateral flow test for mass screening so that large numbers of false positives are not generated which would create a major burden on follow-on testing resources, and result in a significant socio-economic cost of unnecessarily isolating people.

As stated above, on the basis of these excellent initial data, the Group will now progress to a full clinical validation with a larger number of patient samples to CE mark the test for professional use, aiming to bring the test to market in Europe around the end of the first quarter of this year.

A vacta Diagnostics Division expects ISO13485 accreditation around end of March 2021

Avacta's Diagnostics Division is currently in between the two audits of the Group's Quality Management System that are required by its external auditor in order to award ISO13485 accreditation.

Medical device manufacturing is a highly regulated sector in which stringent quality systems and product performance requirements must be satisfied. These regulatory requirements are intended to ensure that manufacturers consistently design, produce and place onto the market medical devices that are safe and fit for their intended purpose. ISO13485 certification provides a practical foundation for diagnostics and medical device manufacturers to address these regulatory requirements and obligations of the industry as well as demonstrating a commitment to device safety and quality.

The Diagnostics Division has established a Quality Management System and the first external audit by the Group's Notified Body[2] (BSI Group) was passed in December successfully. The second and final audit is scheduled for March 2021. A positive outcome of the second audit will lead to ISO13485 accreditation. This certification sets the organisational and operational framework for all current and future diagnostic product developments and it is an essential accreditation that underpins future commercial success.

Mologic partnership enables near-term AffiDX^™ CE Mark for Professional Use

Whilst the Group establishes its own ISO13485 accreditation, in order to achieve the fastest possible and lowest risk route to CE marking, Avacta has established a partnership with Mologic Ltd. so that the AffiDX^™ SARS-CoV-2 Lateral Flow Rapid Antigen Test can be CE marked for professional use quickly under Mologic's established ISO13485 Quality System. The CE mark will then be transferred to Avacta when it achieves ISO13485 accreditation, which is expected at the end of March 2021. As part of the collaboration between the two companies, Avacta and Mologic are also exploring the possibility of combining Avacta's spike antigen test with Mologic's nucleocapsid antigen test[3] in a single device which would be a world first and has the potential to deliver the most sensitive rapid antigen test possible. The two companies will evaluate whether the two tests can be combined in a single device and then make a commercial decision on whether to pursue this second generation COVID-19 diagnostic.

Avacta will immediately be able access initial manufacturing capacity through Mologic, in addition to scale-up manufacturing capacity with BBI and Abingdon Health. Combined, these manufacturing partnerships can scale up to several million tests per month and potentially much higher with further investment. Avacta is also continuing its discussions with other manufacturers in the UK and overseas in order to be able to access additional capacity to ensure that it can meet the expected demand.

The Group continues its commercial discussions with potential customers for the AffiDX^® SARS-CoV-2 Lateral Flow Rapid Antigen Test and expects demand to be present for rapid testing for at least two years and probably for longer. Only by having a high-quality test that identifies the majority of infectious individuals can this clinical need be translated into commercial success and the Group believes that the recent initial clinical data are extremely encouraging in that regard.

Healthcare services providers and governments are likely to be the largest volume customers of a professional use rapid antigen test and with an estimated price point in the mid-single digit GBP range. A higher price point is anticipated for sales to corporates for workforce testing.

BAMS^™ SARS-CoV-2 Assay

BAMS assay could enable 1000 sample per day high throughput COVID-19 testing in hospitals

In collaboration with Adeptrix Inc, Avacta has developed a mass spectrometry assay on Adeptrix's BAMS^™ platform which combines enrichment of the sample using Avacta's SARS-CoV-2 spike protein Affimer binders to improve sensitivity with the power of mass-spectrometry for analysis. Up to one thousand samples per day can be analysed by a single technician using BAMS, exceeding the capacity of a single PCR machine.

The SARS-CoV-2 BAMS assay analytical performance has been shown by both Adeptrix and Bruker[4] to hold promise as a high throughput technique for COVID-19 screening in the clinical setting and Avacta is evaluating the assay in the clinic with a view to CE marking it as a diagnostic for professional use.

