Avacta has announced a collaboration and licensing agreement with ADC Therapeutics to develop multiple Affimer drug conjugates. The conjugates will combine Avacta’s Affimers with ADC’s warhead and linker technology. The collaboration is multi-target and will aim to generate Affimer binders to three undisclosed cancer targets. ADC will be responsible for all pre-clinical research and development except for Affimer selection, which will be carried out by Avacta. The agreement includes an option on each target to gain an exclusive clinical and commercial licence. Avacta will also be eligible to receive option fees, development and commercial milestones and single-digit royalties. Additionally, ADC will cover Avacta’s costs during the collaboration. No further financial details were announced. We retain our valuation of Avacta at £51m or 44p/share.
ADC Therapeutics is a clinical-stage oncology company focused primarily on developing antibody drug conjugates for treating haematological and solid tumours. Its therapies are based on pyrrolobenzodiazepine (PBD) dimer warhead technology. PBDs are potent toxins that have been shown to actively kill cancer cells in pre-clinical models and the technology is being tested by ADC in multiple late-stage clinical trials. The original PBD technology was in-licensed from AstraZeneca who continue to hold a board position as well as significant equity stake (7.2%). ADC Therapeutics are well financed, most recently closing a $103m Series E financing expansion (total round proceeds of $303m) in July 2019. Due to undisclosed financial terms, we do not include this deal in our valuation but we view it as further validation by a well established clinical partner of Avacta’s Affimer platform, particularly in relation to Affimers’ formatting capabilities.