REG - Avacta Group PLC - Preliminary Full Year 2024 Results
06/06/2025 07:00
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RNS Number : 7780L Avacta Group PLC 06 June 2025
Avacta Group plc
("Avacta", the "Group" or the "Company")
Preliminary Results for the Year Ended December 31, 2024
LONDON and PHILADELPHIA - June 6, 2025 - Avacta Therapeutics (AIM: AVCT), a
life sciences company developing next generation peptide drug conjugates (PDC)
targeting powerful anti-tumor payloads directly to the tumor, has published
its unaudited preliminary results for the 12 months ended December 31,
2024 ("FY24").
Highlights
● Positioned the business as a pure play oncology biopharmaceutical company
focused on the Company's proprietary pre|CISION(®) peptide drug conjugate
platform
● FAP-Dox (AVA6000) - first pre|CISION(®) program
● Completed Phase 1a enrollment dose escalation portion of clinical trial
● Opening of the Phase 1b expansion cohorts in salivary gland cancers, triple
negative breast cancer and high-grade soft tissue sarcoma
● Anticipate releasing the initial data in salivary gland cancer in late 2025
and in triple negative breast cancer in H1 2026.
● Phase 2 trials in these indications planned for H1 2026
● FAP-EXd (AVA6103)
● Clinical candidate selection enables move toward clinical testing, by
advancing to Investigational New Drug (IND)-enabling studies and Good
Manufacturing Practices (GMP) manufacturing process development to support
initiation of the Phase 1 clinical trial in Q1 2026
● Entered into a strategic collaboration with Tempus, leveraging AI to capture
full market opportunity in both wholly owned and partnered medicines and drive
smarter trials
● Cash and short-term deposit balances at December 31, 2024 of £12.9 million
(31 December 2023: £16.6 million). As of April 30, 2025, £17.3 million
following the divestment of Launch Diagnostics extending the Company's cash
runway into Q1 2026.
● Board and management strengthened - new Chief Financial Officer and Chief
Scientific Officer plus two Non-Executive Directors appointed.
Christina Coughlin, MD, PhD, CEO of Avacta, said,
"Over the past year, we have transformed the business into a dedicated
therapeutics company focused on our unique pre|CISION(®) platform. We are
pioneering a novel, differentiated class of medicines, which has the potential
to revolutionize drug delivery.
"This unique platform has the potential to treat up to 90% of solid tumors by
repurposing a range of effective oncology drugs to significantly reduce
toxicity and side effects. This represents a potential breakthrough for
patients and a major opportunity for Avacta.
"With our first program in the clinic, we expect to release the initial data
in salivary gland cancer for FAP-Dox (AVA6000) towards the end of 2025 and in
triple negative breast cancer in H1 2026 with potential for Phase 2 trials in
H1 2026.
"FAP-EXd (AVA6103) has advanced into IND-enabling work this year and we plan
to initiate the Phase 1 trial in early 2026. In parallel, we are actively
pursuing a number of commercial opportunities.
"Overall, 2025 and 2026 are set to be a transformative for Avacta, driven by a
number of catalysts to drive shareholder value."
-Ends-
For further information, please contact:
Avacta Group plc https://avacta.com/ (https://avacta.com/)
Michael Vinegrad, Group Communications
Director
Peel Hunt (Nomad and Broker)
James Steel / Chris Golden www.peelhunt.com (http://www.peelhunt.com/)
Panmure Liberum (Joint Broker) www.panmureliberum.com (http://www.panmureliberum.com)
Emma Earl / Will Goode / Mark Rogers
ICR Healthcare
Mary-Jane Elliott / Jessica Hodgson / Stephanie Cuthbert avacta@icrhealthcare.com (mailto:avacta@icrhealthcare.com)
Investor Contact
Renee Leck renee@thrustsc.com (mailto:renee@thrustsc.com)
THRUST Strategic Communications
Media Contact
Carly Scaduto Carly@carlyscadutoconsulting.com
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About Avacta - www.avacta.com
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Avacta Therapeutics is a clinical-stage life sciences company expanding the
reach of highly potent cancer therapies with the pre|CISION(®) platform.
pre|CISION(®) is a proprietary warhead delivery system based on a
tumor-specific protease (fibroblast activation protein or FAP) that is
designed to concentrate highly potent warheads in the tumor microenvironment
while sparing normal tissues. Our innovative pipeline consists of
pre|CISION(®) peptide drug conjugates (PDC) or Affimer(®) drug conjugates
(AffDC) that leverage the tumor-specific release mechanism, providing unique
benefits over traditional antibody drug conjugates.
About the pre|CISION(®) Platform
The pre|CISION(®) platform comprises an anticancer payload conjugated to a
proprietary peptide that is a highly specific substrate for fibroblast
activation protein (FAP) which is upregulated in most solid tumors compared
with healthy tissues. The pre|CISION(®) platform harnesses this tumor
specific protease to cleave pre|CISION(®) peptide drug conjugates and
pre|CISION(®) antibody/Affimer(®) drug conjugates in the tumor
microenvironment, thus releasing active payload in the tumor and reducing
systemic exposure and toxicity, allowing dosing to be optimized to deliver the
best outcomes for patients.
Chairman's statement
The Group has undergone significant transformation in the past year, driven by
Dr. Christina Coughlin following her appointment as CEO, positioning Avacta as
a dedicated therapeutics company with its unique pre|CISION(®) technology
platform.
This novel platform demonstrates significant potential in addressing one of
the primary challenges of effective treatment of diseases, specifically the
balance between efficacy and safety.
There has never been any doubt in my mind about the potential of, and the
opportunities for, Avacta's pre|CISION(®) platform. Avacta is pioneering a
novel, differentiated class of pre|CISION(®)-based medicines to revolutionize
drug delivery, which have the potential to demonstrate multiple advantages
over conventional therapeutics.
Despite the challenging environment, we have achieved a number of significant
markers of strategic and operational progress, including the repositioning of
the business into a pure-play therapeutics business with a unique technology
platform; the divestment of the non-core diagnostics business; and the
build-out of a leading management team, particularly the appointments of
Michelle Morrow as Chief Scientific Officer and Brian Hahn as Chief Financial
Officer.
FAP-Dox (AVA6000), the lead asset in the pre|CISION(®) platform, continues
to make good clinical progress. Avacta is continuing to develop an exciting
and innovative pipeline of differentiated assets as the business builds its IP
portfolio and builds a profile in the sector with corporates and investors.
Now that Avacta is positioned as a clinical stage biopharmaceutical company,
the more immediate challenges are less about clinical and operational
execution - since Chris and her team continue to demonstrate their expertise
and capabilities here - and are more about ensuring Avacta can establish a
sustainable, long-term financing strategy to realize the pipeline's potential.
Avacta has a clear value proposition and world-class scientific capabilities
and is supported by robust data and an innovative platform and there are good
opportunities to attract long-term investors. The Avacta management team
continues to build knowledge and trust with a broad range of specialist and
other investors in the US and closer to home.
At this stage in the Company's development, with substantially all resources
dedicated to research and development and generating key data that will be key
to the Company's long-term value, the Board's primary focus in relation to
cash management is on funding critical pipeline progression.
The macroeconomic backdrop to the global biotechnology sector remains
volatile, driven by both economic and political uncertainties resulting in a
more subdued market backdrop and competitive funding environment.
The Board understands that the Heights Capital Bond ("HCB") liability remains
a source of frustration for shareholders and is a significant factor in
shaping shareholder sentiment. We continue to explore a number of possible
alternatives.
The Board is committed to both the Company's near-term as well as the
long-term financing requirements and is resolutely focused on executing its
strategic goals and furthering the pre|CISION(®) platform, which it believes
will be the springboard to deliver a longer-term solution to the Company's
needs including its capital structure and driving shareholder value.
