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Avacta Group - Capital Network: Preliminary Results

Avacta’s FY 2017 Preliminary Results: Reagents and therapeutics programs all on track
Avacta Group - Capital Network: Preliminary Results

KEY INVESTOR MESSAGES

  • Avacta’s Affimer® technology is a proprietary alternative to antibodies with key technical and commercial benefits
  • Avacta is building a pipeline of Affimer drugs for immuno-oncology and growing revenues based on a licensing model for Affimer reagents
  • Excellent progress in both parts of the business during the reporting period substantially de-risking the opportunity
  • A pipeline of potential valuable and licensable drugs is being built and the company is targeting first clinical trials in 2019
  • A sum-of-the-parts model now suggests an equity value four times the current market capitalisation

 

RESULTS SUMMARY

On the 4th October, Avacta Group Plc (LON:AVCT) has reported preliminary results for the fiscal year ending July 2017, including a detailed update on the business.

Overall Avacta Group Plc (LON:AVCT) is delivering according to management's guidance and has made significant progress in both the Affimer reagents' business and the Affimer therapeutics programs (please refer to our initiation report of March 2017 for an overview of Avacta's Affimer technology and business strategy).

As regards the Reagents business, Avacta Group Plc (LON:AVCT) announced in April 2017 that, after a trial period, they have granted a leading diagnostic company exclusive rights to specific Affimer reagents. Although financial details weren't disclosed, this was the first time that Avacta signed an agreement of this nature, representing an important inflection point in de-risking the reagents business.

As such we remove any risk adjustment from our valuation of the Affimer reagents business, which we now value approx. £140mil, from about £110mil before this deal was signed.

NEXT STEPS

Following the release of FY 2017 preliminary results, we have updated our chart showing the key upcoming milestones for Avacta's reagents and therapeutic programs.
 
Affimer Therapeutics
 
As regards the further pre-clinical development of the Affimer's immuno-oncology program, we expect Avacta to focus on additional in-vivo PK and toxicity studies and on the preparation of the tech transfer and CMC (chemistry, manufacturing and control) dossier.
 
We also note that Avacta's collaborations with Moderna, the Sloan Kettering Cancer Center and Glythera are all progressing according to plan and are due updates over the next 12 months.

Affimer reagents
 
With custom Affimers' order book up 91% y-o-y, we would expect that one or more of the ongoing paid-for evaluations will lead to the finalization of further licensing agreements in the coming quarters.

 

Full report is available via Capital Network website
View full AVCT profile View Profile

Avacta Group PLC Timeline

Related Researches

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September 03 2018

Legendary Investments (LON:LEG) creates value through privately held and pre-market investment opportunities with the potential for outsized returns. The company has a strong track record with:

  • Total investments valued at of £6.2mln (from zero in 2011)
  • Out of 12 investees in total, five are exhibiting multiple returns from 1.3x to 35x
  • Two crystallised with exits at a multiple of the initial investment

We believe this is an interesting time to revisit the investment case, as the shares are currently trading at a discount to net asset value (NAV), which has not been the case in the past.

N.B. Legendary plans to change its name to Eight Peaks Group (LON: 8PG) in the near future.

 

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April 16 2018

KEY INVESTOR MESSAGES

  • Faster than expected development of the second immuno-oncology (I-O) program, a LAG3 inhibitor, allows company to evolve its lead program into a more ambitious LAG3/PD-L1 bispecific aiming to enter the clinic in 2020
  • Good progress of the ongoing external collaborations in two key areas: gene delivery (Moderna, OncoSec, FIT Biotech) and drug conjugates (Glythera)
  • Expect further licensing deals for Affimer reagents, based on multiple on-going evaluations
  • Stock price weakness reflects in our view uncertainty around a likely capital raise before year end rather than the company's strong fundamentals

 

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January 18 2018
  • Overall Genedrive PLC (LON: GDR) reported a business and financial update for the six months to December 2017 in line with expectations
  • Launch preparation of Genedrive® HCV test with partner Sysmex on track, expect sales to start coming through in CY2018
  • £1.3mln income from the ongoing collaboration with the US DoD, in line with expectations
  • Discussions for the disposal of the Services business are in progress
  • With £4.6mln of cash at end-2017, and given the company's expected cash burn, a capital raise in the next 12 months can't be ruled out
  • Full financial results for the six months to December 2017 to be published on March 20th

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