Avacta raising £9.2m to fund fresh global spurt
Cambridge UK life science business Avacta Group plc is raising up to £9 million through a share placing and subscription exercise on AIM. The company is developing Affimer® biotherapeutics and research reagents.
FinnCap is acting as nominated adviser and joint broker alongside WG Partners and Turner Pope who will also be acting as joint brokers in connection with the placing. Neither the placing nor subscription is to be underwritten.
The money is designed to allow Avacta to deliver the next key value inflection points in its global expansion strategy. These are chiefly:-
- The phase 1 clinical trial of AVA6000 pro-doxorubicin;
- Continuing to advance Affirmer immunotherapy pipeline with partners
- Delivering further commercial progress for therapeutics and diagnostics.
In July the company obtained advance assurance from HMRC that a subscription for new ordinary shares was capable of qualifying for EIS tax reliefs.
The issue price is at a discount of approximately 11.8 per cent to the closing price of the ordinary shares on AIM to October 17 (17p per share).
Avacta also reveals a good year to July 31; it now has cash balances of £6.5m – up from £5.2m year-on-year.
The revenues of £4.1m were greater than expectation (£2.8m FY18) due to recognition of an up-front milestone payment of $2.5m from LG Chem Life Sciences.
The operating loss of £11.2m – up from £10.4m last time – was due to significant investment in research and development, which increased to £5.9m (£3.8m). The increased R & D investment led to a reported loss of £9.7m (£8.8m).
CEO Alastair Smith said: “I am very pleased to see the strong growth in Affimer® reagents revenue and order intake over the reporting period.
“This has been driven by the growing reputation of the Affimer technology particularly in the diagnostics and pharmaceutical sectors; two markets where the company will be focusing our resources in the reagents business going forwards.
“We have numerous evaluation projects ongoing with large diagnostics partners, each of which could lead to a lucrative licence deal. To reduce the time taken to reach the point of signing licence deals, we are close to completing the first two in-house Affimer diagnostic assays, as set out last year. Building a profitable Affimer reagents business remains a high priority for the group.”