Pure speculation, I’m as clueless as everyone else, but what I’d like to see is:
1 or 2 platform licensing deals in the near term, maybe not for huge upfront payments, but enough to reassure the market on any immediate worries over cash.
Full phase 1a data to date, including C7 to be presented at AACR in April, leading to US based investment and subsequent boost to sp.
Commercial Partnership with a big pharma going into phase 2 later this year, including large upfront payment and expansion of trial. Consequently no need to go back to the markets for cash.
Accelerated approval from FDA as soon as possible once phase 2 data starts to become available.*
First sales in 2025.
Grow sales, including off label where possible, before talking to BP re sale of co.
There’s a lot of talk of a buyout, but I think a partnership going into phase 2 would ultimately make the platform much more valuable, despite having to give up a percentage of future revenues.
Having just read ‘For blood and money’ for a second time, I had a few observations with regard to pros and cons of partnering on 6k versus a sale of the company. Spoilers ahead if you haven’t read it:
Acerta, developing their BTK inhibitor for blood cancers, were about to enter registrational trials (phase 3 in their case, phase 2 for AVA6000). They had shown promising safety and efficacy data, and were projecting possible future revenues of $5 billion pa. The drug had not yet received any approvals (all sounds familiar). They accepted an offer from AZ to buy the company for $7 billion.
By contrast, the other company, Pharmacyclics, decided, at a similar pre-approval, pre-registrational study stage to partner with J&J, receiving $150 million upfront and a total of $975 million in milestone payments, splitting future worldwide profits 50/50. This partnering gave them the additional funding required, leading to accelerated approval, plus the weight of J&J in getting the product to market
With regard to selling the company, they decided they would be able to “command the highest price only after it had demonstrated the ability to generate some $1 billion in revenue.” Once it became clear that this was achievable, they were bought for a staggering $21 billion (for just their half).
*Pharmacyclics had their accelerated approval granted when the FDA stopped the registrational trial (phase 3 in their case) early, once they had seen interim data showing that patients saw their disease stop progressing and were living longer.
It requires a bit more patience, but in my view the partnering route is ultimately the best way to ensure a potentially huge future value.
It’s worth reminding ourselves what positive initial data in the next few days could mean for the company.
In an interview in 2019 speaking about Prodox, AS said they could take a $billion market and increase the market size to $3,4,5 billion. He also said that they would aim to license it when they saw the FIRST phase 1 data I.e. very soon indeed. Furthermore he said “a license would almost certainly be accompanied by an upfront payment in the order of around $50 million, so really transformational, non-dilutive upfront capital.”
Add in milestone payments and royalties on future sales, then multiply this by 14/15 other types of chemo to which the same platform technology can be applied.
Then think about the affimer platform, hopefully soon to go into trials (possibly though LG) - potentially a better alternative to antibodies and freedom to operate around any existing antibody IP.
Then think about TMAC combining these two platforms - both immunotherapy and chemotherapy.
Then think about taking advantage of the world’s new taste for testing and retailing this range of tests through Medusa. The issue with the Covid LFT will be resolved and the requirement for testing will continue worldwide for many years.
Yes there have been delays and setbacks as with all growth companies, but I honestly don’t know how anyone can properly research everything that is going on at Avacta and not be incredibly excited about the future.
Merry Christmas to all as we look forward to what I’m sure will be a spectacular new year for investors here.
PK data due for AVA6000 which could trigger the start of a revolution in chemo. LG potentially taking affimer therapeutics into the clinic, setting up TMAC further down the line.
With regards to the LFT I’m sure it will soon become clear why investors have held through all the white noise from shorters/derampers over the past few months. Medusa certainly haven’t been sitting on their hands this past 18 months. The private LFT market will become a gold rush style land grab and they, quite rightly have operated under an NDA in order not to show their hand to the competition. Once their true capacity becomes apparent to the market it will be a shock to many.
With FDA and APAC approvals seemingly imminent it opens up a global market which these guys will be ready for.
