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Avacta tackles the pandemic on all fronts with its Affimer technology

The biotech is using its engineered proteins to develop diagnostics and treatment for Covid-19

Avacta Group PLC -

Avacta Group PLC (LON:AVCT) has been one of the most sought after stocks during the coronavirus crisis, with the shares soaring over 400% since March.

The reason is the potential of its novel Covid-19 tests, a potentially effective way to trace the disease.

WATCH: 'The small cap pharma cream now rising to the top' after initial wave of interest - Zak Mir

With the latest research predicting a market worth US$45bn this year alone for Covid-19 tests, the prize for the £300mln market cap AIM-listed remains enormous.

Up until recently the biotech firm’s focus was on cancer immunotherapies using its two proprietary platforms, Affimer and pre|CISION.

Affimers are engineered proteins capable of binding specific molecular targets, in a similar way to antibodies.

This binding property can be used to target cancer cells in the human body and make those cells vulnerable to attack from the body’s own immune system.

They are smaller, quicker to manufacture and easy to format, but they maintain antibody-like biologic activity when binding a target.

pre|CISION is a targeted chemotherapy platform, which releases the active drug only in the tumour, improving the overall safety for the patients.

Avacta also licenses its technology to other companies.

But it has been the recent switch in focus to tackle the Covid-19 pandemic that has excited investors.

Since April, the AIM-listed firm has entered two new partnerships for diagnostics and embarked on a study for a potential treatment.

The most advanced collaboration is with Cytiva, formerly known as GE Healthcare Life Sciences, for the screening of large populations by testing the saliva.

The assay is designed to give results in minutes to both healthcare professionals and consumers, compared to the most common tests that are processed in laboratories.

According to Avacta, global demand for quick tests could reach millions per month so that people can go back to work with fewer risks of spreading the virus.

The company is working on finalising the product after releasing positive initial performance data.

“We aim to have completed the optimisation very soon so that we can begin the transfer to manufacturers,” chief executive Alastair Smith said at the end of June.

Avacta is also working with Adeptrix to develop another antigen test using the US-based firm’s bead-assisted mass spectrometry platform.

The technology improves the sensitivity and specificity of the sample so that a single technician can analyse hundreds in a day.

If approved, this assay would allow hospitals to switch their existing mass spectrometers for COVID-19 testing.

In this project, Affimers are used to better capture the virus particles in the samples, which could be saliva, nasopharyngeal swabs or serum. 

The prototype was finalised in early June and sent across clinical laboratories around the world for evaluation.

The pair expect to receive official approval in the UK, US and Europe for professional use in the summer.

What’s more, Avacta also expanded in the treatment realm after its engineered proteins were shown to provide a potential therapy for COVID-19.

Joint studies with the University of Glasgow revealed that Affimers block the interaction between the virus' spike protein and ACE2, a receptor on human cells that is key to the virus infection pathway.

In this way, they prevent infection and act as "neutralising" therapies.

They could be useful to prevent workers exposed to the virus from getting infected, as well as helping existing patients to stop symptoms from worsening.

According to Avacta, its technology is smaller and more soluble than antibodies, allowing a higher concentration to penetrate in the human cells, ensuring higher protection.

Last month, the biotherapeutics developer announced plans to raise £45mln amid institutional interest.

It ended up increasing the target to £48mln following huge demand, issuing 40mln shares at a 4% discount in a heavily oversubscribed placing.

Most of the proceeds were dedicated to its cancer therapies pipeline, while £10mln was allocated to its COVID-19 projects.

“The placing has received overwhelming support from both institutional and retail investors leading to a bookbuild that was multiple times oversubscribed,” Smith said after the placing was completed.

“This substantial fundraising allows us to rapidly expand the in-house Affimer and pre|CISION cancer therapy pipelines and scale-up the diagnostics business to expand the Affimer diagnostic products pipeline.

In the short term, the funds will provide the company with the working capital to support the development and manufacture of the COVID-19 antigen tests in development.

Over the long-term and given the potential demand, they might just help turn Avacta into one of the UK’s major biotech success stories.

Quick facts: Avacta Group PLC

Price: 139.5 GBX

AIM:AVCT
Market: AIM
Market Cap: £347.57 m
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