Report

Early progress towards therapeutic Affimers


Market Data:

Price (p): 112.0

Mkt Cap (£m): 76.6

Sector: Pharmaceuticals & Biotech

Interims: Publication of interim results is more about updating the market about progress in the identification and development of therapeutic Affimers than the actual numbers themselves. The most important figure is that, following the £21.0m (net) cash injection in 2015, £25.0m remains on deposit.

Immuno-oncology: Avacta has delivered on a number of Affimer candidates in 1H’16 that bind to and inhibit activity of the PD-L1 checkpoint protein, proving the company’s ability to find Affimers with activity against specific drug targets. Some candidates have entered pre-clinical testing to identify the best leads.

Blood clotting disorders: Avacta has commenced a two-year pre-clinical study to examine the effects of Affimer candidates on clot formation and prevention. Once in-vitro & in-vivo data are available, the best candidates will be considered for clinical studies as potential drugs for clotting disorders or anti-thrombotics.

Risks: Although Affimers have significant advantages over traditional antibody technology, the customer base might take time to realise these advantages and adapt to a new disruptive technology. Avacta is minimising this risk by initially focusing on areas where antibodies are unavailable or perform poorly.

Investment summary: The enterprise value of Avacta does not reflect the value that big pharma is prepared to pay for new technologies and assets. The median up-front paid is US$17m and US$40m for pre-clinical and Phase I assets respectively. These figures were exemplified superbly by the deals that Molecular Partners secured for its comparable DARPin technology.


Underlying
Avacta Group

Avacta Group is a biotechnology company that is developing biotherapeutics and reagents based on its proprietary Affimer technology, an engineered alternative to antibodies. Affimer® reagents and therapeutics are a class of non-antibody binding proteins that have been engineered for a range of applications where antibodies and aptamers have limitations. Co. has two operating segments: Life Sciences, which provides custom Affimers for reagents and diagnostics, drug and biomarker discovery in biotech research and development; and Animal Health, which provides tools and contract services to assist diagnosis of conditions in animals to enable treatment for veterinarians.

Provider
Hardman & Co
Hardman & Co

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