Member Info for ShearClass

Avacta have stated that they were working on a test from mid March but didn’t inform the market until 8th April.

Kamani and Hughes bought £2m of shares on 2nd April stating it was to support current strategy. They then set a company up 3 weeks later to sell tests.

Were they aware of the test when they subscribed?

Was this why IP group were so happy to sell their 15% shareholding at 18p?

Was this why Alan Aubrey resigned?

Answers on a postcard, but this stinks if you ask me.

“2 April 2020

Avacta Group plc

("Avacta", the "Group" or the "Company")

Subscription to raise GBP2 million

Avacta Group plc (AIM: AVCT), the developer of Affimer(R) biotherapeutics and research reagents, is pleased to announce a proposed Subscription (the "Subscription") to raise gross proceeds of GBP2 million. The Subscription comprises of 11,111,110 subscription shares (the "Subscription Shares") at a price of 18 pence per new ordinary share ("Ordinary Shares"), being a 2% discount to 14 day volume weighted average of 18.4 pence . The two subscribers are Clare Hughes (wife of Richard Hughes, co founder of Zeus Capital) and Mahmud Kamani, co-founder of Boohoo.com. Admission of the Subscription Shares is subject to, amongst other things, shareholder approval at the general meeting ("General Meeting"), notice of which will be sent to shareholders shortly. A further announcement will be made in due course.

Reason for the Subscription and Use of Proceeds

The Company intends to utilise the net proceeds of the Subscription to continue to execute the strategy outlined last October. The Company's key objectives are to enter the clinic with its first preCISION chemotherapy programme, to secure further significant drug development partnerships that help progress the Company's technology platforms, and to continue to grow revenues and secure licensing partnerships for Affimer(R) diagnostics reagents. Given the current economic climate the Board have deemed it prudent to take on a small amount of additional equity capital at this time to ensure that it is in a strong position to exploit progress after the coronavirus pandemic is over.”

Kamani bought shares at 18p in the placing on 2nd April before they even announced they were working on a test???????

It really doesn’t CS, if you were anything but a gobshi*e you would know that listed companies have trading windows for around 1 month after their annual / interim results. The fact that the directors bought as soon as they could after releasing the results tells you everything you need to know.

Remind me when the directors of AVCT last bought shares in the open market? As far as I know they only ever bother in the heavily discounted placings that Alistair Smith specialises in.

Seb46

“Like I’ve said before this won’t change significantly until June and the results start to leak out“.

The results will not leak, if they do it will invalidate them! See many excellent posts over the weekend on this subject. Also, unless you are an oracle you have no idea what could be released before June, it was 77p on the morning after Panorama so a move back up to that level would be getting back to parity in my opinion.

"I'd like to point out that Novacyt came on to my radar at about the same price that Avacta is now and I didn't buy because it seemed to me that it had already reached the top, I was wrong."

YOU CANNOT COMPARE TWO COMPANIES ON THE PRICE OF THE SHARES, ONLY ON THEIR MARKET CAP. It is the most basic knowledge and yet so many don't understand it. At £1.50, Novacyt had a market cap of £100m and already had a world class finished product. At £1.50 AVCT has a market cap of £310m and no finished product or even a prototype.

No product until mid summer means no regulatory approval until late summer & no sales until after this. Until evidence of test performance is provided, this is overvalued and very high risk.

Was more than that Faze - 3 x 50k buys reported late on advfn, so just shy of 2% of the company bought in 30 mins...

The price per share is irrelevant though, market cap is far more interesting and revealing. As far as I’m concerned, at £90m SNG is ridiculously undervalued versus some of the others on LSE

Take ETX - market cap now at £55m, who released this morning;

“An initial compound set, which we believe has the potential to address both viral replication and the associated excessive immune response, will be tested by WuXi AppTec utilising its relevant cell-based assays”.

All I see is initial, experimental & potential. So far off anything of value, yet only £35m behind SNG.