Throughout the year, we have been actively engaging with interested industry
parties who align with our strategic vision and have the potential to bring
complementary expertise and resources to the table. These discussions have
focused on identifying collaborative opportunities to accelerate the
development and commercialization of our pre|CISION(®) platform assets.
Establishing the right partnerships is critical for expanding our reach and
ensuring the long-term success of our pipeline as well as potentially reducing
the Group's internal financing requirement. Alongside finding a solution to
the HCB, progressing these discussions remains a top priority for the Board.
Avacta is updating its Board to reflect the evolution in its strategy and its
needs. We have recently brought on two new Non-Executive Directors, David
Bryant and Richard Hughes. David brings extensive commercial industry
knowledge and networks and Richard a track record in UK capital markets. Their
respective experience and perspective will strengthen the Board's oversight
and governance. As previously announced, Dr. Trevor Nicholls has retired from
the Board as a Non-Executive Director.
All organizations are dependent upon their people, and we are very fortunate
to have some of the leading international scientists in biotech, who are
providing the intellectual backbone to the Company. They are developing the IP
which makes our business so exciting and on behalf of the Board, I would like
to thank them for their commitment and hard work.
With the strategy and operational focus solely now on the
pre|CISION(®) platform and the strong development of the pipeline, along
with the strength of the management team, we are now a much better proposition
for both investors and potential international industry partners.
The future continues to be exciting for Avacta and the Board is resolutely
focused on driving this exciting program of assets forward and delivering
long-term shareholder value.
Shaun Chilton,
Chairman
Chief Executive Office's statement
Overview
Avacta's proprietary pre|CISION(®) platform enables the repurposing of a
range of oncology
drugs to significantly reduce toxicity and side effects for patients by
concentrating the payload in the tumor, offering the potential to improve
efficacy and patient tolerability.
Many anticancer drugs have demonstrated positive activity in the clinic but
failed in clinical testing due to either severe toxicity that limits dosing or
inferior drug half-life. Our pre|CISION(®) technology can address both these
limitations.
Over the last year or so, we have rapidly developed a range of early-stage
technologies using pre|CISION(®). Avacta has multiple programs running
designed to improve the therapeutic index (quantitative measurement of the
relative safety and efficacy of a drug) and the exposure (the released drug
kinetics or half-life).
These advances have led to new and increasingly valuable intellectual property
being developed around our foundational pre|CISION(®) technology. Advances
in chemistry are opening multiple opportunities for the development of
pre|CISION(®) enabled drugs.
We see very significant market prospects as some 90% of solid tumors are
potentially treatable by our pre|CISION(®) platform as demonstrated by
multiple indications across all solid tumors. The versatility of the platform
is one of its key advantages and USPs.
pre|CISION(®) is a highly innovative and unique platform that is set to
deliver clinical results across our two lead programs in late 2025 and 2026.
pre|CISION(®) - our proprietary technology
The challenge in oncology is that the most effective therapies cause the most
toxicity in normal tissues. The ability to deliver the active drug directly
to the tumor is the promise of our proprietary pre|CISION(®) platform.
The key aspect of pre|CISION(®) peptide drug conjugates (PDC) technology is
that the conjugated drug (the combination of the oncology drug and our
peptide) is inert. It is incapable of entering cells and killing until the
peptide is specifically released when it comes into contact with common
tumor-associated protein, known as fibroblast activation protein or FAP, in
the tumor.
When a pre|CISION(®) PDC encounters FAP in the tumor, the peptide is cleaved
and active payload is released. The release of the payload from the
pre|CISION(®) product in the tumor results in higher concentration of the
drug at the tumor and lower blood and healthy tissue levels than would be
achievable with standard systemic administration. Importantly, the increased
toxicities (payload) at the tumor are directly associated with the pre|CISION
medicines.
Two factors that dictate the antitumor potential of pre|CISION medicines are
(1) the expression of FAP in the tumor to cleave the peptide (the amount of
the FAP protein that exists in the tumor) and (2) the inherent susceptibility
of the associated tumors to the chemotherapy (chemicals in the drug) that is
released.
We believe that pre|CISION is capable of delivering higher drug levels within
tumors which will lead to improved antitumor activity while reducing systemic
toxicities. This will dramatically impact the therapeutic index and efficacy
of a given anticancer drug.
Programs
We are generating a portfolio of product candidates that combine our
pre|CISION(®) peptide with various anticancer drugs to enable the treatment
of a broad spectrum of solid tumors. This will require execution of both a
near term and long-term financing strategy to achieve the Company's goals.
FAP-Dox (AVA6000), our lead product candidate, is a peptide drug conjugate
form of doxorubicin, an approved cancer drug with known severe toxicities.
Doxorubicin was selected as the first candidate for three reasons:
● it is an approved drug with known activity in a set of solid tumors;
● the chemistry and half-life of the drug was highly amenable to peptide
conjugation; and
● there is one distinct serious toxicity (cardiac failure) that would represent
proof of concept, if pre|CISION(®) enabling could eliminate this toxic
effect.
AVA6000 has been well-tolerated in the Phase 1a dose escalation trial in
patients, with solid tumors and promising antitumor activity has been
observed. FAP-Dox dosing in Phase 1 has escalated to doses nearly four-fold
higher than those safely achieved with conventional doxorubicin in routine
clinical use.
Despite these high doses delivered and high lifetime exposure to released
doxorubicin, there has been no serious cardiac toxicity observed in the trial.
Importantly, tumor biopsy data from this trial demonstrated that intratumoral
levels of doxorubicin were a median 100-fold higher than plasma levels in most
of the patients tested, validating the ability of pre|CISION(®) to limit
systemic exposure to the active cytotoxic (tissue damaging) drug.
The Phase 1b portion of the trial is underway, with the expansion cohorts
currently enrolling at the recommended dose for expansion (RDE) determined in
the Phase 1a dose escalation part of the trial.
Exatecan (EXd) (AVA6103) is our second product candidate that uses the
pre|CISION peptide drug conjugate technology to deliver exatecan, a potent
topoisomerase I inhibitor directly to tumors, while limiting the exposure of
the released exatecan in normal tissues.
Exatecan has demonstrated clinical activity in cancers such as breast,
gastric, lung and pancreatic cancers. However, dose-limiting toxicities and a
short half-life in patients led to discontinuation of its development.
We believe that exatecan represents a good candidate for our
pre|CISION(®) technology for three reasons:
● exatecan demonstrated single agent activity in a set of Phase 2 trials;
● a closely related payload, deruxtecan has demonstrated significant activity in
two antibody drug conjugate programs including potent bystander effects; and
● the pharmacokinetic and systemic toxicities of exatecan can be potentially
solved by pre|CISION(®) technology.
We believe that AVA6103 will enable patients to obtain the therapeutic benefit
associated with delivering exatecan directly to tumors in a sustained release
mechanism, while limiting systemic exposure associated with poor tolerability.
Our research pipeline has now extended to our new biologic drug conjugate
platform, where the pre|CISION(®) peptide is used as the linker element to
attach the payload to a biologic agent such as an antibody or an Affimer
(another form of protein).
The advantage of this technology is the tumor-specificity of the release
mechanism. It also enables half-life extension (e.g. optimizing the exposure)
and further targeting with the biologic aspect of the drug. We anticipate
moving a candidate forward in late 2025 from this research program
Our strategic collaboration with Tempus, a technology company leading the
adoption of artificial intelligence to advance precision medicine and patient
care, has delivered results in terms of a better understanding of the
addressable patient population for the full suite of pre|CISION(®)
medicines.
It has also a deeper understanding of the indications for the FAP-EXd program
where we would anticipate the optimal efficacy, based on the wider use of the
topoisomerase I inhibitor mechanism (direct to tumor drugs) of action in
oncology.
Outlook
2025 and into 2026 are set to be a transformative time for Avacta with
multiple catalysts.
