After the big news of its development partnership with Bach BioSciences last week, Avacta Group PLC (LON:AVCT) on Monday tapped the market for £11.6mln, before expenses.
The drugs group raised the money from a placing of 38,952,724 shares and a subscription for 7,520,000 shares with new and existing institutional investors at a price of 25p each, 10.5p below Friday’s closing price but just 2.45p below the level at which the shares were trading before last week’s big news.
READ: Avacta shares jump as much as 60% after it inks co-development deal with US innovator
The company intends to use the net proceeds from the share issue to enter into significant drug development partnerships, develop the Affimer therapeutic pipeline, license Affimer reagents and seek to achieve a clinic-ready candidate for first-in-man trials of its PD-L1/LAG3 bispecific therapy.
On the therapeutics side, around £2mln will be deployed into the PD-L1/LAG3 bispecific antibody programme focused on the investigational new drug-enabling studies during 2018/19; these studies would ultimately facilitate the company to commit to the substantial regulatory, good manufacturing practice (GMP) manufacturing and clinical trials costs of a first-time-in-human Phase I clinical study in 2020/21.
Some £1.2mln has been earmarked for the PD-L1 Drug Conjugate programme in partnership with Tufts Medical Center to seek to develop a novel PD-L1 targeted drug conjugate in order to achieve in-vivo (in a living organism) pharmacology data in 2020 for development or partnering.
A total of £750,000 is to be deployed into the targeted agonists – a substance that can combine with a receptor on a cell to initiate signal transduction (the transfer of genetic material from one cell to another) - in order to achieve in-vivo pharmacology data in 2020 for partnering or development.
Around £1mln will be pumped into the discovery pipeline to continue to build the pipeline of Affimer I-O assets for partnering and to support third-party technology evaluations through collaborative projects.
Finally, £1.25mln will be invested into further staff costs related to the clinical and regulatory team, including the appointment of a chief medical officer.
On the reagents side, around £3.3mln will be invested, the bulk of which - £2.5mln – will go on research and development. The rest will go on business development, with the aim of having 10-20 royalty-bearing licensing deals in place by 2021.
With regards to the Affimer Therapeutics business, Avacta said it has made good progress with in-house programmes, while the lead PD-L1 programme is on-track to deliver several key pre-clinical milestones in 2018 and there is continued platform validation and de-risking through completion of a number of in-vitro (i.e. test tube) data packages.
The pipeline of opportunities continues to grow across multiple applications, Avacta added.
With regards to Affimer research and diagnostics reagents, the focus is on licensing opportunities for reagents in non-therapeutic markets.
With the growing body of data generated in-house and through collaborations, the company expects that it will have sufficient evidence of the performance of Affimer therapeutics to secure at least one significant development partnership, including an upfront payment, with a significant pharma partner in the next two years before it reaches the clinic itself with its lead in-house programme.
Avacta reported that progress has been made with multiple third-party technology evaluations and it is expecting further licensing deals in 2018. In addition, there has been strong growth in the number of public validations of Affimer technology by third parties, including a record period for publication of third-party peer-reviewed scientific papers using Affimers.