AVCT are another who have been aggressively promoting their experimental Affimer technology. No trials, never been in a human, and now sits at £300m market cap having been £40m at the start of April. Nowhere near having a treatment or even a trial.

SNG haven’t self promoted like some outfits, they know they don’t need to as the potential of the drug speaks for itself.

The flow of capital into SNG on a successful trial result will be spectacular and at the current level the risk reward is better than anything else on LSE IMO.

Hi Mike29,

I'm not a scientist either, however via reading the many recent journals I feel as though I'm gaining a greater understanding of the big picture & the role interferons could play in any treatment, but it's super complex so any interpretation is pure opinion!

Here is the link again for anyone new : https://www.sciencedirect.com/science/article/pii/S1568997220301294

At the end of the first paragraph in section 3.1 the authors state:

"although IFN-a inhalation can lower SARS-CoV-2 infection rate and serve in prophylaxis or treatment (Chinese guidelines) [108], the preferred solutions remain the better-evaluated, safer intravenous and subcutaneous routes [94,109]."

So they are preferred simply because they are better evaluated, and they are talking about IFN-a rather than IFN-ß.

SNG are using IFN-ß1a, of which they state ; "IFN-ß1b and IFN-ß1a are the most potent subtypes for SARS-CoV inhibition (probably even more for SARS-CoV-2) [56,104,105]; (ii) type-I IFN must be administered as soon as possible after infection (ideally before symptom onset)"

Re. Your final point on whether they are referencing SNG

"Additional well-designed studies involving timely administration of IFN-a are thus eagerly awaited."

No they aren't referencing them because SNG are using IFN-ß, however if IFN-ß is more potent that IFN-a then we could speculate that they would also eagerly anticipate well-designed studies involving timely administration of IFN-ß.

So in summary, the key points are;

- Trials must be well designed
- Timely administration is critical
- IFN-ß1b and IFN-ß1a are the most potent subtypes of interferons, SNG are using IFN-ß1a
- intravenous and subcutaneous routes are preferred because they have been evaluated, so the SNG study is quite groundbreaking as it tests inhaled IFN-ß1a

From the April 30th RNS

“In due course, details of the design, implementation and timing of this novel study will be disclosed more fully.”

My take would be that they are finalising the design & implementation of the study. The key here is that there is no point proceeding with the study without the correct design and methodology, as the results won’t carry any scientific weight. However, an update on it would certainly be appreciated & the sooner it formally starts the better.

Overall communication has been as expected really, they can’t update continually on patient recruitment etc, but I would expect an RNS this month to confirm the close of the hospital trial.

Re. A 50% fall, same here! However, the below is an excellent read & illustrates the huge complexity of the virus & the response of the body, I found it fascinating. Sadly it’s highly unlikely one drug will solve everything for everyone...

See section 3.1 for Comments around Type 1 Interferons, but great for learning more about the bigger picture (published 4th May)

https://www.sciencedirect.com/science/article/pii/S1568997220301294

For what it’s worth the broker target (Finncap) is £1.20 excluding Covid, with potentially £2.40 being added by a successful trial result.

Thanks for the link ShareSting, the following sections are especially relevant;

"Exacerbations of COPD are a major drain on healthcare resource, and are the second
most common cause of unplanned hospital admission in England.2 The peak for these
admissions coincides with the virus season. Viruses are implicated in 40% of
exacerbations,3 with bacteria being the other major cause. Patients are currently
treated with oral steroids and antibiotics. They will frequently receive antibiotics even
if the cause is suspected to be viral; this is because viral infections often precipitate a
bacterial chest infection. There is a serious gap in the therapeutic options available to
combat these severe lung infections. A successful product would alleviate symptoms,
prevent exacerbations, reduce healthcare resource utilisation and reduce antibiotic
prescribing. The directors believe that such a product could be very successful with
annual revenues exceeding $1 billion, just for COPD, with further potential in other
patient groups where these normally benign viruses cause serious illness."