For FAP-Dox (AVA6000), we anticipate releasing the initial data in salivary
gland cancer in late 2025 and in triple negative breast cancer in H1 2026 from
these cohorts. Phase 2 trials in these indications are also planned for H1
2026.
The second asset, FAP-EXd (AVA6103) will advance into clinical testing with
the IND filing in late 2025 and initiation of the Phase 1 trial in 2026, with
initial data available in late 2026.
Our team continues to explore a number of commercial opportunities. We
continue to seek a partner for our lead asset FAP-Dox that is poised to enter
Phase 2 in 1H 2026.
Christina Coughlin,
Chief Executive Officer
Financial Review
Reported Group revenues for the year ended 31 December 2024 was £24.42
million (restated 2023: £24.04 million), This includes contributions from
both continuing and discontinued operations.
Revenues for the continuing operations of the Therapeutics Division were
£0.11 million (restated 2023: £2.85 million). The reduction from the prior
year was lower activity resulting in no milestones received from AffyXell.
Revenues for the discontinuing operations of the Diagnostics Division were
£24.31 million (2023: £21.19 million). This 14.7% increase is driven by
higher sales volumes and improved market penetration.
Overall, the loss from continuing operations for the year were £28.98 million
(2023: £31.13 million)
Research costs
During the year, the Group expensed through the income statement £14.27
million (2023: £13.11 million) research costs from continuing operations
relating to the ongoing expansion of the preCISION(®) and Affimer(®)
therapeutic programmes with AVA6103 and increased clinical and CMC expenses
related to AVA6000, which are expensed given their early stage in the
development pathway.
Selling, general and administrative expenses
Administrative expenses have increased during the year to £12.05 million
(2023: £7.89 million). The increases are primarily related to personnel
related expenses due to executive management changes and increased legal and
professional expenses related to the strategic shift toward becoming a
pure-play biotech company. However, exceptional items relating primarily to
the wind down of the Group's internal diagnostics division of £1.96 million
are included in the total administrative expenses for the year (2023: £ nil).
Amortisation and impairment expense
Amortisation charges of £0.89 million (2023: £1.03 million) have been
recognised in the period, which includes amounts due on discontinued
operations. Launch Diagnostics Holdings Ltd and its subsidiary entities and
Coris Holdings SRL and its subsidiary entity were all held for sale at 31
December 2024. The fair value less costs to sell were compared with the net
asset value of the entities based on the latest information available during
the divestment process. This resulted in total impairment charges of £22.41
million, Launch Diagnostics, £15.64 million, and Coris Holding £6.67
million.
Share of loss of associate
The share of loss of associate of £0.75 million (2023: £0.85 million) arises
from the Group's equity-accounted investment in AffyXell Therapeutics Co.,
Ltd. The share of losses reflects the Group's 21% ownership share of the
losses accumulated in the year. The Group investment decreased from 25% to 21%
at 31 December 2024 as a result of a dilution in shares.
Share-based payment expense
The non-cash charge for the year from continuing operations increased to
£4.11 million (2023: £2.55 million), this increase was due to modifications
to certain executive options awards and new options issued to the hiring of
new executives.
The non-cash charge for the year from discontinued operations increased to
£0.87 million (2023: £0.36 million), this increase was due to both
additional option awards and modification to existing agreements.
Convertible bond
In October 2022, the Group issued senior unsecured convertible bonds ('the
Bonds') of £55.00 million to a fund advised by Heights Capital Ireland LLC, a
global equity and equity-linked focussed investor. The Bonds were issued at
95% par value with total net proceeds of £52.25 million, (net of transaction
costs of £3.5 million) and accrue interest at an annual rate of 6.5% payable
quarterly in arrears.
The Bonds contain various conversion and redemption features. The Bonds have a
maturity of five years, and are repayable in 20 quarterly amortisation
repayments, of principal and interest over the five-year term, in either cash
or in new ordinary shares at the Group's option. If in shares, the repayment
is at the lower of the conversion price (88.72p) or a 10% discount to the
volume weighted average price ('VWAP') in the five- or ten-day trading period
prior to election date. The conversion price reset downwards from the original
118.75p at the Reset Date on 20 April 2024. There is a Reset Clawback Period
in place until 20 January 2025 during which, if the VWAP of the Company's
Ordinary Shares on each of at least 20 dealing days in any period of 30
consecutive dealing days is greater than 130% of the pre-reset conversion
price, then the conversion price will be restored, thereby reversing the
effect of the reset made on 20 April 2024. Additionally, the bondholder has
the option to partially convert the convertible bonds at their discretion
which has occurred twice to date, on 10 February 2023 and 20 September 2023
where £2.85 million and £0.85 million of principal was settled respectively
The bond agreement contains embedded derivatives in conjunction with an
ordinary host debt liability. The derivative element is measured at fair value
using a Monte-Carlo option pricing model, which estimates the fair value based
on the probability-weighted present value of expected future investment
returns, considering each of the possible outcomes available to the
bondholders. The fair value of the derivative liability has reduced during the
year to £1.28 million (2023: £15.00 million) as a result of fluctuations in
the share price during the period and a reduction in the principal amount
remaining from £40.80 million to £30.60 million. This has resulted in a gain
on revaluation of derivative of £13.72 million (2023, restated: gain of
£6.33 million).
The host debt liability is measured at amortised cost, being adjusted to
reflect revisions in estimated cashflows arising from early conversion events,
resulting in an implied interest charge of £9.85 million (2023: £14.48
million) and a liability at year-end of £20.50 million (2023, restated:
£24.33 million).
An error arose from changes in the measurement of the convertible bond
derivative valuation at inception and subsequent reporting date. The
convertible debt liability for 2023 has been reduced by £3.33 million
(restated: £15.0 million) due to a valuation error resulting in a change to
the carrying amount at inception, and subsequent amortization. There is also
an increased impact on share premium for 2023 with a further £0.18 million of
share premium recognised in instances where the bondholder exercised their
option, due errors in derivative valuation at the exercise date.
Net finance costs
Finance income increased to £0.66 million (2023: £0.55 million) due to a
higher average cash balance during the year following the fundraise in 2023.
Other finance costs of £0.24 million (2023: £0.39 million) relate primarily
to IFRS 16 interest charges.
Losses before taxation
Losses before taxation from continuing operations for the year were £28.98
million (2023: £31.13 million).
Taxation
The taxation credit has decreased to (£0.44) million (2023, restated: £1.96
million). The decrease is a result of reversal of temporary differences
related to discontinued operations of (£2.27) million (2023, restated:
£nil). This has resulted in a current tax asset of £2.45 million (2023,
restated: £2.24 million)
Loss for the period
The reported loss for the period from continuing operations was £29.43
million (2023, restated: £29.15 million). The loss per ordinary share from
continuing operations reduced to 8.54p (2023, restated: 10.69p) based on a
weighted average number of shares in issue during the period of 344,577,451
(2023: 272,683,485).
The reported loss for the period from discontinued operations was £23.41
million (2023, restated: £4.11 million). Operating loss from discontinued
operations decreased to £2.17 million (2023, restated: £4.43 million)
however impairment charges from discontinued operations increased to £23.39
million (2023, restated: £0.51 million) due to the group being held for sale
Cash flow
The Group reported cash and cash equivalent balances of £12.87 million at 31
December 2024 (2023: £11.55 million).
Operating cash outflows from continuing operations amounted to £24.94 million
(2023: £14.09million). The increase reflects higher operating losses due to
elevated R&D expenditure and one-off costs associated with organisational
realignment. Research and development tax credit cash rebates were received in
relation to the years ending 31 December 2024 and 2023, resulting in a cash
inflow of £1.17 million from income tax received (2023: £4.26 million).
Net cash outflows from investing activities amounted to £1.43 million (2023:
£9.00 million). Activity in the current year was significantly lower, with
minimal capital expenditure and no acquisitions or disposals completed during
the period. The prior year included an outflow of £6.93 million net of cash
principally from the acquisition of Coris.
