Member Info for Nanomat

Gmcc

From searching the EMA archive I see that Avacta has been shortlisted twice before for the best technology award - in 2017 when it was won by MaxCyte and 2021 when it was won by BioNtech.

Other than Avacta I know Creo Medical better than the others- their 'Speedboat' inject device to remove bowel cancer growths without the need for general anaesthetic so that the patient can leave hospital on the same day (saves on hospital beds, costs etc.) has high hopes of potential hospital-wide use within the NHS and beyond. However I think that the impact that our pre | CISION platform that will hopefully save lives as opposed to saving time and beds would get my vote - especially now that we have so much more data. Fingers crossed for third time lucky.

Bella

You state - 'AS's moving on has been in progress since 2022.' OK, let's look at these facts since 2022 from RNSs :-

1 8/11/22 - AVCT raises £64m including purchase of Launch Diagnostics

2 1/6/ 23 - Purchase of Coris for £7.4m

3 19/6/23 - The following statement by AS in response to market speculation about a placing- 'Avacta has a strong cash balance of GBP27 million on its balance sheet as at 31 May (unaudited) and anticipates strong news flow in the coming months from across the Group. '

4 20/9/23 - Christina takes on role of consultant whilst retaining Non - Director status.

5 29/2/24 - Fundraise of £26m at 50p

6 Leaving aside the date when Christina became a 'consultant' - all these financially related events happened whilst AS was CEO. Are you honestly telling me that all through this time the Board was looking to replace him yet allowed these disastrous purchases in a falling diagnostics market to take place?

7 AS was the CEO all through this period whilst Christina was only an ND up until 20/9/23. If the Board allowed such purchases to take place knowing they were looking to replace AS then at the very least they would be allowing a departing CEO to saddle AVCT with a Convertible Bond with its inevitable strains on the balance sheet as well as the 'Lead Weight' effect on the SP. Was that a sensible strategy for any Board to take if what you say is true?

8 You need to stop trying to defend AS in a manner that reminds me of Nadine Dorries's perpetual defence of Boris Johnson. Just look at the facts as they are and not try to come up with 'alternative facts' . I know very well that Sparta is an Imperial College start up - I met Imperial a number of times at the Biotech conferences here in London - and it is ludicrous to compare such a spin-out to Avacta.

I'm all in favour of moving on now Christina is CEO as she is sharper than many people here realise. But I'm not in favour of 'airbrushing out' who was CEO when the calamitous events listed above - other than Christina's appointment - were taking place whilst AS was CEO. You call that 'moving on'? Go tell that to the 'Spartans'.

SoleBoy

Totally agree re the need for further board changes now that the previous 'captain' of HMS Avacta has been made to 'walk the plank'. In particular the CFO. The 'Chief First Officer's ' credibility was finally well and truly shot to pieces when the Block Listing Six Monthly Return issued on 26 April had to be replaced as the obvious errors were picked up by many shareholders minutes after it was issued and had to be amended and re-issued. The CFO must also 'walk the plank' and replaced by someone with a good track record in this sector so that the market can see that financial competence is restored.

Harrogate4

You are absolutely right on scanning but I didn't want to be presumptuous and refer to Christina as 'Chris'.

I presume you have a musical background of some kind. In another life I played keyboards and guitar as well as compose though as a schoolboy I played violin - mother pressure - in the school orchestra and still consider the cellist Jacqueline Du Pre the finest musician ever - though I was too young to have seen her live . Still,thank you for that musical observation. Brought back memories.

Just a few points from my perspective :-

1 Although I hear the words about 'planned succession' it is pretty obvious to me that AS has hardly gone with a fond farewell from his side. And we do not know if/if not there may be any currently unknown issues yet to be raised from either side regarding events since the purchase of Launch in October 2022 and AS's departure.

2 Christina only officially takes over today - 1 May - as per the RNS with AS stepping down yesterday. She may not be able to currently address past issues for all kinds of reasons - including legal advice not to do so. It is therefore unfair in my view to make any kind of judgment until we hear from her again - especially about the future strategy with timelines for the Therapeutics side.

