REG - Avacta Group PLC - Unaudited Preliminary Full Year 2025 Results
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RNS Number : 8813E Avacta Group PLC 19 May 2026
Avacta Group plc
("Avacta", the "Group" or the "Company")
Unaudited Preliminary Results for the Year Ended December 31, 2025
LONDON and PHILADELPHIA - May 19, 2026 - Avacta Therapeutics (AIM: AVCT, "the
Company", "Avacta"), a clinical stage biopharmaceutical company developing
pre|CISION, a tumor-activated oncology delivery platform today published its
unaudited preliminary results for the 12 months ended December 31,
2025 ("FY25")
FY25 Highlights
Research & Development (R&D) Highlights
· Increased momentum and strengthened position as a pure-play oncology
biopharmaceutical company by focusing on the Company's unique proprietary
pre|CISION(®) peptide drug conjugate platform, with significant progress in
R&D programs
· Gen Two (AVA6103):
o First patient received treatment in FOCUS-01, a multicenter, open‑label
Phase 1 clinical trial of AVA6103 (FAP-Exd, pre|CISION(®)-enabled exatecan) -
March 2026.
o The FOCUS-01 trial is enrolling patients with six advanced cancers that
were selected by leveraging our strategic collaboration with Tempus AI
o Presented highly favorable data from multiple preclinical studies compared
to successful antibody drug conjugate, Enhertu(®) . Also presented further
data comparing with another successful antibody drug conjugate, Datroway(®).
o Updated preclinical and translational data presented at the American
Association of Cancer Research (AACR) Annual Congress in San Diego in April
2026
· Gen One (AVA6000):
o Reported highly encouraging efficacy and safety data from patients with
salivary gland cancer.
o Program continued to enroll patients in the Phase 1b trial to assess the
efficacy of AVA6000 (Faridoxorubicin, pre|CISION(®)-enabled doxorubicin) in
more homogenous, defined patient populations.
o Positive Health Authority interactions resulted in the lifting of lifetime
maximum dose due to highly favorable cardiac safety and agreement on dose
selection for subsequent trials.
· Gen Three (AVA6207):
o Demonstrated the dual payload technology incorporating the sustained
release mechanism with multiple combinations of payloads with updated in vivo
data presented at the AACR Annual Congress in San Diego in April 2026.
· Intellectual property (IP) portfolio continued to grow and gain
momentum measured by increased IP filings. These include two important
advances in the pre|CISION(®) IP estate:
o The sustained release mechanism of payload delivery and
o The dual payload mechanism of delivery allowing the precise delivery of
two payloads.
Management and Board strengthening
· Appointment of Brian Hahn as Chief Financial Officer (non-Board) in
January 2025.
· Appointment of Francis Wilson as Chief Scientific Officer in February
2026.
· Appointment of David Bryant and Richard Hughes as Non-Executive
Directors of the Company in May 2025.
· Appointment of David Liebowitz as Chief Medical Officer in July 2025.
Financial
· Strengthened financial position to support our R&D programs.
o Raised £22.5 million in new equity from a broad range of existing and new
investors and renegotiated the terms of the convertible bond
o March 2026 - completed oversubscribed placing and subscription raising
£10 million - extending cash runway into Q1 2027
Cash and short-term deposit balances at December 31, 2025, of £16.9 million
(31 December 2024: £12.9 million). As of April 30, 2026 cash held was £16.4
million
Outlook for 2026
· Initial clinical data in the AVA6103 program anticipated in late H2
2026.
· AVA6000 clinical data from the Phase 1a and 1b cohorts are expected
in H1 2026 - including updated efficacy data in expansion cohorts, the lead
indication of salivary gland cancer, and cardiac safety data which resulted in
removal of lifetime maximum dose limit.
· Payload selection and clinical candidate selection in the Gen Three
pre|CISION(®) Dual Payload program (AVA6207) are expected in H2 2026.
· Continuing discussions with multiple parties on potential partnering
of first, second and third generation assets.
Christina Coughlin, MD, PhD, CEO of Avacta, commented,
"We have made great strides to strengthen our position as a pure-play oncology
therapeutics company by focusing on our industry-leading technology
pre|CISION(®.,) Ahead of industry norm, we already have two programs in
clinical development.
"Our pre|CISION(®) provides unique advantages, as we believe it is the only
technology that is capable of delivering cancer treatment drugs directly to
the tumor at the precise concentrations our payloads can achieve - and without
triggering severe toxic side effects.
"Our portfolio is supported by strong and increasingly valuable intellectual
property to protect our innovation. It continues to generate strong interest
from multiple parties for potential commercial agreements. These could both
generate revenue to support our development and broaden the application of our
technology.
"Our strong financial position, having raised £32.5 million over the last 18
months, provides us with a cash runway into early Q1 2027 and through key
value inflection points. This promises to be a transformative period for
Avacta and our patients."
-Ends-
For further information from Avacta, please contact:
Avacta Group plc https://avacta.com/ (https://avacta.com/)
Christina Coughlin, Chief Executive Officer via Cohesion Bureau
Strand Hanson Limited (Nominated Adviser) www.strandhanson.co.uk (http://www.strandhanson.co.uk)
James Harris / Chris Raggett / James Dance
Zeus (Broker) www.zeuscapital.co.uk (http://www.zeuscapital.co.uk)
James Hornigold / George Duxberry / Dominic King
Cohesion Bureau avacta@cohesionbureau.com (mailto:avacta@cohesionbureau.com)
Communications / Media / Investors
Richard Jarvis
About Avacta - https://avacta.com/ (https://avacta.com/)
Avacta Therapeutics is a clinical-stage life sciences company expanding the
reach of highly potent cancer therapies through its proprietary pre|CISION(®)
platform. pre|CISION(®) is a payload delivery system based on a
tumor-specific protease (Fibroblast Activation Protein or FAP) that is
designed to concentrate highly potent payloads in the tumor microenvironment
while sparing normal tissues. Avacta's innovative pre|CISION(®) peptide drug
conjugates (PDC) are a novel entry to the XDC drug class, leveraging the
success of antibody drug conjugates with alternative methods of delivery
beyond antibodies.