It is also a huge opportunity for Avacta/Medusa to use the world’s new found familiarity with LFTs to introduce multiple product lines using this method of diagnostics, addressing all kinds of illness and disease.
I’m very confident that 2022 will be a very rewarding year.
Infuriating that he now appears to be actively taunting the UK diagnostics industry on Twitter:
https://twitter.com/jimbethell/status/1472118975848923141?s=21
PAH00, I think the market is missing this vital piece of apparent new information - that Medusa will not just be retailing Affidx utilising Avacta’s 3-5 million capacity, but will be producing their own branded version under license, and utilising their own sourced capacity - the size of which we can only speculate on. However, the people who have set up Medusa are hardly known for doing things on a small scale. Like many investors here I am sitting quietly and waiting for all to be revealed. It feels extremely close now.
It also says:
DHSC recognises that it is not possible to predict every possible innovation. If a manufacturer has developed a test with an unforeseen advantage, we reserve the right to review and permit submission for validation if the scientific consensus supports the claim.
The DHSC published their revised ‘desktop review’ approvals process on the 28th July, which states:
“ DHSC aim to have the results of the review within 20 working days, but this may take longer if there’s a high volume of applications.”
I make it that it was 20 working days ago, so assuming Avacta were in a position to apply quickly they should hopefully have approval imminently.
https://www.gov.uk/guidance/covid-19-test-approval-how-to-apply
Published 17/8 by DHSC.
https://www.gov.uk/government/publications/assessment-and-procurement-of-coronavirus-covid-19-tests/covid-19-test-approval-step-2-process-for-desktop-review
For those who applied early it is also now getting close to the ‘within 20 working days’ referred to in the original 28/7 publication
https://www.gov.uk/guidance/covid-19-test-approval-how-to-apply
Published 17/8 by DHSC.
https://www.gov.uk/government/publications/assessment-and-procurement-of-coronavirus-covid-19-tests/covid-19-test-approval-step-2-process-for-desktop-review
For those who applied early it is also now getting close to the ‘within 20 working days’ referred to in the original 28/7 publication
https://www.gov.uk/guidance/covid-19-test-approval-how-to-apply
https://www.bsigroup.com/en-GB/our-services/certification/certificate-and-client-directory/
Timster, that’s exactly what I’m expecting - once CV is complete I can see a flurry of licensing announcements.
At the last investor Q & A meeting, AS said the following -
“ Yes we are looking to license both the reagents themselves against the SARS cov 2 spike protein and that allows other diagnostic companies to develop a range of diagnostic tests on different platforms, but also specifically there is the opportunity to license the affimer to allow other people to develop their own lateral flow antigen tests.
The reason why that is commercially sensible and interesting is because of the way in which manufacturing capacity limits our own ability to exploit the commercial opportunity. So that gives us access to third party manufacturing scale. These companies are of course going to develop tests, regardless of whether there is an antibody on there or an affimer, and I want an affimer to be in those tests so we deliver as much potential value to shareholders as possible.”
Ok, I know it’s the Sun but just shows the demand there will be for LFTs
“Arrivals from green countries would require hardly any restrictions for travellers apart a 15 minutes lateral flow test - likely taken when arriving in the UK.
Amber nations will likely require negative PCR tests before travel and some form of quarantine, as well as a lateral flow test on arrival.”
https://www.thesun.co.uk/travel/14468386/all-passengers-uk-rapid-covid-test-holiday-summer/
It’s also worth remembering what AS said at the investor presentation:
“It’s Important to stress that this process of manufacturing scale up and tech transfer - it is absolutely essential that we do that properly. Rushing that simply pushes risk down the line to clinical validation, and I’m not prepared to do that.”
It helps explain why they have taken longer than anticipated - in order to remove as much risk as possible from CV.
I think one of the main reasons why things have taken longer with the lft is the need to absolutely nail the process and avoid any issues in clinical validation - this is what AS said at the previous investor presentation:
“It’s Important to stress that this process of manufacturing scale up and tech transfer - it is absolutely essential that we do that properly. Rushing that simply pushes risk down the line to clinical validation, and I’m not prepared to do that.”