Avacta Group (LSE:AVCT) — Interim results for the 6 months ended 30 June 2020

0:08 Good morning, ladies and gentlemen, and welcome to the AVACTA PLC Interim Results Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in the text in the Due to the significant number of investors on the call today, the company will not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via our Investor Meet company dashboard. I'd also like to remind you that this presentation is being recorded. Before we begin, I'd like to submit the following poll.

0:56 I'd now like to hand over to Alastair Smith, CEO Tony Gardner, CFO and Neil Bell, Chief Development Officer of AVACTA. Good morning. Good morning. Thanks very much indeed, and thanks, everyone, for making the time to listen to the presentation. I'll push straight on with it so we don't lose time for questions. So for those of you who are new to the company, I suspect many of you will know this, but let me give a quick introduction for those who are new to to the company. So we have two divisions, one based in Cambridge, UK,

1:28 just focused around the therapeutic developments based on the Afema platform and the Precision platform. We'll have some time today to talk about the first of those precision prodrugs, AVAC6000, that we're pushing into the clinic early next year and the Diagnostics division, which is based in Wetherbee in Yorkshire. And of course, we will be talking in some detail around the lateral flow antigen test we are developing with Scytiva and and the test developing with the ADEPTRYX as well. I'll give you an update on on on that too. Okay. So brief introductions. Myself, Alastair Smith, for those of you who don't know, chief executive of a a scientific background, but been been out of science, as it were, for for many years now. And, Tony, would you like to say a a quick word? Yeah. Good morning. I joined AVACTA GROUP in 2016 as a CFO. I've worked across several different businesses as CFO over the last twenty years, businesses where we've got lots of intellectual property to handle.

2:36 Thank you. Neil?

2:39 Hi. Thanks. Yes. I've just recently joined AVACTA Life Science as a Chief Development Officer in August of this year, and I'm delighted to be here. So I'm responsible for late stage preclinical and clinical development for the therapeutics pipeline, including the precision prodrugs and Afirma

3:00 immunotherapies. My drug development career has spanned over thirty years across various leadership roles, working for successful mid to large pharma companies as well as biotech at the global level. I think it's worth actually highlighting that my drug development experience extends across small molecules, biologics and more recently cell and gene therapies, where I've taken actually CAR T cells successfully into the clinic. So I've got extensive early and late development experience covering preclinical phase one, two and three. And in addition to the technical side of my drug development experience, I've got significant experience of building new organizations from the ground up. So I hope that gives you a useful insight into my expertise.

3:48 Thanks. Thanks, Neil. I'd just like to say publicly, welcome as well, Neil, to AVACTA, and thank you for the the impact, the positive impact you've already had on the company. So really looking forward to Neil's contribution over the coming years.

4:02 Okay. So let's go through the results and then we'll look at the business update. I'm not going to read through all of the operational financial highlights because those are sort of historical r and s's that you you should all be for familiar with. So let me push through to the numbers and let Tony just take you through those. Alastair, so this is our first reporting period to the end of June, having changed the year end to December back in December 19. So reporting the six months to June 2020 compared to June 2019.

4:41 So revenues have have increased across the pyramid primarily from the custom projects in our diagnostic sector increasing, but also the development projects with our partners such as LG Chem and a one where we've got funded income coming through on those projects, which has pushed revenue up in the period. You'll notice there's a line where r and d and amortization costs have increased over the period as we start to build towards taking our our first program into clinical trials, and we'd obviously expect those to continue to increase given the cost of that program. The taxation positive numbers there reflect the r and d tax credits, which we receive as part of the process. We go through in our tax returns every year. Now retained loss for the period was just shy of 7,000,000 compared to 5,700,000 in comparative period.

5:33 The loss per share has reduced slightly given the the increase in the average number shares of shares in issue over the reporting period. Moving on to the the cash and balance sheet. We there was a net inflow of cash of of just over 45,000,000 within the six months. Obviously, that was driven by the proceeds from the two placings, but also from the purchase of shares by staff from, you know, the employee share option schemes that they've they've exercised. So there was a net 51,000,000 that came into the business in that period. That left us with just over 54,000,000 of cash at the end of June. Now that will be used to to fund the expansion of of the the therapeutic pipeline and also the expansion in the diagnostics side of the business, and that should provide us a cash runway through into 2023.

6:25 We we finished the six months with net assets of 71,000,000, so we're in a strong strong position as as we head forward. Thank you. Okay. Thanks, Tony. So, again, I'm I'm not going to read through the post period highlights. We're obviously, we're gonna cover a lot of this during the presentation and a forward look as well. So going on to the the business update, the first thing I thought I would do is set out some near term milestones over the next three and six months. And I put those broadly speaking into three buckets. So the the first relates to AVACTA six thousand, which we'll talk about more in a moment. So that is the prodrug form of doxorubicin, the precision form of doxorubicin.

7:12 And we are aiming for a regulatory filing before the end of the year with dosing first patients late in in q one next year. We should see the initial PK and safety data around the middle of the year. Neil will take us through that in a little bit more detail in a moment. That's a really significant set of milestones for the group because not only does that move the AVACTA six thousand into the clinic and transition of ACTA into a clinical stage biotech, but most importantly, I think, is should deliver proof of concept for the precision platform in human. And, of course, that can be more broadly applied to a a wide range of chemotherapies.

