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Avacta Group plc (LSE:AVCT), a life sciences company known for developing innovative oncology drugs and diagnostics, has released its unaudited interim results for the six months ending June 30, 2024. The company has made significant strides towards achieving its goals for the year, both in operational developments and financial performance.
Operational Developments
A major highlight from the first half of 2024 is the completion of the AVA6000 Phase 1a dose escalation trial. AVA6000 is a peptide drug conjugate that utilizes Avacta’s proprietary pre|CISION™ platform. The trial, which focused on determining the drug’s maximum tolerated dose (MTD), concluded without identifying an MTD, a positive indicator of the drug’s safety. Furthermore, patients with high-grade sarcoma and salivary gland cancers displayed multiple durable RECIST responses, which suggests that even lower levels of tumor stroma-only expression are sufficient for the release of doxorubicin. This outcome is encouraging, as it indicates that tumor cell expression of fibroblast activation protein (FAP) is not required for the drug to be effective.
Enrollment in the recommended dose for expansion (RDE) cohort is ongoing, focusing on patients with high-grade sarcomas and a subset of head and neck cancers, particularly salivary gland cancers. Additionally, Avacta has formed a Scientific Advisory Board (SAB) to guide the further development of AVA6000 and the pre|CISION™ platform. This board is chaired by Dr. William D. Tap, Chief of the Sarcoma Oncology Service at Memorial Sloan Kettering Cancer Center in New York City, which reflects the importance of expert guidance in these critical trials.
Financial Highlights
On the financial front, Avacta reported a performance in line with the Board’s expectations. For the first half of 2024, the company recorded revenues of £11.3 million, compared to £11.9 million in the same period of 2023. Research and development (R&D) expenditure increased to £6.7 million, up from £6.0 million in H1 2023, reflecting the company's continued investment in its drug development pipeline.
The adjusted EBITDA loss for the first six months of 2024 was £11.1 million, compared to a loss of £7.9 million in H1 2023. Meanwhile, the reported loss amounted to £12.5 million, an increase from £11.5 million during the same period last year. The company also posted a loss per share of 3.8p, a slight improvement from the 4.3p loss reported in H1 2023.
However, a positive note came in the form of a successful fundraising effort in March 2024, which raised £31.1 million. This significantly boosted the company’s cash reserves, bringing cash and cash equivalents to £32.5 million as of June 30, 2024. This is a considerable improvement from the £16.6 million it held at the end of 2023. Following the reporting period, the company made a quarterly amortization payment of £3.08 million related to its convertible bond in July 2024.
In the Diagnostics division, revenue grew to £11.2 million, compared to £9.9 million in H1 2023. The division also posted an adjusted EBITDA profit of £0.1 million, improving from a loss of £0.4 million in the same period last year.
Outlook
Looking forward, Avacta is optimistic about the potential of AVA6000 and its pre|CISION™ platform, based on the encouraging data from the Phase 1a clinical trial. The company is also in the process of divesting its Diagnostics division, a move aimed at sharpening its focus on therapeutics and maximizing value for shareholders. This strategic decision is intended to make Avacta more appealing to international investors with a focus on oncology therapeutics.
Furthermore, the Board is exploring the possibility of a dual listing on NASDAQ as part of the company’s long-term financing strategy. An update on this development will be provided in the near future, marking an exciting new chapter for Avacta as it continues its mission to develop targeted oncology treatments and expand its global footprint.