There was a net cash inflow from continuing financing activities of £26.09
million (2023: £0.44 million), arising primarily from the proceeds of issue
of share capital of £31.1 million (2023: £0 million) as well as the
repayment of a convertible bond of £3.13 million. In the prior period, the
net cash outflow arose from the principal payment of lease liabilities of
£0.91 million.
Financial position
At 31 December 2024, the Group reported net assets of £9.28 million (2023:
£16.90 million), reflecting the impact of the strategic disposal of its
diagnostics business, ongoing investment in the therapeutic division, and
non-cash fair value movements in the Group's convertible bond derivative.
Total assets decreased to £48.27 million (2023: £73.19 million), primarily
due to the reclassification of £22.92 million of assets to 'assets held for
sale', following the ongoing divestment process of the diagnostics division
and wind down of ALS-Dx. This strategic move is expected to simplify the
Group's operations and provide greater focus and capital allocation towards
the therapeutic platform.
Non-current assets declined to £8.07 million (2023: £45.16 million),
primarily due to a reduction in intangible assets following the
reclassification of discontinued assets and impairment recognised in the year.
Property, plant and equipment and right-of-use assets also decreased
significantly, consistent with the Group's strategic shift towards a pure-play
biotech company. Investment in associate reduced to £3.45 million (2023:
£4.08 million) due to recognised losses for the period.
Current assets increased to £40.20 million (2023: £28.04 million), largely
due to the classification of assets held for sale and a modest increase in
income tax receivables. Cash and cash equivalents were £12.9 million (2023:
£11.55 million), after investing and financing activities, including the
£31.1 million gross proceeds from a successful share placing during the year.
Current cash runway takes us into the first quarter of 2026.
Total liabilities decreased to £39.0 million (2023: £56.3 million), mainly
reflecting:
● A reduction in the fair value of the convertible bond derivative, which
decreased to £1.28 million (2023: restated, £15.00 million), following
changes in assumptions.
● The partial unwinding of lease liabilities, consistent with the decline in
right-of-use assets;
● The reclassification of £8.69 million of liabilities to 'liabilities directly
associated with the assets held for sale'.
Share capital and share premium increased by a combined £40.7 million
following the equity placing and debt service. The accumulated deficit widened
to £138.8 million (2023: £90.8 million), reflecting continued operating
losses and non-cash finance charges.
Consolidated Statement of Profit or Loss
for the Year Ended 31 December 2024
Notes 2024 2023 (restated)*
£000 £000
Continuing operations
Revenue 3 113 2,851
Cost of sales - (15)
------------- -------------
Gross profit 113 2,836
Research costs (14,266) (13,108)
Selling, general and administrative expenses (12,046) (7,892)
Depreciation expense (1,489) (1,279)
Amortisation expense (16) (13)
Share of loss of associate (747) (847)
Acquisition-related expenses - (282)
Share-based payment expense (4,107) (2,547)
------------- -------------
Operating loss (32,558) (23,132)
Convertible bond - interest expense 6 (9,854) (14,478)
Convertible bond - revaluation of derivative 6 13,719 6,327
Loss on earnout receivable (717)
Finance income 663 549
Other finance costs (237) (391)
------------- -------------
Loss before tax (28,983) (31,125)
Taxation (444) 1,975
------------- -------------
Loss from continuing operations (29,427) (29,150)
------------- -------------
Discontinued operation
Loss from discontinued operation, net of tax (23,414) (4,106)
------------ ------------
Loss for the year (52,841) (33,256)
----------- -----------
Loss per share:
Basic and diluted 5 (15.34p) (12.20p)
Loss per share - continuing operations: 5
Basic and diluted (8.54p) (10.69p)
.
.
Consolidated Statement of Other Comprehensive Income
for the Year Ended 31 December 2024
Notes 2024 2023 (restated)*
£000 £000
Loss for the year 7 (52,841) (33,256)
Other comprehensive income
Items that may be reclassified to profit or loss
Foreign operations - foreign currency translation differences Continuing
operations
(6) (350)
Discontinued operations
(436) 351
----------- -----------
Other comprehensive (loss)/income (442) 1
------------ ------------
Total comprehensive loss for the period (53,283) (33,255)
----------- -----------
Total comprehensive loss for the period attributable to the shareholders
arises from:
Continuing operations 8 (29,433) (29,500)
Discontinued operations 8 (23,850) (3,755)
----------- -----------
(53,283) (33,255)
------------ ------------
Consolidated Statement of Financial Position as at 31 December 2024
At 1 January
2024 2023 (restated)* 2023
(restated)*
£000 £000 £000
Assets
Property, plant and equipment 543 2,921 2,380
Right-of-use assets 2,242 7,065 5,418
Intangible assets 1,844 30,837 26,324
Investment in associate 3,445 4,079 2,180
Deferred tax asset - 253 274
------------- ------------- -------------
Non-current assets 8,074 45,155 36,576
------------- ------------- -------------
Inventories - 2,585 1,681
Trade and other receivables 1,960 6,585 5,579
Income tax receivable 2,447 2,239 6,510
Cash and cash equivalents 12,873 16,627 41,781
------------- ------------- -------------
17,280 28,036 55,551
Assets directly associated with the assets held for sale 22,916 - -
------------- ------------- -------------
Current assets 40,196 28,036 55,551
------------- ------------- -------------
Total assets 48,270 73,191 92,127
------------- ------------- -------------
Liabilities
Lease liabilities (1,482) (5,735) (3,753)
Provisions (208) - -
Financing liabilities - (219) -
Deferred tax liability - (323) (562)
------------- ------------- -------------
Non-current liabilities (1,690) (6,277) (4,315)
------------- ------------- -------------
Trade and other payables (5,877) (9,225) (8,423)
Lease liabilities (956) (1,295) (1,361)
Other financing liabilities - (166) -
Convertible bond - debt (20,497) (24,325) (29,615)
Convertible bond - derivative (1,281) (15,000) (24,200)
------------- ------------- -------------
(28,611) (50,011) (63,599)
Liabilities directly associated with the assets held for sale (8,688) - -
-------------- ------------- ------------
Current liabilities (37,299) (50,011) (63,599)
------------- ------------- -------------
Total liabilities (38,989) (56,288) (67,914)
------------- ------------- -------------
Net assets 9,281 16,903 24,213
------------- ------------- -------------
Equity
Share capital 37,018 28,501 26,685
Share premium 115,585 83,408 62,184
Reserves (4,493) (4,163) (4,434)
Accumulated Deficit (138,829) (90,843) (60,222)
------------- ------------- -------------
Total equity 9,281 16,903 24,213
------------- ------------- -------------
* The comparative information is restated due to adjustments to revenue and
the convertible bond, see Note 9
Approved by the Board and authorised for issue on June 5, 2025.
