Uk Investor Magazine 30/10/2330 Oct 2023 10:28
Top three AIM stock to watch in November.
Avacta (LON: AVCT)
Avacta enjoys, by some margin, the most dedicated retail investor base on AIM. There are some good reasons for this — its flagship clinical trial candidate AVA6000 is delivering some frankly astounding results for a phase 1 trial — and a company attempting to deliver chemotherapy without side effects will deservedly enjoy investor devotion.
November will almost certainly see Avacta release the hard numbers for Phase 1A — and it’s this data which could start to see research platforms increase the likelihood of success from the standard 10% to a more realistic 40%+.
Investors questioning why this data isn’t published yet should understand that from a trust perspective, the company gets one shot at a first impression: any mistakes, no matter how small, would require a rectification. This would be a disaster from a PR perspective, when you have a company attempting to convince the wider investing public that it can deliver such an extraordinary medical advancement.
Fortunately, it seems that CEO Alastair Smith understands the need to be careful when starting to engage with the mainstream media. The other facet to consider is financial; while Avacta has multiple funding options open, including non-dilutive, the company will need access to significant cash to deliver the next clinical trial phase.
It seems inevitable that a tie-up between Avacta and a pharma major is coming down the tracks — if nothing else, the company simply does not have the financial firepower to engage in logistics such as mass manufacture and transport of its treatments.
I suspect that the favoured partner will be Novartis — apart from its large cash position and appetite for merger activity, its head of innovation of Global Drug Development, Janet Munro, recently issued a ‘personal view’ on LinkedIn concurring with Smith that AVA6000 may very well be a ‘paradigm shift.’
Of course — and I’ve made this point before — Avacta is still in the early days. No biotech, no matter how promising, is a sure thing. But the risk-reward ratio remains very attractive, even If you could have picked up shares for less than £1 a few short months ago.
Sign In
Follow the stocks
