Revenue rises, adjusted EBITDA loss improves for Avacta

Oncology-focussed drugs and diagnostics developer Avacta reported full-year revenue of £9.7m in its preliminary results on Tuesday, up from £2.9m year-on-year.

The AIM-traded firm said its adjusted EBITDA loss improved to £15.1m for the 12 months ended 31 December, from £21.7m in 2021.

However, Avacta reported an operating loss of £32.6m, widening from £29.1m a year earlier, and a loss from continuing operations of £39.5m, compared to 2021’s £26.4m.

The company's cash and short-term deposit balances at the end of the year stood at £41.8m.

It noted a successful fundraise of £61.3m gross in October, through a combination of senior unsecured convertible bonds and a placing to new and existing shareholders.

In March, Avacta appointed Dr Christina Coughlin, a medical oncologist and immunologist and CEO of CytoImmune Therapeutics, as a non-executive director on its board.

After the end of the financial year, Avacta completed the fourth dose escalation cohort of its phase one clinical trial, ‘ALS-6000-101’, in January.

The analysis of tumour biopsy material showed that the active chemotherapy, doxorubicin, was being released in the tumour microenvironment, confirming the tumour-targeting potential of the ‘preCISION’ technology.

In February, Avacta hosted a science day for fund managers and analysts, providing a detailed review of the ongoing phase 1a clinical trial ‘ALS-6000-101’, and an update on preclinical programmes.

The firm announced the opening of the first two US clinical investigator sites for patient enrolment and presented pre-clinical data regarding ‘AVA3996’ at the AACR 2023 annual meeting.

Additionally, the first patient was dosed in the fifth cohort of the AVA6000 phase 1a dose escalation study in April, at 250 milligrams per square metre.

“I am very encouraged by the favourable safety data emerging from the ongoing phase 1a dose escalation study of AVA6000, which has confirmed the tumour targeting potential of the preCISION platform,” said chief executive officer Alastair Smith.

“We look forward to starting the dose expansion part of the phase one study later this year.

“The potential of the preCISION platform to create a pipeline of better tolerated chemotherapies and improved outcomes for patients has been further evidenced by the AVA3996 pre-clinical data recently presented at the 2023 American Association for Cancer Research annual meeting.”

Dr Smith said the data not only supported the preCISION mechanism of FAP activation, but also opened up the possibility of treating solid tumours with a proteasome inhibitor for the first time, which would expand the size of the market for the cancer therapy.

“I am delighted with the ongoing integration of Launch Diagnostics into the Avacta Diagnostics division following our acquisition of the largest independent in-vitro diagnostics distributor in the UK in October.

“This is a first step towards our vision of building a fully integrated in-vitro diagnostics company supporting the healthcare profession and broadening access to diagnostics for consumers via a careful, disciplined merger and acquisition-led growth strategy.

“The progress made during 2022 has positioned Avacta for further strong growth during 2023 and I look forward to updating the market fully as we hit key milestones across the group.”

At 1319 BST, shares in Avacta Group were down 0.63% at 129.68p.

Reporting by Josh White for Sharecast.com.