Avacta Share Discussion Threads

[wan] 20/12/2016 08:28

Spekky...They should be embarrassed, the annual performance awards are clearly based on inadequate criteria in the first place!

I note that the options are granted at what appears to be significantly higher values than the bonuses indicated in the AR.

[spekky] 20/12/2016 07:43

Well done wan.........perhaps your communication embarrassed them.

[wan] 20/12/2016 07:30

Well the annual performance bonus (The maximum bonus that can be earned by an executive director is 100% of basic salary) was firmly on my radar to highlight (page 42 & 43 of the AR).

Today's news is only a very small step in the right direction, but ultimately if the Chairman wants to look at aligning such options with shareholders, then vesting should have been at the very least at the recent placing price. Performance awards should be more 'directly' aligned with shareholders in terms of revenue, profit and indeed the share price performance.

[lentjes] 19/12/2016 22:18

IP have been major share holders for years. Please explain why this is now seen as an issue ?

Also what is the concern on the link with Fusion

Since the announcement of the results less than 1m shares have been traded buy & sell which would hardly indicate abandon ship

[lantanatony] 19/12/2016 20:58

Reply to all,
IP and Avacta are joined at the hip,and that is in the public domain.
However,a bit more concerning to me at least,is that the current FD of Avacta I think is from Fusion Group.
They are also close to IP Group and If you look at Fusion's record you can make up your own mind!

[lavalmy] 19/12/2016 14:54

I, for one, would be interested in a detailed exposition of the relationship bewteen IP and Avacta. The website doesn't have anything going back more than a couple of years and I did want to look at the shareholder circular mentioned in the RNS when the Affimer techology was acquired.

In fact, I always like to go way back in a company's history, particularly if the same people are involved, to come to a view of their integrity. Most of interest are optimistic statements prior to a fundraising which are then forgotten about, or a large increase in sales upon which they congratulate themselves (and often pay themselves) whereas the following year it is described as a bulk order or some such.

Most of that sort of stuff will be available as RNS's. Of course, I can also go back on this and previous threads. But the shareholder documents, which are normally available on company websites, are in this case not, at least that I can find. Something of a red flag, but not necessarily sinister.

I am keeping an open mind about AVCT's prospects, but it does seem to be a candidate for a fallen angel. If it comes to a point where most have given up on it through serial disappointmemt, it could make a very good investment.

[lantanatony] 18/12/2016 11:18

Many University spin outs over promise.
However the Avacta Board seem to make a habit of it!
I agree somebody knows something and it does not look good.
Perhaps Wan and others are right, the technology may be under question.
Maybe that's why big Phama seem to have passed on this.
The Avacta Board owe Wan and shareholders like him some news on this subject soon.
Meanwhile, Avacta was just a punt for me,but even punters need some respect.
Therefore Wan,I suggest you forward your last blog to the Avacta CEO.After all he is the one talking up the technology.

[poacher45] 18/12/2016 09:59

The ideal investment would in my opinion be one where you make a profit even if it is only a small one and the firm concerned does a lot to help humanity.
The problem with most of these companies is they have no end of boffins and they tend to get side tracked. You end up with a company producing very little turnover with a massive share cap.
It seems strange to me that suddenly we have a lot of selling somebody knows something and in my opinion it will not be good news.
I actually feel sorry for you wan your loyalty has been totally misplaced I have made the same mistake with Osmetech a long time ago.
I decided after that it was time to get back to basics and go for shares that have asset values above the share price when I buy them. This has paid off with Principality bonds giving me a good dividend and then giving me a pound back. Alternative asset opportunities have sold all there life policies and the majority of the cash will be returned in January. Avarae made a profit out of their valuable coin collection but it should have been more.The fantastic management at Avesco having given me £1.12 back have now accepted a bid of £6.50 a share. So for me I have to stick with basics.

[wan] 18/12/2016 08:30

Last week I found the time to read Avacta's Annual Report, and overall I was not impressed!

