(Alliance News) - Avacta Group PLC on Thursday said it plans to raise GBP2 million through a 11.1 million share subscription priced at 18 pence per share with two subscribers.
Shares in Avacta were down 4.7% at 20.25 pence in London on Thursday.
The subscribers will be Clare Hughes, who is the wife of Zeus Capital co-founder Richard Hughes, and Boohoo.com co-founder Mahmud Kamani. Shareholder approval for the subscription is requirement and a general meeting notice will be sent out "shortly".
Avacta developed the Affimer platform, intended as an alternative to antibodies in diagnostics and treatment.
"The company intends to utilise the net proceeds of the subscription to continue to execute the strategy outlined last October. The company's key objectives are to enter the clinic with its first preCISION chemotherapy programme, to secure further significant drug development partnerships that help progress the company's technology platforms, and to continue to grow revenues and secure licensing partnerships for Affimer diagnostics reagents," said Avacta.
"Given the current economic climate the board have deemed it prudent to take on a small amount of additional equity capital at this time to ensure that it is in a strong position to exploit progress after the coronavirus pandemic is over," the firm added.
Having inked a collaboration and option agreement with ADC Therapeutics SA in late 2019, the firm has subsequently expanded the LG Chem Life Sciences Partnership and established a South Korean joint venture with Daewoong Pharmaceutical Co Ltd.
Avacta plans to post its results for the 17 months ended December 31 "later this quarter", having ended December with a GBP8.7 million cash balance.
At present, the firm does not foresee its revenue being "materially affected" by Covid-19 or to suffer "significant delays of more than a few weeks", though "is reliant on clinical trials proceeding in the UK by the end of the year".
"The small amount of additional capital raised through the subscription will help to ensure that the company can deliver on key milestones despite the Covid-19 pandemic," said Avacta.
By Anna Farley; annafarley@alliancenews.com
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Avacta Group (AVCT)