Avacta hails progress on in-house and third-party programmes

Avacta Group posted a slightly wider full-year loss on Wednesday even as it highlighted progress both with its in-house programmes and third parties.

Among its in-house initiatives, the manufacturer of affimers for use as reagents for pharmaceuticals research and clinical diagnostics hailed "significant" progress on its second therapeutic programme, a LAG-3 inhibitor, which it said would allow it to leap-frog clinical trials by itself on a PD-L1 inhibitor and aim instead for first-time-in-human clinical data for a PD-L1/LAG-3 bispecific therapy.

That, the company said in a statement, was a potentially much more valuable asset and could be achieved within a similar timescale.

On that note, company boss, Alastair Smith, said Avacta was firmly on the path towards "key near-term" commercial and clinical milestones which would constitute "major" value inflection points for its Affimer platform and the group as a whole.

Avacta also anticipated licensing deals for its reagents were set to materialise in the "near-term".

"The substantial number of technology evaluations of Affimer reagents that we have established is now showing signs of bearing fruit," Smith said.

"We expect to be able to report on reagents licensing deals in a number of application areas in the coming financial year that will validate the licensing business model which we are pursuing, and in turn, will underpin future royalty revenue streams."

During the period, the firm also opened an important second programme in its therapeutic strategy alongside Tufts Medical School following its joint discovery of a way to improve patient response via the use of drug conjugates.

Nevertheless, given the time lag involved in technology evaluations, management had also embarked on developing custom Affimer services with a view to generating sales more quickly.

In terms of its financials, the company posted a wider loss from continuing operations of -£8.83m on the back of accelerated research and development costs.

The year before it had incurred in -£6.37m of red ink.

Cash balances were also run down significantly, from £13.2m as at 31 July, 2017, to £5.2m, but were supplemented by a cash call for a gross amount of £11.6m which it had received post-period end.

At £2.76m revenues were little changed from the £2.74m it achieved in 2017.

As of 1502 BST, shares of Avacta were slipping 1.20% to 24.70p.