BullsEye Insights

BullsEye: Daily London AIM RNS Round-Up

Wednesday 6 May 2020


Here is our summary of the day's hottest RNS alerts from across London's Alternative Investments Market (AIM).


Avacta Group Plc (AVCT.L)

Results for the period ending 31 December 2019

Avacta Group plc, the developer of Affimer® biotherapeutics and research reagents , is pleased to announce its preliminary results for the 17-month period ending 31 December 2019.


Operating highlights

LG Chem partnership: progressing well and expanding to new targets


  • Major therapeutics development partnership and licensing agreement with LG Chem Life Sciences (LG Chem).  Potentially generating revenues for Avacta of up to $310 million, plus future royalties on product sales, the agreement included an upfront payment of $2.5 million , pre-clinical milestone payments of up to $5.5 million plus payment of Avacta's full research costs to generate Affimer molecules for the treatment of a range of diseases. 

  • Excellent progress with initial target during 2019 has led to LG Chem expanding the collaboration and nominating the second and third targets for development.

Collaboration with ADC Therapeutics: partnership to develop Affimer-drug conjugates


  • Collaboration agreement with ADC Therapeutics SA (Lausanne, CH) to develop Affimer-drug conjugates combining Affimer technology with ADC Therapeutics' PBD warhead and linker technologies.  Under the terms of the agreement, ADC Therapeutics will cover all Avacta's research costs during the collaboration and Avacta will also receive certain fees, development and commercialisation milestones, as well as a royalty on sales of successfully developed products.

Partnership with Moderna Therapeutics: enters next phase as Moderna exercises commercial option 


  • Moderna Therapeutics Inc exercised its option to enter into an exclusive licensing agreement for Affimers against an undisclosed target; part of an ongoing research collaboration between the two companies.  A future regulatory submission by Moderna for an Affimer clinical candidate would trigger the next milestone payment to Avacta.

pre|CISIONTM chemotherapy platform: significant opportunity as "chemotherapy without side effects" and in novel Affimer drug-conjugates (TMACs)


  • Research collaboration and licensing agreement for chemistry developed at Tufts University Medical School has created the pre|CISION chemotherapy platform which is a new class of chemotherapies that are only activated in the tumour thereby improving the safety and tolerability of these effective anti-cancer drugs. 

  • Avacta's long-term strategy to build a pipeline of novel and differentiated cancer treatments is to combine pre|CISION chemotherapies with Affimer immunotherapies in TMACs to improve the outcomes for patients who do not respond to existing immunotherapies alone.

  • Completed IND-enabling studies for first pre|CISION chemotherapy candidate - AVA6000 pro-doxorubicin. The Company is aiming to begin a Phase I dose escalation clinical trial in 2020 to show that the cardiotoxicity of this $1 billion global annual revenue generic drug is significantly reduced, potentially creating a proprietary, blockbuster chemotherapy for advanced soft tissue sarcoma, as well as other cancers, and validating the pre|CISION technology in humans.

  • An additional pipeline of more than ten pre|CISION chemotherapies has been established with the most advanced of these, a pre|CISION proteasome inhibitor, approximately 12 months from IND filing.

In-house Affimer therapeutic programmes: first candidate completes cell line development


  • Critical milestone of selecting the first Affimer clinical candidate for first-in-human trials for the Affimer platform has been achieved.  Initial GMP manufacturing steps for the AVA004-251 PD-L1 blocker clinical candidate have been successfully completed, confirming a high production yield from a routine manufacturing process.

Affimer diagnostics reagents: strong revenue growth and progress with partners towards licensing deals


  • Strong growth in revenue reported at £0.8 million for Affimer diagnostics reagents business.

  • Appointment of David Wilson, a diagnostics industry veteran with over 25 years of experience, as Commercial Director for Affimer diagnostics reagents.

  • Excellent range of ongoing paid-for technology evaluations and Affimer services projects with high-quality, global commercial partners across significant in vitro diagnostic, pharma, biotech and bioprocessing companies with potential for licensing deals.

  • Commercial licence agreed with New England Biolabs® (NEB®), a global leader in the discovery and production of enzymes for molecular biology applications.  This agreement is to commercialise a product using the Affimer technology for use in both life science research and diagnostics assays.

  • A proprietary pipeline of Affimer diagnostic assays aimed at accelerating licensing deals has been established, with the first two, a D-dimer and an estradiol assay, having been completed.

Financial highlights


  • Initial up-front milestone payment of $2.5 million received from LG Chem Life Sciences.

  • Fundraising completed in November 2019 raising gross proceeds of £9.0 million in order to progress the AVA6000 programme into clinical trials.

