Avacta raises £2m for chemotherapy programme

Drug developer Avacta, which is working on cures for lung, breast, gastric and bowel cancer, is to raise £2m to fund a chemotherapy programme.

Alastair Smith, CEO of Avacta Group

The Wetherby-based firm said the cash will also be used to secure significant drug development partnerships.

Given the current economic climate, the group said it is prudent to also take on a small amount of additional equity capital to ensure it is in a strong position to exploit progress once the coronavirus pandemic is over.

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Avacta is raising the £2m by way of a subscription for 11.1m ordinary shares at 18p, a 2 per cent discount to a 14 day volume weighted average of 18.4p.

Avacta said it is currently monitoring the Government's guidance regarding the Covid-19 pandemic.

It has instigated a working from home policy where possible and has curtailed all travel. Laboratory staff are continuing to carry out their duties, working in smaller teams to allow social distancing to be observed.

The group's revenues are not expected to be materially affected this year and will continue to benefit from the expanded LG Chem partnership, the new collaboration established with ADC Therapeutics and the recently announced joint venture with Daewoong Pharmaceuticals.

These will fully fund Avacta's related research and development activities.

Analyst Mark Brewer at FinnCap said: "Given the current economic uncertainty and disruption caused by the coronavirus outbreak, we think this is prudent as it extends the cash runway further into 2021.

"Not only does this create a cash buffer for any unseen disruption, but it also provides additional time to advance its immunotherapy pipeline with partners (fully funded by the partners), as well as delivering further commercial progress for both therapeutics and diagnostics."

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