Initial attempts to access patient samples through the government's CONDOR programme have been very disappointing and recent information indicates that these data also cannot be used to CE mark the test. Avacta has therefore established two collaborations with clinical teams outside of the CONDOR and FALCON programmes. In collaboration with these teams the BAMS assay protocol has been simplified and amended to fit into the clinical work processes and the Group is working with its collaborators to determine the sensitivity of the BAMS assay when run on the type of mass spectrometers that are predominantly installed in hospital laboratories.

This evaluation is expected to continue for another two or three weeks and the Group is establishing outsourced manufacturing capacity for the BAMS tests in collaboration with Adeptrix so that it is in a position to formally validate the diagnostic product as soon as possible. Avacta is also in discussions with a large commercial partner to provide a route to market for the BAMS assay.

Non-COVID Diagnostics Update

Recently the Group entered into a license agreement with Astrea for the use of the Affimer platform in affinity purification applications.

Astrea is a leading provider of affinity separation solutions to the pharmaceutical and biomanufacturing industries. It is a division of Gamma Biosciences, the life sciences tools platform created by KKR, to build a leading position in next-generation bioprocessing for advanced therapies.

This is an important validation of one part of the Group's business model for non-therapeutic Affimer applications - that of third party technical evaluations of bespoke Affimer reagents generated for a specific application leading to licensing of those Affimer reagents and long term royalty based revenue streams. Astrea has evaluated certain Affimer reagents for affinity separation resulting in the agreement between the two companies for a non-exclusive license for the use of the Affimer technology in this field.

The agreement includes a £0.5m upfront payment to Avacta which gives Astrea the rights to generate and develop Affimer reagents in-house for affinity separation using an Affimer library to be provided by Avacta. It also provides Astrea with an option to convert the agreement into an exclusive license if certain commercial performance criteria are met over the next three years and subject to the payment of an additional undisclosed option exercise fee.

Avacta will receive royalties on future sales of Astrea's purification products that contain Affimer reagents.

Although the pandemic has affected the Group's business development activities, it continues to generate new projects and to work on established Affimer evaluations with partners to generate further license agreements.

The Group is also developing an in-house pipeline of Affimer based diagnostic tests. Resources have been focused during 2020 primarily on the immediate COVID testing opportunities, and since the lateral flow test is now in clinical evaluation the Group is in a position to begin to refocus its research and development resources onto non-COVID diagnostic tests, which include assays for D-dimer, cortisol, vitamins D and B12 and CRP. Avacta has recently appointed a Product Manager who will join the Group in March whose role is to define the market opportunity and performance requirements for new tests to feed the product development pipeline in the future. This appointment is part of a wider expansion of the Diagnostics Division's management team which includes a Product Manager, Head of Product Development and Operations Director.

During the pandemic, in order to maintain a COVID safe working environment the Group has not been able to have all laboratory staff on site at the same time and has worked two teams. New CAT 2 laboratory facilities in Wetherby have been completed and equipment that has been installed is now being validated to satisfy the requirements of ISO13485. The new facilities will house about 20 staff and the Group expects therefore to be able to get all staff who cannot work from home back on site from February.

Therapeutics Division

Wholly-owned pre|CISION and Affimer Drug Pipeline

The Therapeutics Division has also had to work two teams in order to maintain social distancing in the laboratories in Cambridge, effectively reducing laboratory staffing to half its normal capacity. Nevertheless, the Group has continued to make progress with both in-house and partnered programmes.

Approval of CTA for AVA6000, the Group's lead pre|CISION^™ prodrug, is a key milestone

The Group achieved a significant milestone with the submission in Q4 2020 and subsequent approval on 19 February 2021 from the MHRA (Medicines and Healthcare products Regulatory Agency) of the Clinical Trial Authorisation (CTA) for AVA6000 Pro-doxorubicin, the Group's lead pre|CISION^™ prodrug, for a phase 1, first-in-human, open label, dose-escalation and expansion study in patients with locally advanced or metastatic selected solid tumours. The Group anticipates dosing first patients in mid-2021, subject to COVID-19 restrictions on hospital resources, with first pharmacokinetics read-out possible before the year end.

Instrumental in achieving the CTA submission milestone was the appointment of Chief Development Officer, Neil Bell, who has rapidly established a highly experienced Clinical Development Team including a Head of Chemistry, Manufacturing and Controls (CMC), Head of Clinical Operations and Head of Translational Medicine appointed in-house to manage an extensive outsourced network of service providers.

