Avacta Group Regulatory News (AVCT)

28 Jul 2008 07:00

Avacta Group plc

Collaboration agreement and completion of prototype detection system

Laser based gas analysis and detection - industrial and clinical markets

Avacta Group plc ("Avacta"), which develops detection and analysis technology aimed at the pharmaceutical, healthcare, security and industrial sectors, is pleased to announce that it has signed a collaboration agreement with V&F Medical Development GmbH ("V&F"), and, separately, has completed a detection prototype for a constituent of breath, potentially positioning Avacta strongly in the high value clinical diagnostics market.

Avacta's laser based trace gas detection technology was gained through the acquisition of Oxford Medical Diagnostics Ltd ("OMD") in December 2007. This provided Avacta with important strategic opportunities in clinical diagnostics through the analysis of breath and gases. OMD's technology has high levels of sensitivity and rapid response times, low maintenance, low costs and relative simplicity when compared with competing technologies. These qualities make it highly suitable for a wide range of applications within industrial and diagnostic environments.

Avacta's technology has significant potential for breath analysis as well as for the analysis of gases produced by clinical samples such as urine, blood and faeces. Bacterial infections which are present in these samples produce gases and the analysis of these is called "headspace analysis". At present headspace analysis requires large and very expensive centralised equipment. Avacta's CEAS technology has the potential to replace these with a low cost headspace analysis product and, to this end, Avacta has signed a collaboration agreement with V&F, an Austrian producer of high quality mass spectrometers.

This collaboration agreement concerns a programme of research and development to identify key headspace gases for selected bacterial infections and to determine the performance requirements for such a product with a view to a full co-development agreement being signed.

In a separate development Avacta has completed a prototype product for detection of a constituent of human breath which is aimed at clinical use. In a clinical setting, the sensitive detection of this particular gas in breath allows some gastrointestinal problems to be tested for and monitored. Avacta is now pursuing protection of its intellectual property in this application area and commercialisation in both industrial and healthcare testing markets.

Alastair Smith, Chief Executive of Avacta commented :

"We believe that the potential size of the markets for clinical analysis of breath and headspace gases is large and was a key factor in our decision to acquire OMD late last year. Clinical diagnostics products are still in early development stages but this collaboration with V&F and the completion of the prototype breath analysis system brings us significantly closer to market and is a major step forward in achieving our clinical diagnostics ambitions for OMD.

"I am very pleased with the progress of OMD since acquisition and there hasbeen considerable interest from potential commercial partners for a range ofindustrial gas detection applications and I hope to report on further progresssoon." 28 July 2008Enquiries:Avacta Group plc Tel: 0870 835 4367 Alastair Smith, Chief Executive Officer Tim Sykes, Chief Financial Officer Haggie Financial LLP Tel: 020 7417 8989

Nicholas Nelson / Kathy Boate Nicholas.nelson@haggie.co.uk

WH Ireland Limited Tel: 0161 832 2174 David Youngman Novum Securities Limited Tel: 020 7562 4700 Henry Turcan / Michael Brennan

Notes to Editors:

About Avacta

Avacta was spun-out from the University of Leeds in 2004 by its current management team as a biophysics company, with the aim of combining the disciplines of physics and biology to develop innovative technologies and expert technical services to address needs in the pharmaceutical, defence and clinical diagnostics markets. Avacta has a core bio-analytical technology development programme addressing the needs of the biopharmaceutical sector to fully characterise their new products at the earliest stage in their development to reduce the risk of late stage failure. High value solutions in defence and clinical diagnostics are also being provided by these core bio-analytical technologies. A successful and growing part of the Avacta business model is its technical services arm, Avacta Analytical Ltd, which is focused on providing leading edge contract research to the biopharmaceutical and healthcare/personal-care materials sectors. Avacta listed on AIM in August 2006 through the reverse takeover of Readybuy plc which changed its name to Avacta Group plc.