Avacta Therapeutics has agreed to sell its UK-based diagnostics business, Launch Diagnostics Holdings Limited, to Duomed Belgium NV for £12.9 million in cash. The transaction, expected to close by the end of April 2025, represents a significant strategic shift as the company refocuses its operations on developing novel cancer therapeutics.
The sale to Duomed, a subsidiary of Barcelona-based Palex Healthcare Group, is part of Avacta's broader strategy to transform into a pure-play biotechnology company. The proceeds will be directed toward advancing the company's proprietary pre|CISION platform, which aims to deliver potent anti-cancer payloads directly to tumors while minimizing damage to healthy tissues.
"The diversification into diagnostics over the last two years has been very disappointing," acknowledged Shaun Chilton, Avacta's non-executive chairman. "However, this disposal is a critical and necessary step forward in our corporate strategy to become a pure-play therapeutics company."
Launch Diagnostics, which generated £17.9 million in revenue and £0.38 million in profit after tax for the year ended December 31, 2023, represents Avacta's largest diagnostics unit. The company is also in discussions regarding the potential sale of its smaller Belgian-headquartered diagnostics operation, Coris BioConcept SRL, to complete its exit from the diagnostics sector.
Promising Clinical Progress with AVA6000
Alongside the divestiture announcement, Avacta reported encouraging clinical data for its lead therapeutic program, AVA6000, a pre|CISION-enabled form of doxorubicin. The company has completed the Phase 1a dose escalation study with notable efficacy signals, particularly in patients with salivary gland cancers.
Among 11 patients with salivary gland cancers treated with AVA6000 at or above 250mg/m², one patient experienced a confirmed partial response, four showed minor responses, and only one patient had disease progression. This translates to a disease control rate of 91%, which Avacta reports compares favorably to published progression-free survival data with conventional therapies.
Dr. Christina Coughlin, Avacta's Chief Executive Officer, stated: "Our development of AVA6000 is proceeding according to plans and today's new data demonstrate the durability of the responses we have observed in the SGC indication. We believe that AVA6000 has an important role to play in the clinic, given our preliminary efficacy data and the large commercial market size of conventional doxorubicin."
The clinical data has demonstrated three key findings that validate the pre|CISION approach: significantly reduced toxicities compared to conventional doxorubicin, tumor shrinkage with multiple durable responses across different cancer types, and concentrated delivery of the active payload to tumors versus plasma.
Pipeline Expansion and Financial Outlook
Following the divestment, Avacta's cash runway will extend into Q1 2026, providing crucial financial stability as the company advances its therapeutic pipeline. The company expects to report a non-cash loss as a result of the disposal in the year ending December 31, 2025.
Avacta's second program, AVA6103, is a pre|CISION-enabled peptide drug conjugate (PDC) linked to exatecan, described as the most potent topoisomerase I inhibitor in clinical development. The program has completed candidate selection and is in pre-IND preparation with GMP manufacturing underway. Phase 1 trials for AVA6103 are anticipated to begin in early 2026.
Preclinical models for AVA6103 have demonstrated what the company calls a "dramatic increase in therapeutic index," suggesting potential for an unprecedented safety profile in clinical settings. The company notes that AVA6103 could potentially treat hundreds of thousands of patients, as over 90% of solid tumors express fibroblast activation protein (FAP), the target of the pre|CISION platform.
Strategic Financing Considerations
Avacta continues to explore the possibility of attaining a dual listing on NASDAQ, though any definitive decision will depend on multiple factors including the company's clinical data package, SEC approval, and broader market conditions. The board views a NASDAQ dual listing as a key strategic option while continuing to explore all available financing pathways to support its clinical therapeutics program over the long term.
The company's pre|CISION platform represents a novel approach to cancer treatment, utilizing a tumor-specific protease (fibroblast activation protein or FAP) to activate potent anti-cancer payloads specifically in the tumor microenvironment while sparing normal tissues from toxicity.
Avacta plans to provide a further update on the AVA6000 Phase 1a dose escalation data in Q2 2025, with full Phase 1a data presentation expected in the second half of 2025.
