Avacta announces new agreement

Avacta's chief executive Dr Alastair Smith
Avacta's chief executive Dr Alastair Smith
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Drug developer Avacta, which is working on cures for lung, breast and bowel cancer, said that biotech firm Moderna has exercised its option to enter a commercial licensing agreement with the firm.

The deal could lead to payments on future clinical development milestones and royalties on future product sales.

Analysts said the announcement is "a hugely positive" outcome for Wetherby-based Avacta.

In 2015, Avacta and Moderna entered into a collaboration, license and option agreement under which Moderna was granted exclusive access to Avacta’s Affimer technology for certain collaboration targets.

Affimer technology is Avacta's high-tech alternative to antibodies.

Moderna was also granted the option to enter into exclusive license agreements to research, develop and commercialise Affimers selected by Moderna.

Avacta's chief executive Dr Alastair Smith said: “I am delighted to report that Moderna has exercised its option to enter into this exclusive license agreement with respect to certain Affimer molecules that have been generated through our collaboration.

"This is further strong validation of the potential of the Affimer drug platform to generate differentiated therapeutic molecules for development.

"We will continue to support Moderna and their development objectives and I look forward to updating the market as and when key development milestones are met.”

Analyst Mark Brewer at FinnCap said: "This is a hugely positive outcome for Avacta.

"It not only demonstrates Avacta’s ability to generate a series of effective Affimers to a chosen target, which are likely to have undergone extensive preclinical testing by Moderna, but it also provides further external pharma validation and endorsement of the technology.

"We increase our target price to 125p to reflect the incremental value of this deal."