Member Info for RorkesDrift

NSAID impact on gut mediated systemically......

AIM down > 4%

The current P1 trial is important because ava006 is closest product to market.

We all recognise it also highlights pitentual of a stable of other chemotherapies - son of velcade being one of those

However even beyond that is the TMAC program which combines precision and affimer technologies. The Ava004 being backbone of the first wave

"In a mouse syngeneic tumor model study, Avacta has shown that AVA04-VbP outperforms Bavencio; animals treated with AVA04-VbP showed a significant reduction in the rate of tumor growth with respect to those treated with Bavencio. A considerably higher level of the released I-DASH warhead was measured in the tumors compared with very low levels in the blood, indicating that healthy tissues are less exposed to the highly toxic warhead. This tumor targeting is central to the TMAC mechanism of action, and permits the use of the highly potent cancer-killing warheads."

Would be unusual to release info part way through a trial unless it was a planned interim. Might hear how far trial has got - dose escalation from which we could infer that all is going to plan.

I'm thinking it will be a much wider review than just Ava0006. So will hear more about bispecifics and where we are in various partnerships. Hype up the science, say little about the commercials unless Avacta have inked another deal or been paid another milestone. Will need to disclose cash flows and balance sheet fairly soon and reflect that in expectations of investors.

Its not just £50M though. The costs of P2 and more relevant P3 would be borne by partner. Call that £100M. There would then be a series of milestone payments - AS suggested £500M. Enables partner to shift cash flow towards revenue and allows for risk.

Then there is the royalty income - if anything a bit low - however product is likely to be loss making first couple of years and have short patent. Call it £1B in total - based on 50% MS and 10 years.

Risk handed over to someone else. Profits go with it.

The SP however will respond beyond the cash asset. Ava006 licence would see

I) Proof of concept. Increases value of Avacta pipeline immediately
II) Cash to bring these products to commercial use before their patent expires.
Iii) The above two then shine a light on the TO value of Avacta.

I didn't need to go to McDs to work any of the above out but we are due another ridiculous "I have reliably been informed..." Post any day. Remember September?

Pharma business deals are about risk.

Drug takes $Ms and years time get to market and more fail than succeed. Many of the ones that make it never provide a return. A few pay for all the rest.

Avacta response - get others to do heavy lifting on some - lined with milestones. This reduces risk and brings cash in for in-house projects. Downside is profits are also split IF they happen.

Ava6000 has taken one step further and entered phase 1/2 clinical trial. Balance of risk - known active, good preclinical vs uses up a lot of available resource (cash) but was possible due to fund raise (above current price).

Now Avacta have committed to that they will see it through to end of P1A I guess end Q2 (always late). They then have either shown it works or it doesn't - not only safety / tolerability but efficacy signals (tumour volume etc). They might even see it through to the end of P1b a year later but my belief is they need cash for other projects - other precision drugs, Ava004 and the bispecifics. I believe that is the key strategic driver at present - how to get several products to market not just one. Thus a good result in P1a later this year will either see a licensing deal or a fund raise. I think share holders would prefer the first.

Going it alone with first drug probably not an option - others with drugs in oncology offer a rapid penetration of a short lived opportunity (patent expiry).

After that we have shop window, several partners and a stable of other products. Let the bidding begin

Huge part of the cost of being in pharma is promotional. That is why small companies tend to licence their products to much larger companies. Even large companies will licence products to others if they lack either geographic or therapeutic presence. Added to promotion you have all the costs associated - regulatory, distribution etc - larger companies can spread that over several products.

Avacta would have to start from zero. Unlikely.

Additionally AS has only ever talked about licensing and has gone so far as to leave this on the company website.

Indicative Deal Structure
• $50M in upfront and near-term milestones
• $300-500M in pivotal and market authorization milestones
• Low to mid-single digit royalties

I guess you knew that - weird?

Its a little out of date - now you have highlighted it and thank you for that they might take it down but some brilliant background.

