Avacta raises £48m to boost Covid-19 test work

Avacta CEO Alastair Smith

Shares of Wetherby-based biotherapeutics company Avacta Group plc rose another 8% on Thursday after it said it raised £48 million by selling new shares in the firm to help fund its Covid-19 test work programme.

Avacta also revealed it has attracted “a significant strategic US investor” to its shareholder register.

“The fundraising has conditionally raised gross proceeds of, in aggregate, £48 million, before expenses, through the issue of 40,000,000 new ordinary shares …” said Avacta.

“The issue price is at a discount of approximately 4.4 per cent to the 30 day volume weighted average price of the ordinary shares on AIM on 3 June 2020, being 125.3 pence per ordinary share.”

Avacta’s share price has soared from around 14p on March 18 to 150p on Thursday to give it a current stock market value of around £313 million.

Avacta Group CEO Alastair Smith said in a statement: “Following encouragement from retail and institutional shareholders to re-capitalise the business to provide us with the resources to unlock the potential in the therapeutic and diagnostic pipelines, I am delighted to report that the placing has received overwhelming support from both institutional and retail investors leading to a bookbuild that was multiple times oversubscribed.

“I would like to thank our existing investors and welcome new shareholders to Avacta.  

“We are very pleased to have added a significant strategic US investor to our register.

“This substantial fundraising allows us to rapidly expand the in-house Affimer and pre|CISION cancer therapy pipelines and scale-up the diagnostics business to expand the Affimer diagnostic products pipeline.

“In the short term the funds will provide the company with the working capital to support the development and manufacture of the Covid-19 antigen tests in development which, given the potential demand, could be transformational for Avacta.

“The board anticipates strong near-term news flow relating to the Covid-19 test developments with Cytiva and Adeptrix, as well as commercial and technical progress in the established therapeutic and diagnostics businesses, allowing the company to concurrently achieve multiple value inflection points that we expect will deliver substantial shareholder returns. 

“I look forward to updating the market on our continued progress.”