Christina
Brian Hahn
Chief executive
Officer
Chief Financial officer
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2024
Share capital Share premium Other reserve Translation reserve Reserve for own shares Retained earnings Total equity
£000 £000 £000 £000 £000 £000 £000
------------- ------------- ------------- ------------- ------------ ------------- -------------
Balance at 31 December 2022 (as previously reported) 26,685 62,184 (1,729) 50 (2,755) (63,440) 20,995
Prior period error (see note 29) - - - - - 3,218 3,218
------------- ------------- ------------- ------------- ------------ ------------- -------------
Balance at 1 January 2023 (restated*) 26,685 62,184 (1,729) 50 (2,755) (60,222) 24,213
Loss for the year (restated*) - - - - - (33,256) (33,256)
Other comprehensive income for the year - - - 1 - - 1
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total comprehensive loss for the year (restated*) - - - 1 - (33,256) (33,255)
Transactions with owners of the Company:
Convertible bond-issue of shares (restated*) 1,563 21,078 - - - - 22,641
Exercise of share options 253 146 - - - - 399
Transfer of own shares - - - - 270 (270) -
Equity-settled share-based payment - - - - - 2,906 2,906
------------- ------------- ------------- ------------- ------------ ------------- -------------
1,816 21,224 - - 270 2,634 25,945
------------- ------------- ------------- ------------- ------------ ------------ ------------
Balance at 31 December 2023 (restated*) 28,501 83,408 (1,729) 51 (2,485) (90,843) 16,903
Loss for the period - - - - - (52,841) (52,841)
Other comprehensive income for the year - - - (442) - - (442)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total comprehensive loss for the year - - - (442) - (52,841) (53,283)
Transactions with owners of the Company:
Issue of shares net of transaction costs 6,230 23,175 - - - - 29,405
Own shares acquired 1 9 - - (10) - -
Convertible bond - issue of shares 1,689 8,863 - - - - 10,552
Exercise of share options 597 130 - - - - 727
Transfer of own shares - - - - 122 (122) -
Equity-settled share-based payment - - - - - 4,977 4,977
------------- ------------- ------------- ------------- ------------ ------------- -------------
8,517 32,177 - - 112 4,855 45,661
------------- ------------- ------------- ------------- ------------ ------------- -------------
Balance at 31 December 2024 37,018 115,585 (1,729) (391) (2,373) (138,829) 9,281
------------- ------------- ------------- ------------- ------------ ------------ ------------
* The comparative information is restated due to adjustments to revenue and
the convertible bond.
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2024
Note 2024 2023
£000 £000
Operating cash outflow from continuing operations (26,051) (18,750)
Interest received 83 549
Interest elements of lease payments (138) (151)
Income tax received 1,170 4,260
------------- -------------
Net cash used in continuing operating activities (24,936) (14,092)
Net cash from/( used in) discontinued operating activities 1,339 (780)
------------- -------------
Net cash used in operating activities (23,597) (14,872)
------------- -------------
Cash flows from investing activities
Purchase of property, plant and equipment (323) (166)
Proceeds from sale of property, plant and equipment - (39)
Acquisition of subsidiary - (10,129)
Payment of deferred consideration on past acquisition - (868)
Acquisition of right-of-use assets - -
Purchase of intangible assets (16) -
------------- -------------
Net cash used in continuing investing activities (339) (11,202)
Net cash(used in)/from discontinued investing activities (1,092) 2,201
------------- -------------
Net cash used in investing activities (1,431) (9,001)
Cash flows from financing activities
Proceeds from issue of share capital 31,148 -
Transaction costs related to issue of share capital (1,744) -
Proceeds from exercise of share options 728 398
Principal elements of lease payments (913) (838)
Cash repayment of convertible bonds (2,550) -
------------- -------------
Net cash from (used in) continuing financing activities 26,669 (440)
Net cash from (used in) discontinuing financing activities (574) (858)
------------- -------------
Net cash from (used in)/ from financing activities 26,095 (1,298)
Net increase / (decrease) in cash and cash equivalents 1,067 (25,171)
Cash and cash equivalents at beginning of year 16,627 41,781
Effects of movements in exchange rates on cash held 84 17
------------- -------------
Cash and cash equivalents at end of year, including held in disposal group 17,778 16,627
------------- -------------
Cash held by disposal group (4,905) (5,078)
------------- -------------
Cash and cash equivalents at end of year 12,873 11,549
2024 2023
£000 £000
Operating cash outflow from continuing operations (26,051) (18,750)
Interest received 83 549
Interest elements of lease payments (138) (151)
Income tax received 1,170 4,260
------------- -------------
Net cash used in continuing operating activities (24,936) (14,092)
Net cash from/( used in) discontinued operating activities 1,339 (780)
------------- -------------
Net cash used in operating activities (23,597) (14,872)
------------- -------------
Cash flows from investing activities
Purchase of property, plant and equipment (323) (205)
Acquisition of subsidiary - (10,129)
Payment of deferred consideration on past acquisition - (868)
Purchase of intangible assets (16) -
------------- -------------
Net cash used in continuing investing activities (339) (11,202)
Net cash(used in)/from discontinued investing activities (1,092) 2,201
------------- -------------
Net cash used in investing activities (1,431) (9,001)
Cash flows from financing activities
Proceeds from issue of share capital 31,148 -
Transaction costs related to issue of share capital (1,744) -
Proceeds from exercise of share options 728 398
Principal elements of lease payments (913) (838)
Cash repayment of convertible bonds (2,550) -
------------- -------------
Net cash from (used in) continuing financing activities 26,669 (440)
Net cash from (used in) discontinuing financing activities (574) (858)
------------- -------------
Net cash from (used in)/ from financing activities 26,095 (1,298)
Net increase / (decrease) in cash and cash equivalents 1,067 (25,171)
Cash and cash equivalents at beginning of year 16,627 41,781
Effects of movements in exchange rates on cash held 84 17
------------- -------------
Cash and cash equivalents at end of year, including held in disposal group 17,778 16,627
------------- -------------
Cash held by disposal group (4,905) (5,078)
------------- -------------
Cash and cash equivalents at end of year 12,873 11,549
1a Basis of preparation
Avacta Group plc (the 'Company') is a public company incorporated under the
laws of England and Wales and domiciled on London, United Kingdom. This
preliminary information for the year ended 31 December 2024 comprise the
Company and its Subsidiaries (together referred to as the 'Group').
The preliminary information of Avacta Group plc has been prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006. The consolidated financial statements
have been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies.
The results shown for the year ended 31 December 2024 and 31 December 2023 are
audited. The consolidated financial information contained in this announcement
does not constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. Statutory accounts of the Company in respect of the
financial year ended 31 December 2024 were approved by the Board of directors
on 5(th) June 2025 and will be delivered to the Registrar of Companies in due
course. The report of the auditors on accounts for the year ended 31 December
2024 was unqualified and contained an emphasis of matter paragraph in relation
to a material uncertainty over going concern. The report did not contain a
statement under 489(2) or 498(3) of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2023 have been delivered to
the Registrar of Companies and distributed to shareholders. The auditors'
report on those accounts was unqualified, did not draw attention to any
matters by way of emphasis, and did not contain a statement under 489(2) or
498(3) of the Companies Act 2006.
Going concern
The Financial Statements have been prepared on a going concern basis. The
Company's going concern assessment has been performed as part of the Group's
going concern assessment.
During the year ended 31 December 2024, the Group reported a loss from
continuing operations of £29.4 million and incurred net cash used in
operating activities of £23.6 million.
As at 31 December 2024, the Group's accumulated losses were £138.8
million, and cash and cash equivalents were £12.9 million. The Group has
external borrowings in the form of a convertible bond, with a principal amount
outstanding of £20.4 million as at 31 December 2024.
As disclosed in Note 18, the gross proceeds of £31.2 million were received,
net of costs of £1.7 million, through a placing of ordinary shares. As
disclosed in Note 29 of the financial statements for the year ended 31
December 2024, net proceeds of £10.6 million were received in March 2025 from
the sale of Launch Diagnostics Holdings Limited and its subsidiaries ("Launch
Diagnostics"). The Directors continue to progress with the sale of Coris
BioConcept, the remaining diagnostics division held for sale as at 31 December
2024.
The Group continues to advance its clinical trials and generate successful
data and expects to report further findings in late 2025 and 1H 2026.
Following the data, the Group will evaluate partnering and out-licensing
opportunities.
The Group faces significant risks associated with successful execution of its
strategy. These risks include, but are not limited to technology and product
development, introduction and market acceptance of new products and services,
changes in the marketplace, liquidity, competition from existing and new
competitors which may enter the marketplace and retention of key personnel. As
a clinical stage oncology business, the Directors anticipate operating losses
to continue for the foreseeable future due to, among other things, costs
related to research funding, growth plans and further development of our
technology.
