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(Sharecast News) - Biotherapeutic and reagent developer Avacta Group announced its intention to raise up to £45m through a placing to institutional and other investors, a direct subscription with the company, and offers to retail and other investors via the PrimaryBid platform, it announced on Thursday.
The AIM-traded firm said the fundraising would consist of up to 37,500,000 new ordinary shares, in each case at a price of 120p each.
It noted that the issue price was at a discount of around 4.4% to the 30-day volume weighted average price of its shares on AIM on 3 June.
Avacta said the proceeds would be used to fund the rapid scale-up of its broader 'Affimer' diagnostic products opportunities, including Covid-19 antigen rapid testing and accelerated expansion of the in-house Affimer and the 'preCISION' cancer therapy pipeline.
It said it would spend £10m on the rapid scale-up of its diagnostics business, including working capital for its Covid-19 testing opportunity.
That would also be spent on the expansion of in-house diagnostics product development capabilities, including facilities, capital equipment, scientific, commercial and senior leadership teams, as well as the acceleration of its broader diagnostics product pipeline and commercial partnerships.
A total of £35m would go towards the accelerated expansion of Avacta's differentiated cancer therapies pipeline, including "rapidly growing" the preCISION pre-clinical pipeline, and delivering pre-clinical packages for several pro-drugs.
That would also help to expand the Affimer immunotherapy, and go towards investigational new drug and clinical trial authorisation filings for "one or more" Affimer immunotherapy, and one or more preCISION pro-drug.
The first-in-human data for the Affimer platform would also be obtained with that funding.
"The ongoing development of Covid-19 antigen tests, including a saliva-based lateral flow test strip, requires the expansion of the group's research and development, and production facilities at its site in Wetherby to meet the anticipated demand for Affimer reagent production," the board said in its statement.
"The group is also growing its senior team in the diagnostics division to include regulatory affairs and product management roles, and expand the commercial and technical teams to support the development and commercialisation of the COVID-19 test and its wider product pipeline."
Avacta said it would grow the therapeutics development team in Cambridge and add further clinical development resources to support the transition of several Affimer and preCISION therapeutic programmes through preclinical development into the clinic.
"The board anticipates strong near-term newsflow relating to the Covid-19 test developments with Cytiva and Adeptrix, further commercial partnerships to exploit the Covid-19 Affimer reagents and from ongoing commercial and technical progress in the core therapeutic and diagnostic businesses."
At 0925 BST, shares in Avacta Group were up 1.08% at 140p.
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