7:58 And, again, Neil Neil will talk a little bit about that in a moment. And then the second area, which is obviously of a huge importance and very great interest to to everyone at the moment, is the

8:12 rapid antigen test, the saliva based SARS CoV two spike protein test. We are and we'll talk through this more. We're aiming for clinical validation in the fourth quarter of this year. I'll talk to you about how we can more precisely nail that down in terms of timing. I'll talk to you about the product strategy in a little bit more detail than we've done in the past around professional use and consumer self testing. And I'll I'll I'll say a little bit about the additional opportunities that the Afimas we've raised against SARS CoV two spike protein have have generated. Then the third bucket, as it were, is around the core business, you know, the the continued progress of the diagnostic business towards licensing deals for non COVID applications, which is absolutely key to the progress of that business towards towards, you know, validation of the AVMA platform in this sector and profitability, notwithstanding, obviously, the the huge COVID nineteen opportunity that there is. And and, of course, in therapeutics where we continue to carry out the business development to deliver further substantial licensing deals for the for the group.

9:30 Okay. So let me ask Neil if he would take us through the next few slides around AVACTA the first of these precision pro drug chemotherapies and taking that into the clinic. Thanks, Neil. Great. Thanks, Alastair. So I'm going to talk about the AVACTA6000 early clinical development, and I think it's important, and Alastair has already indicated this, that AVACTA6000 will be a VACTA's first entry into the clinic, will be a first in man study, and it will take AVACTA through a really important milestone to become a clinical stage company. So this morning, I've got a few slides to cover four key areas. The first is what is the Precision platform and how does it work. The second is is protoxorubicin, also known as AVAC6000.

10:20 The third is the overview of the timeline and design of the AVAC6000 clinical study. And finally, the potential for the PRECISION platform to be used across other chemotherapeutic agents. So if we go into Slide 15 sorry, that was Slide 15. Yeah. Okay. So fibroblast activation protein alpha, also known as FAP, is an enzyme known to be highly expressed in most solid tumors compared to normal healthy tissues. So the Precision platform is based on using the overexpression of FAP alpha to cleave or to break a linked substrate which is attached to the drug and thereby switch the drug into its activated form, and that's why we call this a prodrug.

11:10 So the graph at the top right hand of the slide highlights the high level of expression of FAP across different tumor types compared to the matching serum. And what this actually means is that the fat expression is actually localized in the microenvironment of the tumor itself in the stroma. So precision is a simple peptide substrate, which is chemically linked to a drug of choice. And in our case, for AVAC6000, it's doxorubicin. The linked drug is actually prevented or limited from entering cells and it therefore renders the chemotherapy agent inactive once it's infused into the body prior to reaching the tumor microenvironment where it's activated by high levels of FAP, cleaving the linker to the cytotoxic.

12:01 And as we know, the substrate is exclusively licensed from Tufts University in The U. S. So going on to Slide 16. So while doxorubicin is an effective antitumor agent, it does cause what we call cumulative and dose dependent cognitive toxicity. So it ranges from hidden changes in the heart structure and function to severe cardiomyopathy and congestive heart failure. And these are two serious

12:37 pathologies, and they may result in even a heart transplant or death. So despite doxorubicin being considered an important standard of care treatment for many cancers, which it is, its use in patients is limited by its cumulative toxicity. And what that means is that physicians are limited by the additive dose of doxorubicin, by the total dose that they can give to patients. Normally, they're limited up to four hundred mg per meter squared. So what we have with AVAC6000 is we have the potential to address these key cardiac safety concerns for doxorubicin by limiting doxorubicin getting into cardiac cells, to cardiomyocytes, as they're called, and actually damaging the heart.

13:33 So we know that data from mouse models has demonstrated that AVAC6 000 compared to doxorubicin has significant increase in penetration in the tumor tissue compared to the cardiac tissue. And this means potentially that higher doses of AVAC6000 can be tolerated systemically in the body without risking cardiac toxicity. So this is an important market opportunity for AVAC6000 and is significant across a number of tumor types, including soft tissue sarcoma, breast and ovarian.

14:13 So in terms of our planned Phase I clinical study, these are the timelines that we're looking at, at the moment. We're aiming to file a clinical trial application to the MHRA by the end of fourth quarter twenty twenty. And our team are actively putting all the relevant documentation together to actually compile the CTA now. So our anticipated dosing of first patient in the current planned study is by first quarter of twenty twenty one, followed by initial safety and pharmacokinetic data from our first dose, first cohort expected roundabout mid-twenty twenty one. So the Phase I clinical study has been designed in two parts, Part A and Part B. Part a is the dose escalation stage where the main objective of the study is to assess safety and tolerability of AVAC6000.

15:13 And the next objective is to determine the maximum tolerated dose that the patient can tolerate, and that might well be the recommended dose or maybe a dose below. So we anticipate Part A will recruit approximately 15 to 20 patients through approximately four dose levels, depending on dose limiting toxicities that we'll see in the study. Patients will be recruited across a range of cancers, but they'll include soft tissue sarcoma, breast and ovarian, as we said earlier. Once we've decided on the recommended dose to move into Part B, Part B is the dose expansion stage where the main objective of the study again is to assess the safety and tolerability of AVAC6000, but in a larger cohort of patients in possibly one tumour or maybe two tumour types, depending on the data that we see from Part A.

16:12 Now I think it's important to say that unfortunately we'll be starting this study in hospitals in The UK where at the time of COVID-nineteen pandemic and where many clinical trials, particularly oncology trials have been severely affected in the lockdown. We'll monitor the situation. We'll take mitigation actions where necessary to actively move AVAC6000 into patient recruitment. And we are looking at the planning of an IND as well in The U. S. So in terms of a little more detail around the Part A, we actually are going to follow a classical three plus three design for Part A. Three patients will be dosed and if no dose limiting toxicities are observed, we'll then escalate to the next dose until we reach the maximum tolerated dose.

