Avacta Group (AVCT) H1 2024 earnings summary

Executive summary

• Interim results for H1 2024 were in line with board expectations, with Diagnostics division revenue and gross profit growth, and a positive adjusted EBITDA of £0.1m, reversing a £0.4m loss year-over-year.

• Therapeutics division focused investment on AVA6000, accelerating Phase 1a trial enrollment, demonstrating strong tolerability and preliminary efficacy, and 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.

• A sustainable long-term funding strategy is being explored, including a potential dual Nasdaq listing and engagement with specialist US healthcare funds.

• March 2024 fundraise raised £31.1 million, significantly strengthening the cash position and extending the cash runway.

Financial highlights

• Group revenue for H1 2024 was £11.3 million, with Diagnostics division revenue rising to £11.2 million and adjusted EBITDA improving to £0.1 million profit.

• Gross profit increased to £6.7 million, and gross margin for H1 2024 was 44.6%.

• Adjusted EBITDA loss narrowed to £7.9 million from £11.1 million year-over-year.

• Cash and cash equivalents at 30 June 2024 were £32.5 million, up from £16.6 million at 31 December 2023.

• Operating cash inflow from Diagnostics was £1 million; net cash used in operating activities was £12.4 million.

Outlook and guidance

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

• Therapeutics cash outflow will increase as AVA6000 trial progresses, with Phase 2 to begin in H2 2025.

• Next-generation preCISION candidate selection and pipeline updates are scheduled for H2 2024, with a live R&D spotlight in October.