TPI provides its latest research note on Avacta Group plc (AVCT.L).

Avacta has announced the expansion of its existing multi-target collaboration and development agreement with LG Chem Life Sciences (‘LG Chem’), the life sciences division of the South Korean LG Group.

To include new programmes incorporating Affimer XT™ serum half-life extension system.

In a clear reflection of the value Big Pharma places on the Group’s proprietary technology, this new arrangement lifts the potential total value of upfront and near-term development milestones plus option fees due to Avacta from US$310m to as much as US$408.5m, on top of a further undisclosed upfront payment plus additional royalties on all future Affimer XTTM product sales by LG Chem. Similar non-exclusive partnerships already in place with ADC

Therapeutics , Daewoong and Moderna now push this pre-royalty figure to c.US$600m, although the exceptional level of interest in this novel class of biotherapeutics suggests continuing opportunity for growth both through yet further expansion of existing arrangements and/or the signing of new collaborations with other sector majors. While near-term sentiment clearly rests on the Group’s coronavirus-related developments, today’s announcement highlights the long-term value contained in its therapeutic and diagnostic platforms along with its advancing pipeline of in-house drug candidates.


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We would draw your attention to the various disclaimers in the document both at the beginning and at the end of the note. Retail clients (as defined by the rules of the FCA) must not rely on the research document. In particular you should note that the research document is a non-independent marketing communication. The analyst who has prepared the research is aware that TPI provides research to Avacta Group plc Accordingly the research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibitions on dealing ahead of its dissemination.

The information in the document is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The material contained in the document is general information intended for recipients who understand the risks associated with equity investment in smaller companies. It does not constitute a personal recommendation as defined by the FCA or take into account the particular investment objectives, financial situation or needs of individual investors nor provide any indication as to whether an investment, a course of action or the associated risks are suitable for the recipient.

Copyright © 2020 Turner Pope Investments (TPI) Limited, all rights reserved.

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