Our pre|CISION(®) PDCs leverage this tumor-specific release mechanism to
provide unique benefits over traditional antibody drug conjugates, releasing
active payload in the tumor and reducing systemic exposure and toxicity which
enables dosing to be optimized to deliver the best outcomes for patients. The
lead clinical program is faridoxorubicin (AVA6000), a Gen One FAP-enabled
pre|CISION(®) version of doxorubicin that delivers the payload directly in
the tumor with limited peripheral blood exposure and has demonstrated
preliminary activity in tumor types sensitive to doxorubicin including
salivary gland cancer and soft tissue sarcoma.
About AVA6103 (FAP-Exd)
AVA6103 is the second clinical candidate and is based on the innovative
pre|CISION(®) sustained release mechanism that provides for prolonged release
of payload directly in the tumor, minimizing systemic exposure. AVA6103 is
being evaluated in the FOCUS-01 Phase 1 trial (FAP-Exd in Oncologic Cancers
with Unmet needS). Preclinical data suggest this approach has optimized
payload delivery with a high intratumoral concentration and prolonged exposure
of released payload in the tumor, coupled with limited systemic exposure to
the released payload.
Chairman's statement
Avacta has made great strides forward in 2025 and into 2026. The Company has
developed into a pure-play therapeutics biotechnology force with two clinical
stage programs, a developing pipeline of pre|CISION(®) medicines and a
broadening IP portfolio that will drive value for patients and shareholders,
boosted by raising £32.5 million over the last 18 months to support our
R&D programs.
The Company has moved the numerous development initiatives forward faster than
industry norms and has increasing confidence in the growing class of drugs in
the peptide drug conjugate field - the combination of an oncology drug and our
pre|CISION(®) peptide. The Board believes the pre|CISION(®)-enabled
technology makes the drug conjugate model considerably more advantageous.
Avacta's profile across the sector is now also gaining real momentum and it is
in discussions with numerous parties over commercial partnering agreements
which, if secured, will support the Company'sdevelopment as well as widen the
scope to exploit its technologies.
Board and employees
In January 2025 Brian Hahn was appointed Chief Financial Officer (non-Board),
in July of 2025 David Liebowitz was appointed Chief Medical Officer. In
April 2025, Dr Trevor Nicholls retired and Mark Goldberg took over as Chair of
the Remuneration Committee. In May 2025, David Bryant and Richard Hughes
were appointed Non-Executive Directors.
On behalf of the Board, I would like to thank all our employees in the UK and
the US. We have some of the leading international scientists in biotech,
their expertise, creativity and commitment have enabled the business to move
faster than expected and also drive numerous innovative developments.
The delivery from concept to IND application (Investigational New Drug - the
submission to the US Food and Drug Administration) for the AVA6103 program in
less than 12 months from candidate selection is a strong illustration of the
team's capabilities. A second example is the innovative use of AI to recreate
a synthetic comparator arm which allows a direct comparison of the AVA6103
data with the published data of other oncology drugs, Enhertu(®) and
Datroway(®), rather than repeating their experiments in-house.
Outlook
As I stated last year, Avacta has a clear value proposition and world-class
scientific capabilities. It is supported by robust data and an innovative
platform.
The coming 9-12 months are crucial for the Company as we anticipate seeing the
first evidence of the real potential for our innovative Gen Two pre|CISION(®)
platform from our exatecan program, AVA6103.
Clinical testing has now started in the AVA6103 program based on the sustained
release delivery mechanism and we expect initial evidence in late H2 2026.
This innovation opens up the full potential for the platform by enabling
multiple payloads to be delivered as either single or dual platforms, driving
value for both patients and shareholders alike
We expect multiple data updates in the AVA6000 program in all groups from the
Phase 1b expansion cohorts, in H1 2026.
Our team continues to explore multiple commercial opportunities with potential
strategic partners. Our new data in both clinical programs are anticipated
to be significant advances in moving these ongoing conversations forward.
Shaun Chilton,
Chairman
Chief Executive Officer's statement
Overview
Avacta is making excellent progress and gaining real momentum as we invest in
and develop our unique proprietary industry-leading protein-drug conjugate
technology platform, pre|CISION(®).
We are building a substantial portfolio of related intellectual property (IP)
and currently have two programs in clinical development, our lead candidate
AVA6000 (faridoxorubicin) and our Gen Two sustained release program, AVA6103
(FAP-Exd).
The Company raised £22.5 million in equity during 2025 to support our
investment programs which was supplemented by the recent raise of a further
£10 million in March 2026, meaning that Avacta now has cash resources to
support its development until early Q1 2027.
pre|CISION(®) is a highly innovative, versatile and unique platform, through
which we are seeking to deliver clinical results across our two lead programs.
Vision and strategy
Our vision Is to conquer cancer with existing therapies while preserving
patient vitality and healing. In a world where effective cancer therapy often
means a difficult trade-off between efficacy and safety, pre|CISION(®) has
the potential to offer something different: Hope without compromise.
Our strategy is to develop and ultimately commercialize a broad portfolio of
drugs, based on the ability of pre|CISION(®) technology to repurpose a range
of oncology drugs to significantly reduce toxicity and side effects by
concentrating the payload in the tumor, and so improving efficacy and patient
tolerability.
We are challenging the current drug delivery methods with the goal of
expanding the reach of high potent anticancer therapies. In principle, if
applied to all patients whose tumors overexpress fibroblast activation protein
(FAP), a common tumor-associated protein, our approach could ultimately lead
to treatments for nearly all patients across a wide range of cancers.
A unique approach to treating cancer - our proprietary technology
pre|CISION(®)
A key challenge in oncology is that it is the most effective therapies which
cause the most toxicity in normal tissues. Our approach leverages existing
cancer drugs that are delivered precisely to the tumor using our proprietary
pre|CISION(®) platform.
The key aspect of our pre|CISION(®) peptide drug conjugate (PDC) technology
is that the conjugated drug (the combination of the oncology drug and our
peptide) is inert. Our innovative technology links a dipeptide to an
existing cancer drug to inactivate it. It is incapable of entering cells and
killing, until the peptide is specifically released when it comes into contact
with FAP, in or near the tumor.
