IP Group's Avacta signs $180m deal with LG Chem

IP Group’s AIM-listed portfolio company Avacta Group has agreed an ‘Affimer’ therapeutics development partnership and license agreement with LG Chem Life Sciences, part of the South Korean LG Group chaebol, worth up to $180m across upfront, near-term payments and development milestones, it was announced on Monday.

The FTSE 250 intellectual property development firm said Avacta’s agreement, which was aimed at developing Affimer therapeutics in several disease areas, could also result in an additional $130m in option fees and milestone payments should LG exercise their options for additional targets.

Avacta would also receive royalties on any future product sales, and LG Chem would cover Avacta's costs of research and development associated with the collaboration.

IP Group currently holds a direct undiluted beneficial stake of 17.1% in Avacta, while IP Venture Fund holds 1.0%.

“Avacta will generate and carry out early-stage optimisation of Affimer drug candidates against multiple undisclosed targets,” the IP Group board said in its statement.

“LG Chem and Avacta will collaborate to progress these candidates through to drug candidate selection, and LG Chem will be responsible for pre-clinical and regulatory studies, clinical development and world-wide marketing of any resulting products.”

IP Group explained that the Affimer technology was Avacta's proprietary alternative to antibodies, with wide applications in the life sciences for drug development, diagnostics and research tools.

Avacta's in-house therapeutic pipeline was focused on immuno-oncology, and the group expected to advance its lead programme - a PD-L1/LAG3 bispecific - into the clinic in 2020 whilst building out its pipeline of innovative Affimer drug candidates.