Grant Funding Awarded

24 February 2016

Avacta Group plc

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

Avacta Awarded Grant Funding

Avacta to develop and potentially commercialise novel Affimer reagents to reduce use of animals in life sciences research

Potential to deliver substantial cost savings in global production of genetically engineered mice

Avacta Group plc (AIM: AVCT), the developer of Affimer® biotherapeutics and research reagents, is pleased to announce that it has been awarded a grant to work with the Mary Lyon Centre at MRC Harwell to develop novel Affimer reagents which could help reduce the use of animals in life sciences research. This has the potential to deliver substantial cost savings in the global production of genetically engineered mouse models, providing a significant commercial opportunity for the Company.

Genetically engineered mice are a widely used and essential tool in biomedical research and drug development. If the efficiency of the mice breeding programmes could be improved, the cost of production would be reduced and fewer animals would be required, providing ethical as well as commercial benefits.

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

"We are grateful to NC3Rs for providing the funding that will allow us to develop Affimer inhibitors of inhibin, which we will provide to MRC Harwell for evaluation. If successful then there is a potentially very large global market for such Affimer reagents that will reduce the costs of production and the number of mice used each year in breeding programmes. We are delighted to be working with MRC Harwell on this project which could also open the way to applications in human IVF treatments."

Avacta has been awarded a CRACK IT Solutions technology partnering grant by NC3Rs, a UK-based scientific organisation dedicated to replacing, refining and reducing the use of animals in life sciences research. The grant provides funding for Avacta to develop Affimer inhibitors of a protein called inhibin. Inhibiting the action of this protein stimulates the production of greater numbers of embryos per mouse, a process called superovulation, which increases overall efficiency of a breeding programme. The Mary Lyon Centre at MRC Harwell, a world-leading centre for functional mouse genomics providing expertise, tools and facilities to generate mouse models of human disease, will evaluate the ability of the Affimer reagents to induce superovulation in mice.

A good inhibin inhibitor could reduce the number of mice needed for embryo production by 100,000 animals a year in the UK alone. When this is scaled up to the number of mice used in breeding programmes globally, there are substantial cost savings to be made in the production of genetically engineered mouse models as well as a significant reduction in animal use. The market for an Affimer reagent that induces superovulation in mice could therefore be substantial.

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Notes to Editors

Avacta Group plc (www.avacta.com)

Avacta's principal focus is on its proprietary Affimer® technology which is a novel engineered alternative to antibodies that has wide application in Life Sciences for diagnostics, therapeutics and general research and development.

Antibodies dominate markets worth in excess of $50bn despite their shortcomings. Affimer technology has been designed to address many of these negative performance issues, principally; the time taken to generate new antibodies, the reliance on an animal's immune response, poor specificity in many cases, and batch to batch variability. Affimer technology is based on a small protein that can be quickly generated to bind with high specificity and affinity to a wide range of protein targets.

Avacta has a pre-clinical biotech development programme with an in-house focus on oncology and bleeding disorders as well as several partnered development programmes. Avacta is commercialising Affimer reagents through custom Affimer services to provide bespoke solutions to customers and via a growing on-line catalogue of Affimer reagents.

About the NC3Rs

The National Centre for the Replacement, Refinement and Reduction of Animals in Research (NC3Rs) is a leading independent scientific organisation dedicated to replacing, refining and reducing the use of animals in research and testing (the 3Rs). It supports the UK science base by driving and funding innovation and technological developments that minimise the need for animals in research and testing, and lead to improvements in welfare where animals continue to be used. It funds research, supports training and development, and stimulates changes in regulations and practice.

Primarily funded by Government, the NC3Rs is also supported by the charitable and private sectors. It works with scientists in universities and industry in the UK and internationally.

Further information can be found at: www.nc3rs.org.uk @nc3rs http://blog.nc3rs.org.uk