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Another comparison is Moderna. At the beginning of 2019, i.e., before they announced that they would work on a covid vaccine, they were worth $5.0 billion. From what I can see, they had not even started a single clinical trial at that time. So they were pre-clinical. Yet, investors ascribed high value to the technology and potential of the platform.

What is Avacta worth following successful P1a readout? How do you value ava6k and the pipeline of Precision products behind it? What value do you ascribe to diagnostics or affimer based therapeutics? RAH has put forward some attempts to value the drug and pipeline, along with references and has highlighted the underlying assumptions. I tend to agree with those valuations.

But many PIs (or at least posters) seem to trip over these evaluations. They focus on the stock price (SP), rather than the Market Cap (mcap). For them it is hard to imagine a SP increasing by a factor of 10 or 20 over a relatively short period, I guess because it so rarely happens. This is AIM after all, how many successful pharma companies got their start there? If we compare our mcap to other fledging bio-pharma companies on AIM, it seems high by comparison. However, I would argue that is because of the myriad of programmes (i.e., shots on goal) that Avacta have, rather than being a one or two trick pony.

I would suggest a different comparison. Two companies I follow on Nasdaq are Intellia and Crispr Therapeutics. They are developing gene editing (crisper) technology. Both are clinical stage companies, with a few ongoing trials, however neither have ever brought a drug to market. In fact, even in the absolute best case scenario, they are not expected to be able to bring a drug to market before 2025, and most estimates put it well beyond that (i.e., the hurdles to bring gene editing to market are enormous...at least in the US). Not only that, but the markets that the first drugs are targeting (namely beta-thalassemia and sickle cell diseases as well as a rare liver condition) are tiny. i.e., they are not expecting blockbuster sales for the first few candidates...as these candidates were chose to target specific, bad, and untreatable (or under treatable) diseases to get their foot in the door. The whole idea is to get these drugs to market, show that gene editing is safe, get it largely accepted in the industry, and then start in on products that may become blockbusters. But these drugs haven't even made it to pre-clinical yet, so their timeline is 2030+.

Ok great. So what are they worth? Short term, the technology is not expected to be profitable, at least not significantly. But long term (8+ years) they offer the potential to revolutionise medicine. Intellia and Crispr are currently worth $3.3 billion and $3.5 billion, respectively.

Over that timescale Avacta have the potential to upend chemotherapy with their 10+ Precision products and even TMAC should be on the market well before this. Not only that, their first product, ava6k, potentially may make it to market in 2024, assuming a fast track process. If ava6k works as it did in the pre-clinical models (and there is evidence to suggest that it will outperform those results in humans) this will be a blockbuster right out of the box. Summary: AIM is not the place to be for a company like A

@livedata: AS mentioned that the amount of paperwork and effort to bring a new site online, especially one in the US, is a monumental effort. The suggestion was that this was taking longer than originally planned. At the same time, he mentioned that they were not having any problem recruiting the number of patients needed from the UK sites. So presumably they will be included in P1B.

Remember back and the end of last May, the annual report was released. In that report, it still said that readout was expected in Q2 '22, i.e., within the next month or two at the time. We all took heart that this would have been a good opportunity to shift the timeline, and Avacta chose not to. I, for one, was convinced by the argument (https://twitter.com/MylesMcNulty/status/1531524798496522240). The same applies to the present, don't put too much faith in the 'Q4 2022' statement on the webpage or previous estimates from AS.

As has been said many times, it's an oncology clinical trial with very sick patients. Things happen, and timelines slip through no fault of the company or clinicians. So we should temper our expectations accordingly.

Matml74, there is no evidence that recruitment has been a problem or led to delays. In fact, AS has stated that recruitment has not been a problem. The delays appear to be due to patients on the trial needing to be taken off. This could be due to death (likely unrelated to the trial as the trial has never been paused) or other conditions. One a patient is removed, another patient is brought in but they need to start at the beginning. Hence the delays. Clearly C3 did not have any delays, and we are currently waiting to see how C4 plays out. Perhaps it has finished and they are analysing the data, or perhaps a patient had to pull out. We simply don't know.

Sorry Energy, my bad. Thanks.

Hi Energy, I don't think that's true. The last time (before today) the clinicaltrials site was updated was April 6th. So in that time, they have gone through 2 dose escalations with no update. And the April 6th update was in the middle of the 2nd cohort. So the updating of the page does not seem correlated with the dose escalations.

where'd you get that from tom?

Didn't it say "late q4 2022" before? rather than "late 2022"? (i.e., last week)

I know that Avacta's PR machine is on the weak side, but surely even they wouldn't announce world leading cancer results when the US is essentially switched off for media and the stock market.

Agreed MrR. It's surprising to me that we haven't seen more articles similar to this. As you say, it's relatively basic, but it does a decent job explaining ava6k and Avacta's strategy in general.

Once a week or so, I have a look through Google News for each of the companies that I own shares in (e.g., Moderna, Crispr, Intellia). Some/most of these articles provide a good update on each company, discussing the potential and also highlight worries or complications. But if you look at Google News for Avacta, the articles are atrocious. Really poorly informed (i.e., mixing up Precision with Affimers), focussing on Covid related things and often ignoring Precision and also ignoring that we are 15+ months into a clinical trial.

Without any press coverage, Avacta remains largely a "word of mouth" AIM small/microcap. Yes, Paul Hill highlights Avacta every so often, but his viewership isn't off the charts. This, to my mind anyway, goes a long way in explaining the current SP, and is the reason why the potential upside is so great. Just a few decent articles, highlighting Avacta to the wider investment company (or of course a Nasdaq listing) could do wonders for the SP.

