Avacta Group PLC's (AIM:AVCT) latest data showcase a significant advance in cancer drug design. The company has demonstrated that its proprietary pre|CISION technology can deliver two different anti-cancer drugs into a tumour simultaneously, an achievement that could redefine the economics and effectiveness of targeted chemotherapy.
The announcement, made at the AACR-NCI-EORTC conference in October, marks the first proof that Avacta’s platform can release dual payloads from a single molecule. For a company whose market capitalisation stands at just under £290 million, this progress underscores why investors have been watching it closely.
Sophisticated system
At its core, pre|CISION is a sophisticated delivery system designed to make chemotherapy more selective. Traditional drugs circulate through the body and damage both healthy and cancerous tissue, leading to severe side effects. Avacta’s approach modifies existing chemotherapy drugs so that they only activate in the tumour environment.
The trigger is an enzyme called fibroblast activation protein, or FAP, which is found in the fibroblasts that surround many solid tumours but is rare in normal tissue. Avacta has designed a short peptide that can be cleaved only by FAP, releasing the active drug exactly where it is needed. The result should be higher concentrations of treatment inside the tumour and lower exposure elsewhere in the body, improving efficacy while reducing toxicity.
Double-threat
What is new is that the company can now attach and release two drugs at once. At the Boston conference, Avacta reported that it had successfully combined exatecan, a topoisomerase inhibitor that interferes with DNA replication, with a PARP inhibitor, which blocks the repair of DNA damage, or alternatively with MMAE, a microtubule inhibitor that prevents cell division. Laboratory studies showed that the dual-payload combination achieved roughly five times the cell kill rate of exatecan alone, indicating clear potential synergy between the two drugs.
Equally important is that Avacta can fine-tune how quickly the drugs are released by modifying the linker that joins them to the peptide backbone. This flexibility allows for staggered or sustained activation, tailored to each therapeutic approach. Such versatility could make pre|CISION an attractive technology for partners seeking new ways to boost the effectiveness of existing drugs.
Competing tech
For investors, the comparison with antibody-drug conjugates (ADCs) is inevitable. ADCs have become one of the most active areas of cancer drug development, with major pharmaceutical companies signing multi-billion-pound licensing deals. They work by attaching a chemotherapy molecule to an antibody that targets a specific cancer marker. But antibodies are large, complex proteins that are costly to produce, and each ADC can only target tumours expressing the right marker.
Avacta’s peptide drug conjugates (PDCs) aim to simplify that concept. They are smaller, easier to manufacture and do not rely on a single biomarker. Because the FAP enzyme is found across many tumour types, a single peptide design could work in multiple cancers. The drugs also do not require internalisation by tumour cells to be effective, which could increase their reach within a tumour.
Partner interest
Panmure Liberum analysts said these qualities “are likely to be of significant interest to potential partners,” adding that discussions are underway around Avacta’s key programmes, including faridoxorubicin and FAP-Exd. The company’s first dual-payload candidate, AVA6207, combining exatecan and MMAE, is expected to enter human trials in the second half of 2026 following additional pre-clinical and toxicology work.
Financially, Avacta remains at an early stage. It raised £16 million in new equity, extending its cash runway into the second half of 2026, allowing it to start the FAP-Exd Phase 1 study and deliver early clinical readouts next year. The funding buys time but not yet independence, and further financing will be required to sustain the broader platform and strengthen its negotiating position with prospective partners.
Panmure Liberum’s analysts maintain a ‘buy’ recommendation and a 72p target price, only modestly above the 70p market price at the end of October. They argue that Avacta trades at a discount to peers with similar pipelines, largely because investors have yet to see pre|CISION validated in more than one clinical setting. “
Additional validation is required to prove the technology can be applied in multiple applications,” the note said, although it added that a successful demonstration of efficacy in the upcoming FAP-Exd study would “result in a step up in value.”
Risks remain
The numbers underline both promise and risk. Avacta remains loss-making, with forecast operating losses of £28 million this year and £54 million next, but that is par for the course in early-stage biotech. What differentiates it is its chemistry. If pre|CISION proves it can safely activate drugs only where FAP is present, it could become a licensable technology platform, applicable across a range of oncology drugs.
After waxing lyrical, it is worth adding a few ‘cautionaries’ at this point.
Yes, Avacta offers a potential revolution in cancer drug delivery. However, life science R&D is an expensive business. Inevitably, this means there will be periodic requirements for new investments, exemplified by the company’s recent £16 million fundraiser.
It is also a risky business that can be binary in nature, while the regulatory pathway to approval is never linear.
Deep pockets
All of these mean patience and deep pockets are required to get Avacta from its current promising position to successfully tap into multi-billion-dollar markets. The dearth of UK success stories underlines how tough the road is.
So, for private investors, Avacta’s shares remain speculative, but the dual-payload results add credibility to the science. The near-term catalysts will be clinical data from FAP-Exd in 2025 and the first-in-human results for the dual-payload compound in 2026. Success there could move the dial.