Avacta Group Regulatory News (AVCT)

21 Aug 2008 07:00

Avacta Group plc

Pre-Close Trading Update

Achievement of milestones for laser analysis technologies

Avacta Group plc ("Avacta" or the "Company"), which develops detection and analysis technology aimed at the pharmaceutical, healthcare, security and industrial sectors, announces a pre-close trading update following the year ended 31 July 2008. The preliminary results are expected to be announced during October and the directors look forward to reporting on a successful period of revenue growth, product development and industry collaboration.

The Company's product portfolio, built around the core technologies of laser analysis and automated fluid handling, continues to move closer to market and on target with reported expectations. Last month the Company reported continuing success with trials of its stand-off chemical detection device in collaboration with the MOD; the completion of a prototype device for trace gas analysis in diagnostics and industrial applications; and the recent announcement of a product development partnership with one of the market leaders in toxic and flammable gas detection. In the past few weeks further milestones have been reached on two other lead products, putting commercialisation within the Company's sights:

Avacta's flagship product, Optim, a high end benchtop instrument which performs biophysical analysis on minute amounts of biological and biopharmaceutical samples, completed its alpha prototype stage, and in-house demonstrations to a number of early stage adopters are planned in the near future. The projected launch in late 2008/early 2009 remains on track. The Directors believe that once available for purchase, Optim will provide customers with a step change in their ability to characterise drug compounds at a very early stage of development thereby improving lead compound selection and reducing the risk of later stage failures. The directors are encouraged by customer feedback which leads them to believe that the product will be well received by its target market.

The Company completed development of a prototype technology designed to improve the sensitivity of Raman spectroscopy, a commonly used chemical identification and analysis technique with a wide range of potential applications in almost every scientific field. Commercialisation of the technique has been limited historically because of problems with weak signals and interference from background noise. Avacta has countered these problems with its new noise suppression technology which significantly improves the quality of the data available and the Directors believe that this will open new markets for Raman spectroscopy. Avacta is in preliminary discussions with several third party Raman system providers regarding potential licence deals for the technology.

The contract services division continues to thrive profitably following further growth in the number and range of customers internationally, which are keen to take advantage of the unique range of biophysical characterisation services. A range of strategic alliances entered into over the period strengthens the Company's offering by enabling it to provide a greater range and depth of services to its customers.

21 August 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.