Member Info for Moneysponge

Https://investingstrategy.co.uk/biotech/investing-strategy-the-avacta-edit/

Just like I identified my lithium picks last week, I am keenly following four London-listed small cap oncology shares — each at very different stages and focusing on different areas of treatment.

Avacta (LON: AVCT)

Hemogenyx (LON: HEMO)

Cizzle (LON: CIZ)

Poolbeg Pharma (LON: POLB)

While the other companies are attractive investments on their own terms — with some also offering non-oncology based treatments — they are all blown out of the water by Avacta. There is simply no comparison from a risk-reward perspective. I am a supporter and investor in the other three, all of which are promising, but Avacta is simply in a different league

Https://investingstrategy.co.uk/biotech/investing-strategy-the-avacta-edit/

Just like I identified my lithium picks last week, I am keenly following four London-listed small cap oncology shares — each at very different stages and focusing on different areas of treatment.

Avacta (LON: AVCT)

Hemogenyx (LON: HEMO)

Cizzle (LON: CIZ)

Poolbeg Pharma (LON: POLB)

While the other companies are attractive investments on their own terms — with some also offering non-oncology based treatments — they are all blown out of the water by Avacta. There is simply no comparison from a risk-reward perspective. I am a supporter and investor in the other three, all of which are promising, but Avacta is simply in a different league

Https://investingstrategy.co.uk/biotech/investing-strategy-the-avacta-edit/

Takeover will come out the blue as well, shares go into suspension. There will be no trading it.

You're either invested for the buyout or your crying on the sidelines thinking of what could of been if you didnt trade for beer money and just believed in your research. Jadam

I would prefer a buyout

If the dox market alone is going to be worth £10bn + in just a few years by using AVA6000

Then you would expect a buyout to be a multiple of that so £30bn

But that doesnt include the pipeline of other drugs or the affirmer platform or the diagnostics business

A £30bn buyout would see AVCT become a 1 hundred bagger and be considered cheap given they would be getting all the above for just 3x sales of doxorubicin (AVA6000).

Worth remember when your trading for beer money, JAdam.

Https://x.com/Borg74/status/1704775427397443825?s=20

Can see this a mile off. People are saying one thing and doing another.

Saing they ar ebuying but they are selling

Why would they raise at all this year when

1. They had enough cash to last them to middle of 2024 and that runway has now been extended

2. They have plenty of non-dilutive funding options such as licencing

3. The CEO knows once the data presented at end of P1a will lift SP to new highs and he and the bored own shed loads of shares themselves - not going to dilute themselves unnecessarily now are they.

This placing line is nothing but BS FUD spread by likes of JAdam who is gutted he sold for pennies when all he had to do with hold tight.

Nothing stopping avacta becoming a multi billion pound company now. it is inevable

AVACTA had cash until mid 24 but announced only this week they have increased the length of the cash run way

The CEO then confirmed what had already been said by EF at the AGM in that we are seeing a increase in commercial interest with loads saying they want our technology.

We are in no rush to raise funds and if and when that time comes there are plenty of non-dilutive options which are explored as a priority

Yet the fud merchants persist with this narrative to try and drive the shareprice down after they sold out on what they wrongly thought was the top of a spike

This goes much higher and any future raise PI's might not even be invited too. I suspect a private placing if they go down that route would be most likely with an II onboarded like HEMO just did.

Or we outlicence 3996 for example

This technlogy works, doxorbucins days are numbered.

AVA6000 will make avacta a multi billion pound company in itself if you carnt see that and or want to take the risk of trading for beer money then thats up to you just dont deceatfully try and bring the price down because you made an error selling

WE. ARE. NOT. DAFT

.

A licencing deal or partnership has to be bringing in 100m + right?

