Prognosis good for return to growth after Avacta relapse

Wetherby-based Avacta makes devices to speed up and reduce the cost of drug development.

The company has high hopes for its diagnostic tool Optim, which delivers information faster than other systems, while using smaller samples.

In the year ended July 31, the group reported revenue of £2.70m, compared with £3.13m in the previous year.

The company said this was mainly due to slow Optim sales in the first half of the financial year. However, Optim’s sales picked up sharply in the second half.

The loss before tax was £1.85m, compared with a loss of £1.60m the year before.

The group recently raised £4.7m through a share placing, which it is using for product development.

Some of the cash will support the early stage commercialisation of the group’s Sensipod in-clinic analyser in the veterinary market

Sensipod is a blood testing instrument that provides vets with “point-of-care” diagnostics, which means pets can be treated more quickly.

Avacta, which was spun out of the University of Leeds, is structured into three business units; Avacta Analytical, which focuses on the commercialisation of analytical tools, Avacta Animal Health, which covers vet diagnostics, and Avacta Life Sciences.

Alastair Smith, the company’s chief executive, said yesterday: “Our recently re-engineered Optim2, with increased functionality and performance improvements, has been well received by the market which bodes well for the coming financial year.

“We will also see the first revenues from our Sensipod product as they are sold to veterinary practices in the UK.

“We have already seen a good level of interest and expect this to accelerate as we expand the menu of diagnostic tests over the coming months and years.”

Mr Smith said “good progress” had been made with its life sciences business.

He said he remained confident that Affimers, an engineered alternative to antibodies, will generate revenues in 2014.

He added: “I am very excited about the prospects for the business and look forward to reporting on growth in the forthcoming financial year.”

Mr Smith confirmed that Avacta had 65 staff, which is slightly more than last year.

During the year, 12 Optim units were shipped. The group has units installed in major pharmaceutical customers across all of the major global markets.

After the period end, the group announced the first licence deal for its Affimers product with Blueberry Therapeutics, a private UK biotechnology company.

Avacta will provide Affimers that Blueberry will use in the development of new therapies for the treatment of drug resistant bacterial infections.

The company recently announced the recruitment of Matt Johnson, who was previously head of research and development, at Abcam, one of the global leaders in research antibodies, to the post of head of R&D (research and development) of Avacta Life Sciences.

In a statement, the company said: “At this critical point in the group’s development and commercialisation of Affimers, the directors believe that he brings an in-depth understanding of the antibody market, emerging technologies and customer needs, as well as a strong technical and operational track record.”

New diagnostic test kits are being realised as a spin-off from the Sensipod development programme, The company said there were “substantial opportunities” for the group to grow its animal health unit.