In AVA6000, Doxorubicin has been modified with Avacta's pre|CISION^™ chemistry, which renders the modified drug inactive in the circulation until it enters the tumour micro-environment. Here it is activated by an enzyme called FAP (fibroblast activation protein), which is in high abundance in most solid tumours but not in healthy tissue such as the heart. AVA6000 has been shown in animal models to significantly increase the amount of active drug in a tumour compared with the heart and should thereby improve tolerability and achieve better clinical outcomes for patients

Phase 1 study will be clinical proof-of-concept of the pre|CISION platform

The phase 1 study is a first-in-human, open-label, multi-centre study to be carried out in the UK in patients with locally advanced or metastatic solid tumours which are known to be FAP positive including pancreatic, colorectal, breast, ovarian, bladder and non-small cell lung cancers, squamous cell carcinoma of the head and neck and soft-tissue sarcoma.

The dose-escalation phase of the study, which will be carried out in 15-20 patients, is designed to evaluate the safety of AVA6000 in humans and establish the appropriate dosing levels for the dose expansion phase of the study.

The dose expansion phase will consist of up to three studies in specific tumour types to further evaluate safety and tolerability and to explore the anti-tumour activity of AVA6000 when administered as a monotherapy. This phase of study will comprise 45-60 patients in total.

If the AVA6000 study shows that the pre|CISION chemistry is effective in reducing systemic toxicity of Doxorubicin in humans, then it can be applied to a range of other established chemotherapies to improve their safety and efficacy. This would open up a pipeline of next generation chemotherapies for the Group with significant clinical and commercial value in a chemotherapy market that is expected to grow to $56 billion by 2024.

Group rapidly making progress to expand proprietary pre-clinical therapeutics pipeline

A significant proportion (c. £40m) of the funds raised through the placing in the summer of 2020 has been allocated to the rapid expansion of the pre-clinical therapeutics pipeline and the efficient translation of this pipeline into clinical development candidates during 2021 and beyond.

The Group is on schedule to select the next clinical development candidate by the end of 2021 from the pre|CISION prodrug pipeline. Lead programmes include AVA3996 a FAPα activated proteasome inhibitor, AVA7500 a FAPα activated platin, and AVA7000 a FAPα activated taxane. These are being developed in close collaboration with Professor William Bachovchin at Tuft's University School of Medicine.

Good progress has also been made with the in-house Affimer bispecific programmes towards selection of a clinical development candidate by the end of 2021. Two new programmes have been initiated that build upon the AVA004 PD-L1 antagonist programme: AVA027, a PD-L1/TGfb receptor trap combination and AVA028, a PD-L1/IL2 bispecific.

The Group will update shareholders and the wider market in detail on the biological, clinical and commercial rationale for the selection of these pre|CISION and Affimer therapeutic programmes during Q2 2021.

In-vivo studies of the lead tumour microenvironment activated drug conjugate (TMAC) programmes are ongoing to support the selection of a clinical development candidate from the pipeline. The first of these programmes is AVA04-VbP, a TMAC combining a PD-L1 Affimer antagonist with Val-boro-pro (also known as IDASH) which is a DPP9/9 inhibitor. The second TMAC programme combines an Affimer against an undisclosed target with VbP. The Group will update shareholders when a full in-vivo data set has been generated and the Group is in a position to select a candidate for clinical development.

Partnered programmes continue to expand

The Group has established several significant therapeutic partnerships with biotech and pharma partners including Moderna Therapeutics Inc., LG Chem Life Sciences, Daewoong Pharmaceuticals, ADC Therapeutics and recently with POINT Biopharma. Despite the effects of the pandemic, the Group has continued to make solid progress on those programmes in which Avacta plays an active research and development role (LG Chem, Daewoong and ADC Therapeutics).

In August 2020 Avacta agreed to expand the existing multi-target collaboration and development agreement with LG Chem to include new programmes incorporating Avacta's Affimer XT^™ serum half-life extension system. The expansion of the partnership includes an undisclosed additional upfront payment, plus near-term pre-clinical milestones and longer-term clinical development milestones totalling $98.5m for two therapeutics to be developed using the Affimer XT technology. Under the terms of the extended agreement, LG Chem has the exclusive rights to develop and commercialise, on a world-wide basis, Avacta's Affimer PD-L1 inhibitor with Affimer XT serum half-life extension.

