Avacta shares fall as interim revenues slide

(Sharecast News) - Biotherapeutics and research reagents developer Avacta Group reported a fall in half-year revenues to £1.0m on Tuesday, from £1.5m a year earlier.The AIM-traded firm put the fall down to the absence of research services revenue for full-time equivalents (FTEs) working on the Moderna collaboration, now that assets had been transferred into their development pipeline.It noted that LG Chem funded research services work began in February, and would contribute to second half figures.The company reported an operating loss of £5.9m for the six month period ended 31 January, widening from £4.5m year-on-year, with its research and development costs increasing to £2.4m from £1.5m.Those increased research and development costs lead to a reported loss of £5.2m, the board said, which grew from £3.9m 12 months earlier.Avacta did receive its first up-front milestone payment of $2.5m from LG Chem Life Sciences during the period, and completed a fundraising in August, with £11.6m received.Cash balances stood at £11.8m at period end, up from £5.2m on 31 July, as a result."The group remains focused on the key objective of first-time-in-human data for the Affimer therapeutic programme and growing a profitable Affimer reagents business," said chief executive officer Alastair Smith."First-time-in-human data is a significant value inflection point for the technology and a major de-risking point from a deal making perspective."The group remains on track, to a tight schedule, to dose first patients in late 2020."Smith said the addition of Dr Jose Saro as chief medical officer was a "significant strengthening" of the senior management team with regards that translation of programmes into the clinic."Whilst the lead programmes progress into the clinic, the group will continue to build-out its pipeline of immuno-oncology assets," he added."The group believes that the TMAC platform incorporating a range of Affimer immune checkpoint mono and multi-specific therapies, and the complimentary development of co-administered combinations of Affimers with the chemotherapy drugs arising from the TMAC programme, provides the potential to develop an extensive, highly differentiated and valuable drug pipeline in the years ahead."The group has recently reported a substantial collaboration and license agreement with LG Chem and the exercise of a commercial license option by Moderna with whom the group has been collaborating with since 2015."That combination of the growing technical and commercial progress, Alastair Smith explained, was expected to help catalyse further significant partnerships in due course."As a proven platform technology addressing multiple non-therapeutic markets the group has the opportunity to establish a profitable reagents business, and there is significant upside potential as it builds a pipeline of valuable Affimer drug assets."As at 1022 BST, shares in Avacta were down 9.33% at 34p.