Avacta shares jump on Korean venture

Alastair Smith, CEO, Avacta Group
Alastair Smith, CEO, Avacta Group
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Drug developer Avacta, which is working on cures for lung, breast, gastric and bowel cancer, has formed a new joint venture with a leading South Korean pharma company to develop the next generation of cell and gene therapies.

Analysts said the deal will open up a new opportunity for Wetherby-based Avacta in immunotherapeutic engineered cell therapy.

Avacta’s shares rose 7 per cent on the news as shareholders welcomed the new tie-up with Daewoong Pharmaceutical, a leading Korean pharmaceutical company.

Avacta will enter into a collaboration and license agreement for the joint venture to develop the next generation of cell and gene therapies, incorporating Affimer proteins to enhance the immune-modulatory effects. Affimers are Avacta’s high-tech alternative to antibodies.

Avacta’s chief executive Dr Alastair Smith said: “Cell and gene therapies are attracting intense clinical and commercial interest.

“We are very excited to establish this joint venture with Daewoong, one of the top pharmaceutical companies in Korea, to develop the Affimer platform in this important therapeutic area.”

He said Avacta’s vision is to combine the two platforms to create the next generation of cell therapies, for which the potential is “huge”.

Dr Smith said: “Within the last six months alone we have seen early stage stem cell companies acquired for significant sums.

“For example, Bayer acquired control of Blue Rock for $600m, valuing the company at close to $1bn; and Vertex acquired start-up Semma Therapeutics, which is developing stem cell therapies for type 1 diabetes, for $950m.”

He said the tie-up with Daewoong will have a unique opportunity to generate superior cell therapies for some of the most pressing needs in immune-mediated disease.

“We look forward to working closely with the Daewoong team to develop these new medicines, and get them to the patients who need them,” he added.

Dr Seng-ho Jeon, CEO of Daewoong Pharmaceutical, said: “Our partnership reinforces the companies’ shared vision of designing the next level of treatment paradigm, and opens up a new horizon in immunotherapeutic strategies.

“This innovative collaboration will deliver invaluable synergy and lead to new solutions to transform patients’ lives.”

Analyst Mark Brewer at FinnCap said: “The joint venture will open up a new opportunity for Avacta in immunotherapeutic engineered cell therapy, an area of intense M&A activity and focus, whilst Avacta retains the rights to commercialise these Affimer proteins outside of the stem cell therapy field.

“This provides further validation of Avacta’s proprietary Affimer technology.”

Avacta said mesenchymal stem cells (MSCs) are promising agents for the treatment of autoimmune and inflammatory diseases.

The joint venture will develop a new class of MSCs that are primed to produce Affimer proteins, which are designed to enhance the immune-modulatory effect when administered to patients, by reducing inflammatory and autoimmune responses.

Avacta will develop Affimer proteins against several undisclosed targets which will be transferred to the joint venture to be incorporated into MSCs.

Avacta’s research and development costs will be fully covered by the joint venture which is funded by Daewoong. Avacta will retain the rights to commercialise the Affimer proteins outside of the field of cell therapies.