Our platform is based on a highly successful drug class in oncology, known as
the antibody drug conjugate or ADC. The ADC delivery mechanism was founded
on the premise that an antibody directed at a tumor antigen can deposit or
release a highly potent payload in the tumor. Our platform seeks to move
this premise further by creating a highly selective release mechanism that
leverages a key tumor-specific enzyme, FAP. Antibodies are comprised of
1300-1400 amino acids, whereas the pre|CISION(®) peptide contains only 2
amino acids, resulting in better tumor penetration, higher maximal
concentrations of released payload and simpler, less expensive manufacturing
for use in patients.
When a pre|CISION(®) PDC encounters FAP in the tumor microenvironment (TME),
the peptide is cleaved and active payload is released. The release of the
payload from the pre|CISION(®) product in the TME 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. Our
pre|CISION(®) technology is designed to concentrate the active drug in the
tumor while maintaining the inactive pre|CISION(®)-enabled drug in the
bloodstream.
Our clinical data with the first pre|CISION(®) medicine AVA6000 demonstrates
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 widen the all-important therapeutic index
and efficacy of a given anticancer drug.
Therapeutic index (TI) is a quantitative measurement of a drug's relative
safety, comparing the dose that produces a toxic effect to the dose that
produces a desired, effective response. A higher TI indicates a wider, safer
margin between effectiveness and toxicity.
In addition to the impact on the TI with our newly developed sustained release
mechanism, we have demonstrated that pre|CISION(®) is also capable of
delivering improved release kineticsthe rate and mechanism of active
pharmaceutical ingredients exiting a formulation, which is crucial for
optimizing therapeutic efficacy. This addresses issues associated with the
pharmacokinetics (how the body interacts with a drug throughout its exposure)
of an agent in the clinic in addition to the impact on the TI.
Additionally, our pre|CISION(®) platform has been demonstrated to have four
key advantages over the ADC drug class:
1. tumor-specific release leading to very low peripheral exposure to the
payload;
2. rapid tumor penetration and release of payload with demonstrated higher
maximal tumor concentration;
3. an optimized bystander effect, allowing effective killing of antigen
(FAP)-negative tumor cells; and
4. a large market opportunity based on FAP expression noted in 90% of
solid tumors and the ability to link multiple payloads to the pre|CISION(®)
peptide
We believe there are no other technologies that can deliver cancer treatment
drugs directly into the tumor at the concentrations that our payloads enable
without causing highly toxic side effects.
Our strategic collaboration with Tempus, a technology company leading the
adoption of artificial intelligence to advance precision medicine and patient
care, has also enabled us to better understand the large addressable patient
population for the full suite of pre|CISION(®) medicines.
Opportunities and business development
The recent advances in our R&D are allowing us to "pre|CISION(®)-enable"
a number of different therapies. We now believe that some 90% of solid tumors
are potentially treatable by our pre|CISION(®) platform, as demonstrated by
multiple indications across a wide range of solid tumors.
Our IP portfolio continued to grow and gain momentum measured by increased IP
filings, including two important advances in the pre|CISION(®) IP estate:
1. the sustained release mechanism of payload delivery piloted in our
AVA6103 program, and
2. our dual payload mechanism of delivery allowing the precise delivery of
two payloads to the tumor from a single FAP cleavage event with our
pre|CISION(®) technology.
These advances have led to new and increasingly valuable IP being developed
around our foundational pre|CISION(®) technology, the Company's most valuable
asset. The advances we have made in the last year and a half are remarkable
and open up a wealth of opportunities for the platform, both with single-agent
delivery mechanisms as well as our new dual payload system. The latter
allows our scientists to design drugs that attack cancer at the same time as
treating the resistance mechanism.
Avacta has an active business development program as it looks to enhance its
position and develop the numerous opportunities by working with other
companies in the sector. The unique nature of the dual payload program is
also generating interest with potential partners.
Programs
AVA6000 (Faridoxorubicin) - 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 because:
· 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 a distinct serious toxicity (cardiac failure) that would
represent proof of concept, if pre|CISION(®) enabling could eliminate this
toxic effect.
The program continues to demonstrate excellent progress in the clinic with the
lead indication selected, salivary gland cancer (SGC). We have seen a
significant gain in progression free survival over existing therapy.
We have also cleared significant regulatory hurdles with the cardiac lifetime
maximum limit of doxorubicin exposure removed during Phase 1 testing and we
have agreed with the regulators on the dose selection for further study.
In December 2025, we reported highly encouraging efficacy and safety data
from the cohort of patients enrolled with SGC where a disease control rate of
90% is maintained in the full cohort.
The program continued to enroll patients in the Phase 1b expansion cohorts, to
assess the efficacy of AVA6000 in more homogenous, defined patient populations
to better predict the magnitude of efficacy anticipated in larger Phase 2/3
trials.
Further data will be presented by the end of the 1H 2026, in particular an
update on the Phase 1b cohorts, including the lead indication, salivary gland
cancer. In addition, we will present the full cardiac safety data and
clinical pharmacology data that led to the lifting of the cardiac dosing
limitation.
AVA6103 (FAP-Exd)
AVA6103 is our second program. Exatecan (Exd) is a potent topoisomerase I
inhibitor (a chemotherapy drug that interrupts DNA replication and
transcription leading to DNA damage and cancer cell death).
Conventional exatecan has demonstrated clinical activity in the original Phase
1-3 trials enrolling patients with cancers such as breast, gastric, lung and
pancreatic cancers. However, dose-limiting toxicities and challenging dosing
regimens required based on the short drug half-life led to discontinuation of
its development.
We believe that exatecan represents a good candidate for
our pre|CISION(®) technology because:
· This drug has demonstrated single agent activity in a set of Phase 1
and 2 trials
· A closely related payload, deruxtecan has demonstrated significant
activity in two approved top-selling antibody drug conjugate medicines
(Enhertu(®) and Datroway(®)) including potent bystander effects
· The pharmacokinetic challenges and systemic toxicities of exatecan
can be potentially solved by the sustained release mechanism in the
pre|CISION(®) technology.
The first patients have been treated in Phase 1a of the program with the
FOCUS-01 trial initiating in Q1 2026 as planned. This pre|CISION(®) drug
moved from concept to clinical trial enrollment in only 24 months, and our
final drug candidate to first patient in less than 12 months, both time frames
were considerably faster than the standard industry timelines.
