Diagnostics specialist Avacta Group has raised up to £22m through a share placing as part of a strategy that could cut the cost of drug development.
The Wetherby-based company said the funding would accelerate the development of its Affimers technology as a new bio-therapeutic platform.
Affimers are engineered proteins that mimic the way antibodies work. Antibodies help fight viruses or bacteria in the body by binding to them and targeting them for destruction.
Avacta believes that Affimers are better than standard antibodies at latching on to target pathogens.
They are more stable, more robust and quicker to develop than standard antibodies, according to Avacta.
Alastair Smith, the chief executive of Avacta, said yesterday: “We have made excellent progress in demonstrating the potential of the Affimer technology as a bio-therapeutic platform to rival antibodies.
“We believe our proprietary Affimer technology has significant competitive advantages that address the limitations of antibodies, and other non-antibody protein scaffolds, which suggests that they have the potential to become a leading alternative bio-therapeutic platform.
“This fundraising will allow us to resource the development of Affimers as therapeutics, in addition to the ongoing development and commercialisation of Affimers as research reagents, and we thank our existing investors for their continuing support and welcome a number of new investors.”
Dr Smith became CEO of Avacta, which makes devices to speed up and reduce the cost of drug development, in 2005 and oversaw its flotation in 2006.
The board has faced challenges over the past 10 years, but now there are signs the hard work is about to pay off.
Avacta will raise the funds by a placing of new ordinary shares with new and existing institutions shareholders at a price of 1.25 pence per ordinary share.
In May, Avacta signed an agreement with US biotech firm Moderna Therapeutics that could eventually be worth tens of millions of dollars.
The collaboration, licensing and option agreement saw Moderna pay $500,000 (£318,800) upfront to access Avacta Life Science’s Affimer technology for use in drug development.
At the time, it was confirmed that Moderna would have exclusive use of certain types of Affimer with different targets.
This could be extended to include other targets under the agreement.
In addition to the upfront fee, Avacta will also receive payments for pre-clinical development milestones, on both the original contract and any extensions.
Richard Naish and Shubhu Patil, from the corporate department at Leeds-based law firm Walker Morris, provided legal advice to Avacta.
Mr Naish, a corporate partner, said: “Avacta is a long-standing client of Walker Morris and we’ve worked with them on a number of key developments over the years, including on equity fundraising, merger and acquisition and other matters.
“This fundraising will provide investment for infrastructure and in-house development programmes as part of its strategy, amongst other things, to develop a pipeline of Affimer assets.”