Avacta’s latest deal ‘worth millions’

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Diagnostic specialist Avacta Group has signed an agreement with US biotech firm Moderna Therapeutics that could be worth tens of millions of dollars.

The collaboration, licensing and option agreement will see Moderna pay $500,000 (£318,800) upfront to access Avacta Life Science’s Affimer technology for use in drug development.

Investors were buoyed by the announcement, as shares in FTSE AIM-listed Avacta climb 28 per cent to £1.10 at close on Monday.

Affimers are engineered proteins that mimic the way antibodies bind and target cells to destroy disease, but are much smaller, more robust and simpler to produce.

Moderna will have exclusive use of certain types of Affimer with different targets.

This could be extended to include other targets under the terms of the agreement.

In addition to the upfront fee, Avacta will also receive payments for pre-clinical development milestones, on both the original contract and any extensions.

Dr Alastair Smith, chief executive at Wetherby-based Avacta, told The Yorkshire Post that the deal is “fantastic validation” of the role Affimers can play in drug development.

He said: “We’ve always said we realise there’s huge potential for Affimers as drugs, but really our model has to be to partner with people and licence those Affimers to be taken through the drug development process.

“What this represents is a really strong validation of the fact Affimers are clearly attractive as a potential therapeutic.”

Moderna is an “extremely well-funded” company with significant experience in the field, Dr Smith said.

In January, it completed the largest ever fundraising round for a privately-owned biotechnology company, securing $450m.

It also collaborates with Astra Zeneca and Alexion on projects in the US.

“Moderna is a very interesting company, we’re very pleased to be working with them,” he added.

While the deal is not the first therapeutic partnership for Avacta, Dr Smith it was the most significant to date.

Previously Avacta has agreed collaborations with UK drug discovery firm Phoremost and Norwegian liver metabolism specialists D’Liver. The last six months have also seen it secure contracts with Swedish firm Agrisera AB and ProtATonce.

In the six months to January 31, the group posted a £1.6m loss. It also sold its Optim machine for up to £3.3m in February to enable it to focus on the Affimer market.

Dr Smith said the Moderna deal will give an excellent opportunity to demonstrate the potential of Affimer technology.

He added: “It is now of course all about delivery and making it work.”

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Affimers are engineered proteins that mimic the way antibodies work.

Antibodies help fight viruses or bacteria in the body by binding to them and targeting them for destruction.

Affimers are better than standard antibodies at latching on to target pathogens, Dr Smith said.

They are more stable, more robust and quicker to develop than standard antibodies.

Avacta has secured a number of contracts since focusing on its Affimers business.

Speaking at the group’s six month results in January, Dr Smith said: “We are pleased and surprised at how much quicker it has been to get interest.”