Flagship device sales up by 50pc at Avacta

DIAGNOSTICS group Avacta said sales of its flagship Optim device, which is designed to speed up and reduce the cost of drug development, have increased by 50 per cent year-on-year as it looks to expand into more territories such as India, Brazil and South Africa.

The Wetherby-based group, which has a headcount in the mid 60s and is a spin-out of the University of Leeds, said yesterday it sold 21 Optim units in its latest financial year, compared to 14 the year before. Avacta claims that Optim can deliver vital information 10 times faster than other approaches using much smaller samples.

Aim-listed Avacta said the figures were “positive”, in an update to the stock market for the year ending July 31, 2012, adding that its overall year-on-year revenues have “grown significantly” and that its year-end balance “remains strong”.

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The group expects to release its preliminary results for the year in October. Chief executive Alastair Smith said it will meet market expectations, which are for a turnover of about £3.3m or £3.4m. He said that despite the difficult economic climate the company has “done very well”.

The firm also said a programme to improve margins on Optim sales was “well underway”, and added that early revenues from disposable cartridges for Optim are “encouraging”.

The disposable cartridges are holders for samples such as drugs in development and act as an ongoing revenue stream for Avacta as they are sold to be used with Optim.

The company said it has extended its partnership with Pall Life Sciences so that Optim can be sold into South East Asia. It now has five commercial partnerships selling Optim, covering territories including the United States, Europe, China, Japan and South East Asia.

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Mr Smith said: “This financial year just gone is the first one where we’ve had the distributors on board so you would hope to see an improvement [in sales] and next year of course.

“We should shortly be in India, and then there’s probably only two or three other markets that we would go into at this stage. We are getting pretty close to having what we would call our distributor network in place.”

“In the first full year of working, the group has invested significant efforts into training and support of its partners and has addressed logistical challenges that have arisen,” Avacta said. “The group now anticipates realising the benefits of this investment in a more streamlined infrastructure and sales process as these agreements progress.”

Avacta also reported on the progress of its its AX-1 animal diagnostics device, which aims to allow vets to test blood samples in their own surgeries. The company said that getting the first AX-1 units into the hands of vets has slipped to the next financial year. But it added that the group has taken the opportunity to expand the different types of cartridges it can offer to go with AX-1 so vets can take different types of blood tests. Mr Smith said Avacta would initially focus on the UK market with AX-1, before looking at international markets.

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Avacta said its exclusive agreement with Maine-headquartered veterinary services firm IDEXX Laboratories to supply it with reagents was “progressing well”. Reagents are compounds or chemicals added to induce a chemical reaction. Avacta’s proprietary diagnostic reagents will be used to test for C-reactive protein (CRP) in dogs – an early sign of acute inflammation or infection. The deal, announced earlier this year, allows IDEXX to use Avacta’s chemicals to provide testing in its high-volume pet diagnostics services.

In December 2011, Avacta acquired the intellectual property and inventor Paul Ko Ferrigno of Aptuscan, a technology company also spun out of the University of Leeds, which has developed unique binding agents for the diagnosis and treatment of disease.

The proteins it has developed act like antibodies, but they are not prone to the weaknesses and damage that beset antibodies. Mr Smith said “excellent progress” was being made in that area.

Avacta posted a 72 per cent surge in revenues to £1.7m for the six months to the end of January. Pre-tax losses of £506,000 improved on losses of £597,000 a year earlier.