There are some inconsistencies that have been creeping in which are irritating, the development time for Affimers has been increasing from when they first informed us, so whilst still quicker than antibodies it has moved from around 5 weeks to 7 weeks and (now) 12 weeks, so will this trend keep growing as they 'learn' more about Affimers? Avacta's past track record in this regard (telling us things that either move or does not happen) is not a good one (cue Optim, Midas and Micro-arrays to name three recent ones).

The following two paragraphs are from the AR -

In the near term the Company is concentrating in three areas: affinity separation, immunoassays and lateral flow diagnostics.

The Company is now working with a number of potential commercial partners in these markets to provide custom Affimer reagents which will undergo evaluation in their applications. Successful evaluations will lead to commercial licensing agreements and product development programmes which would be expected to take 12-24 months for the third party to complete.
(END)

I don't know what others were thinking, but given how long these technology evaluations have been going on, I thought we were a lot closer to actual products than another 12 -24 months from when a license deal gets announced. Unfortunately this seems familiar to previous examples of over promising!

The Key performance indicators on page 37 is woefully inadequate in my view. Along with the vesting criteria for options listed on page 62 & 63 which are predominantly based on time served or unconditional with little based on actual performance!

It is becoming increasingly difficult to ignore past promises which failed to deliver such as Optim, Midas and Micro-arrays to name recent ones (and not to mention previous company transforming acquisitions!). The track record to date is indeed difficult to ignore and does not exactly instil much confidence.

So, with some reluctance and wanting to be transparent I have sold a good percentage of my holding last week. I say reluctant because I can see the potential, but I have doubts that it is going to be realised in a meaningful way, or at least anytime soon. Thus I am wary (and tired) in respect of the need for further funding and dilution.

Have I finished selling? This depends on, my own on-going research regarding competition and how easy it is to develop novel non-antibody binding proteins and the set up a phage display and production system, but its not exhaustive in this particular regard, and of course any news flow in the interim, which could change my view/challenge my rationale for selling.

If anyone wants to challenge or add in any way (positive or negative) to my above comments (which are only in summary), I would welcome that.

[spekky] 16/12/2016 19:22

Came across that by accident.......looks likely to be a major market....I would hope avacta are in with a shout.....we know they are on the case.The E3 gets a mention last year.

[lentjes] 14/12/2016 22:37

Has Avacta Group Plc (AIM:AVCT) Got Enough Cash To Cover Its Short-Term Obligations?

 Felix Olson  December 14, 2016


The direct benefit for Avacta Group Plc (AIM:AVCT), which sports a zero-debt capital structure, to include debt in its capital structure is the reduced cost of capital. The cost of debt is always less than that of equity as debt-holders have a superior claim over the company’s assets. In addition, interest on debt brings down taxable income, reducing the tax paid.

A drop in the cost of capital beefs up a company’s valuation as the same is used to discount its future cash flows to arrive at the intrinsic value — an estimate of its worth right now. Precisely due to the same reason, companies raised debt in their capital structure with costs at record lows in a low interest rate environment. This improved their capital returns and they were rewarded with higher valuations.

On the other hand, rate hikes are imminent, it’s a part of the broader economic cycle. No-debt companies will clearly be in a stronger cash position compared to companies of which most, if not all, will be forced to retire a chunk of their debt due to rising costs. Higher the interest rates, higher the cost of debt. Although zero-debt makes Avacta Group’s financial strength analysis lot more stressful, there are other metrics to check its financial health. These are a few basic checks to assess the financial health of companies with no debt.
Check out our latest analysis for Avacta Group


Is growth fast enough to value financial flexibility over lower cost of capital?


AIM-AVCT-income-statement-Wed-Dec-14-2016


For small-cap companies such as AVCT with its market cap of USD $64 Million, financial flexibility is a valuable option. And currently operating on a smaller scale, they’re not wrong in choosing it over improved total shareholder returns. However, choosing financial flexibility over capital returns is logical only if it’s a high-growth company. While ideally I expect a revenue growth to the tune of 20% or more for companies choosing to have additional financial flexibility, AVCT’s revenue growth of 19.42% over the past year doesn’t exactly meet the criteria. However, it’s delivering a significant revenue growth.