The Directors have considered detailed cash flow forecasts that extended to 31
December 2026, which is at least twelve months from the date of approval of
these financial statements ("the going concern period"). The forecasts
indicate that we currently have enough cash to fund our planned operations
into the first quarter of 2026. The forecasts consider current and future
economic conditions that are expected to prevail over the period. These
forecasts include assumptions regarding the timing and quantum of investment
in the therapeutic development programs together with various scenarios which
reflect growth plans, opportunities, risks and mitigating actions. The Board
is focused on both the short-term and long-term financing strategy to achieve
the company goals including obtaining additional funding through the capital
markets.
The forecast therefore shows the Group and the Parent Company are dependent on
raising funds to advance their key projects and investments to remain cash
positive during the going concern period. There are currently no agreements in
place and there is no certainty that funds will be raised within the
appropriate timeframe. This indicates that a material uncertainty exists that
may cast significant doubt on the Group and the Parent Company's ability to
continue as a going concern, and therefore they may be unable to realise their
assets and discharge their liabilities in the normal course of business.
However, the directors have a reasonable expectation that the required funding
will be forthcoming. As a result, the directors believe that the Group and the
Company will continue as a going concern for a period of at least 12 months
from the date of approval of these financial statements and have therefore
prepared the financial statements on a going concern basis.
The financial statements do not include any adjustments that would result from
the basis of preparation being inappropriate.
2 Segment reporting
Operating segments - continuing operations
In the view of the Board of Directors, the Group has one (2023: one)
reportable segment in continuing operations: Therapeutics. Segment reporting
has been presented on this basis for continuing operations. The Directors
recognise that the operations of the Group are dynamic and therefore this
position will be monitored as the Group develops.
The principal activity of Therapeutics is the development of novel cancer
therapies harnessing proprietary technology
The previous second reportable segment as the diagnostics division which is
currently under a divestment strategy and being held for sale. All reporting
for this segment will be presented as discontinuing operations.
Segment revenue represents revenue from external customers arising from sale
of goods and services, plus inter-segment revenues. Inter-segment transactions
are priced on an arm's length basis. Segment results, assets and liabilities
include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.
The Group's revenue to destinations outside the UK amounted to 100% (2023:
100%) of total revenue. The revenue analysis below is based on the country of
registration of the customer:
2024 2023
£'000 £'000
South Korea 113 2,851
------------- -------------
113 2,851
------------- -------------
During the year, transactions with one external customer in the Therapeutics
segment amounted individually to 10% or more of the Group's revenues from
continuing operations, being £113,000 (2023: £2,851,000 (restated due to
prior year error, see note 9)).
Operating segment analysis 2024
Therapeutics Central overheads1 Total Diagnostics (discontinued)
(continuing)
£000 £000 £000 £000
Revenue 113 - 113 24,311
Cost of goods sold - - - (13,134)
------------- ------------- -------- -------------
Gross profit 113 - 113 11,177
Research costs (14,266) - (14,266) (280)
Selling, general and administrative expenses (3,135) (8,910) (12,045) (10,336)
------------- ------------- -------- -------------
Adjusted EBITDA (17,288) (8,910) (26,198) 561
Impairment charge - - - (23,388)
Depreciation expense (1,238) (251) (1,489) (991)
Amortisation expense (11) (5) (16) (870)
Share of loss of associate (747) - (747) -
Share-based payment expense (707) (3,400) (4,107) (871)
------------- ------------- ------------- -------------
Segment operating loss (19,991) (12,566) (32,557) (25,559)
------------- ------------- ------------- -------------
(1)Central overheads, which relate to operations of the Group functions, are
not allocated to the operating segments.
Operating profit/loss is the lowest measure of profit or loss regularly
reviewed by the Board. Other items comprising the Group's loss before tax are
not monitored on a segmental basis.
Segment operating loss is equivalent to the Group's operating loss and
therefore a reconciliation between segment operating loss and reported loss
before tax is set out in the Consolidated Statement of Profit or Loss and
Other Comprehensive income.
Adjusted EBITDA, a measure reported to the Board, is defined as earnings
before interest, tax, depreciation and amortization, adjusted to additionally
remove items of expenditure for which the relative magnitudes year-on year are
not directly reflective of year-on-year performance, or are not closely linked
to the underlying cashflows from operations. Adjusted EBITDA further excludes
impairment charges, acquisition-related expenses, share of operating loss of
associate and share-based payment expense from EBITDA.
The information reported to the Board does not include balance sheet
information at the segment level.
All material segmental non-current assets of continuing operations are located
in the UK.
Operating segment analysis 2023
Therapeutics Central overheads(1) Total (continuing) Diagnostics
(restated) (discontinued)
£000 £000 £000 £000
Revenue 2,851 - 2,851 21,192
Cost of goods sold (15) - (15) (11,988)
------------- ------------- -------- -------------
Gross profit 2,836 - 2,836 9,204
Research costs (13,108) - (13,108) (1,421)
Selling, general and administrative expenses (2,489) (5,403) (7,892) (8,963)
------------- ------------- -------- -------------
Adjusted EBITDA (12,761) (5,403) (18,164) (1,180)
Impairment charge - - - (512)
Depreciation expense (1,271) (8) (1,279) (1,359)
Amortisation expense (10) (3) (13) (1,020)
Share of loss of associate (847) - (847) -
Acquisition-related expenses - (282) (282) -
Share-based payment expense (1,739) (808) (2,547) (359)
------------- ------------- ------------- -------------
Segment operating loss (16,628) (6,504) (23,132) (4,430)
------------- ------------- ------------- -------------
( )
(1)Central overheads, which relate to operations of the Group functions, are
not allocated to the operating segments.
Operating profit/loss is the lowest measure of profit or loss regularly
reviewed by the Board. Other items comprising the Group's loss before tax are
not monitored on a segmental basis.
Segment operating loss is equivalent to the Group's operating loss and
therefore a reconciliation between segment operating loss and reported loss
before tax is set out in the Consolidated Statement of Profit or Loss and
Other Comprehensive income.
Adjusted EBITDA, a measure reported to the Board, is defined as earnings
before interest, tax, depreciation and amortization, adjusted to additionally
remove items of expenditure for which the relative magnitudes year-onyear are
not directly reflective of year-on-year performance, or are not closely linked
to the underlying cashflows from operations. Adjusted EBITDA further excludes
impairment charges, acquisition-related expenses, share of operating loss of
associate and share-based payment expense from EBITDA.
The information reported to the Board does not include balance sheet
information at the segment level.
All material segmental non-current assets of continuing operations are located
in the UK.
3 Revenue
The Group's revenue is all derived from contracts with customers.
a) Disaggregation of revenue
In the following table, revenue is disaggregated by both its nature and the
timing of revenue recognition. The table also includes a reconciliation of the
disaggregated revenue with the Group's reportable segments.
Year ended 31 December 2024
Therapeutics Continuing operations Diagnostics Total
(Discontinued)
£000 £000 £000 £000
Nature of revenue
Sale of goods - - 22,849 22,849
Provision of services - - 1,462 1,462
Licence-related income 113 113 - 113
113 113 24,311 24,424
Timing of revenue recognition
Products or services transferred at a point in time 113 113 22,848 22,904
Products or services transferred over time - - 1,463 1,520
113 113 24,311 24,424
Year ended 31 December 2023
Therapeutics (restated) Continuing operations Diagnostics Total
(discontinued) (restated)
£000 £000 £000 £000
Nature of revenue
Sale of goods - - 20,019 20,019
Provision of services 3 3 1,173 1,176
Licence-related income 2,848 2,848 - 2,848
2,851 2,851 21,192 24,043
Timing of revenue recognition -
Products or services transferred at a point in time 2,848 2,848 20,019 22,867
Products or services transferred over time 3 3 1,173 1,176
2,851 2,851 21,192 24,043
b) Contract balances
The following table provides information about receivables, contract assets
and contract liabilities from contracts with customers.
