# Avacta Group “Affimers First-Class Prospects” says Zeus Capital

- Link: https://www.directorstalkinterviews.com/avacta-group-affimers-first-class-prospects-says-zeus-capital/412822822
- Published: 2020-05-19T07:46:56+01:00
- Author: Amilia Stone

**[Avacta](https://www.directorstalkinterviews.com/company/avacta-group-plc/avct.l)
Group PLC** ([LON:AVCT](https://www.directorstalkinterviews.com/ftse-company/avacta-group-plc/avct.l))
is leveraging the antibody-like properties of Affimers for Therapeutic and Diagnostic
applications across multi-billion dollar markets, including testing and treatment
for COVID-19, building a differentiated pipeline and global partnerships. The near-
term key is the roll out of its SARS COV-2 antigen tests, including potentially 
one of the first Point-of-Care tests to-market, offering game-changing commercial
scope, sufficient to significantly accelerate the clinical development of its Therapeutic
pipeline.

 * **Collaborations;** in FY19 AVCT formed partnerships to progress Affimers in 
   a range of highly promising therapeutic applications, including with ADC Therapeutics,
   and set up a 48% owned JV with Daewoong Pharma. Moderna exercised its option 
   on a first Affimer target. We estimate these collaborations plus its partnership
   with LG Chem Life Sciences, present aggregate milestones up to $0.5bn plus future
   royalties, and crucially, they cover R&D costs of taking first Affimers into 
   the clinic.

 * **Diagnostics;** the division has a late stage pipeline addressing markets with
   projected value up to $18bn. Affimer-based assays can potentially displace market
   share from antibody equivalents, largely unhindered by IP. The ability to rapidly
   generate Affimer reagents against SARS-COV 2 showcases the characteristics of
   Affimers for Diagnostic use. Even by capturing a small share of the estimated
   millions of tests per day needed globally to bring COVID-19 under control to 
   help people safely resume normal activities, provides game-changing commercial
   scope; we estimate annual sales up to $2bn at scale.

 * **Novel Technologies;** AVCT is focused on clinically validating its novel pre
   |CISION platform based on technology licensed from Tufts University School of
   Medicine, through a trial start for the first candidate AVA6000 in the next 12-
   months. Initially this can multiply up the $1bn market for standard chemotherapy
   doxorubicin on which AVA6000 is based, as well as improve other established chemotherapies.
   pre|CISION technology is also being used to generate a potent new class of Affimer
   Drug Conjugates called TMACs. This combines the Affimer and pre|CISION platforms
   in a single drug synergising the potency of chemotherapy with immunotherapy and
   can build on the hugely promising field of Antibody Drug Conjugates, predicted
   to exceed $9bn by 2025.

 * **Avacta Group has promising Therapeutic and Diagnostics pipelines;** we suggest
   a base case valuation of AVCT of £290m. There is clearly enormous upside from
   a successful rollout of SARS COV-2 tests. Even executing a fraction of this potential
   in FY20 would be transformational, providing cash resource to advance its promising
   Therapeutics pipeline. Applying market metrics it also implies that a £ multi-
   billion valuation of AVCT is achievable on execution.

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