Trinity Delta Lighthouse: Avacta
Trinity Delta view: This clearly disappointing news effectively pushes back the commercialisation of the AffiDX SARS-CoV-2 LFT. The positives are that management has identified the issue and responded promptly and, importantly, the issue does not lie with the Affimer technology. Avacta’s Diagnostics business demonstrated its technical abilities and the ability to react rapidly to problems when creating the original LFT, hence it will hopefully resolve this issue quickly too. We note that there is also the possibility that the sensitivity of other marketed COVID-19 LFTs to Omicron may be similarly impacted. The uncertainties around timelines, in addition to the challenging market environment, prompt us to suspend our forecasts and valuation until there is greater visibility. Our prior Avacta valuation was £710m (280p per share), with the Diagnostic opportunities representing £133m. We continue to view the Therapeutics pipeline as the greater driver of long-term value; our £559m rNPV for the Affimer and pre|CISION platforms is unaffected by this announcement.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.
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