Avacta joint venture with Daewoong raises $7.3m in series A funding

Biotherapeutics developer Avacta Group announced on Monday that its joint venture with Daewoong Pharmaceutical, AffyXell Therapeutics, has closed a series A venture capital investment of $7.3m (£5.32m) to further develop its pipeline of next generation cell and gene therapies.

The AIM-traded firm established AffyXell in January 2020 as a joint venture with Daewoong to develop novel mesenchymal stem cell (MSC) therapies.

It explained that AffyXell was combining Avacta's ‘Affimer’ platform with Daewoong's MSC platform, so that the stem cells were genetically modified to produce and secrete therapeutic Affimer proteins in situ in the patient.

The Affimer proteins were designed to enhance the therapeutic effects of the MSC, creating a “novel, next generation” cell therapy platform.

It said the series A funding was 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 would be used by AffyXell to further the development of MSCs engineered to produce Affimer molecules that suppress immune response and restore immune balance.

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, the board said.

Under the terms of the collaboration and licence agreement, Avacta's research and development costs associated with the generation of the Affimer proteins were being funded by AffyXell, while Avacta retained the rights to commercialise the Affimer proteins outside the field of cell therapies.

“The potential for AffyXell's new class of MSC therapies to deliver improved treatments for a wide range of inflammatory and autoimmune diseases is significant, in a market estimated to be worth $16bn by 2025,” said chief executive officer Dr Alastair Smith.

“We expect these novel engineered MSCs to show a more powerful therapeutic effect than existing antibodies and stem cells and they therefore have the potential to lead the rapidly growing field of cell and gene therapy.”

Smith said AffyXell was “uniquely positioned” to develop novel and powerful cell therapies through the combination of two “world-class” technologies:

“Avacta's Affimer platform and Daewoong's proprietary technology for generating ‘off-the-shelf’ allogeneic MSC therapies.

“Completion of the series A funding is a strong validation of this concept and moves us closer to providing these new therapies to the patients who need them.”

At 0904 GMT, shares in Avacta Group were up 4.27% at 128.25p.