Avacta Group PLC (LON:AVCT) has set up a joint venture to develop new cell and gene therapies using its Affimer proteins.
The new JV with Daewoong Pharmaceutical Co will specifically target the development of a new class of mesenchymal stem cells (MSCs), multipotent cells where functions can include being agents for the treatment of autoimmune and inflammatory diseases.
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Avacta said its research and development costs for these targets “will be fully covered by the joint venture which is funded by Daewoong”.
Avacta is a specialist in developing Affimers, which are engineered proteins that help drugs more effectively target diseases such as cancer by reducing inflammatory and autoimmune responses.
The JV will develop MSCs that are primed to produce Affimer proteins against several unnamed targets, which will be transferred to the joint venture to be incorporated into MSCs.
The AIM-listed company said it retains the rights to commercialise the Affimer proteins outside of the field of cell therapies.
Growing interest in cell therapies
“Cell and gene therapies are attracting intense clinical and commercial interest,” said Avacta chief executive Alastair Smith, adding that the JV “will have a unique opportunity to generate superior cell therapies for some of the most pressing needs in immune-mediated disease”.
“Our vision is to combine our platforms to create the next generation of cell therapies, for which the potential is huge.”
This JV adds to a range of partnerships that Avacta has around the world, including with the drug development arm of Korean giant LG.
Smith noted that in the last six months, deals involving early-stage stem cell companies have included Bayer acquiring control of Blue Rock for US$600m and Vertex buying start-up Semma Therapeutics for US$950m.
In a note to clients, analysts at ‘house’ broker finnCap pointed out that joint venture will open up a new opportunity for Avacta in immunotherapeutic engineered cell therapy, an area of intense M&A activity and focus, whilst Avacta retains the rights to commercialise these Affimer proteins outside of the stem cell therapy field.
They said: “This provides further validation of Avacta’s proprietary Affimer technology.”
finnCap repeated its 76p target price on Avacta shares, which in late morning trading were 7.7% higher at 18.85p.
-- Adds broker comment, share price --