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Avacta Group plc (AIM: AVCT), the developer of Affimer® biotherapeutics and research reagents, announces its unaudited interim results for the period ended 31 January 2019.

Operating highlights

Affimer Therapeutics

• Major development partnership and license agreement with LG Chem Life Sciences (LG Chem) potentially worth over $300m plus future royalties on product sales.  The agreement included an upfront payment of $2.5m, near-term milestone payments of up to a further $5.5m plus payment of Avacta's research costs to develop Affimer therapeutics for oncology and the treatment of inflammatory diseases. 
• Continuing to build the in-vivo pharmacology data packages for our lead immune checkpoint programmes - PD-L1 and LAG3 antagonists; aiming to initiate first-in-human clinical studies for the Affimer drug platform in 2020.
• Research collaboration and licensing agreement, to access novel drug conjugate technology developed at Tufts University Medical School, established to underpin pipeline of innovative "TMAC" Affimer drug conjugates and combination therapies.
  • Pre-clinical development of first TMAC drug conjugate has started and initial in-vivo efficacy data from a combination of the lead Affimer PD-L1 candidate with a DDP8/9 inhibitor (AVA100) are promising.

Affimer Research and Diagnostics Reagents

• Ongoing paid-for technology evaluations and custom Affimer services projects with commercial partners include:
  • Global in vitro diagnostic companies
  • Pharma and biotech companies
  • Bioprocessing companies
• Marketing campaign for anti-idiotypic Affimer reagents has helped grow the size of the custom Affimer sales pipeline to its largest value to date.  This includes multiple pharma and biotech, several global diagnostic and life sciences reagents companies.
• Agreed commercial license with New England Biolabs® (NEB®), a global leader in the discovery and production of enzymes for molecular biology applications.  This agreement is to commercialise a product using the Affimer technology for use in both life science research and diagnostics assays.
• Strong focus on generating further license deals during 2019 arising from multiple ongoing technology evaluations.
• Good progress in building a proprietary pipeline of Affimer reagents against specific diagnostic targets with the aim of generating two diagnostic assets with the supporting data packages during 2019 for future licensing.

Board and Senior Management

• Dr Jose Saro appointed in December 2018 as Chief Medical Officer to lead the pre-clinical and clinical development of the Affimer® therapeutic platform.  Dr Saro joined Avacta from Roche where he held the role of Senior Translational Medicine Leader at the Roche Innovation Center Zurich.
• Alan Aubrey, Non-executive Director retired from the Board at the recent Annual General Meeting following 12 years of service to the Group.
• Dr Sam Williams was appointed to the Board as a Non-executive Director.

Financial highlights

• First up-front milestone payment of $2.5m received from LG Chem Life Sciences.
• Fund raising completed August 2018, with £11.6m gross received.
• Cash balances £11.8m (£5.2m 31 July 2018).
• Half year revenues of £1.0m (£1.5m FY18) reduced due to absence of research services revenue for FTEs working on the Moderna collaboration now that assets have been transferred into their development pipeline.  LG Chem funded research services work commenced February 2019 and will contribute to second half-year figures.
• Operating loss £5.9m (£4.5m FY18), with research and development costs increasing to £2.4m (£1.5m FY18).
• Increased R&D costs leading to reported loss of £5.2m (£3.9m FY18).

Post-period highlights

• ModernaTX, Inc. (NASDAQ: MRNA) exercised its option to enter into an exclusive licensing agreement with respect to certain Affimers against a potential therapeutic target that has been part of an ongoing research collaboration between the two companies. Under the terms of the agreement Avacta may receive undisclosed payments upon future clinical development milestones and royalties in connection with future product sales.

Alastair Smith, Chief Executive Officer, commented:

"The Group remains focused on the key objective of first-time-in-human data for the Affimer therapeutic programme and growing a profitable Affimer reagents business.

First-time-in-human data is a significant value inflection point for the technology and a major de-risking point from a deal making perspective.  The Group remains on track, to a tight schedule, to dose first patients in late 2020.  The addition of Dr Jose Saro as Chief Medical Officer is a significant strengthening of the senior management team with regards this translation of programmes into the clinic.

Whilst the lead programmes progress into the clinic, the Group will continue to build-out its pipeline of immuno-oncology assets.  The Group believes that the TMAC platform incorporating a range of Affimer immune checkpoint mono- and multi-specific therapies, and the complimentary development of co-administered combinations of Affimers with the chemotherapy drugs arising from the TMAC programme, provides the potential to develop an extensive, highly differentiated and valuable drug pipeline in the years ahead.

The Group has recently reported a substantial collaboration and license agreement with LG Chem and the exercise of a commercial license option by Moderna with whom the Group has been collaborating with since 2015.  This combination of the growing technical and commercial progress is expected to help catalyse further significant partnerships in due course.

As a proven platform technology addressing multiple non-therapeutic markets the Group has the opportunity to establish a profitable reagents business, and there is significant upside potential as it builds a pipeline of valuable Affimer drug assets." 

- Ends -

For further information from Avacta Group plc, please contact:

 

Avacta Group plc	Tel:  +44 (0) 844 414 0452 www.avacta.com
Alastair Smith, Chief Executive Officer Tony Gardiner, Chief Financial Officer
finnCap Ltd (Nominated Adviser and Joint Broker)	Tel:  +44 (0) 207 220 0500 www.finncap.com
Geoff Nash / Giles Rolls - Corporate Finance Tim Redfern - ECM
WG Partners (Joint Broker)	Tel:  +44 (0) 203 705 9318 Tel:  +44 (0) 203 705 9217 www.wgpartners.co.uk
Nigel Birks / Nigel Barnes David Wilson / Claes Spang
Turner Pope Investments	Tel: +44 (0) 203 621 4120 www.turnerpope.com
James Pope / Ben Turner
Yellow Jersey PR (Financial Media and IR)	Tel: +44 (0)7764 947 137 Tel: +44 (0)7544 275 882 [email protected]
Sarah Hollins Harriet Jackson
Zyme Communications (Trade and Regional Media)	Tel: +44 (0)7787 502 947 [email protected]
Katie Odgaard

About Avacta Group plc - www.avacta.com

Avacta's principal focus is on its proprietary Affimer® technology which is a novel engineered alternative to antibodies that has wide application in Life Sciences for diagnostics, therapeutics and general research and development.

Antibodies dominate markets worth in excess of $100bn despite their shortcomings.  Affimer technology has been designed to address many of these negative performance issues, principally; the time taken to generate new antibodies, the reliance on an animal's immune response, poor specificity in many cases, and batch to batch variability.  Affimer technology is based on a small protein that can be quickly generated to bind with high specificity and affinity to a wide range of protein targets.

Avacta has a pre-clinical biotech development programme with an in-house focus on immuno-oncology as well as partnered development programmes.  Avacta is commercialising non-therapeutic Affimer reagents through licensing to developers of life sciences research tools and diagnostics. 

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