"There are hundreds of respiratory viruses that can cause exacerbations of COPD. IFN-beta,
because it stimulates many different intra and extra cellular antiviral pathways, has
been shown to be effective in tests against all of the cold and flu viruses that we have
encountered in the trial thus far, namely: rhinovirus; influenza; RSV; coronavirus; and
parainfluenza."

There is a huge difference, antibodies as a subject area are tried, tested & well understood by the science community. Affimers have never been in a human. So firstly AVCT need to prove their safety before anyone would even consider a therapeutic. That’s years away even if everything went like clockwork.

Bad news for AVCT, great news for the world... IMO shows big pharma are right to focus on Antibodies rather than untried Affimers

https://www.google.co.uk/amp/s/www.nbcsandiego.com/news/local/antibody-effective-at-blocking-coronavirus-from-human-cells-sorrento-therapeutics/2326358/%3famp

“Also the financial report wasn't exactly a blockbuster.“

Stupidity summed up in one sentence. If you expected the 2019 results to be fantastic then you are an absolute fool, they didn’t sell a single test until the end of Jan 2020, so why would this be recognised in 2019?

As for referencing PWhite73, his opinion that the share price will return to 7p by October this year & that the Covid 19 tests are loss making are also insane and undermine any argument that he has. How is he a ‘knowledgeable investor’?

In my opinion the reason for the fall was the delay in the release of the new dPCR test from May to June & the lack of any positive surprises. Interesting to see where the SP goes from here in the short term if there isn’t any news for a couple of weeks.

https://www.frontiersin.org/articles/10.3389/fimmu.2020.01061/full

This paper is exciting when read in conjunction with the science direct paper posted here yesterday. If Interferon-a2b clears it 7 days faster, then based on the below IFNß1a has the potential to be even faster...

Type 1 interferons as a potential treatment against COVID-19

https://www.sciencedirect.com/science/article/pii/S0166354220302059

"It was repeatedly shown that IFNß is a more potent inhibitor of coronaviruses than IFNa (Scagnolari et al., 2004; Stockman et al., 2006): depending on the studies, IFNß1b or IFNß1a were the most potent IFN-I subtype in the inhibition of SARS-CoV (Hensley et al., 2004) and MERS-CoV (Chan et al., 2013; Dong et al., 2020; Hart et al., 2014). Consequently, IFNß1 appears to be most relevant interferon to treat coronavirus infections."

Warrenbe, they are not after hours buys, they are delayed buys from earlier in the day that have been reported late!

Maqsood, it wasn't 'HL who was selling' it was Lansdowne Partners, a hedge fund. Learn more about them here; https://www.ft.com/content/1b29a76c-9e53-32d2-b286-e8609b5ac11f

They've invested around £8m in SNG over the years & participated in 5 placings dating back to 2009. More than conceivable that they are effectively taking their £8m stake out and leaving the rest as a free ride. Up to May 6th they had sold 7.5m shares, assuming they received 65p on average that is just shy of £5m. Not far to go at all if this is indeed the case.

It feels as though Lansdowne may be finished selling and the rise and fall today is PI driven. More buys than sells overall which is why the SP is up, but each rise is met by traders 'profit taking' hence the drop back.

Lansdowne first invested in SNG way back in 2008 and their recent reduction is the first time they have ever sold SNG shares. So given their long term support, I see it as very unlikely that they will sell out completely when on the verge of potentially transformational news. It's hard to imagine a hedge fund holding for 12 years at an average of around 30p and then selling the whole lot at 50p a couple of months before the price could be 3 or 4 x higher.

Further to my point about the fact that Affimers have never been tested in humans, this is exactly the reason that the science community have focused their efforts on repurposing existing / advanced pipeline drugs to combat the virus. Something that has never been tested before would require a much longer and wide ranging trial process to prove safety etc. So whilst this is exciting news, I’m tempted to say that if it had real potential the big guns would have already been all over it.