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Preliminary Results for the Year Ended 31 December 2023

Avacta appoints new Chief Executive Officer Christina Coughlin, MD PhD 

Clinical proof-of-concept demonstrated for Avacta’s lead programme AVA6000 and proof-of-mechanism for the pre|CISIONTM platform presented this month at the American Association for Cancer Research (AACR) Annual Meeting 

New leadership and strong clinical momentum positions Avacta well for its evolution into a therapeutics-focused business

 

Avacta Group plc (AIM: AVCT), a life sciences company developing innovative, targeted oncology drugs and powerful diagnostics, is pleased to announce its preliminary results for the twelve months ending 31 December 2023 (“FY23”).

 

Operating highlights

Therapeutics Division – Encouraging clinical data for AVA6000, the Company’s lead pre|CISION™ peptide drug conjugate 

  • Data from the three-weekly study confirm the ability of the pre|CISIONTM platform to concentrate a therapeutic warhead in the tumour microenvironment (TME) to transform the safety profile of in patients with advanced cancers
  • The results to date show that AVA6000, the first peptide drug conjugate in the Avacta pipeline, has a favourable safety profile with concentration of the warhead in the TME resulting in multiple responses in patients with high levels of Fibroblast Activation Protein (FAPhigh), thus delivering clinical proof-of-concept for AVA6000 and proof-of-mechanism for the proprietary pre|CISIONTM drug delivery platform
  • In the three-weekly dose escalation study for AVA6000 the seventh dose cohort was successfully completed and, in light of the highly positive safety data, patients are now being dosed in a two-weekly dose escalation study with the aim of defining the recommended Phase 2 dose (RP2D), allowing dose expansion cohorts to begin in H2 2024 followed by the Phase 2 efficacy study in a selected orphan indication
  • AffyXell Therapeutics (“AffyXell”), the joint venture between Avacta and Daewoong Pharmaceutical (“Daewoong”) continued to progress well with the triggering of a second milestone payment. This has resulted in an increase in Avacta’s shareholding in AffyXell to 25%
  • The growing body of clinical and pre-clinical data validating the pre|CISIONTM platform has supported an acceleration in the Group’s commercial activities including the appointment of Dr Simon Bennett as Chief Business Officer of the Therapeutics Division

 

Events after the reporting period

  • Appointment of Christina Coughlin MD, PhD as Chief Executive Officer, effective May 1 2024, replacing Dr Alastair Smith. Chris was appointed to the position of Head of Research & Development in February 2024.
    • Coughlin has served as a Non-executive Director of Avacta Group plc since March 2022 and Head of Research & Development. She trained as an oncologist and immunologist and has been pivotal in driving the clinical development strategy for AVA6000, Avacta’s lead pre|CISION™ tumour targeted therapy, and the broader drug pipeline strategy at the Company.
  • The Board will also evolve to meet the increased demands of being a clinical stage oncology company alongside the need to more clearly communicate with shareholders and other key stakeholders. An individual with sector, commercial and listed company experience will be the ideal addition.
  • Data from the AVA6000 Phase 1 clinical trial three-weekly dose escalation study reported at the AACR annual meeting in San Diego, USA, providing Clinical Proof of Concept for AVA6000 with multiple patient responses and a favourable safety profile.
  • AVA6000 update
    • The Company announced that patients are now being dosed in a two-weekly dose escalation study with the aim of defining the recommended Phase 2 dose (RP2D), allowing dose expansions to begin in H2 2024 followed by the Phase 2 efficacy study in a selected orphan indication
    • Avacta receives approval to enrol patients in the UK in the ongoing two-weekly dose escalation study
    • Patients in the two-weekly study in each cohort can be dosed in parallel allowing the Company to remain on track to begin the dose expansion studies in the second half of 2024.