The clinical development of AVA6103 is a true catalyst for the Company, given
the exceptional innovative chemistry that was developed by our team using the
clinical and translational data collected in the AVA6000 clinical trial and
this chemistry enables many more payloads to be implemented as pre|CISION(®)
medicines. Crucially, the AVA6000 trial data has enabled the discovery of
our newest innovation, the sustained release mechanism of AVA6103.
The innovation of this program and the sustained release mechanism of delivery
are critically important to the next stage of the pre|CISION(®) platform
development for three reasons:
1. the development of the suite of chemical linkers that sit in the active
site between the FAP-cleavable peptide and the payload, dramatically widens
the types of payloads that can be attached to the pre|CISION(®) mechanism,
2. the sustained release mechanism of the capping group (the therapeutic
molecules added to improve stability and effectiveness) and linker together
allows our scientists to dial-in the exact kinetics of release desired for a
given payload, and
3. the linker chemistry developed allows the attachment of two payloads
that can be released simultaneously with one FAP cleavage event allowing
combination therapy in a single pre|CISION(®) molecule
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 that was associated with poor
tolerability in the original development of conventional exatecan.
The clinical data with AVA6103 in the chemistry allows many more payloads to
be delivered through a pre|CISION(®) mechanism and the exact kinetics to be
designed into the peptide drug conjugate in both single and dual payload
formats.
In December 2025, we published new pharmacology data in support of the IND
process and the design of the Phase 1 trial. Clinical testing has now
started at a number of US specialty oncology centers covering four cancer
tumor types: pancreatic, gastric, small cell lung and cervical.
Expertise
Our recent updates from both programs demonstrate the unwavering commitment of
the management team and their attention to both flawless execution in the
clinic and a highly favorable regulatory interaction.
This was demonstrated by the recent lifting of the lifetime maximum of
doxorubicin exposure in the AVA6000 program and rapid filing and efficient
clearance of the AVA6103 IND to allow clinical development of this program to
commence quickly at our US sites.
We have strengthened our team with the appointments of Brian Hahn as Chief
Financial Officer (non-Board) (CFO), Francis Wilson as Chief Scientific
Officer (CSO) and David Liebowitz as Chief Medical Officer.
Mr. Hahn, appointed in January 2025, brings 25 years' senior financial and
operational experience, including a 15-year tenure as CFO and Senior Vice
President of GlycoMimetics, Inc., where he led the company's 2014 initial
public offering (IPO) on Nasdaq and the build-out of its finance, accounting,
investor relations and corporate affairs functions.
Dr. Wilson joined Avacta in September 2022 as Vice President of Chemistry and
has been one of the key drivers in the chemistry field of our platform,
notably the development of the sustained release mechanism. He was appointed
CSO in February 2026.
Dr. Liebowitz is a seasoned hematologist-oncologist and drug development
leader with more than 30 years of experience across academia and industry and
has contributed to the successful filing of more than 25 Investigational New
Drug (IND) applications. He was appointed CMO in July 2025.
We are exceptionally proud of the efforts and innovation of our team at
Avacta, our team is a great advantage. This team has driven several creative
initiatives to drive our business forward at speeds not seen in traditional
drug development, including two examples here of the use of large data and AI
in drug development:
1. Our strategic collaboration with Tempus has allowed us to access very
large data sets and manipulate these data to answer key pipeline strategy
questions; and
2. The recent use of data mining and synthetic comparator arms which have
enabled the direct comparison of the kinetics of the pre|CISION(®) payload
release with data published by the developers of the highly successful ADCs,
Enhertu(®) and Datroway(®).
The coming period promises to be transformative for Avacta and our patients,
and we look forward to reporting further significant progress in the months
ahead.
Christina Coughlin,
Chief Executive Officer
Financial Review
Reported Group revenues for the year ended 31 December 2025 was £6.31 million
(2024: £24.42 million), This includes contributions from both continuing and
discontinued operations.
Revenues for the continuing operations of the Therapeutics Division were
£0.11 million (2024: £0.11 million).
Revenues for the discontinuing operations of the Diagnostics Division were
£6.20 million (2024: £24.31 million). The decrease is due to them being sold
part year.
Overall, the loss before tax from continuing operations for the year were
£36.84 million (2024: £28.98 million)
The Company completed its transition to a pure-play therapeutics business via
the sale of its two non-core diagnostics businesses Coris Bioconcept SRL for
£2.2 million upfront in September 2025 and Launch Diagnostics Holdings Ltd.
for £12.9 million in March 2025.
Research costs
During the year, the Group expensed through the income statement £18.76
million (2024: £14.27 million) research costs from continuing operations
relating to the ongoing expansion of the preCISION(TM) and Affimer(®)
therapeutic programs with AVA6103 and increased clinical and Chemistry,
Manufacturing, and Controls (CMC) expenses related to AVA6000, which are
expensed given their early stage in the development pathway.
Selling, general and administrative expenses
Administrative expenses have decreased during the year to £10.03 million
(2024: £12.05 million). The decreases are primarily due to costs incurred
during 2024 relating to personnel expenses due to executive management changes
and additional legal and professional expenses related to the strategic shift
toward becoming a pure-play biotech company.
Amortization and impairment expense
Amortization charges of £0.01 million (2024: £0.02 million) have been
recognized in the period. In the prior year 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 in the prior year of £22.41 million, of which £15.64
million related to Launch Diagnostics and £6.77 million related to Coris
Holding respectively.
Share of loss of associate
The share of loss of associate of £0.45 million (2024: £0.75 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 remained at 21% at 31
December 2025.
Share-based payment expense
The non-cash charge for the year from continuing operations decreased to
£2.13 million (2024: £4.11 million). This decrease was due to modifications
to certain executive options awards and new options issued in respect of the
hiring of new executives in the prior year.
The non-cash charge for the year from discontinued operations decreased to
£0.07 million (2024: £0.87 million). The prior year charge 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") with a principal value of £55.00 million to a fund advised by
Heights Capital Ireland LLC. The Bonds were issued at 95% of par, generating
net proceeds of £52.25 million after placement fees, and bear interest at a
fixed coupon of 6.5% per annum, payable quarterly in arrears. The Bonds have
an original maturity of five years and are subject to mandatory quarterly
amortisation repayments of principal and interest over the term.
