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Avacta Group says it is at "value inflection point" as customer trial results in deal

Last updated: 06:58 24 Apr 2017 EDT, First published: 02:58 24 Apr 2017 EDT

genomics
The work has resulted in a deal, although the financial terms were not released

Avacta Group Plc (LON:AVCT) said it is at an “important value inflection point” after validating the commercial potential of its Affimer technology and by extension the company's business model.

It follows the successful evaluation of its technology by a “large, global diagnostics developer”.

This has led the partner company to acquire the exclusive rights to several Affimer reagents for an undisclosed sum.

WATCH: Avacta CEO "encouraged" by first Affirmer commercial deal

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Affimers are small, engineered proteins, some of which are of human origin and some of plant origin, capable of binding specific molecular targets, in a similar way to antibodies.

However, compared with antibodies, Affimers have several innovative and distinctive features, which could potentially make them a better tool for several diagnostic and therapeutic applications.

They are smaller, quicker to manufacture and easier to format, but they maintain antibody-like biologic activity when binding a target.

Avacta has set up a number of paid-for evaluations of the platform with a view to securing commercial agreements.

First trial, first deal 

Today’s is the first of these studies to conclude and it has led to a commercial deal.

Avacta said this was “an important commercial step and a validation of the significant potential of the licensing business model”.

Chief executive, Dr Alastair Smith, said: "We believe this deal is a key value inflection point for the company.

“We have provided numerous Affimer reagents to customers for in-house research use, but this the first successful conclusion of a technical evaluation of the Affimer technology leading to the third party taking exclusive rights to certain Affimers with product development in mind.

“This is fundamental to the licensing business model that underpins the future growth of the Affimer reagents business and as such this first deal is hugely important commercial progress.”

House broker Fincap added that the non-therapeutics licence was with one of the top three global diagnostics companies.

“We consider this to be another major milestone for the company, providing greater investor confidence in the Affimer platform and validating the significant potential of its non-therapeutics licensing business model.

Finncap left its target price unchanged at 200p.

Shares soared 10% to 76.5p.

-- update for broker comment --

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