Avacta makes another cash call to investors to fund development

The York-based company, which was spun out of the University of Leeds, develops technology to speed up and reduce the cost of diagnosis.

Yesterday it said it has raised 1.95m before expenses through a conditional placing of new shares, to fund its development.

Avacta also raised 1.38m through a placing in June, plus 2m through a share issue in October 2009.

"The cash proceeds of the placing will be used to support the continuing progress in Avacta's business providing products and services to support the biopharmaceutical and healthcare sectors," said the company.

Avacta launched its Optim diagnostics device in April 2009, but orders have been slower than it hoped for. Earlier this month it said it sold an Optim device to an unnamed US pharmaceutical giant, bringing its total sales of the diagnostics machine to nine.

Optim allows drug developers to gain vital information about compounds using tiny samples, more cheaply and quickly than other methods.

Optim can do tests simultaneously – the work of three or four instruments – in just 75 to 90 minutes. Rival processes can take about 18 days. Avacta also hopes to earn significant recurring revenues from the device. Avacta said its sales pipeline in the United States for the device is promising.

Avacta also recently launched its Midas product, aimed at the animal healthcare market.

It said the funds will help support sales and development of these products.

Chief executive Alastair Smith added: "We're delighted to have experienced recent strong interest in Avacta from existing and new investors and to have the opportunity presented to us to raise these additional funds.

"I am very pleased with Avacta's recent progress as it transitions from a period of focused product development to one of commercialisation of its new products. We have a highly motivated and hard-working team that will continue to drive the business forwards during what promises to be an exciting period in the company's growth."

Shares in the company ticked up 0.8 per cent to close at 1.3p yesterday. Avacta's placing is subject to shareholder approval later this month.