Avacta Group Regulatory News (AVCT)

Avacta Group plc

Interim Results Notification and Trading Update

Five further Optim orders since New Year

Avacta Group plc ("Avacta" or the "Company"), which provides innovative, high value proprietary technologies and services to the pharmaceutical and diagnostics markets, is pleased to announce a trading update prior to the announcement of interim results for the six months to 31 January 2011 on Monday 18 April 2011.

Avacta operates through two divisions: Avacta Analytical which develops and commercialises world leading analytical tools and services to the drug development sector; and Avacta Animal Health which provides point of care and laboratory based testing products with services to veterinary healthcare providers.

Despite the tough economic climate the good commercial progress that we have previously reported has encouraged further investment from institutional and other existing and new shareholders and Avacta recently raised £1.95m to strengthen its financial position from a placing of new Ordinary shares. The Company expects to report solid underlying revenue growth and a significant reduction in the level of losses against the comparative period. Whilst continuing to grow substantially, turnover for the current financial year is anticipated to be lower than previously expected with marginally greater pre-tax losses.

First half highlights include :

Avacta Analytical

·; Optim sales momentum builds: Five further Optim orders have been taken since the New Year bringing the cumulative order intake to nine units in FY2011, more than double the total sales in FY2010. These include sales into Europe, the US and China. Optimhas been developed to accelerate the speed of and reduce the risks and cost of drug development through the early analysis of compounds to identify the best candidates for development. Optim comprises a benchtop instrument with a list price currently of £92,500 and a single-use sample holder providing recurring consumables revenues.

·; First US sale of Optim: Avacta Analytical delivered and installed its first Optim system in the US to a major California based pharmaceutical company at the end of last year. This sale, and the placing of further units into two key opinion leading US university laboratories, is expected to play a key role in accelerating the ramp up of sales in Optim's largest potential market. The Company now has a substantial US Optim sales pipeline and will use the University sites for demonstrations and references to drive sales conversion.

·; Avacta has signed a potentially transformational deal with Pall Corporation ("Pall"): Avacta Analytical entered into a major commercial partnership with Pall to distribute and support Optim in North America and potentially into other markets. Pall is a global leader in bioprocessing equipment and is focused on facilitating the process of drug discovery, development, regulatory validation and production; it has recently reported annual revenues of $2.4 billion. Pall provides Avacta Analytical with an internationally renowned scientific and sales partner with global reach.

·; Avacta appoints European and Far Eastern distributors: Avacta Analytical has appointed Isogen Life Sciences ("Isogen") in Europe and Cold Spring Biotech ("Cold Spring") in the China and Taiwan to distribute Optim and its associated consumables. Isogen has already converted its first lead and more than doubled the size of the sales pipeline in Europe since appointment. Cold Spring was only recently appointed as Optim distributor for China, one of the fastest growing and potentially most lucrative markets in the future for Avacta Analytical, but has already placed two orders for Optim for the Chinese market.

Avacta Animal Health

·; AX-1 point of care testing product unveiled: Avacta Animal Health has completed the development of the AX-1 point of care testing platform and showcased it to a City audience during November 2010. Initial marketing activities to corporate veterinary practices and early adopters has generated good response to the new product. The first production units are now coming off the production line and manufacturing of the consumable test cartridges is being scaled up to meet expected demand in advance of widespread sales and marketing activity in spring.

·; AX-1 and Optim facilities expansion: Avacta Animal Health has expanded into 2,500 sq ft of new production and development facilities whilst maintaining some of its existing laboratory space for its diagnostic and analytical services requirements.

·; New acute phase protein test products: Avacta Animal Health has completed the development of the first two acute phase protein test kits which are based on IP acquired with Reactivlab during March 2010. Reactivlab was a spin-out from the world-leading University of Glasgow School of Veterinary Medicine. The Company is now in discussions with a global organization to bring these tests to market and accelerate commercialization of the new products.

Alastair Smith, Chief Executive, Avacta Group, commented:

"Avacta has made excellent progress in the first half of the year as we focus on the task of commercialising our new products and growing revenues. I am particularly delighted with the commercial partnership with Pall which is a collaboration with huge potential impact for the Group. Pall has spent a number of months carefully assessing the commercial and technical opportunity of our Optim system and this agreement is a strong and independent validation of the potential of this product. I am confident that the scope of commercial relationship with Pall will grow and will contribute significantly to Avacta hitting its ambitious commercial targets.

"We have a very clear set of goals for both our businesses and following a successful fund raise earlier this year we are able to concentrate on delivering against these targets and building on the good progress in the first half."

4 March 2011

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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 unmet needs in the biopharmaceutical and healthcare sectors.

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 end analytical instruments and leading edge contract research services are being provided to the biopharmaceutical and healthcare/personal-care materials sectors through the Group's biotech support division, Avacta Analytical. High value solutions for rapid, point of care diagnostics based on these core bio-analytical technologies, with a near term focus on veterinary diagnostics, are being delivered through Avacta Animal Health. Longer term these technologies will be transferred into the human clinical diagnostics market. Avacta joined AIM in August 2006.