Placing, Issue of Equity and related party tran...

Avacta Group plc                                

            Placing, Issue of Equity and related party transaction             

Avacta Group plc ("Avacta" or "the Company"), the biophysics company which
provides innovative high value technologies and services to the pharmaceutical
and diagnostics markets, announces that it has raised £1.95 million (before
expenses) from a conditional placing of new ordinary shares of 0.1 pence each
("New Ordinary Shares") at a price of 1.05 pence per Ordinary Share (the
"Placing"). The New Ordinary Shares have been placed by XCAP Securities Plc
("XCAP") with institutional and other existing and new shareholders pursuant to
a Placing agreement, which contains the usual warranties in favour of XCAP and
the Company's nominated adviser, Grant Thornton Corporate Finance.

The placing is subject to the passing of resolutions giving directors authority
to issue shares, which are being put to shareholders at the Company's AGM that
is taking place on 21 January 2011.

Use of Proceeds & Strategy

The cash proceeds of the Placing will be used to support the continuing
progress in Avacta's business providing products and services to support the
biopharmaceutical and healthcare sectors.

Since joining AIM in late 2006 Avacta has achieved its stated milestones by
delivering products and services and establishing routes to market through two
operating businesses; Avacta Analytical and Avacta Animal Health, in its target
markets of drug development and diagnostics. The Company has announced the
first sales in Europe and the United States of its first product, Optim, which
is designed to significantly reduce risk and cost in the biopharmaceutical drug
development process. Nine units have now been ordered and the Company is in
discussion with several overseas distributors for the product. The pipeline of
validated enquiries is very encouraging and the Company remains confident of
seeing this strong interest in the product convert to accelerating sales over
the coming months.

In addition, the Company has recently launched its first diagnostic product,
AX-1, which will be focused on point of care testing applications in the
veterinary healthcare market. The AX-1 system will be capable of delivering a
wide menu of rapid diagnostic blood tests offering both quantitative and
qualitative analysis in the veterinary clinic and, in due course, in human
healthcare applications.

The funds raised will be used to support commercialisation of these new
analytical and diagnostics products through improvements in infrastructure and
manufacturing processes and through the enhancement of the Company's commercial
teams.

Pursuant to the Placing, IP Group plc ("IP Group") through IP2IPO Limited, will
subscribe for 46,647,619 New Ordinary Shares at the Placing Price. Following
Admission, IP Group will be interested in 410,643,313 ordinary shares,
representing 25.14 per cent, of the Company's issued share capital on
Admission. As IP Group is a significant shareholder in the Company, the
subscription for New Ordinary Shares by IP Group constitutes a related party
transaction as defined by the AIM Rules for Companies. Accordingly, the
Directors, having consulted with the Company's nominated adviser, consider that
the terms of the subscription by IP Group are fair and reasonable in so far as
the Company's shareholders as a whole are concerned.

Admission to trading and Total Voting Rights

Application has been made for the New Ordinary Shares to be admitted to trading
on the AIM market of London Stock Exchange plc and dealings are expected to
commence on 24 January 2011. The New Ordinary Shares will rank pari passu with
existing shares in issue. Following the Placing, Avacta's issued share capital
comprises 1,633,187,577 ordinary shares of par value 0.1 pence each with voting
rights. No ordinary shares are held in treasury.

The above figure of 1,633,187,577 shares may be used by shareholders as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest in the
Company under the FSA's Disclosure and Transparency Rules.

                                                                12 January 2011

Alastair Smith, Chief Executive Officer of Avacta Group commented :

"We're delighted to have experienced recent strong interest in Avacta from
existing and new investors and to have the opportunity presented to us to raise
these additional funds. I am very pleased with Avacta's recent progress as it
transitions from a period of focused product development to one of
commercialisation of its new products. We have a highly motivated and hard
working team that will continue to drive the business forwards during what
promises to be an exciting period in the Company's growth."

For further information, please contact:

Avacta Group plc                              Tel: [phone]             
                                                                             
Alastair Smith, Chief Executive Officer       www.avacta.com                 
                                                                             
Tim Sykes, Chief Financial Officer                                           
                                                                             
Broker                                        Tel: [phone]             
                                                                             
XCAP Securities Plc                           www.xcapgroup.com              
                                                                             
John Grant/Karen Kelly/David Newton           Tel: [phone]             
                                                                             
Nominated Adviser                             www.grantthornton.co.uk        
                                                                             
Grant Thornton Corporate Finance                                             
                                                                             
Philip Secrett/Colin Aaronson/David Hignell                                  

Notes to Editors:

About Avacta

Avacta was spun-out from the University of Leeds in 2004 by its current
management team as a biophysics company, with the aim of combining the
disciplines of physics and biology to develop innovative technologies and
expert technical services to address unmet needs in the biopharmaceutical and
healthcare sectors. Avacta has a core bio-analytical technology development
programme addressing the needs of the biopharmaceutical sector to fully
characterise their new products at the earliest stage in their development to
reduce the risk of late stage failure. High end analytical instruments and
leading edge contract research services are being provided to the
biopharmaceutical and healthcare/personal-care materials sectors through
Avacta's biotech support division, Avacta Analytical. High value solutions for
rapid, point of care diagnostics based on these core bio-analytical
technologies, with a near term focus on veterinary diagnostics, are being
delivered through Avacta Animal Health. Longer term these technologies will be
transferred into the human clinical diagnostics market. Avacta listed on AIM in
August 2006.