17:07 If we do see any dose limiting toxicities, then we'll need to expand that particular cohort by adding further patients. So we're aiming to dose patients up to six cycles of AVAC6000 every three weeks, which should take normally eighteen weeks. So what's the wider Precision Pro drug opportunity? Well, the wider opportunity and the rationale for Precision platform, I think, is compelling. Many chemotherapies have dose limiting toxicities, which restrict their use in patients. Yet despite these toxicities, these chemotherapies retain significant market share and continue to increase their share annually due to better cancer detection rates.

17:55 As an example, Takeda's Velcade is a protease inhibitor and its antitumor potential has never really fulfilled been fulfilled in the market due to dose limiting toxicities and is only a market only has market approval for multiple myeloma and mantle cell lymphoma. If we look at another example, taxanes such as paclitaxel also has significant sales potential through to 2025, but its market share is constrained due to significant toxicities such as myelosuppression and peripheral neuropathy. So we can see that AV6000 will help us to demonstrate the value and the potential of the Precision platform.

18:41 We're at a very exciting junction with Precision, and we need to continue to drive towards the milestones that are being laid out in the development plan. So I'll stop there and hand back to Alastair. That's great. Thank you, Neil. Okay. So pushing on because I'm very sort of aware of time and wanting to make sure that we have time for plenty of questions. So the first thing I wanted to do was talk to you about the performance of the AVACTAs the AVACTAs developed against the SARS CoV two virus spike protein. So these are the AVACTAs that are in the lateral flow antigen test and in the adeptrix test and and potentially can be licensed to to other third parties for their tests as well. So the point that I want to get across is that we now have a fully validated what's called an ELISA test, which is a laboratory test.

19:38 We we will be launching this as a a research laboratory test as soon as possible. But the point I wanted to get across is the poor performance of the AVACTA GROUP PLC really excellent. This this is, as far as I can find, certainly on the Internet, the best performing ELISA test that that we can see, both in terms of sensitivity in in simple systems like like buffer, which is effectively just just water, as well as in saliva. We've not been able to see any saliva performance data for the ELISA tests on the Internet, but also in terms of specificity. So very briefly, because I appreciate that not not everyone has a technical background, but let me try and put this in context. The the sensitivity, we can talk about in terms of the lower limit of quantitation.

20:27 So that's a term used to describe the lowest amount of spike protein that can be properly quantitated in a sample. And that is down at a few picograms per mil. So to put that in context for you, that is very good for any ELISA. It's certainly much better than other SARS CoV two spike ELISAs on the market, and I've given one there just for for reference. You can go to the website. You can see the performance of that test and make the comparison yourself. But but also, to put that in in context, that that level of detection, that level of computation is right down at the lowest levels of, you know, viral infection. And and the work we did with Liverpool School of Tropical Medicine to confirm that shows that this ELISA test will detect down to, just a few thousand copies of the virus per mil of, saliva.

21:23 And you see there the the saliva performance in the graph on the table as well. So from a sensitivity perspective, this gives us huge confidence in terms of the performance of the lateral flow test and the adeptics test and the others. The the AFM reagents work really well. Specificity is absolutely key as we'll see in a moment. And you see there without going into a lot of the detail, no cross reactivity against common coronaviruses and and and less common ones like SARS CoV one, which is just not around too much anymore. So no cross reactivity. Very good specificity as well. So that's the performance of the basic Afema reagents. Let me touch on now the BAMS assay. So this is a mass spectrometer assay, and I've done a very, you know, very simplified cartoon of how this works. So the sample introduced into the sample are, beads coated with the Afema. So those will capture the spike protein and virus, from the the sample, and then you can use a magnet, obviously, to hold those whilst you wash off all the other stuff that will be in that in that sample.

22:33 And then those beads can be introduced into the mass spectrometer in a very simple way. And one of the beauties of the way in which Detrix has developed this test is that there's a very simple, yes, no answer that can be generated from what is quite a complex, mass charge spectrum you'll see in a second on the next slide. So that's fundamentally how the test works. And, and in this way, each machine can do a thousand samples or upwards of a thousand samples, per day. And, of course, the installed base of these machines is quite quite considerable across The UK and and elsewhere in in clinical microbiology labs and hospitals. So that that's the opportunity for us to deliver.

23:20 And we haven't been able to show much data so far primarily because of commercial confidentiality with the Adetrix. But and I obviously don't plan to talk through this mass spectrum. But for those of you who've never seen these things before, that gives you an idea of, let's call it, the fingerprint that this test delivers. There's two points to make. So first of all, this is the mass spectrum from one bead, a single bead. So in terms of sensitivity of this test, it's excellent. And then in terms of specificity, you are combining the Afema reagent specificity to the SARS CoV two spike protein with this fingerprint that is a re literally a fingerprint of the of the protein. So you get exquisite sensitivity.

24:09 And and just an extra bit of detail, you know, the this spectrum gives you information about things like mutations of the viruses as well potentially. So not only a diagnostic, but a really important tool. So what what we are all all, literally all of us, trying to get to is the clinical validation data. Without going into a lot of detail, it it has been a frustrating process getting getting through the the UK Health Systems Condor system to get that clinical data. We are making progress, but it's been it's been slow. However, what what is a real positive is the level of commercial interest we've now got for this test, and it's clearly critical that we have a significant partner who, you know, is most likely a mass spectrometer manufacturer who can take these BAMs assays to market both for research use and as an IVD and get those into the installed base at scale to generate the commercial opportunity for us.