If thats the case no wonder Alistair is so relaxed with many banging on the door saying they want this now

The bond is nothing to worry about at all

I see on twitter people fretting about a placing lol

At what 300+ market cap even if worse case one happened they would only raise what 10m or so

its nothing

This is the dream ticket

I was trading it now holding it tightly as see the potential is enormous

To kick off my new writing project, I am introducing readers to Avacta Group (123p, £344m) a UK

life sciences company that operates two separate divisions: a clinical stage biotechnology business

primarily focussed on developing cutting-edge cancer drugs; and a vertically integrated diagnostics

business that currently has an annual revenue run-rate of approximately £20m to £25m.

I have been invested in Avacta for approaching four years now, having initially built a stake in the

business in late 2019 at around 17p. My rationale was simple: Avacta had, in 2018, secured the global

exclusive license to a patented technology invented at Tufts University School of Medicine,

Massachusetts, US. This technology – now branded pre|CISION – can be used to modify many types

of existing cancer drugs that are used to treat the large majority of solid tumours, in order to

dramatically reduce their side effects. Moreover, a reduction in side effects means that higher doses of

the modified drug can be administered, thus also resulting in a simultaneous boost in efficacy.

In August 2021, Avacta commenced its first ever clinical trial when it brought its first drug, AVA6000,

into a Phase 1a study. AVA6000 is a pre|CISION-modified version of doxorubicin – a half-century

old chemotherapy drug that is still widely used, owing to its exceptional cell-killing abilities.

Doxorubicin’s use must be strictly limited, however, as it kills not just cancer cells, but all cells. This

results in severe side effects such as hair loss, vomiting, etc. – but above all, cardiotoxicity (i.e. damage

to the heart, which is usually irreversible). Consequently, cancer patients treated with the drug (and

indeed with most chemotherapies) are limited to a lifetime cumulative dose (for example, six cycles).

Phase 1a is a ‘dose escalation’ study, which is designed to find a ‘maximum tolerated dose’ (‘MTD’), i.e.

the highest dose that can be administered to a patient without causing life-threatening side effects. The

design of the study follows that three patients (a ‘cohort’) are treated with a relatively low dose of the

drug under investigation. If the drug is well tolerated and no MTD is found in those patients, then a

second cohort is launched, in which three new patients are treated with a higher dose of the drug.

Successive cohorts are launched, each with incrementally higher doses, until an MTD is discovered.

Prior to commencement of Phase 1a, Avacta had estimated that an MTD would be discovered for

AVA6000 well within the first four cohorts. Yesterday, 25 months after the trial began, the Company

announced that it had completed the sixth cohort of patients – who had received doses of AVA6000

2.8x greater than an equivalent dose of doxorubicin typically administered – and still an MTD had not

been found. This is a stunning result and blows Avacta’s initial expectations for improvements in safety

and tolerability of AVA6000 (in comparison to doxorubicin) out the water. But yesterday’s

announcement contained a whole lot more besides, which I shall endeavour to explain below:

- Significant reduction in tumour volume confirmed in a patient with soft tissue sarcoma.

- Cohort 7 to be the final dose escalation cohort in the Phase 1a study.

- Short study to commence in Q4, to explore fortnightly dosing.

- Phase 1b to be replaced with a pivotal Phase 2 study in soft tissue sarcoma, commencing in 2024.

Improving the safety and tolerability of the modified drug in comparison to the standard drug is one

thing; but proving that the modified drug also demonstrates an improvement in efficacy, is a whole

other matter. It is important to note that the patients that have taken part in the AVA6000 Phase 1a

trial have all been extremely sick people, often terminally ill with no other treatment options available.

Many are taking part for altruistic reasons, to help improve treatments for future cancer patients. It is

thus extraordinary to see a significant reduction in tumour volume for one such patient with soft tissue

sarcoma (‘STS’); as well as signs of efficacy in patients with other types of tumours.

