RE: US Influence15 May 2026 11:33
Avacta remains a classic biotech cash incinerator riddled with dilution and overhang risks. With over 450 million shares now in issue and a chunky ~£19-20m convertible loan note (CLN) facility still hanging over the register—convertible at a 75p cap—the company can (and does) keep printing shares to service debt and fund its money-losing operations.
Revenue is negligible (often under £1m in core operations), losses are massive (£25-50m+ annually in recent years), and the balance sheet relies on repeated placings, open offers, and CLN conversions that relentlessly erode shareholder value.
Despite the pre|CISION platform hype and occasional clinical updates, the business burns cash with no clear path to profitability or meaningful partnerships, leaving it chronically dependent on dilutive financing in a tough market for unprofitable biotechs. At a ~£350-400m market cap, the setup screams further downside as more CLN amortizations hit, shares get issued at discounts, and the overhang weighs on any attempted rallies. This is a value trap for anyone hoping for a clean re-rating.