Successful initial proof-of-concept

28 January 2020

Avacta Group plc

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

Successful initial proof-of-concept for a proprietary new class of anti-cancer therapy

Avacta's first TMACTM drug conjugate molecule shown to out-perform avelumab in an animal model

Avacta Group plc (AIM: AVCT), the developer of Affimer® biotherapeutics and reagents, is pleased to announce that it has demonstrated initial proof-of-concept for its proprietary new class of drug conjugate, "TMACTM", in a preclinical animal model of cancer.

Avacta's TMACTM drug conjugates combine the Company's two proprietary platforms, Affimer® immunotherapies and pre|CISIONTM chemotherapies, in a single drug molecule.

The first TMACTM drug conjugate (AVA04-VbP) combines an Affimer PD-L1 checkpoint inhibitor with an I-DASH drug warhead. The TMAC molecule is designed to target the release of its drug warhead in the tumour microenvironment, inflaming the tumour locally in such a way that it attracts the immune system to further attack the cancer, whilst the Affimer immunotherapy part of the TMAC molecule supports this secondary immune system attack.

In a mouse tumour model, the Company has shown that the first TMAC drug conjugate (AVA04-VbP) outperforms Bavencio (avelumab), a marketed PD-L1 antibody inhibitor developed by Merck and Pfizer. Animals treated with AVA04-VbP showed a significant reduction in the rate of tumour growth with respect to those treated with Bavencio.

A considerably higher level of the released I-DASH warhead was measured in the tumours compared with very low levels in the blood. This indicates that the healthy tissues in the body are being spared exposure to the highly toxic warhead, which is central to the TMAC mechanism of action, permitting the use of highly potent cancer-killing warheads.

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

"These in vivo efficacy and distribution data demonstrate initial proof-of-concept for TMAC drug conjugates and represent an important milestone for the Company.

We continue to receive significant commercial interest in the TMAC concept, so I am delighted that we have been able to demonstrate superior efficacy and targeting of the warhead to the tumour with the first TMAC that we have tested in animals.

This is hugely encouraging for the TMAC programme and I look forward to keeping the market updated on future developments."

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About Avacta Group plc - https://www.avacta.com

Avacta is developing novel cancer immunotherapies combining its two proprietary platforms - Affimer® biotherapeutics and pre|CISION™ tumour targeted chemotherapy. With this approach, the Company aims to address the lack of a durable response to current immunotherapies experienced by most patients. The Company's therapeutics development activities are based in Cambridge, UK.

The Company benefits from near-term revenues generated from Affimer reagents for diagnostics, bioprocessing and research, through a separate business unit based in Wetherby, UK.

The Affimer platform is an alternative to antibodies derived from a small human protein. Despite their shortcomings, antibodies currently dominate markets worth in excess of $100bn. Affimer technology has been designed to address many of these negative performance issues, principally: the time taken, and the reliance on an animal's immune response, to generate new antibodies; poor specificity in many cases; large size and cost.

Avacta's pre|CISION platform, activates chemotherapy only in the tumour, thereby limiting systemic exposure and damage to healthy tissues, and thus improving the overall safety and therapeutic potential of these powerful anti-cancer treatments.

By combining these two platforms the Company is building a wholly owned pipeline of novel cancer therapies with the aim of creating effective treatments for all cancer patients including those who do not respond to existing immunotherapies. Avacta expects to take its first drug, a pre|CISION targeted form of the standard-of-care Doxorubicin, into the clinic in the middle of 2020.

Avacta has established drug development partnerships with pharma and biotech, including with Moderna Therapeutics Inc., a collaboration with LG Chem to develop treatments for autoimmune and inflammatory diseases worth up to $310m, a partnership with ADC Therapeutics to develop Affimer drug conjugates and a joint venture in South Korea with Daewoong Pharmaceuticals to develop the next generation of stem cell therapies that incorporate Affimer immuno-modulators. Avacta actively seeks to license its proprietary platforms in a range of therapeutic areas.

The Avacta diagnostics business unit works with partners world-wide to develop Affimers for evaluation by those third parties with the objective of establishing royalty bearing license deals. The Company is also developing a small in-house pipeline of Affimer-based diagnostic assays for licensing.

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