Avacta Group Regulatory News (AVCT)

10 October 2019

Avacta Group plc

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

Collaboration and Option Agreement with ADC Therapeutics

Focus on developing potent Affimer-drug conjugates

Avacta Group plc (AIM: AVCT), (Cambridge and Wetherby UK), a biotechnology company developing novel cancer immunotherapies based on its proprietary Affimer® platform, today announces that it has entered a collaboration and option agreement with ADC Therapeutics SA (Lausanne, CH), a clinical-stage oncology-focused biotechnology company pioneering the development of highly potent and targeted antibody-drug conjugates for patients suffering from haematological malignancies and solid tumors. The agreement is to develop Affimer-drug conjugates combining Avacta's Affimer® technology with ADC Therapeutics' pyrrolobenzodiazepine (PBD)-based warhead and linker technologies.

As part of the multi-target collaboration Avacta will generate and optimise Affimer® binders against three undisclosed cancer targets and provide these to ADC Therapeutics to target its proprietary cytotoxic warheads (PBDs) to the site of the tumour. ADC Therapeutics will carry out pre-clinical research and development programmes to evaluate each of the Affimer-drug conjugates with a view to generating clinical candidates.

The commercial agreement between the two companies provides ADC Therapeutics with options, on a target by target basis, to obtain exclusive licenses to the Affimer® proteins for clinical development and commercialisation.

Under the terms of the agreement, ADC Therapeutics will cover all Avacta's costs during the collaboration. Upon ADC Therapeutics entering into each of the commercialisation licenses and successfully bringing new Affimer-drug conjugates to market, Avacta will receive option fees, development and commercialization milestones, as well as a single-digit royalty on sales. Further financial details are not disclosed.

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

"I am delighted to have established this collaboration with ADC Therapeutics to develop drug conjugates that harness the benefits of Affimer proteins to selectively and efficiently target ADC Therapeutics' PBD drugs to the site of the tumour. We are very excited about the potential of this collaboration to develop breakthrough oncology treatments, and about its considerable commercial value to Avacta.

We look forward to working closely with the ADC Therapeutics team to generate new Affimer-drug conjugates and advance these promising cancer treatments into the clinic."

THE INFORMATION COMMUNICATED IN THIS ANNOUNCEMENT IS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014.

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 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 proprietary targeted chemotherapy platform, releases active drug only in the tumour, thereby limiting systemic exposure and 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 targeted form of the standard-of-care Doxorubicin, into the clinic in Q2 2020 of 2020 and to follow on with an IND/CTA submission for the first Affimer programme, a PD-L1 antagonist, in Q4 2020.

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

Avacta reagents 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 with a particular focus on the diagnostics sector. The Company is also developing a small in-house pipeline of Affimer-based diagnostic assays for licensing.

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About ADC Therapeutics (www.adctherapeutics.com)

ADC Therapeutics SA is an oncology drug discovery and development company that specializes in the development of proprietary antibody drug conjugates (ADCs) targeting major hematological malignancies and solid tumors. The Company's ADCs are highly targeted biopharmaceutical drugs that combine monoclonal antibodies specific to surface antigens present on particular tumor cells with a novel class of highly potent pyrrolobenzodiazepine (PBD)-based warheads via a chemical linker.

The Company has five PBD-based ADCs in ongoing clinical trials, ranging from first in human to pivotal Phase II, in the USA and Europe, and a deep pipeline of other preclinical ADCs in development. ADC Therapeutics has world-class partners, including AstraZeneca and its global biologics research and development arm, MedImmune.

ADC Therapeutics is based in Lausanne (Biopôle), Switzerland and has operations in London, San Francisco and New Jersey.