The Bonds are repayable in either cash or, at the Group's option, in ordinary
shares of Avacta Group plc. Where repayments are settled in shares, the number
of shares issued is determined in accordance with the contractual terms of the
bond and is linked to the market price of the Company's ordinary shares. The
Bonds also include bondholder conversion rights allowing partial conversion of
the Bonds at the holder's discretion.
The convertible bond is accounted for as a hybrid financial instrument
comprising a host debt liability and an embedded derivative representing the
equity linked conversion and settlement features. The host debt liability is
measured at amortised cost, while the embedded derivative is measured at fair
value through profit or loss. The embedded derivative is valued using a Monte
Carlo option pricing model and is classified as a Level 3 fair value
measurement under the IFRS fair value hierarchy.
On 28 August 2025, the Group announced amendments to the terms of the Bonds.
The revised terms became effective on 20 October 2025 following satisfaction
of the amendment conditions. The amendments were assessed in accordance with
IFRS 9 and were determined to be substantial, principally due to changes in
the timing and contractual profile of the bond's cash flows. Accordingly, the
original host debt liability was derecognized and a new host debt liability
was recognized at fair value on the effective date.
The difference between the carrying amount of the original host debt liability
and the fair value of the new host debt liability resulted in a gain on
derecognition of financial liabilities of £2.03 million, which has been
recognized in profit or loss. Following derecognition, the new host debt
liability is measured at amortized cost using an effective interest rate
determined at initial recognition. Finance costs recognized in the period
reflect the unwinding of the discount on the new host liability together with
the contractual coupon.
The embedded derivative continued to meet the definition of a derivative
following the amended bond terms and remained bifurcated from the host debt
liability. The derivative was remeasured at fair value on the effective date
to reflect the amended contractual terms, including the revised conversion
price, and is subsequently remeasured at each reporting date, with movements
recognized in profit or loss.
During the year ended 31 December 2025, repayments of the Bonds were settled
partly in cash and partly through the issue of ordinary shares. Settlements in
shares resulted in the derecognition of the corresponding portions of the host
debt and derivative liabilities, with the aggregate amounts recognized within
share capital and share premium in accordance with IFRS.
At 31 December 2025, the carrying amount of the host debt liability was
£13.36 million (2024: £20.50 million) and the carrying amount of the
derivative liability was £2.79 million (2024: £1.28 million). Interest
expense recognized in respect of the host debt liability during the year
amounted to £6.98 million (2024: £9.85 million). A loss of £1.51 million
arose from remeasurement of the derivative liability during the year (2024:
gain of £13.72 million).
Net finance costs
Finance income decreased to £0.37 million (2024: £0.66 million) due to a
lower average cash balance during the year.
Other finance costs of £0.07 million (2024: £0.24 million) relate primarily
to IFRS 16 interest charges.
Losses before taxation
Losses before taxation from continuing operations for the year were £36.84
million (2024: £28.98 million).
Taxation
The taxation debit decreased to £0.21 million (2024: £0.44 million). This is
due to a reversal of temporary differences incurred in the prior year related
to discontinued operations of (£2.27) million and the R&D expenditure
credit in the current year now being classified within operational costs. The
current tax asset held on the balance sheet has increased to £3.36 million
(2024: £2.45 million)
Loss for the period
The reported loss for the period from continuing operations was £37.06
million (2024: £29.43 million). The loss per ordinary share from continuing
operations reduced to 9.27p (2024: 8.54p) based on a weighted average number
of shares in issue during the period of 399,920,000 (2024: 344,577,451).
The reported loss for the period from discontinued operations was £1.32
million (2024: £23.41 million). Operating loss from discontinued operations
decreased to £1.15 million (2024: £2.17 million), impairment charges from
discontinued operations all were incurred in the prior year (2024: £22.41
million) at the point of being held for sale. The loss of the disposal of
subsidiaries in the current year was £0.24 million.
Cash flow
The Group reported cash and cash equivalent balances of £16.86 million at 31
December 2025 (2023: £12.87 million).
Net operating cash outflows from continuing operations amounted to (£22.64)
million (2024: (£24.94) million). The decrease relates to higher operating
losses in the prior year 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
2023, resulting in a cash inflow of £0.78 million from income tax received
(2024: £1.17 million).
Net cash inflows from investing activities amounted to £9.90 million (2024:
outflow (£1.43) million). Due to the sale of Launch Diagnostics Holdings and
Coris BioConcept
There was a net cash inflow from continuing financing activities of £16.6
million (2024: £26.7 million), arising primarily from the proceeds of issue
of share capital of £22.5 million (2024: £31.1 million) as well as the
repayment of the convertible bond of £5.1 million (2024: £2.6 million).
Financial position
At 31 December 2025, the Group reported net assets of £2.48 million (2024:
£9.28 million), following the impact of the strategic disposal of its
diagnostics business.
Total assets decreased to £29.42 million (2024: £48.27 million), primarily
due to the clear down of £22.92 million of 'assets held for sale', following
the 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 £6.22 million (2024: £8.07 million),
primarily due to depreciation. Investment in associate reduced to £3.10
million (2024: £3.45 million) due to recognised losses for the period.
Current assets decreased to £23.20 million (2024: £40.20 million), primarily
due to the clear down of £22.92 million of 'assets held for sale'. Cash and
cash equivalents were £16.9 million (2024: £12.9 million), after investing
and financing activities, including the £22.5 million gross proceeds from
successful share placings during the year. Current cash runway take us into
early Q1 2027.
Total liabilities decreased to £26.9 million (2024: £39.0 million),
primarily due to the clear down of £8.69 million of 'liabilities held for
sale', following the divestment process of the diagnostics division
Share capital and share premium increased by a combined £28.9 million
following the equity placing and debt service. The accumulated deficit widened
to £175.3 million (2024: £138.8 million), reflecting continued operating
losses and non-cash finance charges.
Dividends
No dividends have been proposed for the year ended 31 December 2025 (2024:
£nil).
