Avacta Group Share News (AVCT)

(Alliance News) - Avacta Group PLC on Thursday described its first half as "transformative", as the drug maker drew attention to the launch of its new Covid lateral flow tests, saying this will provide future revenue.

While the company's outlook was positive, in the six months that ended June 30, its pretax loss widened to GBP11.4 million from GBP8.1 million a year before. The increased loss was blamed on higher research and development spending.

Interim revenue was GBP2.3 million, 28% higher than GBP1.8 million a year before. Revenue from the group's Therapeutics Division was up 79% year-on-year to GBP1.4 million, which Avacta partly attributed to milestone payments. Avacta's Diagnostic Division reported a sharp decrease in revenue to GBP90,000 from GBP340,000 a year before, as resources were focused on the development of its new Covid testing products.

The Wetherby, England-based biotechnology firm highlighted that there was the opportunity to "generate significant profitable revenues" from its Covid lateral flow test, which it began shipping last month. The test has been shown to detect all major variants of the virus including the Delta variant, it said.

"It has been a period of very significant progress for the group and a transformative one for both the Diagnostics and Therapeutics divisions. The progress made during the reporting period has been extraordinary, as indeed it has been over the last 18 months, under very challenging circumstances," said Chief Executive Alastair Smith.

Looking ahead, Smith said the company was confident about the immediate and long-term future of the group.

Future opportunities were outlined including encouraging data from a study aiming to help develop more affordable chemotherapy treatments. Avacta also said it will drive future sales by expanding its distributor network and extending regulatory approvals outside of the UK and EU for its lateral flow test.

Avacta shares were trading 3.5% lower in London on Thursday at 114.50 pence each.

By Will Paige; willpaige@alliancenews.com

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