Avacta Group (LON:AVCT) Chief Executive Officer Alastair Smith caught up with DirectorsTalk for an exclusive interview to discuss their latest trading update, increase in revenues, better cash position and the outlook for 2020.
Q1: You’ve reported a strong set of results this morning, could you explain to us why this is for a 17-month period?
A1: Very straightforward, we’ve changed our financial year from a July to a December year-end so that creates the extended reporting period.
I think it’s important to say that on a like-for-like basis as well, Avacta Group is still seeing that very strong performance that you mentioned so it’s not just the extended period that’s creating that.
Q2: As you’ve said, revenues are up substantially. Could you take us through the drivers of that growth?
A2: There’s two primary reasons, one is that the revenues in the Affimer diagnostics business unit are up strongly compared with the like-for-like reporting period so we’ve seen really good growth in evaluations of the Affimer platform in that business unit. We received an upfront payment from LG Chem when we signed the therapeutics development partnership with them so those are the two primary reasons for such a strong growth in revenue in the last period.
Q3: Now, the cash position is better than expected, what are the reasons for that?
A3: So, £8.7 million on the balance sheet at the turn of the year, primarily really good cost control and a reduction in overheads as well. Going forward with our focus for our internal resources on the AVA6000 Pro-doxorubicin programme, this cash sees us all the way through into 2021 as we set out at the fundraise last year.
Other partner programmes are fully funded by the partners so we have more than 12 months cash runway now as we set out last year.
Q4: Talking about looking ahead, what is the outlook for the financial year 2020 for Avacta Group?
A4: So, the diagnostics business unit has started the year strongly so continuing that growth that we saw last year, started strongly so we expect to see that continue to grow in 2020.
By the time we get to speak about the audited results at the end of March, we will have got feedback from the regulators from the MHRA on the AVA6000 Phase I clinical trial plan. We’ll also have completed the CMC, the manufacturing process, for that drug product.
With that information in hand, I’ll be able to give the market a really accurate timeline for going through that clinical trial through the backend of this year.