Key performance indicators
At this stage of the Group's development, the non-financial key performance
indicators focus on:
· The progression of the preCISION(®) technology innovations into
clinical stage assets and successful clinical development of these assets.
Unaudited Consolidated Statement of Profit or Loss
for the Year Ended 31 December 2025
2025 2024
Note £000 £000
Continuing operations
Revenue 3 113 113
Cost of sales - -
------------- -------------
Gross profit 113 113
Research costs 7 (18,761) (14,266)
R&D expenditure credit (RDEC) 9 1,852 -
Selling, general and administrative expenses 7 (10,034) (12,046)
Depreciation expense 12,21 (1,268) (1,489)
Amortisation expense 11 (11) (16)
Share of loss of associate 24 (454) (747)
Share-based payment expense 6 (2,126) (4,107)
------------- -------------
Operating loss 7 (30,689) (32,558)
Convertible bond - interest expense 23 (6,980) (9,854)
Convertible bond - revaluation of derivative 23 (1,507) 13,719
Gain on modification of financial liabilities 23 2,031
Loss on earnout receivable - (717)
Finance income 8 371 663
Other finance costs 8 (69) (237)
------------- -------------
Loss before tax (36,843) (28,983)
Taxation 9 (216) (444)
------------- -------------
Loss from continuing operations (37,059) (29,427)
------------- -------------
Discontinued operation
Gain on disposal of subsidiaries 28 (236) -
Loss from discontinued operation, net of tax 27 (1,317) (23,414)
------------ ------------
Loss for the year (38,612) (52,841)
----------- -----------
Loss per share:
Basic and diluted 10 (9.66p) (15.34p)
Loss per share - continuing operations:
Basic and diluted 10 (9.27p) (8.54p)
.
Unaudited Consolidated Statement of Other Comprehensive Income
for the Year Ended 31 December 2025
2025 2024
Note £000 £000
Loss for the year 7 (38,612) (52,841)
Other comprehensive income
Items that may be reclassified to profit or loss
Foreign operations - foreign currency translation differences Continuing
operations
165 (6)
Discontinued operations
27 150 (436)
----------- -----------
Other comprehensive income/(loss) 315 (442)
------------ ------------
Total comprehensive loss for the period (38,297) (53,283)
----------- -----------
Total comprehensive loss for the period attributable to the shareholders
arises from:
Continuing operations (36,894) (29,433)
Discontinued operations 27 (1,403) (23,850)
----------- -----------
(38,297) (53,283)
------------ ------------
Unaudited Consolidated Statement of Financial Position as of 31 December 2025
2025 2024
Note £000 £000
Assets
Property, plant and equipment 12 251 543
Right-of-use assets 21 1,319 2,242
Intangible assets 11 1,548 1,844
Investment in associate 24 3,104 3,445
Deferred tax asset 16 - -
------------- -------------
Non-current assets 6,222 8,074
------------- -------------
Trade and other receivables 13 2,979 1,960
Income tax receivable 9 3,361 2,447
Cash and cash equivalents 14 16,855 12,873
------------- -------------
23,195 17,280
Assets directly associated with the assets held for sale 27 - 22,916
------------- -------------
Current assets 23,195 40,196
------------- -------------
Total assets 29,417 48,270
------------- -------------
Liabilities
Lease liabilities 21 (496) (1,482)
Provisions 22 (288) (208)
Deferred tax liability 16 - -
------------- -------------
Non-current liabilities (784) (1,690)
------------- -------------
Trade and other payables 15 (8,948) (5,877)
Lease liabilities 21 (1,059) (956)
Convertible bond - debt 23 (13,362) (20,497)
Convertible bond - derivative 23 (2,788) (1,281)
------------- -------------
(26,157) (28,611)
Liabilities directly associated with the assets held for sale 27 - (8,688)
------------- -------------
Current liabilities (26,157) (37,299)
------------- -------------
Total liabilities (26,941) (38,989)
------------- -------------
Net assets 2,476 9,281
------------- -------------
Equity
Share capital 17 44,119 37,018
Share premium 18 137,371 115,585
Reserves 18 (3,727) (4,493)
Accumulated Deficit 18 (175,287) (138,829)
------------- -------------
Total equity 2,476 9,281
------------- -------------
Unaudited Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2025
Share capital Share premium Other reserve Translation reserve Reserve for own shares Retained earnings Total equity
Note £000 £000 £000 £000 £000 £000 £000
------------- ------------- ------------- ------------- ------------ ------------- -------------
Balance at 1 January 2024 28,501 83,408 (1,729) 51 (2,485) (90,843) 16,903
Loss for the year - - - - - (52,841) (52,841)
Other comprehensive loss 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 17 6,230 23,175 - - - - 29,405
Own shares acquired 17 1 9 - - (10) - -
Convertible bond-issue of shares 17 1,689 8,863 - - - - 10,552
Exercise of share options 17 597 130 - - - - 727
Transfer of own shares 18 - - - - 122 (122) -
Equity-settled share-based payment 6 - - - - - 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
Loss for the period - - - - - (38,612) (38,612)
Other comprehensive income for the year - - - 315 - - 315
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total comprehensive loss for the year - - - 315 - (38,612) (38,297)
Transactions with owners of the Company:
Disposal of subsidiaries - - - (264) - 150 414
Issue of shares net of transaction costs 17 4,273 16,993 - - - - 21,266
Convertible bond - issue of shares 17 1,605 4,592 - - - - 6,197
Exercise of share options 17 1,223 201 - - - - 1,424
Transfer of own shares 18 - - - - 187 (187) -
Equity-settled share-based payment 6 - - - - - 2,191 2,191
------------- ------------- ------------- ------------- ------------ ------------ ------------
7,101 21,786 - 264 187 2,154 31,492
------------- ------------- ------------- ------------- ------------ ------------ ------------
Balance at 31 December 2025 44,119 137,371 (1,729) 188 (2,186) (175,287) 2,476
------------- ------------- ------------- ------------- ------------ ------------ ------------
* The comparative information is restated due to adjustments to revenue and
the convertible bond.
