TIDMAVCT
RNS Number : 9426C
Avacta Group PLC
23 January 2015
23 January 2015
Avacta Group plc
("Avacta" or "the Group")
Pre-close trading update
and
Commercial partnership with Norwegian biotech D'Liver
Avacta Group plc (AIM: AVCT), the global provider of proprietary
diagnostic tools, consumables and reagents for human and animal
healthcare, provides the following pre-close trading update.
Avacta Life Sciences
-- Strong growth in the custom Affimer sales pipeline
-- Affimer order intake of approximately GBP0.1 million to date
-- Strong custom Affimer business development team in place
-- 80 online Affimer catalogue line items developed
-- Commercial partnerships signed with Agrisera AB and D'Liver AS
-- Additional Affimer patent granted in the US
-- Solid progress of the internal validation of Affimers as therapeutics
Avacta Animal Health
-- Clinical study of the effectiveness of the canine lymphoma test published
-- US commercial and operational facilities being established
-- Canine lymphoma test launched in the US market
Avacta Analytical
-- Initial direct sales capability in US market secured
-- Europe pipeline strong
-- Two new OPTIM variants launched
The Company will announce Interim Results for the six months
ended 31 January 2015 on Tuesday 28 April 2015.
Avacta Life Sciences
The Group completed its recruitment of a strong custom Affimer
sales team during October 2014, including the appointment of Senior
Sales Executives from Abcam plc and Cell Signalling Technologies,
Inc., the two market leading antibody suppliers. During the first
three months since these appointments were completed, the sales
pipeline of enquiries for custom Affimers has grown rapidly. Order
intake of custom Affimer services to date is approximately GBP0.1
million.
The on-line catalogue of Affimer products, which was launched
during September 2014 with approximately 40 line items, has been
extended quickly with more than 80 line items today. The Board now
expects this to exceed the internal target of 100 line items by the
end of the financial year. The catalogue product development
strategy is focusing on several key application areas where
antibodies struggle to meet users' required performance levels, and
where antibodies are not available or cannot be generated. The
Board's view is that the growing validation from third party take
up of the Affimer technology, a critical mass in the number of line
items in the on-line catalogue and the effective delivery of the
Group's marketing programme are crucial to growing significant
revenues from the catalogue. The Group has signed a number of
commercial partnership agreements and further strategic alliances
with both distribution and product development partners are in
discussion.
One such partnership recently announced is with Agrisera AB
("Agrisera"), a Sweden based company and well-respected, high
quality provider of research tools for plant sciences research. The
Group and Agrisera have entered into an agreement to develop
Affimer based depletion products with improved performance and
economics compared to the current systems. The agreement provides
for commercialisation to be carried out by Agrisera, the market
leading vendor of antibodies in the protein sciences market, with a
revenue share flowing back to the Group.
Solid progress has been made in generating important data that
will help support efforts to secure licensing deals for Affimers as
therapeutics. Early development targets were to demonstrate that
production of Affimers could be scaled up easily, that bi-specific
Affimers could be generated and produced with good yield and that
Affimers which bind a selected therapeutic target could be
generated from the Group's substantial Affimer library. All of
these development targets have been achieved and work is continuing
to address the next set of therapeutic development targets.
The Group also announces today a partnership to develop Affimers
with therapeutic applications with Norwegian biotech, D'Liver AS
("D'Liver"). D'Liver is a contract research organisation with world
leading expertise in drug/liver interactions. D'Liver's world
recognised expertise in the area provides drug developers with
insights into key properties to get new pharmaceuticals to market
faster and with better safety profiles.
Details of the technical programme and commercial terms are
confidential, but the Group is entitled to share in future revenues
arising from commercialisation of the Affimers that are developed
by D'Liver, or future partners, via a royalty model.
The period also saw the granting of a patent in the US which
covers improvements to the original Affimer protein scaffold. This
patent application is also nearing grant in Europe and a
continuation of this patent is being considered for further grant
in the US.
Avacta Animal Health
Whilst currently the business has predominantly a canine allergy
capability, future growth is expected to be delivered through the
provision of newly developed diagnostic tests delivered as
laboratory services or sold as diagnostic testing kits to third
party laboratories.
The first new diagnostic test, a canine lymphoma test ("cLBT"),
was launched in the UK during 2014 and has seen encouraging early
take-up. The Group has now launched this test in the US and is in
the process of establishing commercial and operational facilities
in Missouri, US. The Group is targeting a partnership with a
significant US veterinary testing services supplier for the longer
term.
