Myles McNulty Profile picture
Jan 28 26 tweets 12 min read
The contrasting opinions on @avacta's valuation on FinTwit is fascinating.

Those who think #AVCT is overvalued, just can't seem to get their heads around the possibility that a £250m British biotech could be on the cusp of revolutionizing cancer treatment.

The bull case⬇️

#AVCT has four platform technologies:

1) Affimer Diagnostics
2) Affimer Therapeutics
3) pre CISION
4) TMAC (a combo of 2+3)

The purpose of this thread is to focus on and explain pre CISION and its potential value. This is the greatest near-term value driver for @avacta.

pre CISION - what is it? The most basic of explanations would be:

"Chemotherapy with dramatically reduced side-effects."

Chemotherapies are highly effective treatments for cancer, and have been used for decades. The issue with them, however, is that their effects are...

...indiscriminate on tumor and healthy tissues alike.

For example, the well known anthracycline chemotherapy, doxorubicin, kills heart cells as much as it kills cancer cells.

This 'dose limiting toxicity' caps the effectiveness of chemotherapy.

#AVCT has exclusively licensed the pre CISION platform - for life of patents - from Tufts University School of Medicine and Bach BioSciences (the company of the scientist who invented the tech).

A single, must-read page on how pre CISION works:

The first pre CISION, pro-chemotherapy that @avacta has brought into human clinical trials is AVA6000 - a targeted form of doxorubicin.

The data generated in preclinical mouse models was extraordinary.

If only 20% of the targeting achieved in animals is achieved in man...

...then #AVCT will have a blockbuster drug on its hands.

Doxorubicin is a $1 billion dollar drug, even now in its current form (major side-effects), and when it's off patent (so must charge less).

If @avacta's AVA6000 can reduce side-effects at all, then it's going to...

...rapidly displace the majority of the generic doxorubicin market. If it can reduce side-effects by 90%+ (as it did in mice), then it'll take the entire market.

But, as #AVCT itself has stated, a working pre CISION platform could multiply that market.


MORE patients would be eligible for AVA6000 than would be for standard doxorubicin, and ALL patients could endure more doses.

Furthermore, a patented drug could be sold on the market for much more than a generic (off-patent) drug.

#AVCT would patent a successfully... 9/25
...developed and trialed AVA6000 (the pro-drug form of dox.).

I have written previously of the chances of success of AVA6000 working in man ⬇️

We are now approaching six months into the Phase 1 trial that is ongoing in three UK hospitals, with three further UK hospitals.. 10/25
...and an unknown number in the US to begin recruiting shortly.

I also suggested four possible news items that could be taken as indicators that AVA6000 was working in the first cohort of three patients:

1) Additional hospitals start recruiting.


2) #AVCT RNSing dose escalation of next cohort (of 3 patients).

3) IND filing for AVA6000.

4) #AVCT selecting a clinical candidate for AVA3996 (pro-velcade).

The rationale for them being good indicators is described in the thread ⬆️

Three of the four have now occurred.

We wait only on dose escalation and launch of the second cohort of patients. This will be the indisputable evidence that pre CISION works in man.

#AVCT would be dosing these next patients with an AVA6000 that is 1.5x or more the potency of standard doxorubicin.

We could be waiting on patients 2 and 3 from the first cohort to finish their last cycles;

Their could be NHS delays owing to Covid;

Their could be issues with patient recruitment.

Dose escalation (and the timing of) is in the hands of the Principal Investigator.

But back to #AVCT's pre CISON platform, and its potential value.

AVA6000 is not a new drug. Its efficacy is not being tested, per se. @avacta is simply trying to reduce its side-effects.

The same technology - William Bachovchin's chemistry - can also be applied to... 15/25
...other types of chemotherapies: besides anthracyclines such as dox, it can be applied to taxanes, to protease inhibitors, to platinum-based chemos, etc.

I believe #AVCT already has a dozen or more existing chemotherapies in the pipeline - not including AVA3996, which...

...has already evidently yield positive results in animals (see latest RNS ⬇️)

To reiterate: #AVCT is NOT making new drugs from scratch. Efficacy of its pro-chemos will not be under question. It is whether pre CISION can simply improve the safety profile of these...

...existing, already highly effective anti-cancer drugs.

Because of this, #AVCT's prodrugs will not be required to go through Phases 1-3 like novel drugs under development.

They will require only Phase 1, and then a Pivotal Phase 2 (from 2.20 ⬇️)

And so we arrive at the crux of the @avacta #AVCT investment proposition:

If - I acknowledge, it's a BIG IF - pre CISION works in man, then the owner/licensee of the platform will be able to remake, rebrand and relaunch the majority of drugs on the existing chemo market.

Provided the owner of the drugs doesn't make them prohibitively expensive (take the piss!), why would the range of prodrugs not rapidly displace the entire market?

But remember: these prodrugs could also MULTIPLY the conventional chemo market (already $74bn pa by 2027).

It's simple to perceive how pre CISION working in man could turn the oncology industry on its head. How many years and tens of $ billions have gone into alternative drug types and products, partially as a result of the dose limiting toxicities of chemo?

If AVA6000 shows signs of working, it's obvious to see how Big Pharma will make a move immediately.

A major could put a dozen pre CISION drugs into pre-clinical simultaneously.

A sole owner of pre CISION - with deep pockets - could monopolize the global chemo market.

With regards to #AVCT: people simply cannot believe that an AIM company could possess this technology.

Moreover, many invested in #AVCT in the past 20 months because of @AvactaDx's SARS-CoV-2 LFT, perhaps with little knowledge of the (at the time) pre-clinical AVA6000...