Can AVCT pay its short-term debts?


AIM-AVCT-net-worth-Wed-Dec-14-2016


Given zero long-term debt on its balance sheet, Avacta Group has no solvency issues. Solvency is the company’s ability to meet its long-term obligations. But another important aspect of financial health is liquidity: the company’s ability to meet short-term obligations, which are mostly comprised of payments to suppliers, bank loans and debts due over the next twelve months. To cover them, a company must have more liquid assets than these obligations. In AVCT’s case, its short-term assets of £22 Million exceed the short-term liabilities of £2 Million, indicating sound liquidity position.

Conclusion

Avacta Group has no long-term balance sheet, so there’s no bankruptcy risk. Additionally, with its liquid assets exceeding the short-term obligations, the company faces no liquidity issues. However, the company’s 19.42% growth rate raises concern over its decision to remain a zero-debt company. Now I recommend you check out our latest free analysis report to see what are AVCT’s growth prospects and whether it could be considered an undervalued opportunity.

[lantanatony] 13/12/2016 18:49

Sorry ment to say "in all of this"

[lantanatony] 13/12/2016 18:40

Where are our new advisors is all of this?

[dec2000] 13/12/2016 16:37

further falls today

as far as I can see there are a series of medium trades say around 10,000 shares.. and these might be a hangover from the 250,000 shares sold a week ago... a broker wanting to get rid of stock?


any other info?

[wan] 13/12/2016 13:41

According to the market not jack sh@t!

[dec2000] 13/12/2016 13:35

What does "advancing beyond the event horizon" mean?

[lantanatony] 13/12/2016 11:30

I agree Wan,
All this potential but no real market traction.
Our CEO needs to enlist some support from to marketplace,as self praise is no praise at all!

[wan] 13/12/2016 10:42

I don't think the market will be interested as it's the same story of potential rather than substance (yes even I am more than frustrated with the share price performance!)-

11th Dec 2016
Avacta has advanced beyond the event horizon with Affimer technology, says CEO Alastair Smith


The market currently says otherwise Alastair!

No doubt the market will also not be interested in yet another 'potential' application of Affimers -


Nanofibrous Affinity Membranes Containing Non-Antibody Binding Proteins
Restricted until 1 November 2019.

Abstract

The specific removal of molecules from various media is an area receiving increasing attention. Affnity membranes, i.e. membranes containing ligands, which can specifically
capture target molecules, can meet this demand. One important area, in which the use of affinity membranes will be beneficial, is blood filtration, specifically haemodialysis treatments.
More details -

[lantanatony] 09/12/2016 23:21

Down another 3% today!
Any ideas why?

[ffp] 04/12/2016 21:01

good question!

[lantanatony] 04/12/2016 20:31

Who is Chris Mills?

[poacher45] 04/12/2016 10:56

What Avacta desperately need is for Chris Mills to come and sort the mess out.

[poacher45] 04/12/2016 10:45

Was it your sell trade wan?

[wan] 04/12/2016 09:27

I note we now have the reason for the recent drop in the share price, in the form of a relatively large sell trade at 75p.

I don't talk about the share price very often, but to perhaps put some perspective across regarding Avacta's share price performance, emerging U.S. biotech firms are down 39 percent this year and their European counterparts are down by 27 percent (and I appreciate that that probable doesn't make anyone feel any better). The main reason driving this under-performance, relative to the wider equity markets, is that drug pricing is weighing on investors minds and it has shifted sentiment. However, with large pharma showing strong interest in preclinical assets, it has been a good year for some companies with early stage assets to sell. Indeed, news elsewhere shows that large pharma is also very interested in alternatives to antibodies and it also continues to demonstrate their strong interest in preclinical assets -

Better than ADCs? AstraZeneca bids for Bicyclic Peptides
AstraZeneca has signed a deal with Bicycle Therapeutics that could exceed €1B. The foundation is bicyclic peptides, which combine the best of antibodies and small molecules. Could Bicycle Drug Conjugates (BDCs) outperform ADCs?