31 December 2024 31 December 2023
£'000 £'000
Receivables, which are included in 'Trade and other receivables' - 3,245
Contract assets - 22
Contract liabilities - (302)
The contract assets primarily relate to the Group's rights to consideration
for work completed but not invoiced at the reporting date. The contract assets
are transferred to receivables when the rights become unconditional; this
usually occurs when the Group issues an invoice to the customer. The contract
liabilities primarily relate to advance consideration received from customers.
Of the £302,000 (2023: £273,000) in contract liabilities at the beginning of
the period, £277,000 (2023: £262,000) has been recognised as revenue for the
year ended 31 December 2024.
All of the contract balances relate to assets and liabilities which are held
for sale at the reporting date.
4 Exceptional items
Included within Selling, general and administrative expenses the group has
identified a number of items which are material due to the significance of
their nature and/or amount, and it has disclosed them in this separate note to
provide a better understanding of the group's financial performance.
2024 2023
£000 £000
Termination payments and settlement agreements 1,130 -
Consultancy and legal fees 668 -
Professional fees associated with the divestment of the discontinued 161 -
operations
------------- -------------
1,959 -
------------- -------------
Termination payments and settlement agreements
These are the costs associated with the restructuring of the business and
resulting reduction in employee numbers throughout 2024.
Consultancy and legal fees
These are outside fees related to legal expenses during reorganization,
consulting expenses related to strategic input on divestment plans and legal
guidance for possible deal structures.
Professional fees
These are the costs to the Group of the divestment of Launch Diagnostics
Holdings Ltd and its subsidiaries and Coris Holding SRL and its subsidiary.
5 Loss per ordinary share
The calculation of earnings per ordinary share is based on the profit or loss
for the period and the weighted average number of equity voting shares in
issue excluding own shares held jointly by the Avacta Employees' Share Trust
and certain employees and the shares held within the Avacta Share Incentive
Plan ('SIP').
At 31 December 2024, 22,684,252 options (2023: 25,491,642) have been excluded
from the diluted weighted-average number of ordinary shares calculation
because, due to the loss for the period, their effect would have been
anti-dilutive.
At 31 December 2024, no potentially dilutive shares relating to the
convertible bond (2023: nil) have been excluded from the diluted
weighted-average number of ordinary shares calculation because, due to the
loss for the period, their effect would have been anti-dilutive. Further
details on the convertible bond are set out in Note 6.
2024 2023 (restated)
Continuing operations Discontinued operations Total Continuing operations Discontinued operations Total
Loss after taxes (£000) (29,427) (23,414) (52,841) (29,151) (4,106) (33,256)
--------------- --------------- ------------ -------------- -------------- ---------------
Weighted average number of shares (number) 344,577,451 272,683,485
--------------- -------------- ------------ -------------- -------------- ---------------
Basic and diluted loss per ordinary share (pence) (8.54p) (6.79p) (15.34p) (10.69p) (1.51p) (12.20p)
--------------- -------------- ------------ -------------- -------------- ---------------
.
In addition to various share issues relating to the exercise of share options,
the following share transactions occurred after the end of the reporting
period and have not been retrospectively adjusted in the calculation of
earnings per share:
On 21 January 2025, 6,663,568 new ordinary shares of 10p each were issued in
settlement of the quarterly principal of £2.55 million and interest repayment
of £0.50 million in respect of the unsecured convertible bond.
On 24 April 2025, 9,384,366 new ordinary shares of 10p each were issued in
settlement of the quarterly principal of £2.55 million and interest repayment
of £0.50 million in respect of the unsecured convertible bond.
6 Convertible bond
In October 2022, the Group issued senior unsecured convertible bonds ('the
Bonds') of £55 million to a fund advised by Heights Capital Ireland LLC, a
global equity and equity-linked focused investor. The Bonds were issued at 95%
par value with total net proceeds of £52.25 million (£3.5 million placement
fees) and accrue interest at an annual rate of 6.5% payable quarterly in
arrears. The effective interest rate of the instrument is 50.0%.
The Bonds contain various conversion and redemption features. The Bonds have a
maturity of five years, and are repayable in 20 quarterly amortisation
repayments, of principal and interest over the five-year term, in either cash
or in new ordinary shares at the Group's option. If in shares, the repayment
is at the lower of the conversion price (88.72p) or a 10% discount to the
volume weighted average price ('VWAP') in the five- or ten-day trading period
prior to election date. The conversion price reset downwards from the original
118.75p at the Reset Date on 20 April 2024. There is a Reset Clawback Period
in place until 20 January 2025 during which, if the VWAP of the Company's
Ordinary Shares on each of at least 20 dealing days in any period of 30
consecutive dealing days is greater than 130% of the pre-reset conversion
price, then the conversion price will be restored, thereby reversing the
effect of the reset made on 20 April 2024. Additionally, the bondholder has
the option to partially convert the convertible bonds at their discretion
which has occurred twice to date, on 10 February 2023 and 20 September 2023
where £2.85 million and £0.85 million of principal was settled respectively.
The convertible bond is subject to covenants which limit the group's ability
to create security interests and incur further financial indebtedness, other
than that in existence at inception of the convertible bond, or assume through
the acquisition of subsidiaries
The bond contains embedded derivatives in conjunction with an ordinary host
debt liability. The derivative element is measured at fair value using a
Monte-Carlo option pricing model, which estimates the fair value based on the
probability-weighted present value of expected future investment returns,
considering each of the possible outcomes available to the bondholders. This
falls under Level 3 of the fair value hierarchy.
Significant assumptions used in the fair value analysis include the volatility
rate. A volatility of 65% (2023: 70%) was used in the determination of the
fair value of the derivative element. A reduction of 20% would have resulted
in a reduction in the fair value of the derivative liability by £561,000
(2023: £3,428,000). An increase of 20% would have resulted in an increase in
the fair value by £2,141,000 (2023: £3,245,000).
The host debt liability is measured at amortised cost, being adjusted to
reflect revisions in estimated cashflows arising from share settlements of
quarterly amortisation repayments or early conversion events, resulting in an
implied interest expense of £9,854,000 (2023: £14,478,000).
In 2022, at inception transaction costs of £3,414,000 were apportioned
between the derivative and debt liability components according to the relative
inception values. This resulted in £1,503,000 of transaction costs being
recognised as an expense at acquisition, with £1,440,000 adjusted for in the
carrying amount of the debt liability at acquisition.
Convertible bond - derivative (restated*) Convertible bond - debt
(restated*)
£000 £000
At 1 January 2023 24,200 29,615
Repayments (equity settled) (1) (2,873) (19,768)
Interest expense - 14,478
Revaluation of derivative (6,327) -
----------- -----------------
At 1 January 2024 15,000 24,325
Repayments (equity settled) (1) - (10,552)
Repayments (cash settled) (1) - (3,130)
Interest expense - 9,854
Revaluation of derivative (13,719) -
----------- -----------------
At 31 December 2024 1,281 20,497
----------- -----------------
* The comparative information is restated due to adjustments to revenue and
the convertible bond, see Note 9.
(1) Repayments relate to the issue of new ordinary shares in settlement of the
liability.
