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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.
12 best small caps to watch in Q4 2023.
Avacta
Avacta’s flagship AVA6000 continues to go from strength to strength, though the real turning point could well be hard data from the Phase 1A clinical trials. The treatment is designed to deliver higher doses of chemotherapy, but without side effects — and where many others have failed, early results look extremely promising.
Having said this, short-term financing needs to be looked at, with CEO Alastair Smith favouring non-dilutive terms.
I don't know about you lot but I wouldn't want that stuff pumped into me knowing what I know about AVA6000.
This will become a greater problem as more and more people get to know of a safer version of doxorubicin.
Once AVA6000 finally gets mainstream media coverage I don't think the FDA and MHRA will have any choice but to fast track the drug.
AVA6000 will become the standard of care.
I think AVA6000 will be commercialised a lot quicker than is currently being forecasted as it's safety has been virtually proven.
The Red Devil and it's very unpleasant side affects has been tamed.