25:10 And I'm very pleased to say we've made solid progress in in securing that that commercial partnership, which I hope over the next, you know, weeks and and and months we'll be able to talk about, you know, publicly. Okay. So that's a quick update on the on the BAM's assay. We are we are getting on with the clinical evaluation now, but it's still slow. So as soon as I have some clinical data to talk about, I will do, but we're we're obviously relying on on third parties for that. So then getting on to the lateral flow antigen test. I've shown this slide before, so I won't dwell on it for too long, but it's the for those of you who don't haven't seen this slide, it's really understanding the difference between an antigen test, which tells you whether you have the infection currently, or an antibody test, which really tells you and we'll see on the next slide the detail, but really tells you whether you had the infection, in the past or not. Two different functions, two different uses, but what we're really focused on and what sort of The UK and worldwide governments are focused on is identifying infectious individuals.

26:14 And this next slide really gives you a bit more, insights into that. So this is a figure taken from Nature. And what it shows you is the sort of relative utilities of PCR antigen testing and antibody testing. And and you can see that the PCR and antigen testing have the best likelihood of getting a a, you know, an accurate result early on in the in the infection when there's a large amount of material to detect. And it takes, you know, probably seven to ten days post symptom onset for the antibodies to be generated. So the the benefits of antigen testing compared with PCR is that you don't get that long residual positive results long after the patient has has recovered.

27:11 An antigen testing is most effective in that period of a couple of days, two to three days before symptom onset, and up to a sort of week or so, after symptom onset when the patient is has

27:26 the highest viral load and is most, infectious. I'm gonna touch on that again on this slide because it is so important for the, intended use of these tests. So, again, I've put some references here, which if you have time, you can go and have a look and read a little more around the the detail. But the the presence of the the virus, the infectious material, is is highest in the, first couple of days, you know, sort of five days or so after you get infected, the first couple of days before symptoms are seen, and then the next sort of seven seven to ten days after symptoms appear. So there's a a window there, which is when the antigen tests work particularly well. And, of course, it's that period when individuals are infectious.

28:15 So there's a very short period when you get infected but are not necessarily infectious because there's not enough viral load. There's not a virus in your upper respiratory tract to be shedding it everywhere and infecting other people. And so the the purpose of these tests is to identify those people who are infectious, not necessarily all people who are infected. And just interesting point to note that the that presymptomatic period of two or three days before symptoms, appear is thought to occur thought to, account for around fifty percent of infection. So that is why this is so important to be able to identify infectious people who are presymptomatic. And sometimes those people are referred to as asymptomatic incorrectly, actually.

29:02 The number of people who, are truly asymptomatic throughout the infection is, it's actually difficult to determine because, obviously, they're asymptomatic, and there's a lot less data around that. But certainly, presymptomatic transition is a major issue that antigen tests can address.

29:20 Okay. So then, again, just just making the final point on and I've been asked a a lot I mean, a a huge amount about sensitivity, you know, on on what are you aiming for. And I wanted just to sort of dig into the detail just a little bit for for two minutes. So what you see with the graph here is I mean, it's just a a made up distribution of patients with different degrees of infectivity, different degrees of viral load. So on the left, those people who have very high viral load, and that that may go from, you know, just just a a a few virus particles per mil up to, you know, maybe 10 to the nine, you know, a billion virus particles per mil of saliva. So there's a very broad range. And you are infectious probably from around a thousand, or a few thousand, viral particles per mil and upwards. So that's that group on the left there that I've, shown. The the red line shows the difference between not being infectious and being infectious. And everyone to the left of that black line is infectious, and it's absolutely essential to be able to identify those people quickly.

30:33 So the purpose is frequent testing frequent testing with a very specific test. You need a very specific test because otherwise, you're gonna create a large number of false positives, and that will overload the the already stretched testing centralized testing.

30:50 But this is exactly what the governments around the world are now trying to achieve, frequent testing on a weekly or even more often, a weekly basis. And the sensitivity within that group has to be very good. You need to be able to identify, all of those infectious people. Unfortunately, they're the ones with the highest viral loads, so that is more straightforward. If you were then to look at the sensitivity across the entire group, clearly, it would be lower. But that that's the the subtlety and the way in which different companies present these results. And, obviously, we we will be very clear how we do the clinical validation and exactly what we're measuring and how we express that in terms of sensitivity. But that that's the that's the question of infectious versus infected individuals, and the use cases, therefore, look somewhat like this. So the product strategy is to see marked for professional use first because that that is, quicker and more straightforward.

31:50 It's a self certification process, as many of you know. The process to achieve consumer self is a little bit more involved and involves what's called a notified body that has to audit your technical files. So that takes a little bit longer. The professional use case. I mean, just to take hospitals from it, immediately, that suggests hospitals and and GP surgeries. Actually, I think the hospital use of lateral flow tests is not likely to be that high because the PCR is on-site. It's relatively rapidly accessed. It's far more likely to be professional use around workplace testing, and that involves having a a a trained technician or health care worker on-site, which many companies are planning to do to be able to do this sort of testing in the workplace with a professional use only test. Testing stations, GP surgeries potentially as well, triaging individuals to reduce the burden on the current, you know, current testing capacity, centralized testing capacity.