 

Diagnostics Division – Second acquisition completed and integration progressing to build a profitable Diagnostics Division

  • Avacta’s Diagnostics Division completed the acquisition of Belgium-based Coris Bioconcept SRL (“Coris”), a developer and manufacturer of rapid tests focused on infectious diseases, on 1 June 2023 for an upfront consideration of £7.3 million with an earnout based on future business performance of up to £3.0 million payable in cash, adding a broad range of marketed professional-use rapid tests to the Diagnostics Division.
  • The Diagnostics Division, which also includes Launch Diagnostics (“Launch”), a leading UK IVD distributor that was acquired in October 2022, reports revenue of £21.2 million (2022: £4.2 million) and an adjusted EBITDA loss of £1.18 million (2022: £5.13 million).
  • The Group continues its focus on consolidating the Diagnostics Division post the Launch and Coris acquisitions. After the period end Avacta announced that it is exploring strategic options for the division in a manner which maximises shareholder value and benefit for the Company in creating a pure-play oncology biopharmaceutical company that the Board expects will be more attractive to specialist international biotech investors. 

Financial and corporate highlights

  • Revenues increase to £23.25 million (2022: £9.7 million).
  • Adjusted EBITDA loss (before non-cash and non-recurring items) of £20.14 million (2022: £15.1 million).
  • Operating loss reduces to £28.36 million (2022: £32.6 million).
  • Reported loss from continuing operations of £24.95 million (2022, restated: £37.0 million).
  • Loss per ordinary share from continuing operations of 9.15p (2022, restated: 14.48p).
  • Cash and short-term deposit balances at 31 December 2023 of £16.6 million (31 December 2022: £41.8 million).
  • Shaun Chilton joined Avacta’s Board of Directors as Non-executive Director in June 2023.

 

Events after the reporting period

  • Fundraise completed in March 2024 raising £31.1 million (gross proceeds) from quality institutions, including a European healthcare specialist investor, and private shareholders to significantly extend the Group’s cash runway.

 

Outlook

During the reporting period and after the period end, the ongoing Phase 1a clinical study of AVA6000, demonstrated Clinical Proof of Concept, with multiple patient responses and a favourable safety profile. This not only builds confidence in AVA6000 but underpins future clinical development of this peptide drug conjugate in orphan and other indications and validates investment in a broader pre|CISIONTM peptide drug conjugate and ADC/AffDC pipeline.

The recent growing body of clinical data is critical to the realisation of significant commercial opportunities with major partners in order to monetise the pre|CISIONTM platform.

Based on this favourable three-weekly dosing safety profile, Avacta continues to enrol patients in a two-weekly dosing safety study in order to determine the dosing regimen for the expansion studies, planned to start in the US in the second half of 2024 to be followed by the Phase 2 efficacy study, once agreed with regulatory authorities.

The appointment of Christina Coughlin MD as Chief Executive Officer, effective May 1 2024, signals a new period of focus on Avacta’s Therapeutics division and on driving forward AVA6000 and the wider pre|CISIONTM peptide drug conjugate and ADC/AffDC pipeline. As indicated, Avacta plans to focus its resources on its therapeutic programmes and will therefore look to divest the Diagnostics Division in a manner that maximises value for shareholders and the strategic benefits of a focused biotech strategy.

Dr Eliot Forster, Chairman of Avacta Group plc, commented:

“As a Board and Company, we are dedicated to improving the treatment outcomes of patients with cancer through focused investment in the lead programme AVA6000 and the growing oncology pipeline which we believe is a driver of significant value. 

“The clinical momentum demonstrated by AVA6000 during the reporting period and into the post-period has significantly enhanced our confidence in AVA6000 and the broader pre|CISIONTM platform. 

“We’re delighted to welcome Chris as Chief Executive Officer of Avacta. Chris brings many years’ experience and training as an oncologist and immunologist and has worked in significant senior development roles in leading biopharma companies. She has also been closely involved in the clinical journey of pre|CISIONTM and has deep insight into the peer landscape and the opportunities. 

“I would also like to extend my thanks to Alastair for the huge role he has played in the foundation and development of the Company. On behalf of the entire Board, we wish him the best for the future.”