DIAGNOSTICS specialist Avacta Group is to raise over £5m through a share placing in a move it claims will transform the company.
The Wetherby-based group plans to spend £1.5m on a Leeds-based company called Aptuscan and much of the proceeds will be used to develop Aptuscan’s potential.
Avacta designs and makes devices to speed up and reduce the cost of drug development and sample analysis. It is keen to buy Aptuscan as the company has developed proteins that act like antibodies, but the proteins are not prone to the weaknesses and damage that beset antibodies.
Avacta’s chief executive Dr Alastair Smith said: “It’s a transformational acquisition. We’re acquiring a different kind of molecule that doesn’t have the same technological problems as antibodies. Also it is a lot less expensive.
“Antibodies can easily get damaged when you make them into products. This is much cheaper to make as it’s not a natural product,” he added.
Antibodies are used in laboratory tests to help scientific research, drug development, diagnostics and purification. Aptuscan’s protein molecule will allow Avacta to replace antibodies in a number of applications.
Avacta said that as well as helping to fund Aptuscan’s future development, the fundraising will help it to launch the next products in its pipeline.
The company is best known for its Optim device, which it claims can deliver vital information for pharmaceutical firms much faster than other approaches, thus slashing the cost of drug development.
Dr Smith said that the group will have shipped 25 units by Christmas, which means it is at the half year target a month ahead of schedule.
The group will also spend some of the fundraising on its second major product; the AX-1 diagnostics blood testing device, which is aimed at the $1.5bn veterinary market.
The AX-1 is about to go on sale and Avacta is keen to develop as many tests for the device as possible.
The next products cannot be revealed yet for commercial reasons.
“The combination of current and proposed new technologies and intellectual property transforms the scale of Avacta’s opportunities and, following the placing, can be fulfilled without the need to return to the market,” said Dr Smith.
“Avacta is set on a very exciting course for the future.”
The share placing is at a 36.3 per cent discount to the closing price on Wednesday.
Avacta also said that university research incubator IP Group is significantly increasing its stake in the company from 24 per cent to 34 per cent.
Corporate lawyers at Walker Morris advised on the share placing and the proposed acquisition of Aptuscan.