3 Christina is a smart cookie and if anyone here thinks that she doesn't understand the issues then 'watch this space'. She said 'everything is on the table' not once but twice in the presentation - and she will consider all things presented to her. As CEO she does not have to be an expert in all operational areas - only to have the nous and open mindedness to listen to advice - something I reckon AS clearly did not seek or take.

4 I very much doubt that she would have taken up the post if - as some here mischievously imply - she didn't know the potential having worked on the inside for the past two years. In addition, she has spoken to many people in the oncology sector and not just at AACR and is now in pole position as our CEO to move things forward.

5 I was very critical in the past about AS as CEO and was proved right about his disastrous Dx purchases - especially as I knew from my observations of EKF Diagnostics that AS was buying Coris and Launch in a falling market. Just check out the downward spiral of EKF's SP since end of 2021. So I personally cannot fathom why AS made those purchases at this particular time and with a Convertible Bond or 'Lead Weight' to the SP. As I said in previous posts - 'They saw him coming' in London parlance and he was well and truly shafted in my opinion - but at our expense! And the overall Dx business is still loss making - surprise surprise -and projections of EBITDA positive in the second half is just 'bovine manure' as it is still a loss and what 2025 will bring is anyone's guess. So now that we all know the damage that AS has done - and I agree that the CFO's position is 100% untenable as well - which is why he had a very short slot yesterday and then was not referred to again like a very bad smell.

6 So now that the 'monkey' so to speak has finally been removed and replaced with a 'kosher' (also London parlance - nothing to do with religion) 'organ grinder' let's do the right thing and as John Lennon might have put it - 'Give Christina a Chance'. As I say - today is just Day #1.

Donkey

There are number of reasons the Trolls infect BBs and in our case it's SP volatility and the fact that we are in the cash guzzling AIM biotech sector which means we are unfortunately at certain times at the mercy of shorters - particularly when it's obvious that money needs to be raised.

But whilst I remain very critical of the abilities of the current CEO I am more and more convinced by the science and I am very confident of EXCELLENT news within the next 3-4 months. And that's when the shorters will have to go long so it will be a double whammy in our favour as share holders. NOt long now.

Gje306

In my experience what usually happens regarding a placing is :-

1 'Rumours' first start to circulate and then escalate - usually associated with 'shorters in the know' so to speak. The SP then starts to weaken as shorters take preliminary positions.

2 Deafening silence from the company rumoured to be making the placing only add to SP weakness.

3 The book-building broker approaches potential buyers of shares with something like - 'can I put you down for 500,000 shares at 50p?' The SP is now, say, 120p so its a no brainer to say 'yes'. Broker confirms the allocation.

4 Buyer can now forward sell - or 'flip' - the shares at current price knowing they can later buy them back at 50p from the allocation. Money for old rope.

5 Meanwhile uniformed PIs try and explain daily downward spiral of SP with things like 'CEO is is purdah doing a deal so cannot comment' or ' MMs are flushing out weak shareholders'.

6 Placing is announced.

How far this happened with Avacta in the last placing will probably never be known as those who appear to have been in the know are not likely to admit what they knew and when they knew it.

WAG

I know that Launch was profitable when bought. But if you 'pay £1 for tuppence worth of profit' it's not really profit is it? No doubt we shall find out the true cost of the Launch purchase as and when we sell the Dx side . But will we find another AS to pay 'top dollar' as other Dx companies like EKF were seeing their shares go into freefall? Possibly- but very unlikely in my view.

Spot on notrex and I couldn't have put it any better myself. AS got well and truly shafted.

