Avacta Group enters joint venture with South Korea's Daewoong

Biotherapeutics and reagents developer Avacta Group has agreed to establish a joint venture in South Korea with Daewoong Pharmaceutical, it announced on Wednesday, and to enter into a collaboration and license agreement for the joint venture to develop the next generation of cell and gene therapies, incorporating its ‘Affimer’ proteins to enhance the immune-modulatory effects.

The AIM-traded firm explained that mesenchymal stem cells (MSCs) are promising agents for the treatment of autoimmune and inflammatory diseases.

It said the joint venture would develop a new class of MSCs that would be primed to produce Affimer proteins, which were designed to enhance the immune-modulatory effect when administered to patients, by reducing inflammatory and autoimmune responses.

Avacta said it would develop Affimer proteins against several undisclosed targets, which would be transferred to the joint venture to be incorporated into MSCs.

Its research and development costs would be fully covered by the joint venture, which was being funded by Daewoong.

Avacta said it was retaining the rights to commercialise the Affimer proteins outside of the field of cell therapies.

Daewoong would provide the joint venture with access to its proprietary technology for generating allogeneic MSCs from a single donor to treat a large number of patients.

That technology would facilitate the development of cell therapies as ‘off-the-shelf’ products.

Avacta's shareholding in the joint venture would be 45%, and it would be operationally managed by Seng-ho Jeon, chief executive officer of Daewoong, with a board composed of representatives of both Avacta, being CEO Alastair Smith and vice-president of business development Matthew Vincent, as well as Daewoong.

“Cell and gene therapies are attracting intense clinical and commercial interest,” said Avacta CEO Alastair Smith.

“We are very excited to establish this joint venture with Daewoong, one of the top pharmaceutical companies in Korea, to develop the Affimer platform in this important therapeutic area.

“Our vision is to combine our platforms to create the next generation of cell therapies, for which the potential is huge.”

Dr Smith said that within the last six months, the firm had seen early stage stem cell companies acquired for significant sums, with Bayer acquiring control of Blue Rock for $600m, valuing that company at close to $1bn, and Vertex buying start-up Semma Therapeutics, which is developing stem cell therapies for type-1 diabetes, for $950m.

“This joint venture will have a unique opportunity to generate superior cell therapies for some of the most pressing needs in immune-mediated disease.

“We look forward to working closely with the Daewoong team to develop these new medicines, and get them to the patients who need them.”

Dr Seng-ho Jeon, chief executive officer of Daewoong Pharmaceutical, added that the partnership reinforced the shared vision of the two firm in designing the next level of treatment paradigm, and would open up “a new horizon” in immunotherapeutic strategies.

“This innovative collaboration will deliver invaluable synergy and lead to new solutions to transform patients' lives.”

At 1514 GMT, shares in Avacta Group were up 5.71% at 18.5p.