The listed UK market is about to lose a reasonably sized quoted group –  Axis-shield (LON:ASD)  – in the coming months following an agreed takeover by Alere, a NYSE quoted global leader in near-patient diagnostics and health management services sector, for around £235 million.  Nothing hugely interesting in that, you might think but it is hugely relevant for a company that is probably three to four years behind Axis in terms of its commercial development.

This particular company finds itself potentially represented in one of Axis Shield’s markets, with highly attractive products and services that are only now moving towards sizeable future revenue streams.  

What Alere’s acquisition in Axis-Shield demonstrates is just how valuable those companies with disruptive and strong intellectual property are in the wider global environment, especially in the in vitro immunodiagnostics market; in this case, Alere was extremely attracted to Axis Shield’s’ Afinion’ technology.

Avacta (LON:AVCT) could also be perceived as having similar characteristics to Axis-Shield, possessing a highly disruptive diagnostic instrument – AX-1 – with strong IP, embracing the ‘razor blade’ model, which will be discussed a little later in this article.

Unlike Axis-Shield, Avacta also has a second unrelated market to diagnostic instruments having developed a biomedical instrument (Optim) –again with strong IP and again embracing the ‘razor blade’ model.  This product is highly disruptive and also possesses substantial global growth opportunities.

I was kindly invited along to Avacta’s relatively new premises on a busy industrial trading estate, just off the A1, near Wetherby, West Yorkshire, to meet with Alastair Smith, Chief Executive Officer of Avacta PLC.

The site houses manufacturing, research and development, laboratories and office support functions for approximately 50 staff.

Avacta – Two high growth opportunities

Avacta Analytical (Optim)

Avacta Analytical supports the manufacture and roll out of innovative instrumentation and services to the biopharmaceutical and biotech industries through its broad-ranging expertise in analytical techniques and protein science.  Avacta has developed a world leading product called Optim.

Avacta Animal Health (AX-1)

Avacta Animal Health provides diagnostic products, reagents and services for the US$1.5 billion global veterinary diagnostics market equipping veterinary professionals with high quality animal health and ‘well-being’ information, through point of care diagnostics, reagents, testing kits and laboratory based testing.  Most importantly of all, the flagship diagnostic product – AX-1 - will ultimately be used in the human…

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