Bella

I am sure you know the old saying 'revenue is vanity - profit is sanity' all too well so any cash flow from a loss making Dx side becomes a loss when all the 'nasty bits' - costs, expenses, salaries, etc. - are included. And as for the 'sales forecasts' - we have the For Sale sign up for friggin' sake so what do you expect? We have to show a bit of leg to get the buyers' attention. And forecasts are just that so 'caveat emptor'. Just have a look at diagnostic companies such as EKF and see how they have fared since October 2022 when Launch was bought. They are now talking their prospects up but we shall have to wait and see wont we? Meantime I reckon this guy knew what was what - RNS dated 18 October 2022 :-

'Key management of Launch Diagnostics will remain in place with the exception of principal selling shareholder who will retire and will be replaced by a Managing Director from within the business.'

His timing to retire and flog the Launch 'shop' to AS was impeccable in my opinion. And as we Londoners like to say - 'he definitely saw AS coming'. And to argue that our only option was the Convertible Bond route backed by Launch to progress AVA6000 is not true in my opinion. Other biotechs have successfully staggered equity placings over a period of time as the asset goes through its paces pre-clinical, Phases 1 and 2. We could have raised many millions at 95p per share - never mind 50p. LIcensing can also happen at any time of course and milestone payments can be made. These aspects are very much down to the quality of management and their contacts as well as the assets themselves so please let's stop banging this drum 'The Only Way Is Launch' or TOWIL. It wasn't and it isn't - which is why the friggiin' For Sale sign is up - and as the months go by we will become ever more needy 'price takers' regardless of any rosy 'forecasts'

Bella

1 You state ; 'simply raise cash through the markets and get nowt else for it except dilusion....'

Any competent BOD would first and foremost fund the progress of the prime asset - namely AVA6000. Yes there is dilution but there is also the expected progress - and by definition increase in value - of the prime asset. In no way can this logical fundraising for the development of the prime asset be described as 'nowt else'. And the purchase of a 'Trojan Horse' - because that's what it was - is totally irrelevant to the raising of money for AVA6000. It is the purchase of Launch that brought 'nowt else' to the actual value of the company. In fact judging by the collapse in the SP it actually reduced the overall valuation. Some purchase!

2 You state re the decision to buy Launch 'this would have been a Board decision'.

This is a PLC so of course such a major purchase would require the approval of the Board. And from my experience one of the most important things to be considered are the financial implications which is where the CFO comes in. That is why I would like to know if the CFO actually sanctioned this purchase or were his views over-ridden? And clearly the CEO must have been in favour of the purchase as it would make no sense for a CEO to approve something so substantial and yet not believe in it himself. And as the CEO he bears ultimate responsibility for BOD decisions because he is the CEO.

Forever

In order to be open with shareholders AS must explain the company's strategy from the decision to buy Launch Diagnostics and the logic of accepting Convertible Bond financing to buy Launch bearing in mind the development costs of AVA6000 trials which must have been known at the time. Was the decision to buy Launch fully approved by the CFO at the time or were the views of the CFO over ridden by AS? Any 'honesty' requires this root cause of the later financial problems - which were painfully predicted by Tom W amongst others on a number of occasions - to be addressed. The latest 50p share placing can only be fully explained by going back to how we got into the financial mess caused by the purchase of Launch.

I very much doubt AS will go anywhere near explaining why Avacta bought an obvious 'Trojan Horse' such as Launch and 18 months later hoist a 'For Sale' sign over the whole Diagnostics division. To my mind it just goes to show how utterly clueless and incompetent AS is from a business perspective - yet he gives me the impression of being too blind and arrogant to accept his obvious faults and go back to the lab where he clearly belongs.

As I say, I remain a shareholder because I have followed Precision/AVA6000 since the pre-clinical trial days. If there is one thing I do agree with AS is that all the evidence to date shows that we appear to be on the way to cracking the 'holy grail' of chemo therapy with substantially reduced side effects in the form of AVA6000. AIMO of course.