Avacta has determined that the seventh cohort, commencing imminently, will be the last cohort in

Phase 1a, regardless of whether an MTD is found. This cohort will receive doses of AVA6000

equivalent to approximately 3.5 times the standard dose of doxorubicin. Moreover, given just how

targeted AVA6000 is (with the latest patients still not experiencing major side effects), Avacta is

launching a mini-study in the next three months, to examine whether fortnightly dosing further boosts

efficacy, in comparison to the current trial in which patients are dosed every three weeks.

Finally, on the back of the astonishing success of Phase 1a, Avacta has fast-tracked its clinical

development plans for AVA6000. It is now seeking to convert the next trial – until yesterday, planned

as a Phase 1b study – into a pivotal Phase 2 trial for treating STS. In a pivotal study, if the investigational

drug successfully meets the endpoints of the trial (i.e. the targeted goals of the study), then regulators

such as the FDA in the US and the MHRA in the UK can approve the drug for marketing.

So, what does this mean for AVA6000 and Avacta? Firstly, the time it will take to bring AVA6000 to

market – to get it into the hands of practising clinical oncologists – has been potentially been cut

dramatically. If the fortnightly dosing mini-study can commence before Christmas, then the new pivotal

Phase 2 study could be launched in H2 next year. Assuming all goes well, accelerated approval for

AVA6000 in treating STS patients could be granted in the US and elsewhere, within two years from now.

Furthermore, fewer trials equate to fewer patients dosed, and lower clinical costs overall. My estimate

is that all clinical costs from today to accelerated approval for STS in the US, should not exceed £25m.

With the granting of marketing approval in the US, other jurisdictions should quickly follow in granting

approval, opening up at least an initial $1 billion per annum revenue opportunity for AVA6000.

Avacta is focussed on STS as it is the fastest route to market for AVA6000 (given that doxorubicin is

already the standard-of-care (i.e. the first drug of choice for oncologists) for treating STS). However,

doxorubicin is also used to treat numerous other solid tumours such as breast and ovarian cancer.

These are much larger markets than that of STS. As the ongoing Phase 1a trial for AVA6000 is a

tumour-agnostic study (patients with numerous different types of cancer have taken part), it is not

unreasonable to assume that pivotal studies for these other indications could also be fast-tracked.

Now consider this: the current doxorubicin market is expected to grow from $1.5bn pa at present, to

$2bn within 5 years. Due to AVA6000’s substantially enhanced safety profile, patients could endure 3-

4 times more cycles of AVA6000 treatment, than they could with standard doxorubicin. AVA6000 could

also be given to a much larger population: many cancer patients simply cannot be treated with

doxorubicin, as they are too old or frail to endure the severe side effects. Finally, AVA6000 would be

branded and patented, and would thus command a much higher pricing point than the generic (i.e. ‘offpatent’) doxorubicin. Taking all this into account, it is simple to understand why AVA6000 could

become a true blockbuster, generating annual revenue at peak sales of $5bn to $10bn.

However, recall that AVA6000 is only the first cancer drug that Avacta has modified. Its second most

advanced drug, AVA3996 – a pre|CISION-modified version of another chemotherapy, bortezomib –

is undergoing pre-clinical studies with a view to moving it into a Phase 1 study, next year. These studies

have already yielded highly impressive data. Beyond AVA3996, Avacta has alluded to another 15 or so

chemotherapies that it believes can be enhanced with the pre|CISION technology. It has also more

recently indicated that it will look to modify even more potent cancer drugs than chemotherapies, that

are too dangerous to dose patients with, without some form of delivery vehicle. I’m expecting the

Company to enter into joint ventures with the owners of these incredibly powerful drugs (e.g. MMAE).

The global chemotherapy market is currently valued at circa $65bn per annum, and growing. The

market for antibody-drug conjugates (‘ADC’) – a novel class of powerful, targeted cancer treatment – is

rapidly growing and is expected to be double the size of the chemotherapy market, within a decade.

These are the markets that Avacta’s pre|CISION-modified prodrugs will be fighting to take a slice of.