32:53 And then the the use case for consumer self testing is obvious, of course. It's individuals at home as well as individuals in in the workplace, but predominantly, it will be testing at home. And then we've we've talked quite a little bit about the product profile, saliva because of the ease of use compared to NP swabs. Visual readout is very important, and we are confident of being able to deliver a visual readout test, which means it doesn't need a a specialist reader, which, of course, if it did, would limit the deployment of the test. So visual readout is is very important. And another area that we've been doing a lot of work on is with our partners is around a smartphone app to read the result, which provides objectivity, which is very important because, of course, this test will limit or prevent certain certain, activity. So objectivity is very important plus the data connectivity into, the health care system, data systems, and ultimately provide a record of a positive or negative result. So all of this is is going on at the moment somewhat behind the scenes, but we can update on that as we as we progress.

34:19 Okay. So let's just talk through what we I mean, we've learned a we, AVACTA, have learned a huge amount about the the market and the demand and the use cases that we've talked about. And what I can tell you is that, you know, within the The UK alone, in order to have effective disease control, I. E, get this r value, well below one, you need frequent testing with these types of tests. You need to be able to catch the infectious people ideally as soon as they're infectious. So let let's say weekly testing, and, ideally, it would be more often, but, you know, let's say weekly testing. So that even if you tested half the population weekly, that implies a 120,000,000 tests per month.

35:06 And that's UK only. So that that does not obviously include any US opportunity or or elsewhere. So, clearly, the commercial opportunity for AVACTA is determined right now by supply capacity and not by demand. There is lots of room in the market. And again, people ask me very often about other tests that are coming through. There will be other tests. There is more than enough room for many tests, many antigen tests across not just The UK, but the rest of the world. So that that competition, if you like, doesn't bother me in the least. The the demand is really significant as we're now very clear about. So the supply capacity is what we need to worry about, and we have been for the last six weeks or so really working very intensively on this. So there are several factors. Raw materials, so the the nitrocellulose strip made by Saitiva and the Afema reagents, we'll we'll talk about that in a in a moment.

36:04 The lateral flow strip manufacture and assembly into cassettes. The plasticware, so the the saliva collection plastic and the what's called transfer pipette to move the sample onto the lateral flow test, and then assembling the full kit. So that's putting all of these elements in a box with the instructions for use and so and shipping those. Let well, I'll talk about that in a in a moment. The other area in which we have been working to to add capacity and increase the commercial opportunity a batch is looking at OEM deals. So this is providing the Afema reagents to third parties who may develop other types of testing modality. And, obviously, that doesn't impinge at all upon our own capacity, but it's a good way to expand that opportunity. And we have several ongoing conversations with potential OEM partners to to add to that commercial opportunity for AVACTA.

37:03 Okay. So let's look at those those individual elements that determine capacity. So first of all, we are putting in place, and in fact, we will have finished putting in place by November the increased production facilities within AVACTA. So we will be able to manufacture at reasonable scale ourselves in house and have control over that, but we're also putting in place very large scale contract manufacturing partners. And we will I'm pretty sure it'll be a UK based manufacturing partner that will allow us to scale that up to very large volumes, which if we get to that 120,000,000 per month or even higher numbers by accessing other markets around the world, that will require some third party contract manufacturing. So the the AVACTAMA supply, we do not believe, is going to be a bottleneck, a limiting factor, and and nor will the nitrocellulose strip.

38:03 So we've we've partnered with BBI Solutions and AVACTAN Health to date, as you know, and they can manufacture several millions of lateral flow test strips per month. Excuse me. So, clearly, there is a, you know, a significant upscaling that needs to be done within The UK

38:23 to be able to meet the demand. And that, I'm sure, we certainly are supporting our partners to to do that upscaling. But I think what it what it speaks to is the requirement to put in some capacity overseas as well to be able to to meet that demand. Well, I mean, we will put through all the manufacturing we possibly can in The UK, but we are very actively in discussion with manufacturers overseas, mainly Asia, Southeast Asia, to be able to put in place increased capacity. And that, of course, just means doing the job properly and making sure that we do our due diligence properly and getting, you know, quality product manufactured. The kit assembly, while whilst you might sort of think, you know, that's that's straightforward, it it is it is a reasonable challenge at these sorts of volumes. If you do a quick calculation of how many kits per second, a 120,000,000 a month, represents, it's a significant number. So, you know, we've already identified, UK partners. And, we'll be putting in place further resource overseas to be able to not only meet the demand, but hopefully look look at other markets around the world in addition to The UK.

39:38 So we now have detailed discussions ongoing on with governments and regulatory authorities, health care providers, and so on. But those are strictly confidential at this stage, and I can't talk in any more detail about those. Okay. So as I'm sure you all know, we are in the process of technology transfer, Sartiva and BBI. So our partners are working together to carry out that technology transfer. And what that involves is the development of the scaled up process to produce the test strips that that perform, you know, adequately for the what we know is the the the clinical performance targets.

40:24 And just to be clear, that is that is not a simple tick box exercise. That that is a process, a development process, which takes some time. And as soon as we have good visibility on that pilot batch of around 10,000 units, which we intend to use for the the clinical validation. As soon as we have visibility on that, I will be able to give you all a much clearer a much more precise timing of the clinical validation CE marking and product launch. I think it's important to stress that this process of, manufacturing scale of the tech transfer, it is absolutely essential that we do that properly. Rushing that simply pushes risk down the line to the clinical validation. I'm not prepared to do that. So we are working with really excellent partners to to get that process nailed so that we have a scaled up process that is robust and reliable, and that takes out a huge amount of technical risk from the from the process.