Unaudited Consolidated Statement of Cash Flows
for the Year Ended 31 December 2025
Note 2025 2024
£000 £000
Operating cash outflow from continuing operations 26 (23,691) (26,051)
Interest received 370 83
Interest elements of lease payments 21 (103) (138)
Income tax received 9 784 1,170
------------- -------------
Net cash used in continuing operating activities (22,640) (24,936)
Net cash from/(used in) discontinued operating activities (2,111) 1,339
------------- -------------
Net cash used in operating activities (24,751) (23,597)
------------- -------------
Cash flows from investing activities
Purchase of property, plant and equipment 12 (53) (323)
Disposal of subsidiary, net of cash disposed of 28 9,984 -
Purchase of intangible assets 11 - (16)
------------- -------------
Net cash used in continuing investing activities 9,931 (339)
Net cash(used in)/from discontinued investing activities (31) (1,092)
------------- -------------
Net cash used in investing activities 9,901 (1,431)
Cash flows from financing activities
Proceeds from issue of share capital 17 22,500 31,148
Transaction costs related to issue of share capital 18 (1,234) (1,744)
Proceeds from exercise of share options 17 1,424 728
Principal elements of lease payments 21 (1,001) (913)
Cash repayment of convertible bonds 23 (5,100) (2,550)
------------- -------------
Net cash from/(used in) continuing financing activities 16,589 26,669
Net cash from/(used in) discontinuing financing activities (2,977) (574)
------------- -------------
Net cash from/(used in) financing activities 13,612 26,095
Net increase / (decrease) in cash and cash equivalents (1,239) 1,067
Cash and cash equivalents at beginning of year 17,778 16,627
Effects of movements in exchange rates on cash held 316 84
------------- -------------
Cash and cash equivalents at end of year, including held in disposal group 16,855 17,778
------------- -------------
Cash held by disposal group 27 - (4,905)
------------- -------------
Cash and cash equivalents at end of year 16,855 12,873
1 Basis of preparation
Avacta Group plc (the "Company") is a public company incorporated under the
laws of England and Wales and domiciled in London, United Kingdom. These
consolidated financial statements for the year ended 31 December 2025 comprise
the Company and its Subsidiaries (together referred to as the 'Group').
Basis of preparation
The financial information set out above and below, does not constitute the
company's statutory accounts for the years ended 31 December 2025 or 2024 but
is derived from those accounts. Statutory accounts for 2024 have been
delivered to the registrar of Companies. The financial information for 2025 is
unaudited.
This preliminary announcement was approved by the board of directors on 18 May
2026. It is not the Group's statutory accounts. Copies of the Group's audited
statutory accounts for the year ended 31 December 2025 are expected to be
available at the company's website in the coming days.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
UK-adopted international accounting standards and as applied in accordance
with the provisions of the Companies Act 2006, this announcement does not
itself contain sufficient information to comply with UK-adopted international
accounting standards.
Basis of measurement
The consolidated financial statements and financial information have been
prepared on the historical cost basis, except for the following items (refer
to individual accounting policies for details):
· Financial instruments - fair value through profit and loss
The preparation of financial statements in compliance with IFRS requires the
use of certain critical accounting estimates. It also requires Group
management to exercise judgment in applying the Group's accounting policies.
The areas where significant judgments and estimates have been made in
preparing the consolidated financial statements and their effect are disclosed
in note 1c.
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 2025, the Group reported a loss from
continuing operations of £37.0 million and incurred net cash used in
operating activities of £25.2 million.
As at 31 December 2025, the Group's accumulated losses were £175.2
million, and cash and cash equivalents were £16.9 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 2025.
As disclosed in Note 17, gross proceeds of £22.5 million were received, net
of costs of £1.2 million, through a placing of ordinary shares. As
disclosed in Note 28 of the financial statements for the year ended 31
December 2025, the Group completed the disposal of Launch Diagnostics Holdings
Limited and its subsidiaries ("Launch Diagnostics") in March 2025 and the
disposal of Coris BioConcept in August 2025. The combined net proceeds from
these disposals totalled £10.0 million.
The Group continues to advance its clinical trials and generate successful
data and expects to report further findings in late 2026 and early 2027.
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 2027, 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 2027. 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.
Segment reporting
Operating segments - continuing operations
In the view of the Board of Directors, the Group has one (2024: 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 was the Diagnostics division, which had
been classified as held for sale under the Group's divestment strategy in the
prior year. During the current year, this division was disposed of: Launch was
sold on 24 March 2025 and Coris was sold on 29 August 2025. The ALS
Diagnostics division, which formed part of this segment was discontinued in
the prior year.
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% (2024:
100%) of total revenue. The revenue analysis below is based on the country of
registration of the customer:
2025 2024
£'000 £'000
South Korea 113 113
------------- -------------
113 113
------------- -------------
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 (2024: £113,000)
Operating segment analysis 2025
Therapeutics Central overheads(1) Total (continuing) Diagnostics (discontinued)
£000 £000 £000 £000
Revenue 113 - 113 6,199
Cost of goods sold - - - (3,272)
------------- ------------- ------------- -------------
Gross profit 113 - 113 2,927
Research costs (18,761) - (18,761) -
R&D expenditure credit (RDEC) 1,852 - 1,852 -
Selling, general and administrative expenses (4,378) (5,656) (10,034) (4,009)
------------- ------------- ------------- -------------
Adjusted EBITDA (21,174) (5,656) (26,830) (1,082)
Depreciation expense (1,121) (147) (1,268) -
Amortisation expense (6) (5) (11) -
Share of loss of associate (454) - (454) -
Share-based payment expense (827) (1,299) (2,126) (65)
------------- ------------- ------------- -------------
Segment operating loss (23,582) (7,107) (30,689) (1,147)
------------- ------------- ------------- -------------
(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 2024
Therapeutics Central overheads(1) 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.
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.
2025 2024
£000 £000
Termination payments and settlement agreements 300 1,130
Consultancy and legal fees 454 668
Professional fees associated with the divestment of the discontinued 795 161
operations
------------- -------------
1,549 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 2025.
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.
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 2025, 12,562,886 options (2024: 22,684,252) 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 share options are set out in Note 6.
At 31 December 2025, no potentially dilutive shares relating to the
convertible bond (2024: 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 23.