Thanks for the insight Rabbo (and others). The big question though is whether your source new that it was an open label trial (i.e., not blinded). Many/most trials are blinded, and indeed for them, data readout and cleansing can take a long time to process. For unblinded trials (i.e., ava6k) most/much of the work can be done before the trial is closed.

Hi Rambo, thanks for this. However, Precision medicine refers to using knowledge of an individuals specific genes in order to treat their disease. So, although Avacta use the term Precision (which I think really nicely summarises their treatment), it has nothing to do with the wider "Precision market". Hence, it is unlikely that Avacta will be discussed at this event.

Last web update said 'late Q4'. Hence mid-December (or possibly later) is the likely timeline.
Also, remember that the meeting with the IIs today was to discuss the recent diagnostic acquisition and potential therein, not provide an update on Precision or ava6k.

If they mentioned radioligands, then it definitely wasn't avacta. And I doubt that Avacta would allow a news story at this stage...in a few weeks it will be a different story though...

@Wyn: here is a simple example of supply and demand, and why demand increases the price. Yes, the buyer wants to buy in at the cheapest price, and the seller wants to sell at the highest price. But the crucial point is that there isn't just one buyer. If buyer a comes in and offers say 1 pound for 1 share, the seller may consider it, until buyer b comes in and offers 1.05 pounds. Buyer a has the choice to up his/her offer to outbid buyer b. This continues until the seller is happy with the price, then sells. Hence, having multiple buyers (while they all want to lowest price) drive up the price of a share.

At the same time of course, you have multiple sellers. They want to sell at the highest price, but if another seller is offering shares at a lower price than they are, the buyers will go to the alternate seller.

Both processes go on in tandem. But when there are more buyers the price goes up. When there are more sellers the price goes down. As Richob says, fairly basic supply and demand here. Read the first paragraph of this: https://www.disnat.com/en/learning/trading-basics/stock-basics/what-causes-stock-prices-to-change#:~:text=By%20this%20we%20mean%20that,and%20the%20price%20would%20fall.

@RAH and @Wiggly, I agree with the potential SP estimates based on the different scenarios for how well ava6k may work. But there is a big elephant in the room regarding how much ava6k could be worth, and it is something that is distasteful to discuss, but big Pharma aren't squeamish and have teams of people working on this. The big question is how much will ava6k cost?

The estimates so far are based on either the current dox market, or reasonable growth rates of that market (i.e., further doses, expanding the patient pool, etc). But remember that dox is a generic drug. That means that it is cheap, as it can be produced by multiple companies, which then compete in the price they charge. Hence, it is sold for relatively near its production cost. So the margins are small.

Ava6k will be a proprietary drug, so Avacta (assuming it gets approved of course) have a lot of freedom in choosing how much to charge for it. But how much could they reasonably charge? Take, for example, remdesivir, the covid anti-viral developed by the pharma Gilead. They company charged $3100 per treatment, even though it cost less than $100 to make, and justified this because remdesivir "saved lives and limited the amount of time patients were in intensive car". In the end, remdesivir didn't work and with the marginal data that they had in hand, they could still take a 31x markup value.

Similarly with Keytruda, the markup (the difference between production cost and sales cost) is huge. Whether we think this is fair or not, this is the current way that pharma works.

So, all the estimates above by RAH and others are strictly lower limits. If it works (which I believe it does), ava6k will save lives and reduce side effects, which normally need to be treated with other drugs and treatments. So there will be an easy case to be made for a premium to be placed on the price of ava6k.

Hence, the dox market is not a good indicator of the potential ava6k market. Avacta will be able to charge much more for it. How much more is up to them. There are many factors to consider, and apparently the price setting is usually done in consultation with government agencies. But factors of 20-30x or more are not uncommon.

Applying these, one reaches even crazier potential evaluations, which many simply scoff at. However, just look at the sales of Keytruda ($17B+) and consider that this is just for one (or a handful) indication, not a generally applicable chemotherapy. Dox, and hence ava6k, is used for dozens of indications. Hence, the potential market for ava6k dwarfs everything to date.

Hi Richob, thanks for the link. I don't think that this is part of the link with Avacta, that is their "Canseek" preclinical programme. I believe that this a treatment that looks to bond with FAP (instead of cleave), keeping the drug predominantly in the TME.

Just like adding oncology experts to the board, Avacta wouldn't do this unless the future of Precision (and Affimer based therapies to a less extent) looked extremely bright. Similarly, you wouldn't have "several other
pre|CISION™ agents in development" if the lead agent (ava6k) wasn't working as expected. Hence, another very positive sign that big things are awaiting...

Based on slide 14 in this presentation:
https://avacta.com/wp-content/uploads/2021/09/Avacta-Group-plc-Interim-Results-Final.pdf

For mice 2mg/kg is the MTD in mice for straight dox. Ava6k was dosed at 12 mg/kg. Correcting this for the weight difference (ava6k vs. dox a correction factor of 0.675) we see 12 * 0.675 = 8.1 mg/kg. If we assume that this was the MTD for ava6k in mice (which I believe was mentioned in a presentation, but i can't find it now), this means that the MTD for ava6k is 4x the equivalent of straight dox.

We are currently at ~2.5x the standard dosage (weight corrected). So we are less than ~2.5/4, or ~65% of the way to the expected MTD (i.e., the standard dosage is expected to be just below the MTD). And again, that assumes that the mice model is representative, whereas there is reason to believe that humans will have a higher MTD.