Avacta Group plc Release: Preliminary Results for the Year Ended 31 July 2015

Avacta Group plc - Preliminary Results for the Year Ended 31 July 2015

26 Oct 2015

Substantial progress in early commercialisation of Affimer® molecules as potentially superior alternatives to antibodies
Significant funds raised to establish in-house Affimer therapeutics programme
Avacta Group plc (AIM: AVCT), the developer of Affimer® biotherapeutics and research reagents, announces its preliminary results for the year ended 31 July 2015. 
Substantial progress has been made against the key objectives set for the Affimer technology at the beginning of the reporting period and the Group reports revenues from sales of products and Affimer services that are in line with market expectations and the pre-close trading statement issued on 7 July 2015.
·      Established high throughput Affimer reagents screening, characterisation and production operations sufficient to meet potential mid-term demand.
·      Affimer biotherapeutic programme initiated:
o  Experienced team of biotech scientists led by Dr Amrik Basran (GSK, Domantis).  
o  Initial key development milestones met.
o  In-house programmes in oncology and blood clotting disorders begun (post-period).
·      Key research partnership with Moderna Therapeutics signed.
o  Development of Affimers for mRNA therapeutics.
·      Business development team established.
o  Key hires from major antibody suppliers such as Abcam (AIM: ABC) and Cell Signaling Technologies (Private US).
·      Order intake of 30 custom Affimer projects achieved in the period.
o  Customers include pharmaceutical, biotechnology and diagnostics companies as well as academics.
·      Revenue from commercialisation of Affimer technology of £0.44m, in line with market expectations.
o  Good pipeline of orders and qualified sales enquiries carried forward into FY16.
·      On-line catalogue of Affimer reagents now focused on a tool kit to probe the ubiquitin proteasome system - a significant gap in antibody research reagent market.
·      Group revenues of £1.81m (2014: £1.62m) following disposal of Optim product to US acquirer.
o  Avacta Life Sciences revenue £0.44m (2014: £0.03m).
-  Moderna Therapeutics contributed revenue of £0.36m (2014: £Nil).
o  Avacta Animal Health revenue fell by 14% to £1.37m (2014: £1.59m), representing the loss of one bulk customer late in the prior financial year.
·      Underlying operating loss increased to £2.85m (2014: £1.62m).
·      Statutory operating loss increased to £5.57m (2014: £2.05m).
o  Impairment of Sensipod development costs of £2.38m.
·      Sale of non-core Optim product which realised cash of $3.5m (£2.21m), with a potential further $1.5m in deferred consideration.
o  Loss on disposal with impairment of £5.10m.
·      Total loss for the period increased to £9.99m (2014: £1.49m).
o  Loss per share increased to 0.20p (2014: 0.04p).
o  Underlying1 loss per share increased to 0.06p (2014: 0.04p).
·      Group reported cash balances of £7.33 million at 31 July 2015 prior to successful fund raising which completed post period end on 3 August.  (2014: £11.48 million). 
·      Successful fund raising generating net proceeds of £21m to support development of the first therapeutic Affimers into the clinic.
·      Dr Mike Owen appointed as Non-executive Director. Previously SVP and global Head of Biopharmaceuticals Research at GlaxoSmithKline.
Alastair Smith, Chief Executive Officer, commented:
"The Board believes that the Affimer technology has enormous potential both as a source of novel biotherapeutics and research reagents. These molecules possess innate attributes that suggest they could be superior alternatives to antibodies. Our strategic mission is to realise this potential and take a meaningful share of a very large and growing market and we have made important progress towards this goal in the last financial year.
"There has been good early interest in our Affimer research reagents and the scaled up operations that we have established have delivered the first commercial Affimer reagents into customers' hands.
"The strategic deal with Moderna Therapeutics in large part underpinned the rationale for our subsequent significant fund raise, completed during August, which has allowed the Company to expand significantly its in-house Affimer therapeutics development programme. These monies should allow us, amongst other objectives, to deliver at least one Affimer drug candidate in to the clinic in the next few years. We are therefore particularly delighted to have attracted Dr Mike Owen as a Non-executive Director to the Board as he brings huge scientific, clinical trial and commercial experience in this space."
Avacta Group plc
Alastair Smith, Chief Executive Officer
Tim Sykes, Chief Financial Officer
Tel:  +44 (0) 844 414 0452

Numis Securities Limited    
Michael Meade / Freddie Barnfield - Nominated Adviser
James Black - Corporate Broking
Tel:  +44 (0) 207 260 1000

WG Partners
David Wilson
Nigel Barnes
Claes Spång
Tel:  +44 (0) 203 705 9318
Tel:  +44 (0) 203 705 9330
Media Enquiries
FTI Consulting
Simon Conway / Natalie Garland-Collins
Tel: +44 (0) 203 727 1000

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