News blog

Avacta Group

• BY: Andrew Hore |
• POSTED: 18/07/2013 |

Diagnostic technology developer Avacta Group is raising £4.7m from a placing at 0.55p a share.

There was a £2.13m cash outflow in the first half but the outflow should be lower in the second half assuming that the cash for the Optim orders comes in before the end of January 2014. Net cash was £2.06m at the end of January 2013. The £4.5m net raised from the placing will supplement this cash and enable more investment in developing affimers. Avacta is also about to launch the Sensipod diagnostics system for the veterinary market.

Interim revenues were lower due to customers waiting for the newest version of the Optim diagnostic device. Since the launch of the Optim2 there have been orders for 10 more devices, compared with two in the first half. Vet revenues were flat in the first half.

In the six months to January 2013, group revenues fell from £1.72m to £1.15m. The loss increased from £506,000 to £957,000.

At the time, Panmure cut its forecast for Optim orders to 22 units, from 30 units prior to the results. That assumes another ten are placed this year. That still means a reduction in full year revenues from £3.9m to £3.3m and a loss of £1.6m. No revenues are expected from the company’s antibody replacement technology for the next couple of years.

Aptuscan, like Avacta’s core business, came out of Leeds University and it develops non-antibody affinity protein reagents or Affimers. This enables Avacta to enter the protein microarrays market for high throughput drug/biomarker discovery and new applications for companion health diagnostics. These microarrays can be used to test whether an individual will benefit from particular drugs. Currently antibodies are used in this area but the Affimer arrays can be developed more quickly and cheaply than antibody arrays, as well as providing scope for a wider range of tests. They are also more robust. Initial sales may come from Affimer reagents.

At 0.61p a share, the enlarged share capital is worth £19.3m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFJuly2013_46.pdf