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Avacta losses widen as R&D costs increase
Biotherapeutics developer Avacta Group released its unaudited interim results for the period ended 31 January on Monday, reporting half-year revenues of £1.5m - up 16% year-on-year - comprising £0.7m from Avacta Life Sciences and £0.8m from Avacta Animal Health.
The AIM-traded firm reported an operating loss of £4.5m, widening from £3.9m year-on-year, with research and development costs increasing to £1.5m from £1.3m.
Its reported loss totalled £3.9m, widening from £3.4m.
Cash balances at period end were £8.3m, down from £13.2m as at 31 July last year.
"The group has delivered strongly against the objectives set out in 2015 when it raised funds to initiate an Affimer drug development programme and to begin commercialisation of Affimer reagents," said chief executive Alastair Smith.
"We remain focused on the key objective of generating clinical data for our lead Affimer therapeutic programme.
This first-time-in-human data is a significant value inflection point for the technology and a major de-risking point from a partnering perspective."
Smith said that, while the company progressed towards the clinic in 2020, it would continue to build-out a "potentially transformative" pipeline of assets in immuno-oncology.
"Avacta is confident that partnerships can be established for assets in this pipeline before the technology is in the clinic, but we also believe that the value of these deals will rise markedly when the first Affimer human clinical data is obtained.
"We will continue to grow the Affimer reagents revenue during this time period, with a focus on long term recurring royalty revenue rather than short term services income, with the objective of creating a potentially stand-alone business unit."
As a "proven platform technology" addressing multiple markets, Smith claimed the downside risk was "low", with significant upside potential as the company built a pipeline of valuable drug assets.
"Sanofi's recent acquisition of a clinical stage comparator to Avacta - Ablynx - for $5bn highlights the potential valuation of a clinical stage platform technology like affimers with a pipeline of assets in development."