Key points:
- The Avacta Group share price spiked higher then fell on a funding round.
- Investors had a mixed reaction to the news that AffyXell had raised money.
- The funds will be used to develop its drug pipeline further.
The Avacta Group Plc (LON: AVCT) share price spiked higher after revealing that its AffyXell, its joint venture with Daewoong Pharmaceuticals Co., Ltd, had completed a funding round, although it did not release the financial details of the fundraising.
Investors initially cheered the move, as evidenced by the spike higher, but the bullish momentum was short-lived as sellers stepped in and pushed Avacta’s share price lower. AffyXell is focused on developing next-generation cell and gene therapies based on mesenchymal stem cells, which use its Affimer® immunotherapies.
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Avacta said it could not disclose the details of the fundraising event due to confidentiality reasons. However, the funds were raised from new and existing strategic and financial investors and will be used to fund the company’s progress towards critical value inflection points.
AffyXell will use the funds to support studies that underpin its Investigational New Drug (IND) application since it wants to apply for IND approval regarding its lead drug candidate. The mixed reactions from investors could be based on multiple reasons.
First, the sellers might have thought that the news didn’t warrant a move higher in Avacta shares, hence the selling pressure as they overpowered the buyers to lower prices.
Avacta added that AffyXell would use the funds raised to develop its drug pipeline of cell therapies targeted at multiple immune diseases with a significant unmet need. The company also intends to bolster its platform IP portfolio.
Dr Alastair Smith, Avacta Group’s CEO, commented: “We are delighted with the continued strong progress made by AffyXell. This joint venture with Daewoong Pharmaceutical is a key strategic collaboration allowing us to demonstrate the potential of the Affimer platform to enhance cell therapies generally, as well as providing an opportunity to address the high unmet needs in AffyXell’s focus area of immune diseases.”
Dr Jong Sang Ryu, AffyXell’s CEO, said: “I am very pleased that we have raised the capital required to accelerate the development of therapies using AFX platform targeting intractable diseases and providing meaningful options for suffering patients, especially in the immunology area.”
*This is not investment advice. Always do your due diligence before making investment decisions.
Avacta share price.
The Avacta share price spiked higher briefly before falling to trade in negative territory at writing.