Avacta Group Regulatory News (AVCT)

8 January 2020

Avacta Group plc

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

Avacta and Daewoong Establish Joint Venture

Collaboration to develop next generation cell and gene therapies incorporating Affimer proteins

Avacta Group plc (AIM: AVCT), the developer of Affimer® biotherapeutics and reagents, is pleased to announce that it has agreed to establish a joint venture in South Korea with Daewoong Pharmaceutical Co. Ltd., (KSX: 069620), a leading Korean pharmaceutical company, and to enter into a collaboration and license agreement for the joint venture to develop the next generation of cell and gene therapies, incorporating Affimer proteins to enhance the immune-modulatory effects.

Mesenchymal stem cells (MSCs) are promising agents for the treatment of autoimmune and inflammatory diseases. The joint venture will develop a new class of MSCs that are primed to produce Affimer proteins, which are designed to enhance the immune-modulatory effect when administered to patients, by reducing inflammatory and autoimmune responses.

Avacta will develop Affimer proteins against several undisclosed targets which will be transferred to the joint venture to be incorporated into MSCs. Avacta's research and development costs will be fully covered by the joint venture which is funded by Daewoong. Avacta retains the rights to commercialise the Affimer proteins outside of the field of cell therapies.

Daewoong will provide the joint venture with access to its proprietary technology for generating allogeneic MSCs from a single donor to treat a large number of patients. This proprietary technology facilitates the development of cell therapies as "off-the-shelf" products. 

Avacta's shareholding in the joint venture is 45%. The joint venture will be operationally managed by Seng-ho Jeon, CEO of Daewoong, with a Board composed of representatives of both Avacta (Alastair Smith, CEO and Matthew Vincent, VP Business Development and Strategy) and Daewoong.

Dr Alastair Smith, Chief Executive Officer of Avacta Group, commented: 

"Cell and gene therapies are attracting intense clinical and commercial interest. We are very excited to establish this joint venture with Daewoong, one of the top pharmaceutical companies in Korea, to develop the Affimer platform in this important therapeutic area. Our vision is to combine our platforms to create the next generation of cell therapies, for which the potential is huge.

"Within the last six months alone we have seen early stage stem cell companies acquired for significant sums. For example, Bayer acquired control of Blue Rock for $600m, valuing the company at close to $1bn; and Vertex acquired start-up Semma Therapeutics, which is developing stem cell therapies for type 1 diabetes, for $950m." 

"This joint venture will have a unique opportunity to generate superior cell therapies for some of the most pressing needs in immune-mediated disease. We look forward to working closely with the Daewoong team to develop these new medicines, and get them to the patients who need them."

Dr Seng-ho Jeon, CEO of Daewoong Pharmaceutical, commented:

"Our partnership reinforces the companies' shared vision of designing the next level of treatment paradigm, and opens up a new horizon in immunotherapeutic strategies. This innovative collaboration will deliver invaluable synergy and lead to new solutions to transform patients' lives."

- Ends -

For further information from Avacta Group plc, please contact:

About Avacta Group plc - https://www.avacta.com

Avacta is developing novel cancer immunotherapies combining its two proprietary platforms - Affimer® biotherapeutics and pre|CISION™ tumour targeted chemotherapy. With this approach, the Company aims to address the lack of a durable response to current immunotherapies experienced by most patients. The Company's therapeutics development activities are based in Cambridge, UK.

The Company benefits from near-term revenues generated from Affimer reagents for diagnostics, bioprocessing and research, through a separate business unit based in Wetherby, UK.

The Affimer platform is an alternative to antibodies derived from a small human protein. Despite their shortcomings, antibodies currently dominate markets worth in excess of $100bn. Affimer technology has been designed to address many of these negative performance issues, principally: the time taken, and the reliance on an animal's immune response, to generate new antibodies; poor specificity in many cases; large size and cost.

Avacta's pre|CISION targeted chemotherapy platform, releases active chemotherapy only in the tumour, thereby limiting systemic exposure and damage to healthy tissues, and thereby improving the overall safety and therapeutic potential of these powerful anti-cancer treatments.

By combining these two platforms the Company is building a wholly owned pipeline of novel cancer therapies with the aim of creating effective treatments for all cancer patients including those who do not respond to existing immunotherapies. Avacta expects to take its first drug, a pre|CISION targeted form of the standard-of-care Doxorubicin, into the clinic in the middle of 2020.

Avacta has established drug development partnerships with pharma and biotech, including with Moderna Therapeutics Inc., a deal with LG Chem worth up to $310m, and a partnership with ADC Therapeutics. Avacta actively seeks to license its proprietary platforms in a range of therapeutic areas.

Avacta diagnostics business unit works with partners world-wide to develop Affimers for evaluation by those third parties with the objective of establishing royalty bearing license deals. The Company is also developing a small in-house pipeline of Affimer-based diagnostic assays for licensing.

To register for news alerts by email go to www.avacta.com/investor-news-email-alerts

About Daewoong Pharmaceutical http://www.daewoong.com

Established in 1945, Daewoong Pharmaceutical Co., Ltd. is a leading South Korean pharmaceutical company that develops, manufactures, and commercializes pharmaceuticals for both domestic and international markets. With its strong and competent in-house R&D and qualified manufacturing facilities (cGMP), Daewoong provides a total healthcare solution to customers across the globe. Aiming to become a global healthcare company, Daewoong has broadened international operations by establishing branch offices and research centers throughout Asia and the United States. Also Daewoong has expanded strategic partnerships in more than 100 countries worldwide.