  • Cash balances at 31 December 2019 of £8.8 million (31 July 2018: £5.2 million)

  • Revenues of £5.5 million for 17-month period to 31 December 2019 (12-month period to 31 July 2018: £2.8 million)

  • Operating loss of £18.0 million for 17-month period to 31 December 2019 (12-month period to 31 July 2018: £10.4 million)

  • Increased R&D investment, driven by strong progress in therapeutic programmes, leading to reported loss of £15.6 million (2018: £8.8 million)

  • Loss per ordinary share 13.0p (2018: 13.5p)

Post-period highlights: further therapeutic and diagnostic partnerships adding significant value to the Group


  • Established a joint venture in South Korea with Daewoong Pharmaceutical Co. Ltd., (KSX: 069620), a leading Korean pharmaceutical company, to develop the next generation of c ell and gene therapies, incorporating Affimer proteins to enhance the immune-modulatory effects. Avacta's own research and development costs in relation to the joint venture will be paid for by the joint venture.

  • Paul Fry appointed as Non Executive Director. Paul is Chief Financial Officer of Vectura Group plc, an industry-leading inhaled drug delivery specialist listed on the FTSE Main Market.

  • Following a post-period end £5.75 million fundraising the business remains well capitalised with a £10.5 million net cash position as at the 30 April 2020.

  • Collaboration with Cytiva (formerly GE Healthcare Life Sciences) to develop and manufacture a rapid test for the COVID-19 coronavirus antigen for mass population screening .

  • Collaboration with Adeptrix to develop a high throughput Affimer-based antigen test to diagnose COVID-19 infection, to be used on hospitals' existing installed base of mass spectrometers.


For the full RNS, see: https://www.investegate.co.uk/avacta-group-plc--avct-/rns/results-for-the-period-ending-31-december-2019/202005060700080503M/


Integumen Plc (SKIN.L)

Doubling of production of Modern Water reagent

RAWTest AI real-time alert system to be retrofitted in new Modern Water's Microtox units

Further to the previous notification of production commencement (RNS dated 30 March 2020), Integumen announced completion of the first batch of reagent for Modern Water plc. Shipment has commenced to meet the back-orders and growing demand for water contamination detection bacteria from existing clients.  With the increase of water hygiene controls around the world due to the COVID-19 public health crisis, Integumen has doubled production volume with a total list price value of £500,000 per batch, after the current initial production run. Revenues from sales of reagent produced under the revenue sharing manufacturing agency agreement with MW are split 60% / 40% in favour of Modern Water, after costs. 

MW's Microtox is designed to be modular and expandable.  Integumen is integrating its RAWTest AI real-time alert solution within MW's hardware capacity to expand the capability of the instruments to detect bacteria, nitrates and phosphates.  The roadmap for this integration includes the ability to detect viruses such as SARS-Cov-2.

Integumen and MW have accelerated integration following increased orders of the Microtox range in Europe and SE Asia, including 10 new top-of-the-range Microtox CTM units to be shipped to China in the third quarter 2020.

The environmental arm of DEFRA has confirmed it is looking at wastewater epidemiology and US Center for Disease Control ("CDC") is already monitoring human waste , the ministry of ecology in China are mandating the hygiene monitoring of water and wastewater and dormant buildings during the epidemic have built up contaminated water in their pipework.


For full RNS details, see: https://www.investegate.co.uk/integumen-plc--skin-/rns/doubling-of-production-of-modern-water-reagent/202005060700060325M/


Ncondezi Energy Limited (NCCL.L)

US$5.5m C&I Pipeline Secured

Ncondezi Energy Limited announced that it has finalised a binding agreement with GridX Africa Development ("GridX") for a pipeline of solar and battery storage projects in the Commercial and Industrial ("C&I") sector.

Highlights


  • Ncondezi and GridX have signed a binding Relationship Agreement under which Ncondezi has the right (but not the obligation) to fund a pipeline of GridX C&I solar and battery storage projects in Mozambique (the "Projects")

  • Ncondezi has a right of first refusal to fund 100% (up from 50%) of the Projects up to a total of US$5.5 million (the "ROFR")

  • Projects include a diversified portfolio of 7 identified potential projects with a combined potential installed solar capacity of 2.8 MWp and 4.5 MWh of battery storage (the "Initial Projects")

  • Initial Project investments into qualifying projects, subject to funding, represent an annuity revenue stream potential of over US$750,000 per annum

  • Projects to be funded on a project by project basis and must meet strict minimum KPIs to be eligible for funding including: Signed offtake agreement; Use of proven technology; All consents and permits to commence construction; Meeting minimum credit requirements.

  • Generate an ungeared equity post tax IRR to Ncondezi of at least 10%

  • GridX responsible for all costs incurred up to a Project meeting the KPIs and Ncondezi exercising its right to invest

  • ROFR to be managed under newly formed subsidiary Ncondezi Green Power

  • Initial Projects are at an early stage of development with first funding requirement not expected until Q4 2020 / Q1 2021

  • The Relationship Agreement replaces the Term Sheet signed with GridX announced on 5 April 2019


For full RNS details, see: https://www.investegate.co.uk/ncondezi-energy-ltd--nccl-/rns/us-5-5m-c-i-pipeline-secured/202005060700060343M/

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