41:26 So then the the clinical validation, and lay user studies, which is the study required for the additional study for the consumer self test, CE marking, those are being designed with Liverpool School of Tropical Medicine. That's a relatively straightforward process. We get patient sample access through, through LSTM and also through the, through the Condor, system. And we will, complete the verification and validation, and that will allow us to self certify for professional users we talked about. We'll run the lay user study in parallel as much as we possibly can with that process, and then go into the the audit by the notified body of the technical file. And we're looking at how we can streamline this process, but keep it robust so that we end up with a product that is competitive globally at identifying infectious people in in the society.

42:24 So as I said, just to summarize that slide, you know, the the manufacturing scale up process is a development phase. And we are going to do it properly, and we are gonna take risk out at this stage rather than pushing it down the line. And when we have completed that and got to pilot batch, which won't be too long, then we will obviously be able to give a much more precise picture of the the path through to product launch, which is what we all want to see. Okay. So just to summarize and give ourselves some some time for questions. And I'll I'll hit the main bullet points here rather than go through them through them all. So on the therapeutic side of the business, you know, the the, you the effect of COVID actually on both sides of the business has been really on the laboratory, operations because, of course, we've had to maintain social distancing, within the, laboratories.

43:16 And that has meant we've effectively been working at at half staff to get that sort of half staffing levels to get that social distancing. We are putting more space, in place both in Cambridge and in Wetherbee because we see this issue, lasting for a considerable length of time from now. So we've actually taken on more space so we can get everyone back into the laboratories, and we're fitting those out now to be able to give it get back up to full capacity. I'll say I expect this issue of social distancing to remain for some considerable amounts of time through next year and potentially even into '22. So the the progress on the therapeutic has been very good. We focused on partner programs to ensure that those kept kept moving forward. So I would like to say, and it's a good opportunity to thank the teams publicly for, the really positive attitude and commitment that they've shown despite the, you know, the challenges of traveling and, you know, the risks of that has presented.

44:16 The the the attitude and the commitment of both teams in in Cambridge and whether it be has been outstanding to keep pro not not not only keep progress going, but to grow the company and to create these opportunities under these sorts of pressures. But on the diagnostic side, you know, good progress in getting this COVID nineteen lateral flow test to market. We've talked about the next key milestone is the pilot batch, and then I'll really be able to set out the the launch dates with with more certainty. But but also remembering that there are multiple additional COVID testing opportunities, not least through the the the mass spec test with with the AVCTRIX, but also other potential partnering opportunities for those SARS CoV two spike, AFIMAS.

45:03 And then finally, obviously, during the summer, we, we raised a significant amount of capital, and that puts us in a very strong balance sheet position to be able to deliver on the opportunities we've talked about, drive multiple programs into the clinic, and add huge value there, and support the core businesses. So I'll leave it there and give ourselves some opportunity for some questions out of what's been a very, very large number of questions. That's brilliant. Thank you very much, Alastair, Tony, and Neil. Ladies and gentlemen, please continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But for investors on the call, particularly for those that came in perhaps registering on the platform slightly after the event had started, that a recording of this presentation, along with a copy of the slides and the published Q and A, will be available via your Investor Meet company dashboard.

45:59 I'd also like to remind you that your feedback is important to the company. Immediately after the presentation has ended, you'll be redirected for the company. Alastair, thank you very much for dropping on the chat, I guess, a selection of the questions from investors that have come in today and obviously a selection of those that were presubmitted. And I think just given the number of questions that have come in on the platform, along with the number of investors on the call today, that for any question that doesn't get answered, the company will be reviewing all the questions submitted today. And we will, as I said, publish responses where that is appropriate to do so. So the first question, Alastair, think you selected is, could you please give an explanation of SITIVA's role in the manufacture of the rapid antigen test? It was initially indicated that they would manufacture, but this hasn't been mentioned in subsequent news regarding BBI stroke, Abingdon. If so, will they manufacture for The US market only?

47:00 Yes. Thank you. So that's a good question. It allows me to sort of clarify. So so SITIVA are a materials company. So they manufacture the materials to make the the strip, and so we probably, you know, could could have been clearer on that. So they supply the nitrocellulose strip, not not the finished IVD. And so the manufacturers who make the finished IVD are the likes of BBI Solutions and Abingdon Health, who we've we've already partnered with. The the there's a a couple more potential partners in The UK, and as I said, many more around the world that we can access as well. So it's really a process of raw materials from SITIVA and AVACTA.

47:47 So we manufacture those raw materials. We have partners then who do the strip manufacturing and then partners who do what's called the kitting, putting the kits together, and then obviously the logistics of of shipping those out. Thank you very much. Follow on question. What is the maximum number of LFT antigen tests that can currently be produced per month? And what will be the maximum capacity in six months? Can you give a ballpark figure for the potential worldwide manufacturing capacity for AVACTA's rapid anti chest test? Yes. So I touched on this in the presentation, but in The UK so what what I mean, we are partnered with VBI and Abingdon to to access their available capacity because, of course, they are doing other things. And we will look to partner with others in The UK as well to get as much of the available capacity in The UK as possible. I suspect, without giving away anything that's commercially sensitive, I suspect that is, you know, five to 10,000,000 tests per month as we sit here today.