...and the pre CISION platform. Many crystallized big losses and resent the stock. Everyone reading this will have seen the extraordinary trolling of #AVCT. Losing money can drive intense hatred.

And for the two shorters, thinking they can close on a placing: consider ⬇️

Finally: the DISCLAIMER.

pre CISION has not yet been proved to work in man. We may get told next week that it has not worked. Or, that it does, but that AVA6000 has had some specific issues.

This is HIGH RISK biotech.

But: my view is that the R/R is complete nonsense.

*There *There 🤦🏻‍♂️🤦🏻‍♂️

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More from @MylesMcNulty

Jan 17
There are so many ways to arrive at the conclusion that #AVCT's valuation is nonsensical.

Another, beyond the below, is to look at #APTA - owner of a first generation antibody mimetic platform, Aptamers - that recently listed on AIM.

On Friday it surpassed £100m mkt cap. 1/14
For each of its past two FYs, #APTA has generated no more than £1m in revenue.

The Affimer platform is a next generation antibody mimetic platform. It was "engineered to overcome many of the problems associated with aptamers or with antibodies". ⬇️

To my knowledge, #APTA (or its partners) has not put in place manufacturing capacity of 30+ million per month to sell propreitary, Aptamer-based SARS-CoV-2 LFTs.

#AVCT has.

So @avacta not only possesses a next gen., superior antibody mimetic platform; but from it has...

Read 14 tweets
Jan 14
@PapaDoc3333 @TrivChannel Thanks Malcolm, very kind.

The air of failure surrounding #AVCT this week on Twitter and the bulletin boards - largely from non- and ex-holders - is truly mystifying.

We will have a very good idea of whether the pre CISION platform is working, in the coming few weeks…

@PapaDoc3333 @TrivChannel …either from dose escalation in AVA6000 P1a; or from candidate selection for AVA3996.

One vital, silver lining of #AVCT’s RNS on Monday:

Alastair Smith has made it very clear that he is a man of integrity. He could have allowed M19 to continue selling MeduFlow in the EU, 2/n
@PapaDoc3333 @TrivChannel … and continue with their application to the FDA for EUA (home-use) in the US - whilst improving the strip simultaneously in the background.

All other LFT providers are doing this, after all.

The fact that AS didn’t tells us two things:

1) he will inform the market of…

Read 6 tweets
Dec 2, 2021
I came to appreciate long ago that AIM is an inefficient and irrational market.

But the share price of @avacta this week takes the biscuit. Following Monday's RNS, I was convinced we'd be at ATHs by now.

My explanation for what I think the market is missing on #AVCT ⬇️

On Monday, #AVCT announced that it had received FDA approval for its Investigational New Drug ('IND') application, to expand its Phase I clinical trial for AVA6000, into trial sites in the US.

The timing of the submission and the length of review are critical.

The FDA has a 30-day review and turnaround time. Given #AVCT announced the approval this Monday, owing to LSE disclosure laws we must assume it received the approval sometime between Friday and Sunday.

Give a few days for post / admin / comms delays, and we can assume...

Read 25 tweets
Dec 2, 2021
Happy with @Tirupatiuk's H1 results. The growth rate really is incredible, despite not being reflected to a great degree in the financials (yet).

When the acquisition of TSG completes (subject to Reserve Bank of India's approval), #TGR takes off.

Firstly, #TGR's upstream mining operations.

The very small 'proof of concept' Sahamamy plant - 3,000t pa.

It only operated at 2/3 of nameplate capacity in H1 (1,060t produced; 950t sold) owing to various Covid restrictions.

Even so, it achieved a gross margin of 54%.

The second plant, Vatomina, is three times the size, at 9,000t pa. It came online this Q.

A third plant, Sahamamy 2, is now under development, and is coming online within 6 months. It will have capacity of 18,000t pa.

#TGR's nameplate capacity as at 01.07.2022: 30kt pa.

Read 20 tweets
Oct 12, 2021
The portfolio cornerstone, @avacta #AVCT, now down 6% YTD - having been +154% (290p) in April.

The PF is now more heavily weighted than ever to the stock, primarily for the impending AVA6000 data.

Acutely aware that it's a high risk strategy, but have immense conviction.

Four potential indicators to look out for in the coming weeks / months that #AVCT's targeted chemotherapy platform is working:

1) Additional hospitals start recruiting.

If the first patient(s) of the first cohort was experiencing the side-effects...2/11…
...associated with standard doxorubicin, the trial may have been halted already.

On that note, St. James's University Hospital started recruiting, AFTER #AVCT's CEO stated he was "very pleased with the positive progress", re: the first patient at Royal Marsden.

Read 11 tweets
Oct 12, 2021
Frustrating to see @Afritin_Mining trade underwater, ~5.2p average.

Tin pushing to record highs again, yet #ATM flounders 25% below the recent £13m placing at 6.0p.

Phase 1 Expansion at the Uis Mine in Namibia completes mid next year. This will be transformational for ATM.

At the current tin price ⬆️, Uis running at nameplate capacity of 1,200 tpa (post ongoing expansion works) would be generating circa £26m EBITDA on circa £36m revs.

The pilot tantalum plant to come online in next few months will provide incremental revs (although at this... 2/6
...stage, unknown), which could grow considerably. Lithium oxide should also come online at Uis Phase 1 - perhaps later next year.

At the current tin price, the expanded Uis Phase 1 (without Ta or Li credits) will have an NPV of $70m to $80m, v. #ATM's current EV of $61m.

Read 6 tweets

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