Avacta Group (AVCT) H1 2024 earnings summary

Executive summary

• Interim results for H1 2024 met board expectations, with Diagnostics division revenue and gross profit growth, and Therapeutics division focused on AVA6000 clinical progress and next-gen preCISION medicines.

• Diagnostics division achieved adjusted EBITDA of £0.1m, reversing a £0.4m loss in H1 2023, driven by revenue growth and cost savings from lab consolidation.

• Therapeutics division accelerated AVA6000 Phase 1a trial enrollment, with strong safety and efficacy data, and is preparing for Phase 2 in 2025.

• The process to divest the Diagnostics division has begun, with indicative offers received, aiming to become a pure-play therapeutics biotech and attract specialist investors.

• A sustainable long-term funding strategy is being explored, including a potential dual Nasdaq listing.

Financial highlights

• Group revenue for H1 2024 was £11.3m, with Diagnostics division revenue rising to £11.2m and adjusted EBITDA positive at £0.1m.

• Gross profit increased to £6.7m year-over-year; gross margin for H1 2024 was 44.6%.

• Adjusted EBITDA loss narrowed to £7.9m from £11.1m in H1 2023.

• Cash at 30 June 2024 was £32.5m, up from £16.6m at 31 December 2023, reflecting proceeds from a March fundraise.

• Operating cash inflow from Diagnostics was £1m.

Outlook and guidance

• Diagnostics division expected to remain EBITDA positive in H2 2024 and cash flow positive in 2025.

• Therapeutics cash outflow will accelerate as AVA6000 trials progress, with Phase 2 to begin in H2 2025.

• Next-gen preCISION candidate selection expected in H2 2024; R&D spotlight scheduled for October 30, 2024.

• Preliminary data from AVA6000 expansion cohorts to be presented in 2Q 2025.