The expanded partnership also provides LG Chem with rights to develop and commercialise other Affimer and non-Affimer biotherapeutics combined with Affimer XT half-life extension for a range of indications and Avacta could earn an additional $55m in milestone payments for each of these new products.  

In addition, under the agreement Avacta will earn royalties on all future Affimer XT product sales by LG Chem.

Post-period end the Group entered into a new license agreement with POINT Biopharma Inc. to provide access to Avacta's pre|CISION^™ technology for the development of tumour-activated radiopharmaceuticals.

The radiopharmaceutical market is expected to grow to $15 billion by 2025[5] and there is a substantial opportunity to grow much faster if safety and tolerability of these effective treatments can be improved. POINT Biopharma is a clinical-stage pharmaceutical company focused on developing radioligands[6] as precision medicines for the treatment of cancer.

Avacta's proprietary pre|CISION^™ chemistry can be used to modify a radioligand drug to form a tumour-activated prodrug. The prodrug form is inactive in circulation until it enters the tumour micro-environment where it is activated by an enzyme called fibroblast activation protein (or FAP) that is present in high abundance in most solid tumours but not in healthy tissue. Avacta's pre|CISION ^™ technology therefore has the potential to improve the tolerability and achieve better clinical outcomes for patients compared with standard radiopharmaceuticals by targeting the radioligand treatment more specifically to cancer cells.

The agreement provides POINT with an exclusive license to the pre|CISION^™ technology for use in the first radiopharmaceutical prodrug the company intends to develop, and a non-exclusive license to the pre|CISION^™ platform for the development of a broader pipeline of FAP-activated radiopharmaceuticals.

Under the terms of the agreement, Avacta will receive an upfront fee and development milestones for the first radiopharmaceutical prodrug totalling $9.5m. Avacta will also receive milestone payments for subsequent radiopharmaceutical prodrugs of up to $8m each, a royalty on sales of FAP-activated radiopharmaceuticals by POINT and a percentage of any sublicensing income received by POINT.

The Group continues to make excellent progress in its collaboration with Daewoong Pharmaceutical through the joint venture, AffyXell . AffyXell was established in January 2020 by Avacta and Daewoong as a joint venture to develop novel stem cell therapies. AffyXell is combining Avacta's Affimer platform with Daewoong's mesenchymal stem cell (MSC) platform such that the stem cells are primed to produce and secrete therapeutic Affimer proteins in situ in the patient. The Affimer proteins are designed to enhance the therapeutic effects of the stem cells creating a novel, next generation cell therapy platform.

The Group recently announced, post-period end, that the joint venture with Daewoong Pharmaceuticals called has closed a Series A venture capital investment of $7.3m to further develop its pipeline of next generation cell and gene therapies. The Series A funding has been raised from a group of venture funds including Samsung Venture Investment Corporation, Shinhan Venture Investment, Smilegate Investment, Shinhan Investment Corporation, Kolon Investment, Stonebridge Ventures, and Gyeongnam Venture Investment.

The capital raised will be used by AffyXell to continue the development of MSCs engineered to produce Affimer molecules generated by Avacta that inhibit inflammatory and autoimmune pathways and promote tissue regeneration.

While initially focusing on inflammatory and autoimmune diseases and prevention of organ transplant rejection, longer term goals could also include applications in regenerative medicine, infectious diseases and oncology.

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[1] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/950695/s0958-liverpool-covid-smart-evaluation.pdf

[2] A Notified Body is an organisation that has been designated by a member state of the European Union to ensure that products that are sold in the EU conform to the technical requirements. A Notified Body also conducts audits of Quality Management Systems, and a company's adherence to its Quality Management System, in order to award and maintain ISO13485 accreditation for medical device development and manufacture.

[3] https://mologic.co.uk/mologic-receives-ce-mark-approval-for-professional-use-covid-19-rapid-antigen-test/

[4] Link to Bruker application note: https://bit.ly/3jla8Rq

[5]   https://www.marketresearchfuture.com/reports/radio-pharmaceutical-market-1650

[6]   For more information about radioligands visit https://www.radioligands.org

 

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