Subscription to raise £2 million

RNS Number : 5024I

Avacta Group PLC

02 April 2020

 

THE INFORMATION COMMUNICATED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

2 April 2020

Avacta Group plc

("Avacta", the "Group" or the "Company") 

Subscription to raise £2 million

Avacta Group plc (AIM: AVCT), the developer of Affimer^® biotherapeutics and research reagents, is pleased to announce a proposed Subscription (the "Subscription") to raise gross proceeds of £2 million. The Subscription comprises of 11,111,110 subscription shares (the "Subscription Shares") at a price of 18 pence per new ordinary share ("Ordinary Shares"), being a 2% discount to 14 day volume weighted average of 18.4 pence. The two subscribers are Clare Hughes (wife of Richard Hughes, co founder of Zeus Capital) and Mahmud Kamani, co-founder of Boohoo.com.  Admission of the Subscription Shares is subject to, amongst other things, shareholder approval at the general meeting ("General Meeting"), notice of which will be sent to shareholders shortly.  A further announcement will be made in due course.

Reason for the Subscription and Use of Proceeds

The Company intends to utilise the net proceeds of the Subscription to continue to execute the strategy outlined last October. The Company's key objectives are to enter the clinic with its first preCISION chemotherapy programme, to secure further significant drug development partnerships that help progress the Company's technology platforms, and to continue to grow revenues and secure licensing partnerships for Affimer® diagnostics reagents.  Given the current economic climate the Board have deemed it prudent to take on a small amount of additional equity capital at this time to ensure that it is in a strong position to exploit progress after the coronavirus pandemic is over.

Current trading and outlook

Following the collaboration and option agreement with ADC Therapeutics SA (Lausanne, CH) at the end of 2019, Avacta has successfully expanded the LG Chem Life Sciences Partnership and established a joint venture in South Korea with Daewoong Pharmaceutical Co. Ltd. 

The Company expects to announce its results for the 17 months to 31 December 2019 later this quarter and ended the period with cash balances of £8.7 million.

AVA6000

Avacta will file a CTA application as soon as possible for a phase I dose escalation study for its lead preCISION pro-drug chemotherapy AVA6000 pro-doxorubicin. A positive outcome to this phase I study would require an improved safety profile compared with standard Doxorubicin since the efficacy of this existing chemotherapy is well known. Positive data could lead to a significant licensing opportunity for AVA6000 with companies currently marketing existing Doxorubicin products or with companies that are currently carrying out clinical studies combining Doxorubicin with their checkpoint inhibitors. A successful outcome to the study would also open the potential to using the preCISION tumour targeting technology developed at Tufts University and exclusively licensed by Avacta to improve the safety profile of many other chemotherapies.

COVID-19

The Company is monitoring the UK Government's guidance regarding COVID-19 pandemic. The Company has instigated a working from home policy where possible and has curtailed all travel. Laboratory staff are continuing to carry out their duties working in smaller teams to allow social distancing to be observed.  The Group's revenues are not expected to be materially affected this year and will continue to benefit from the expanded LG Chem partnership, the new collaboration established with ADC Therapeutics and the recently announced joint venture with Daewoong Pharmaceuticals; each of which will fully fund Avacta's related R&D activities. The Company has made good progress in manufacturing drug material for the AVA6000 phase I clinical trial and in preparing the CTA filing. At this stage the Company does not expect to experience significant delays of more than a few weeks due to the coronavirus outbreak, but it is reliant on clinical trials proceeding in the UK by the end of the year. The small amount of additional capital raised through the Subscription will help to ensure that the Company can deliver on key milestones despite the COVID-19 pandemic. 

- Ends -

For further information from Avacta Group plc, please contact:

Avacta Group plc Alastair Smith, Chief Executive Officer Tony Gardiner, Chief Financial Officer	Tel:  [phone] www.avacta.com
finnCap Ltd (Nominated Adviser and Joint Broker) Geoff Nash / Giles Rolls, Corporate Finance Tim Redfern - ECM	Tel:  [phone] www.finncap.com
Zeus Capital Limited (Joint Broker) John Goold / Rupert Woolfenden, Corporate Broking Yellow Jersey PR (Financial Media and IR) Sarah Hollins Henry Wilkinson Zyme Communications (Trade and Regional Media) Katie Odgaard	Tel: [phone] www.zeuscapital.co.uk Tel: [phone] [e-mail] Tel: [phone] [e-mail]

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

Avacta is developing novel cancer immunotherapies combining its two proprietary platforms - Affimer^® biotherapeutics and pre|CISION™ tumour targeted chemotherapy. With this approach, the Company aims to address the lack of a durable response to current immunotherapies experienced by most patients. The Company's therapeutics development activities are based in Cambridge, UK.

The Company benefits from near-term revenues generated from Affimer reagents for diagnostics, bioprocessing and research, through a separate business unit based in Wetherby, UK.

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

Avacta's pre|CISION platform, activates chemotherapy only in the tumour, thereby limiting systemic exposure and damage to healthy tissues, and thus improving the overall safety and therapeutic potential of these powerful anti-cancer treatments. 

By combining these two platforms the Company is building a wholly owned pipeline of novel cancer therapies with the aim of creating effective treatments for all cancer patients including those who do not respond to existing immunotherapies. Avacta expects to take its first drug, a pre|CISION targeted form of the standard-of-care Doxorubicin, into the clinic in late 2020.

Avacta has established drug development partnerships with pharma and biotech, including with Moderna Therapeutics Inc., a collaboration with LG Chem to develop treatments for autoimmune and inflammatory diseases worth up to $310m, a partnership with ADC Therapeutics to develop Affimer drug conjugates and a joint venture in South Korea with Daewoong Pharmaceuticals to develop the next generation of stem cell therapies that incorporate Affimer immuno-modulators. Avacta actively seeks to license its proprietary platforms in a range of therapeutic areas.

The Avacta diagnostics business unit works with partners world-wide to develop Affimers for evaluation by those third parties with the objective of establishing royalty bearing license deals. The Company is also developing a small in-house pipeline of Affimer-based diagnostic assays for licensing.

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