Last checked at 4 Apr 2007 07:00
Avacta Group plc Fundraising Appointment of Joint Broker
Avacta Group plc ("Avacta" or the "Company") which provides biophysical analysis technology and expert technical services to the biopharmaceutical industry, and molecular diagnostics tools for defence and healthcare applications, announces that it has successfully completed a fundraising of ‚£2.71 million (before expenses) with a number of new and existing shareholders. The Company also announces the appointment of BankOra Limited ("BankOra") as joint broker to the Company.
The Placing
The Company has today entered into a placing agreement with BankOra under the terms of which BankOra has agreed, as agent for the Company, to use its reasonable endeavours to procure placees for 108,400,000 Ordinary Shares ("the Placing Shares") at the placing price of 2.5p per new share ("the Placing"). Application has been made for the Placing Shares to be admitted to trading on AIM ("Admission") which is expected to take place on Thursday, 5 April 2007. Completion of the Placing is conditional upon Admission. Under the terms of the Placing, certain directors of the Company have agreed to subscribe in aggregate for 3,600,000 Placing Shares.
Trading Update
Since joining AIM in August 2006, Avacta has fulfilled the technical and commercial objectives as set out in the admission document. These achievements have been the development of the detection and analysis technologies to proof of concept stage, securing further commercial collaborations and the development of the analytical services operations. A suite of technical services are now being provided to a growing number of companies in the biopharmaceutical and healthcare industries, endorsing the need for solutions based upon biophysical methods.
The Company has undertaken projects for 20 clients, including four of the leading European biopharmaceutical companies. Over 75% of current business is repeat business and a strong pipeline of work for delivery both in the current and next financial year is in place.
In a separate announcement today, the Company has launched The ViVax Toolkit¢â€ž¢ which provides full biophysical characterisation of viral vaccines and complements the existing Biophysical Toolkit‚® for the characterisation of therapeutic proteins.
Outlook
The Company is now well positioned to commercialise its proven technology and generate product sales. The net proceeds from the Placing will be used to deliver pre-production prototypes of biopharmaceutical analysis technologies and other high value molecular diagnostics applications for defence and healthcare. First product sales delivered through partnerships with original equipment manufacturers are expected in 2008.
The significantly strengthened balance sheet will enable the Company to invest further in the technical services division to enable it to meet the demand that has been evidenced such that it is expected to make a positive contribution to the Group's cashflow in the next financial year.
In addition, the Board continues to look at complementary technologies, routes to market and potential acquisitions where they can deliver further shareholder value.
Professor Alastair Smith, Chief Executive, Avacta Group plc, commented:
"In the nine months since coming to AIM we have seen an exceptional level of progress and commitment from the Avacta team. We stated when we joined AIM that further funding would be needed to take our products forward to commercialisation and I am delighted with the level of support shown by our existing and new shareholders.
"The average cost of developing a biopharmaceutical is now $1.2 billion and the success rate for new compounds entering the development pipeline is only 20-30%. In some cases the failure of compounds is caused by problems which Avacta's technology and services could identify at an early stage. This prior knowledge would enable developers to avoid costly pitfalls and accelerate the commercial process.
"The rapidly growing number of clients from the biopharmaceutical sector using our unique biophysical analysis services endorses the needs for Avacta's new technology products and these funds will allow us to make the necessary investment to deliver on our plans to bring ground breaking new products to market."
4 April 2007Enquiries:Avacta Group plc Tel: 0870 835 4367 Alastair Smith, Chief Executive WH Ireland Limited Tel: 0161 832 2174 David Youngman, Director, Corporate Finance
BankOra Limited Tel: 020 7099 1943 Henry Turcan, Director Nexus Financial Ltd Tel: 020 7451 7050 Nicholas Nelson, Director Mob: 07921 522 920 nicholas.nelson@nexusgroup.co.uk
AVACTA GROUP PLC