Given the upcoming roadshow slide 13 very interesting...
Ava6000
Indicative Deal Structure
• $50M in upfront and near-term milestones
• $300-500M in pivotal and market authorization milestones
• Low to mid-single digit royalties

The rationale is to improve tolerability by reducing systemic levels of dox. There will be a limit on dose response - more drug stops being more effective.

Likely protocol will see a slightly higher dose being used (I don't think the 6x used on mice) which will enable longer or more frequent dosing. It is the cumulative cardiac exposure that is damaging and limits treatment cycles. If it goes to plan Ava006 enables more cycles since cardiac cummaltive dose reduced.

Commercially grab market share but expand use. Pricing will be interesting - too high and patients will be stratified time different approaches. However, its a better drug so higher price x higher volume (dose x freq) would seem appropriate.

If you believe the market can accurately price a stock then current price reflects the markets perception of the balance between risk and reward.

Potential rewards are earnings in the Bs. Therefore the current SP also assigns significant risks. Both of these opposing forces are typical of early stage biotech.

My view is that the market has overplayed the risks. Whilst Avacta have one product in phase 1 this could be considered significant due to the "active" having known efficacy and good preclinical data. We have to accept that mice have different physiology to humans and are an imperfect model especially if you consider drug kinetics. However, the aim of Ava006 is to enable high doses of dox via local dose x freq of dose (i.e. more efficacious) whilst sparing cardiac tissue (better tolerability). Having three animal models demonstrating this is achieved is a strong indicator that the mechanisms works - I believe the market has underestimated the difference in risk compared to other biotech. Not risk free but if looking at other companies at same stage a lower risk - the fact that the tech then opens up multiple £B opportunities also suggests higher reward.

Difficult to see how six cycles of data from patient one would be available when there are 21 days between cycles and it was submitted in October.

First patient announced 11th August not mid July.

Did you just make this up?

"The clinical trial started ~mid-July 2021 and FDA submission would include pre-clinical data for at least 3 clinical trial patients’: One patient with maximum 6 cycles of pro-drug chemotherapy, one patient with 2 cycles and third patient with 1 cycle."

AS was pretty pleased with result of first patient at 90% of standard dose. Was unable to say why but probably an immediately available measure such as systemic levels of dox. Great but not sure grounds for doing cartwheels.

US has approved trial - majority of data was preclinical so effectively same data has used for UK approval. Again great - third party assessment that it holds potential by two respected bodies. Not sure if one patient data really influenced them but hey if it makes people happy.....

More interesting is the study presumably continues and is now in stages where doses exceed standard. Otherwise something significant (in RNS) would have stopped / paused study. I think that is fairly exciting. Almost a no news is excellent news. Timing of announcing second project is intriguing and I like the commitment and direction.

Continue to hold based on clinical trial output required before any other action. If this works there are a lot here who will see significant changes to their own situation - like the fact that PIs with balls and prepared to risk can change their own finances so significantly.

Lol. Its crackers

Thanks for posting link.

Segmenting market by product - fail Marketing 101.

Neutronic you are right but its getting fairly close - topped up at 1.87 and then sold for slight profit. My 60p top up is looking more threatened hence now waiting.

Early stage pharma stocks are volatile and you haven't made a profit or a loss until you sell. Problem is its either really fantastic or really crap when news hits. I'm guessing the LTH here have a balls of steel since most could have been on a free ride by now.

My view - dox and velcade proven efficacy. Preclinical looks promising (noone approves clinical trial if drug kills all the mice). I wouldn't be here if I wasn't positive about opportunity but I find it easier to accept its a risk rather than looking for something to latch onto in tea leaves that are not there.

Given we must be all of a similar mind to be here I'd be interested to know what other pharma stocks people are buying and how risk reward compares.

Market sentiment dominated by people who like facts rather than made up stuff by self appointed experts. If I hadn't already allocated as much id be buying - looking at the current situation and current SP Avacta represents excellent balance between risk and return even when taking into account the unknowns. I've cash on side line awaiting update - still in profit but jeez its been a ride. Suspect lots of people have same plan.

I think they also have Mathew Vincent from Arisaph involved.