Notrex

As someone with substantial business experience I have to agree with you at the appalling level of strategic thinking - if any - over the past 18 months. It all started with the RNS dated 18 October 2022 when AS trumpeted the buying of Launch Diagnostics at £24m cash up front plus up to another £13m based on meeting certain sales/Gross margin criteria. And to pay for this? A massive Convertible Bond plus a much smaller amount from a placing. How on earth would any business minded BOD agree to 'putting their heads into the jaws of a Convertible Bond' when finance was definitely required for progressing AVA6000? The fact that 18 months later there is a 'For Sale' sign over the whole of the Diagnostics section of our 'shop' proves the point. And as for the latest share offering debacle I think I have seen enough on other BBs and media outlets to 'guess' that it was handled so badly that word got out to experienced shorters who clearly took full advantage.

So given the choice I would agree that a new CEO would definitely be welcome and AS can go back to the lab. However, I do also think that the latest data from AVA6000 is so good that any potential predator will go for 'the goods' and get rid or sideline AS. In short, there is justification for the lack of confidence in AS in my opinion and it can be easily traced to the LFT debacle, the purchase of Launch Diagnostics and the recent bungled share placing which decimated the SP.

Having said that, as an optimist ,I remain a believer in the future of the Precision platform and AVA6000 et al and therefore remain a shareholder. But would I trust AS to be able to sell ice creams to sun worshippers on an August Bank Holiday beach? No. I would have fears that he would come back with a tray full of melted gunge.

A very interesting article from yesterday's Washington Post -

https://www.washingtonpost.com/wellness/2024/03/31/chemotherapy-cancer-end-of-life/

Whilst the example relates to leukemia it does show the limitations in today's chemotherapy treatments in that patients' only choice is to have the standard maximum doses of chemotherapy currently permitted with accompanying serious side effects. It is therefore logical to deduce from this example of the current limitations of standard chemo that if AVA6000 gets approval - and given that in the region of 3.5 times more Dox 'warhead' can be tolerated by patients with minimal side effects - then it really does become the new 'standard of care' in FAP rich cancers as it will avoid the kind of choice - more chemo but more side effects - that patients are currently having to make today. We really do need AVA6000 to succeed in these clinical trials as well as other very low toxicity medicines that can be used in cases such as leukemia.

Once the dust settles there should be more focus on the change in strategy announced in today's 'Late News' RNS and the new milestones indicated ahead. In a nutshell :-

1 The focus is now purely on the Therapeutics side of the business so the Diagnostics side is up for sale.

2 What we get for the Diagnostics side will be earmarked for development on the Therapeutics side.

3 The data from AVA6000 is clearly good enough to go for this new strategy and there is now a runway ahead for the outlined Phase trials - even if they take a little longer than previously thought.

4 AVA3996 targetted to commence Phase Ia in the first half of next year with another candidate also to be selected in 2025.

5 We still have £38.25m of convertible bonds with Heights and the reset 'floor price' of 95p will be recalculated.

6 The level of dilution is low - but as I said earlier today - the SP determines how many shares are issued to get the funds required.

Hopefully there will now be an end to such financially illiterate comments such as 'the SP doesn't matter' or that the current value of a company doesn't matter when assessing the individual assets that make up the whole of the company. Or that 'corporate silence' can only be 'golden'. Let's see what happens when the Diagnostics division is put up for sale and what price it achieves in relation to the current valuation that the market is putting on the company as a whole.

As for the Therapeutics side I am 100% behind the new strategy as it concentrates resources and research onto our prize assets - where they should have been in the first place. Hopefully as we progress AVA6000 there will be more interest from IIs as well as from potential partners.

One last thing. The Diagnostics side could be seen as a deterrent or distraction to any potential II investors or even a bidder for the real potential 'goldmine' that is the Therapeutics side. I welcome its sale and as the saying goes - better late than never. There will now be more clarity in the valuation of our assets - especially if AVA6000 continues to progress as it has done to date.

Painful day - yes - but hopefully a better future under a new strategy - both for investors and future patients who might just have better outcomes due to the decisions made today by Avacta to bring AVA6000 and other candidates to market under a more focused and targeted strategy.