48:54 So that that can be scaled, and that that depends on on investment by, you know, partners and and and others to support that that expansion, which clearly is in everybody's interests. And it's difficult to put a precise number on that, I, you know, I I do believe that that could be many tens of millions of tests per month. We've talked about requiring in The UK alone, even just for weekly testing of half the population, a 120,000,000 tests per month. So that that, I think, does still indicate some capacity overseas. The total capacity overseas is is difficult to to sort of know with with certainty. We've done a lot of work in Asia Pacific to understand what the opportunities are there. And that there is, without doubt in my mind, the capacity to meet those, you know, hundreds of millions of tests per month. Although, as I said, doing doing the due diligence on on any, you know, any third party overseas manufacturer has to be done properly. Otherwise, it's a whole world of pain that you have to deal with later.

50:08 The therapeutic platforms and their combination? Yes, it's a great question. So these two platforms, PRECISION and Afirma, actually are really interesting in their own right, but in combination, they're very interesting as well. So the Precision, as I've already said, the wider opportunity and the rationale for the Precision platform, as I indicated, is actually very compelling. Conventional chemotherapy is designed to eliminate that fast growing tumor cell.

50:57 But obviously, it's also harmful to normal tissues as well. So the Precision platform will actually help create a much more targeted therapy. Then you look at the AVACTAMA platform, and this actually brings, you know, really interesting alternative to antibodies because it's derived from a small human protein. It's approximately 10 times smaller than antibodies. So that offers potentially significant advantages in terms of tissue penetration into solid tumors. And there's a huge amount of work going on at the moment to actually develop drugs that will get into the tumor microenvironment and be more specific.

51:43 In addition, the Afirma proteins can be actually genetically fused together to form what we call multi specific. And at the moment, there's a huge amount of interest and development activity in actually developing bi specific monoclonal antibodies. And so, again, the Aframer approach with its small size, it can actually you know, we can design approaches by checkpoint inhibitors. So these are pathways that are set up large to actually for the tumor to defend itself because the tumors are very clever when they actually are growing in the body, and they start to actually work out ways to defend themselves. So when you combine these two platforms, combining Aframas with the chemotherapy agents and using a linker that is designed only to release that chemotherapy agent into the tumor microenvironment, then this actually enables an extremely potent chemotherapy to be combined with the naphthaemir immune checkpoint therapy.

52:55 So I think there's a lot of work going on at the moment with antibody drug conjugates. It's a very exciting area and I think these two platforms being combined actually helps us to get into that area very seriously. Thank you very much. Question here. Are you looking to license out the rapid antigen tests so that companies worldwide can mass produce it under their own names? Yes. So, no, we are both looking to license the the reagents themselves against the SARS CoV two spike protein, and that that allows other diagnostic companies to develop a range of different diagnostic tests on on different platforms.

53:41 But also, yes, specifically, there is the opportunity to to license the AVACTAMA to allow other people to develop their own lateral flow antigen tests. And, you know, that the the reason why that is commercially sensible and interesting is because of the the way in which manufacturing capacity limits our own ability to exploit the commercial opportunity. So that that gives us access to third party manufacturing scale. And these companies are, of course, going to develop tests regardless of, know, whether there's an antibody in there or an. And I want an to be in those tests so we deliver as much potential value to shareholders as possible. So, yeah, the the answer is yes. We we are more than happy to license for for OEM manufacturing.

54:30 That's brilliant. Thank you. Next one, is it intended to make an application for approval and use of the rapid antigen lateral flow test in The US, e g, FDA, EUA, or applications in the Far East? Yes. Yeah. So we are we've mapped out that that sort of pathway to, you know, to go through the FDA process. The one thing I would just sort of add to that is that, you know, just just pragmatically, you can see the the scale of the opportunity in The UK and how how we need to work on manufacturing capacity initially before we can really exploit the opportunity elsewhere. So we're now we have that procedure mapped out. It's actually a relatively forward, a relatively straightforward pathway.

55:19 We can go through that quite quickly once we have a a CE Mark product, in in in Europe. So so, yes, we are looking at the The US opportunity as well. That's brilliant. Thank you. Next one, there has been perceived delay by the market in getting new products into production. In terms of gaining approvals and credentials for product or products being developed, is this being sought directly by AVACTA or its partners, CYVITA or Adeptrix? Yeah. So the the lateral flow device is AVACTA. So we are the legal manufacturer of that, and we'll hold the hold the CE mark. So it's a vector that will, you know, take that through the regulatory process. Then in terms of the the bans assay with the deprec, we touched on that a little bit in the presentation. So the the way our relationship with the deprec works is that they they would be the legal manufacturer of that. But as I said in the presentation, we're we're both aligned on the fact that we need to partner this with a a a large, ideally mass spectrometer manufacturer to develop these kits.

56:29 And I think I said as we went through the presentation, we've made really good progress in that regard. Thank you very much. There's a question revolutionary development of Afema antibodies deserves to be exposed to a wider investor community than in The UK. Is there any intention to list on NASDAQ at any stage? Yeah. So I agree. I mean, there is there is significant interest in The US around actually both the AVMA platform and the precision chemotherapy platform. And so The US capital markets are certainly a mid medium term aspiration for for the company. But no no immediate plans, we have over the last eighteen months or so. We'll continue to do a lot of work in investor relations in in The US, you know, with a a potential view to that in the medium term.