The AVA6000 trial has already proved that the technology can revolutionise conventional

chemotherapy (both in reducing side effects and in boosting efficacy); the key question now is, can its

targeting ability surpass that of ADCs? The Phase 1a data would suggest that it already has

Recall the global exclusive license that Avacta holds over the patented technology developed at Tufts.

Those patents – and Avacta’s license – expire around 2032-34. Until that time, Avacta can develop –

and submit patent applications for – dozens of new pre|CISION-modified drugs, securing protection

on them until as far out as the early 2050s.

Some many now be thinking, This is all well and good, but what drives a proper share price rerating? My answer

would be, The catalyst for the rerate has just landed. Yesterday’s news has proved that Avacta’s pre|CISION

platform can not only dramatically improve the safety profile of the world’s most potent chemotherapy,

but also its efficacy – its cancer-killing ability. In my mind, the path to regulatory approval – to getting

AVA6000 into the hands of practising clinical oncologists – is now procedural. Avacta can easily selffund its way down the path, and major revenues are no longer many years away (late 2025, in my view).

The leading companies focussed on targeted oncology that are listed on NASDAQ – at similar points

in their clinical trials to Avacta’s AVA6000 – have market capitalisations in the several $ billions. I

would argue that Avacta has a much higher probability of bringing its lead asset to market than those

companies; and, owing to the platform nature of its technology (i.e. it can be used to modify dozens of

cancer drugs targeting many types cancer), has a market opportunity many times as large. As Avacta’s

CEO stated yesterday, “I believe that we are on the verge of a paradigm shift in how

chemotherapy is delivered to cancer patients.”

Yesterday, Avacta stated it would present the data package from Phase 1a in Q4. I suspect this could

be a major share price catalyst, especially if details emerge of further impressive efficacy in the last

patients in the study. In the coming months, I also expect we see out-licensing deals with Big Pharma

for multiple chemotherapies in the pipeline after AVA6000, including possibly AVA3996; joint

ventures with leading ADC developers; and potentially more left-field announcements, such as the

splitting up of Avacta (either via a spin out, or a disposal, of one or the other of the divisions).

A near-term cash injection – through whatever means – would be most welcome and could, I believe,

also drive a powerful rerating of the share price. I was therefore delighted to hear the CEO state in an

interview yesterday, “We are prioritising non-dilutive sources of capital, either through partnership or licensing…

From a funding perspective, we’re in no rush to raise capital at the moment. There’s a lot of optionality.”

To conclude: I think yesterday’s efficacy news was vital for the investment community and for Big

Pharma to start taking Avacta very seriously. I am now in no doubt that it will become a multi-billion

$ company in the not-too-distant future. As a long-term investment, I can’t find another stock on the

LSE that offers such vast upside at such an attractive risk/reward ratio.

As a short-term trade for Q4? I think there are enough potential major news catalysts (coupled with

exceptionally positive sentiment around the stock) for the share price to enjoy a serious rerating from

the current price of 123p.

The key risks to the short-term trade are concerns over funding; and a

continued lack of understanding of the blue sky potential of pre|CISION. However, as I’ve tried to

explain, I think these risks can be quickly put to bed by the right news flow in the near term.

You do question the boards judgement after turning down such an offer and obviously the subsequent buying despite the freefall in share price

They obviously think the company is undervalued but the people selling relentlessly clearly dont.

Where will this bottom out? My guess is it tests the all time low as just not seeing any green shoots here whatsoever

JAdam is assuming there will be a public fundraise when there might not be, there is a uptick in commercial interest and as Dr Foster said plenty of people are saying they want AVCT's tech.

Even if there is a fundraise it might not even be offered to punters like us and could easily be at a premium even.

Avct were funded into mid 2024 but have just extended the cash runway so this thread is nonesense

Designed to spread fear because Jadam made a huge error selling at 1.19 and is trying to bring the price down in a desperate attempt to be proven right and get back in.

Sad