Avacta Group to raise a further £3.75m at 18p
Biotherapeutics firm
The AIM-listed company said the fundraising was in addition to the subscription it announced on 2 April of £2.0m at 18p.
The funds will be used to complete the group’s phase I clinical trial of AVA6000 and to strengthen the balance sheet amid uncertainty as a result of the coronavirus pandemic.
The board noted that the issue price was at a discount of about 12% to the closing middle market price on 3 April.
Revenues for the 17 month period to 31 December 2019 were reported to have grown 100% from £2.76m to £5.5m which was ahead of market expectations at the time of the annoucement.
‘Importantly, revenues from the Affimer® diagnostics business have grown by 130% as more customer evaluations of the Affimer® platform are underway,’ the group noted.
Shares in Avacta Group were trading 13.41% at 23.25p during Monday afternoon.
Avacta expects to announce its results for the 17 months to 31 December 2019 later this quarter and ended the period with cash balances of £8.7 million.
In a morning research note, broker finnCap said £8.7m would provide the group with a runway into late 2021/early 2022 at the current monthly cashburn.
Avacta expects to benefit from its expanded LG Chem partnership, the new collaboration established with ADC Therapeutics and the recently-announced joint venture with Daewoong Pharmaceuticals.
Despite the dilution afforded by the additional shares, finnCap reiterated a value of 76p a share which it said implies an enterprise value of around £150m.
The broker added that this was supported by the notion that Avacta is fully funded to complete the Phase I trial of its lead asset, AVA6000.
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