57:22 Thank you very much. Your SAR COV-two diagnostic methods are based on detecting the S1 glycoprotein. Does the end glycolation effect for the binding of the Aframers, what impact do they have on the migration of S1 through LTF? Okay. So that's a detailed question from someone who's got some technical background, which is great. So the the question what the question he's asking is that the the SARS CoV two spike protein, that protein is modified, in in nature normally, by adding sugars. So it's called glycosylation. And the question is, does that affect whether the aphemas bind to it or or not? How does that affect flow through the lateral flow device? So, it's an important question, actually, a very detailed technical one, but, I'm pleased to say that the binding of the aphema reagents is not glycosylation dependent.

58:19 So the the aphema reagents work with a range of different glycosylation states, and we can see that from intact mass mass mass spectra profiles that we're capturing afimas with a range of different glycosylation modalities. So that that's that's not an issue. The the whether the different glycosylation states flow in a similar way through lateral flow device, Not don't know at this point. We'll be able to study that if we if we have the opportunity, but we're really focused on really getting getting the product to market rather than digging into the, you know, the more more interesting, perhaps, scientific questions there. But one one point I would make, and no one's raised it, but it is important.

59:08 You may or may not know that there is a mutant of the SARS CoV two virus, which is called d six one four g. So this is a mutant of the spike protein, and it's about seventy percent of cases in The US and EU now. It's a more infectious form, of the virus, and there's a bit of evidence actually that antibodies generated against, the normal virus are not effective against that mutant. So the immediate question is, do your asthma reagents bind the mutant? Because if they don't, you've got a problem. And the answer is yes. They do. We've demonstrated that. So the asthma reagents bind both forms of the, of the virus spike protein.

59:54 Thank you very much. Are AVACTA still talking to pharmaceutical companies with regards to the ACE two blocking Afirmas being used as a therapy? Yes. Well, thanks for that question. Yes. So we we we licensed some of those or the the the around those binders to to Dae Young Pharmaceuticals, our partner in in South Korea, with a view to incorporating those into stem cell therapies that would use the stem cell aspect to treat the tissue damage caused by the immune response to this infection, but at the same time would produce neutralizing atherapies to to limit the spread of further infection.

1:00:41 So we we we continue to have some discussions with other pharma companies. But just to sort of put things in context, I I don't want to sort of overwrite the pudding. You know, they they to take a neutralizing therapy through into approval would require on a on a on a, you know, relatively useful time scale would require a hugely accelerated clinical development program. And and and and generally speaking, because FMRs have not yet been into human, you know, that represents a significant additional risk. So, you know, I I don't want to overwrite the pudding and and and suggest there's massive opportunities for, you know, for a major pharmaceutical partnership here. But there's certainly interest because of the speed in which we develop those binders.

1:01:27 And therefore, you know, the prove the the performance of the AVMA platform very well. Thank you very much. Alastair, I am mindful of time, obviously, with with through the hour, and I know that investor feedback is particularly important to the company. I I propose just to ask you this final question and perhaps ask you to to wrap up. And as I said before, to remind investors that every single question received by the company will be reviewed. And as I said, appropriate responses will be given where that's appropriate. So the final question, I guess, given the cash injection achieved through the fund raising June, plus the expected significant revenues from COVID test sales, will AVACTA look to change their strategy with the cancer therapies therapies and take take the the likes likes likes of of AVACTALLOOK doxorubicin beyond Phase one trials prior to seeking partners in order to extract greater monetary value for shareholders?

1:02:23 Yeah. So I think that that is a very good question. And and certainly, you know, dependent on, you know, what could be very significant, revenue from the the COVID testing opportunity. That does allow us to potentially look at pushing AVACTA 6,000 further through clinical development, and we're building on Neil is building the team to be able to do that. And I I I'm totally aligned with the with the person who asked the question that we, you know, potentially could take AVACTA six thousand further into clinical development and and add significant value for for shareholders around that particular asset. The the other aspect of use of proceeds as it were and and and use of profit from future revenues would be around expanding the AVACTAMA precision pipeline. And I think Neil very sort of clearly set out the, you know, the potential, not not only of those two platforms on their own, but also the combination of those in a very novel drug conjugate form.

1:03:32 So, you know, we would certainly look to invest, you know, any any future sales from COVID nineteen testing products as well as the money we raised during the summer in expanding that partner. And I I hope to be able to take some time maybe later this year, maybe early next year to really talk in detail and communicate the expansion of both the AVACTAMA and Precision platforms, biological and clinical rationale around the choices that we've made because that was a very clear use of proceeds that we set out in June. That's brilliant. Thank you very much indeed. Perhaps, Alastair, just finally, I could ask you just to to wrap up and and then obviously, I'll give instructions of how investors can provide you feedback, if that's alright with you. Yes. Of course.

1:04:19 Yeah. No. I'm I'm very grateful for everyone spending the time again. Thank you, Neil. Thank you, Tony, for for helping with the presentation. When I I I mean, I think we're all totally aligned in what we're expecting to see over the next three months or so, which is the the CTA filing around 6,000 and clear progress into the clinic with that, the delivery of a a lateral flow antigen test as as a a a a the highest priority on the diagnostic I will make that very clear to the market. Right now, we are focused on that manufacturing scale up to get to a robust product for clinical validation.

1:05:12 That's brilliant. Thank you. Alastair, Tony, Neil, thank you very much for updating individual investors today, particularly given that this is the day of your results as well and enabling them to actually come to a more informed decision. Could I ask investors please not to close today's session as you'll now be automatically redirected for the opportunity to provide your feedback. If you access this meeting via our website, the feedback page will appear. If you access this link sent to you by email, you'll be asked to log in to submit your feedback. It will take a couple of moments, but we'd very much encourage you to do so. On behalf of the management team of AVACTA PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. Good morning to everyone.