So when all the toys have been thrown out of all the prams and all the vitriol has been vented from all the spleens - with justification I might add as I heard the same talk as regards 'inflection points' etc. that you did - the smoke will clear eventually and the company can get on with implementing the new focused strategy - though I expect some market 'turbulence' in the next few days as peoples' expectations readjust to the new reality

Good night to all.

DTW

My last words should have read 'potential partners/bidders'. I missed out the last word.

Oh I do think that any potential partner/bidder worth their salt will take into account the current price of the company as a whole (no.of shares x SP) in doing their due diligence on any deal. I agree with your points re the science - which is why I am a shareholder - but in my experience it is a mistake to ignore what the finance bods use as their standard benchmarks - and their view does matter in negotiations. They will generally value company assets in relation to the overall company price to see whether the parts are equal to or lesser/greater than the price of the whole. Any licencing deals will almost certainly take these issues into account first and foremost and any haggling will be around these aspects. An asset such as ours - AVA6000 in its current Phase I status - will no doubt be subject to different financial valuations depending on who is doing the valuing and any licencing will be negotiated. Of course if the SP just continues to go southwards then an offer for the whole may be a better option. It depends on your valuation of the asset in relation to the actual current publicly quoted price of the company's shares. In other words, the SP does matter.

If you know of a finance director who works on different financial principles as regards the valuation of companies and their assets please let me know.

Icecool

The closing price on Tuesday 12 December 2023 prior to the company's presentation was 134-136. Today's current price is 75-78 as I type - down some 43% in just over two months of silence. Do you think that this has gone unnoticed by potential partners? Will they not adjust any offers in the light of the fall in the valuation of the company's offerings which is there for all to see? And do you think that an RNS quashing this rumour will make matters worst in any negotiations? I suppose we can judge that once we know the facts rather than the rumours about what is going on. Perhaps we have a full scale NDA on the company ? Most unusual unless there is a potential T/O in my opinion rather than any licencing talks which are part and parcel of biotech life. We shall see.

BV

You state - 'Why is this slide not in the interests of SHs'? For one, if you have to place shares in the market then the lower the price the greater number of shares you have to issue to get the same amount of money - ergo the greater the dilution and subsequent value of the company as a whole.

You state - 'The SP does not represent the value of a company'. It is basic financial accounting that the SP x Number of shares in issue = the price of a company at that given moment. It is in theory what you would offer to buy the whole company. Whether that makes the company 'expensive' or 'cheap' is down to the buyer. 'Value' is subjective in this respect as a company may be more valuable to Bidder A than Bidder B - but that doesn't change the pricing formula for a listed company.

McMuff

As a LTH I fully agree with your logic as regards the mechanics of placings. However there is absolutely no reason I can think of that prevents Avacta issuing an RNS to rebut claims of a potential near term placing as has been done by other companies in the past where speculative statements have been put out knowing that the effect on their SPs will be negative and that the speculations are false.

Silence from a company is the best friend that shorters have once a rumour of a placing has taken root in the marketplace. The rumour is either true - generally leaked from the book building exercise which goes on prior to the placing itself - or is false speculation. Only the company itself knows which is true and it has a responsibility in my opinion to now issue an RNS if the rumours are false as this has gone for far too long and is not in the interests of shareholders -only for shorters. Enough is enough. The CEO has a responsibility to shareholders that he must now exercise in my opinion in order to either confirm or repudiate this damaging and on-going speculation

Very interesting interview with Karen Snow - Nasdaq's Global Head of Listings - on the Today programme this morning which is worth a listen to by all LTHs. The interview starts just after 16mins 40 secs into the programme -

https://www.bbc.co.uk/sounds/play/m001tgj0

Whether Avacta is one of the companies 'on Nasdaq's list' so to speak I have no idea, but the interview does highlight the attractions of companies such as ours with regard to considering a Nasdaq listing.

Rambo

I agree - the statement clearly says -"If CV6-168 fulfils its’ promise, then this will give us a new therapeutic option that is easy to take alongside existing standard anti-cancer drugs, and with minimal additional side-effects.”

Does this raise the possibility of a potential future combo of AVA6000 plus CV6-168?