7 Operating cash outflow from operations
2024 2023
(restated)
£000 £000
Loss for the period (52,841) (33,256)
Adjustments for:
Loss from discontinued operations 23,414 4,106
Amortisation expense 16 -
Depreciation 1,428 1,279
Net loss on disposal of property, plant and equipment 9 43
Share of loss of associate 747 847
Equity-settled share-based payment transactions 4,107 2,547
Loss on fair value of convertible bond (13,719) (6,327)
Net finance costs 9,427 14,081
Movement in contingent consideration 717 -
Increase in investment in associate (113) (2,745)
Taxation 444 (1,975)
------------- -------------
Operating cash outflow before changes in working capital (26,364) (21,400)
(Decrease)/increase in trade and other receivables (244) 549
Increase in trade and other payables 557 2,101
------------- -------------
Operating cash outflow from continuing operations (26,051) (18,750)
------------- -------------
8 Disposal group and discontinued operations
In 2024, the Group decided to discontinue its diagnostics division. This
resulted in the decision to sell its diagnostic subsidiaries and close down
the Wetherby Diagnostics laboratory, which formed part of the Avacta Life
Sciences Ltd company. All associated costs of the closure of the Diagnostics
division have been recategorised and included into discontinued operations on
the Statement of Profit or Loss in section A below. All assets relating to the
division have been transferred to other group entities.
Management committed to a plan to sell Launch Diagnostics Holdings Ltd and its
subsidiary entities and Coris Holdings SRL and its subsidiary entity in 2024
follow a strategic decision to place focus on the development of the
Therapeutics division. At the reporting date, an active programme to locate
appropriate buyers had been initiated and the division was being actively
marketed for sale at a price that was reasonable to its fair value and a sale
was expected to qualify for recognition as a completion sale within one year
from the date of classification. As a result, this division has been presented
as a disposal group held for sale.
On 24 March 2025, the Group sold part of its diagnostics division, Launch
Diagnostics Holdings Ltd and its subsidiaries. An up-front payment of
£12,900,000 was received. There were associated costs to sell of £710,000.
An impairment loss of £22,413,000 has been recognised in the Consolidated
Statement of Profit and Loss and OCI, as the carrying amount of the disposal
group at the reporting date exceeded the fair value less costs to sell value.
Launch Diagnostics Holdings Ltd and its subsidiary entities and Coris Holdings
SRL and it's subsidiary entity
The disposal group was not previously classified as held for sale or as a
discontinued operation. The comparative Consolidated Statement of Profit and
Loss and OCI has been re-presented to show the discontinued operation
separately from continuing operations.
A. Results of discontinued operation
2024 2023
£000 £000
Revenue 24,311 21,193
Cost of sales (13,134) (11,988)
Gross profit 11,177 9,205
Research costs (280) (1,421)
Selling, general and administrative expenses (10,336) (8,963)
Depreciation expense (991) (1,359)
Amortisation expense (870) (1,020)
Share-based payment charge (871) (359)
Operating loss (2,171) (3,918)
Finance income 150 106
Other finance costs (238) (177)
Loss before tax (2,259) (3,989)
Taxation 1,258 395
Loss for the period (1,001) (3,594)
(22,413) (512)
Loss from discontinued, net of tax (23,414) (4,106)
Exchange difference on translation of discontinued operation
(436) 351
Other comprehensive loss from discontinued operation (23,850) (3,755)
B. Effect of the disposal on the financial position of the Group
2024
£000
Property, plant and equipment (1,628)
Right of use asset (1,726)
Intangible asset (8,277)
Inventories (2,482)
Trade and other receivables (3,898)
Cash and cash equivalents (4,905)
Total Assets directly associated with assets held for sale (22,916)
Current liabilities 4,418
Non current liabilities 4,270
Total Liabilities directly associated with the liabilities held for sale 8,688
------------
Net assets and liabilities (14,228)
C. Details of the impairment charge on diagnostic component
£000
Consideration received/expected for assets held for sale 15,200
Selling costs/expected costs to sell for assets held for sale (966)
Carrying amount of net assets at held for sale date (36,740)
Exchange differences (93)
------------
Impairment charge of disposal group held for sale (22,413)
Carrying amount of net assets at held for sale date 36,740
Impairment charge of disposal group held for sale (22,413)
------------
Carrying value of disposal group 14,228
9 Restatement of comparative information
During 2024, the Group identified the following errors in the 2023 and 2022
financial statements:
1) An error of £796,000 in the recognition of revenue relating to the
AffyXell milestone was identified that related to 2022. This error is the
proportion of the milestone which should be eliminated as unrealised income,
due to Avacta's shareholding in the associate. This error was corrected
prospectively in the 2023 financial statements delivered to the Registrar of
Companies. The error has been adjusted in the period it arose leading to a
reduction in revenue for the year ended 31 December 2022 and a corresponding
increase in revenue for the year ended 31 December 2023. This restatement of
revenue relates to the Therapeutics segment in Note 2, and the
"licence-related income" and "products or services transferred at a point in
time" lines within Note 3.
2) An error arose from changes in the measurement of the convertible bond
derivative valuation at inception and subsequent reporting dates. These
changes lead to a reduction in the net expense from the convertible bond
recognised within net finance costs in the statement of profit or loss by
£4,014,000 for the year ending 31 December 2022 and increase in the
convertible bond - debt liability by £10,886,000 and a decrease in the
convertible bond - derivative liability by £14,900,000. In addition, there
is an increase in the net expense from the convertible bond recognised within
net finance costs in the statement of profit or loss by £9,105,000 for the
year ending 31 December 2023, an increase in the convertible bond - debt
liability by £8,227,000 and a decrease in the convertible bond - derivative
liability by £3,325,000. There is also an increased impact on share premium
by £188,000 arising from the early conversion events. The cashflow statement
has also been restated to reflect these changes
A. Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2023
As previously reported Adjustment 1 Adjustment 2 As restated
£000 £000 £000 £000
Revenue 23,247 796 - 24,043
Convertible bond - interest expense (14,730) - 252 (14,478)
Convertible bond - revaluation of derivative 15,684 - (9,357) 6,327
------------- ------------- ------------- -----------
Loss for the period (24,947) 796 (9,105) (33,256)
------------- ------------- ------------- ------------
Total comprehensive loss for the period (24,946) 796 (9,105) (33,255)
------------ ------------ ------------ ------------
Loss per share:
Basic and diluted (9.15p) 0.29p (3.34p) (12.20p)
B. Consolidated statement of financial position
At 31 December 2023
As previously reported Adjustment 1 Adjustment 2 As restated
£000 £000 £000 £000
Liabilities
Convertible bond - debt (16,098) - (8,227) (24,325)
Convertible bond - derivative (18,325) - 3,325 (15,000)
------------- ------------- ------------- -------------
Net assets 21,805 - (4,902) 16,903
------------- ------------- ------------- -------------
Equity
Share premium 83,220 - 188 83,408
Retained earnings (85,753) - (5,090) (90,843)
------------- ------------- ------------- -------------
Total equity 21,805 - (4,902) 16,903
------------- ------------- ------------- -------------
For the year ended 1 January 2023
As previously reported Adjustment 1 Adjustment 2 As restated
£000 £000 £000 £000
Assets
Investment in associate 2,976 (796) - 2,180
Liabilities
Convertible bond - debt (18,729) - (10,886) (29,615)
Convertible bond - derivative (39,100) - 14,900 (24,200)
------------- ------------- ------------- -------------
Net assets 20,995 (796) 4,014 24,213
------------- ------------- ------------- -------------
Equity
Retained earnings (63,440) (796) 4,014 (60,222)
------------- ------------- ------------- -------------
Total equity 20,995 (796) 4,014 24,213
------------- ------------- ------------- -------------
10 Events after the reporting period
On 21 January 2025, 6,663,568 new ordinary shares of 10p each were issued in
settlement of the quarterly principal of £2.55 million and interest repayment
of £0.50 million in respect of the unsecured convertible bond.
On 22 January 2025 Brian Hahn was appointed as Chief Financial Officer.
The Group completed its divestment of the Launch Diagnostics Holdings Limited
and its subsidiaries on 24 March 2025. Further details of these divestments
are presented in note 8.
On 22 April 2025, 9,384,366 new ordinary shares of 10p each were issued in
settlement of the quarterly principal of £2.55 million and interest repayment
of £0.50 million in respect of the unsecured convertible bond.
On 29 May 2025, David Bryant and Richard Hughes were appointed Non-executive
Directors.
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