Peptides tend to be unpopular because they’re usually less specific than antibodies, although Amcure in Germany is also relying on them to treat cancer. Although the bicyclic peptide technology hasn’t proved itself worthy in the clinic yet, AstraZeneca seems to be attracted by the myriad advantages it offers. For Bicycle Therapeutics, this agreement means an expansion into new disease areas, which were mostly restricted to oncology so far.
Full story -


The AstraZeneca deal with Bicycle is interesting in terms of the development stage of Bicycle. It is also perhaps more than interesting in terms of it being about an alternative to antibodies, which we know are expensive to produce (not to mention other issues). So this brings me back to drug pricing, and it is interesting that if a peptide works in a particular application then it could be attractive because it is easy to produce and subsequently much cheaper than antibodies. It will thus be interesting to see if acquiring or partnering assets that can ultimately reduce the cost of drugs becomes a trend. If so, then Avacta could be in an even better place than some are currently assuming.

My research indicates that Affimers, being proteins, have larger interaction areas, have a greater range of conformations and higher affinities than peptides, hence the range of collaborations to date. So, while Bicycle's offering has clearly caught attention (another example of British success....well done!), it's not difficult to imagine that Affimers are attracting interest beyond the already declared interest coming from affinity separation, immunoassays and lateral flow diagnostics players.

I appreciate though that some investors are only interested in substance i.e. something tangible and meaningful in terms of cash, as opposed to promises. But Avacta has attracted some very interesting and talented people (including collaborations), and such individuals don't usually align themselves to technologies or small companies without very good reason. Whilst some on here are inclined to describe Avacta as a failure waiting to happen, I am far more inclined to describe Avacta as another British success waiting to happen!

We should champion British companies, especially ones that could also make a significant difference to peoples lives. Staying with British; I note that whilst I was away recently a sizeable UK focused fund is being created -
Battle Against Cancer joins Wellcome to be £1bn champion
Battle Against Cancer Investment Trust plans to team up with Wellcome Trust and become national champion in healthcare research

The £483 million company today announced a big change in direction, unveiling plans to deepen its involvement in cancer research and biotechnology investment. It will potentially more than double in size to £1 billion and will gradually wind down its investments in alternative funds.

‘The same logic has given rise to this transaction, which will create a national champion of life science investing and accelerate the achievement of our aim: to win the battle against cancer and to create great returns for our investors at the same time.’

‘This represents a major change in strategy for Bacit,’ said Numis analyst Ewan Lovett-Turner. ‘The tie-up with Wellcome Trust is an interesting development that looks set to create a sizeable listed company to support investment in UK life sciences.
Full story -


And the following also stood out -
£226 million UK investment in cancer research announced
1st December
Cancer Research UK has announced the largest investment to date into its network of Centres across the UK. £190 million has been committed to 13 Cancer Research UK Centres over the next five years.

“I’m particularly pleased that our international panel of experts, which renewed these Centres, stated repeatedly their view that there is no other network like this, of this quality, anywhere else in the world.

“This is an exciting time for cancer research. Emerging treatments like immunotherapy are radically changing the field, we are increasingly able to tailor more treatments to individual patients, and advances in technology mean we can collect and share more research data than ever before.

Full story -

[lantanatony] 01/12/2016 23:55

La Valmy is spot on!
Avacta has all the trappings of a University spin out company.
Lots of promise of jam tomorrow but no solid plan on how to get there.
La Valmy is also right to point out that the Avacta CEO has not delivered on many of his revenue projections.
Therefore,in the very difficult therapeutic sector why are things set to change.
The sideways shift of a failed COO without a replacement in place is also very worrying .