A key aspect to the potential success of this or any diagnostic
test is the independent validation of the science behind the test
through scientific papers and the support of independent key
opinion leaders. The recent publication in the Journal of
Veterinary and Comparative Oncology in collaboration with Dick
White Referrals in the UK and Dierenkliniek Korte Akkeren in the
Netherlands is very supportive of the scientific depth and rigor of
the Group's cLBT. This detailed clinical study showed that the
Group's unique serum test for canine lymphoma not only performs
better than clinicians' assessment in the diagnosis of the disease
and identifies sooner those animals which come out of remission
after treatment, but also has prognostic value. The roll out of the
cLBT in the US is supported by several independent key opinion
leaders including Professor Carolyn Henry at the University of
Missouri Veterinary School.
Further growth is expected to be delivered through additional
new tests, such as a canine pancreatitis test.
Avacta Analytical
During 2014, the Group negotiated the cessation of exclusivity
in the distribution agreement for the key US market with
Pall/ForteBio and, with effect from 1 February 2015, Avacta
Analytical will sell OPTIM directly in that market. The Board
considers that, in the current structure, the significant potential
of OPTIM in the US market is more likely to be realised through
direct selling rather than through a distributor. The appointment
of the Group's first US based Sales Executive has been secured and
a sales pipeline is being built through direct marketing
efforts.
Dr Alastair Smith, Avacta Group Chief Executive Officer,
commented:
"I am pleased with the overall progress of the Group and
delighted with the excellent development made with Affimers to
date. Material revenues in this first full financial year of
Affimer sales and strategic commercial partnerships, to
independently validate the strength of the Affimer technology, were
the two primary performance targets that were set and the Board is
confident of these targets being met.
"The custom Affimer sales team has been established and is first
rate. Their experience and networks have generated rapid growth in
the sales pipeline for Affimers. The Group has seen a great deal of
interest in the Affimer technology emphasised by the recently
signed commercial agreements with two world leading partners in
their respective fields, Agrisera and D'Liver, for the development
and commercialisation of products based on the Affimer technology.
These partnerships are important validation of the technology as
well as long term revenue opportunities and I am pleased to say
that the pipeline of further opportunities at the strategic level
is strong.
"The number of line items on the online Affimer catalogue, which
is expected to generate high margin recurring revenues in the
longer term when the catalogue reaches a critical mass, is being
built more quickly than originally envisaged which is a reflection
of good progress made in establishing efficient high throughput
processes and facilities.
"I am very pleased that Avacta Animal Health is launching its
first major test outside of allergy in the US market on the back of
encouraging take up of the canine lymphoma test in the UK market. I
expect to see near term growth in this part of the Group driven by
this, and other, new diagnostic test kits and services.
"It will take a little while to build our direct sales
capability for Optim in the key US market, but it is important to
establish that capability in order to drive the sales growth that
we expect for this product. Even with a small team we have seen
better sales in Europe through a direct route than with
distributors and the very early indications are that this will be
the same in the US in due course.
"I look forward to providing the market with further updates
through the coming months."
Enquiries:
Avacta Group plc Tel: +44 (0) 844 414
Alastair Smith, Chief Executive Officer 0452
Tim Sykes, Chief Financial Officer www.avacta.com
Numis Securities Limited Tel: +44 (0) 207 260
Michael Meade / Freddie Barnfield - Nominated 1000
Adviser www.numiscorp.com
James Black - Corporate Broking
Media Enquiries Tel: +44 (0) 207 933
Walbrook PR Limited 8780
Mike Wort / Anna Dunphy avacta@walbrookpr.com
About Avacta Group plc - www.avacta.com
Avacta Group plc is a global provider of innovative
technologies, consumables and reagents for the life science
markets, from drug discovery to diagnostics. Avacta operates
through three divisions:
Avacta Life Sciences Novel non-antibody affinity reagents
www.avactalifesciences.com called Affimers, with a wide range of
Life Science applications in diagnostics,
drug and biomarker discover and biotech
research and development.
Avacta Animal Health Veterinary diagnostics reference laboratory
www.avactaanimalhealth.com and diagnostic kit provider.
--------------------------------------------
Avacta Analytical High throughput analysis instrument,
www.avactaanalytical.com Optim, to help reduce the cost and risk
of drug development.
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This information is provided by RNS
The company news service from the London Stock Exchange
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