2025 2024
Continuing operations Discontinued operations Total Continuing operations Discontinued operations Total
Loss after taxes (£000) (37,059) (1,553) (38,612) (29,427) (23,414) (52,841)
--------------- --------------- ----------------- --------------- --------------- -----------------
Weighted average number of shares (number) 399,920,000 344,577,451
--------------- -------------- ----------------- --------------- -------------- ----------------
Basic and diluted loss per ordinary share (pence) (9.27p) (0.39p) (9.66p) (8.54p) (6.79p) (15.34p)
--------------- -------------- ----------------- -------------- -------------- ---------------
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 27 March 2026, the Group announced the successful completion of an
oversubscribed placing and subscription to raise gross proceeds of £10.0
million. A total of 15,000,000 new ordinary shares of 10p each were issued
pursuant to the placing, together with a further 873,016 new ordinary shares
issued under a director subscription, at an issue price of 63 pence per share.
Convertible bond
In October 2022, the Group issued senior unsecured convertible bonds (the
"Bonds") with a principal value of £55,000,000 to a fund advised by Heights
Capital Ireland LLC. The Bonds were issued at 95% of par, generating net
proceeds of £52,250,000 after placement fees, and bear interest at a fixed
coupon of 6.5% per annum, payable quarterly in arrears. The Bonds have an
original maturity of five years and are subject to mandatory quarterly
amortisation repayments of principal and interest over the term. The
effective interest rate of the instrument is 49.99%.
The Bonds are repayable in either cash or, at the Group's option, in ordinary
shares of Avacta Group plc. Where repayments are settled in shares, the number
of shares issued is determined in accordance with the contractual terms of the
bond and is linked to the market price of the Company's ordinary shares. The
Bonds also include bondholder conversion rights allowing partial conversion of
the Bonds at the holder's discretion.
The convertible bond is accounted for as a hybrid financial instrument
comprising a host debt liability and an embedded derivative representing the
equity‑linked conversion and settlement features. The host debt liability is
measured at amortised cost, while the embedded derivative is measured at fair
value through profit or loss. The embedded derivative is valued using a
Monte‑Carlo option pricing model and is classified as a Level 3 fair value
measurement under the IFRS fair value hierarchy.
On 28 August 2025, the Group announced amendments to the terms of the Bonds.
The revised terms became effective on 20 October 2025 following satisfaction
of the amendment conditions. The amendments were assessed in accordance with
IFRS 9 and were determined to be substantial, principally due to changes in
the timing and contractual profile of the bond's cash flows. Accordingly, the
original host debt liability was derecognised and a new host debt liability
was recognised at fair value on the effective date.
The difference between the carrying amount of the original host debt liability
and the fair value of the new host debt liability resulted in a gain on
derecognition of financial liabilities of £2,031,000, which has been
recognised in profit or loss. Following derecognition, the new host debt
liability is measured at amortised cost using an effective interest rate
determined at initial recognition. Finance costs recognised in the period
reflect the unwinding of the discount on the new host liability together with
the contractual coupon.
The embedded derivative continued to meet the definition of a derivative
following the amended bond terms and remained bifurcated from the host debt
liability. The derivative was remeasured at fair value on the effective date
to reflect the amended contractual terms, including the revised conversion
price, and is subsequently remeasured at each reporting date, with movements
recognised in profit or loss.
During the year ended 31 December 2025, repayments of the Bonds were settled
partly in cash and partly through the issue of ordinary shares. Settlements in
shares resulted in the derecognition of the corresponding portions of the host
debt and derivative liabilities, with the aggregate amounts recognised within
share capital and share premium in accordance with IFRS.
At 31 December 2025, the carrying amount of the host debt liability was
£13,362,000 (2024: £20,497,000) and the carrying amount of the derivative
liability was £2,788,000 (2024: £1,281,000). Interest expense recognised in
respect of the host debt liability during the year amounted to £6,980,000
(2024: £9,854,000). A loss of £1,507,000 arose from remeasurement of the
derivative liability during the year (2024: gain of £13,719,000).
Convertible bond - derivative Convertible bond - debt
£000 £000
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 1 January 2025 1,281 20,497
Modification of financial liabilities - (2,031)
Repayments (equity settled) (1) - (6,197)
Repayments (cash settled) (1) - (5,887)
Interest expense - 6,980
Revaluation of derivative 1,507 -
----------- -----------------
At 31 December 2024 2,788 13,362
----------- -----------------
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 prior year 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 was
presented as a disposal group held for sale in the prior year.
In 2024, an impairment loss of £22,413,000 was 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.
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.
On 29 August 2025, the Group sold part of its diagnostics division, Coris
Holdings SRL and its subsidiaries. An up-front payment of £2,150,000 was
received.
A. Results of discontinued operation
2025 2024
£000 £000
Revenue 6,199 24,311
Cost of sales (3,272) (13,134)
---------- ----------
Gross profit 2,927 11,177
Research costs - (280)
Selling, general and administrative expenses (4,009) (10,336)
Depreciation expense - (991)
Amortisation expense - (870)
Share-based payment charge (65) (871)
---------- ----------
Operating loss (1,147) (2,171)
Finance income 34 150
Other finance costs (204) (238)
---------- ----------
Loss before tax (1,317) (2,259)
Taxation - 1,258
---------- ----------
Loss for the period (1,317) (1,001)
Impairment charge - (22,413)
Loss on disposal of subsidiaries (236) -
Tax on disposal of subsidiaries - -
---------- ----------
Loss from discontinued, net of tax (1,553) (23,414)
Exchange difference on translation of discontinued operation 150 (436)
---------- ----------
Other comprehensive loss from discontinued operation (1,403) (23,850)
---------- ----------
B. Effect of the disposal on the financial position of the Group
The table below shows the balances of the disposal companies in the group
accounts in the prior year when they were classed as held for sales. All
assets have been cleared down in 2025 to loss on disposal of subsidiaries.
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)
------------
In 2024, an impairment loss of £22,413,000 was 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.
Events after the reporting period
On 27 March 2026, the Group announced the successful completion of an
oversubscribed placing and subscription to raise gross proceeds of £10.0
million. A total of 15,000,000 new ordinary shares of 10p each were issued
pursuant to the placing, together with a further 873,016 new ordinary shares
issued under a director subscription, at an issue price of 63 pence per share.
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