Avacta Group Plc

Good afternoon, good morning, ladies and gentlemen, and welcome to the Evato PLC preliminary results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Please simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your investor meeting company dashboard. Before we begin, we would like to submit the following poll. And if you'd give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand over to Alistair Smith, CEO. Good morning.

Morning. Thanks very much, Mark. Morning, everyone. Welcome to our results for 2021. Thank you very much for sparing the time to attend. So you've got myself and Tony on the line this morning. I think most of you are familiar with us. I'm Chief Executive, Tony's Chief Financial Officer. We're just going to turn our cameras off actually to make those slides a little bit bigger as we move forward. Just do that. Great. Okay, so a few of you may not be familiar with the company, so a brief little bit of background. The Vactor Group is formed of two divisions, the therapeutics division and the diagnostics division. Therapeutics division, now a clinical stage oncology drug company. We have actually some exciting news that we are co-locating our research team that's been based in Cambridge for a number of years with the clinical development team in London. We'll talk a little bit more about that as we go through the presentation. The Diagnostics Division based in Weatherby in Yorkshire. Okay, Tony, could I hand over to you to go through the results for 2021, please?

Thanks. Good morning, everybody. Just to take you through the results. So these are the results for the year end in December 2021. And just to point out from the offset, these results are based on our continuing operations. As you may well have seen, our animal health division was sold in March 2022. And from a financial reporting point of view, that's treated as a discontinued operation, even though the sale took place after the year end. So the results that you can see in front of you reflect the diagnostics and therapeutics divisions with the revenue for the year just shy of 3 million up from 2.1 the previous year. And as we just walk away down through the profit loss account, you'll see the research costs is the big area of development spend where we've got obviously the clinical and preclinical development costs for the therapeutics business together with all the product development costs of the diagnostics division and in particular the SARS-CoV-2 lateral flow test. the manufacturing costs are reflected there and those costs which is a new cost during 2021 was the costs of the technical transfer and production batches of the lateral flow tests which were made with our partners Mologic and Abingdon Health the cost of those was taken through pause the tests which we will pick up and cover later. Carrying on down the income statement, admin costs have increased during the year as we have scaled up both the diagnostics and therapeutics business with the diagnostics building up its regulatory and quality functions as it's now a fully ISED 13485 IBD company and also the therapeutics is transitioning to a clinical stage. The taxation line there is a credit of 2.8 million and as some of you have heard me talk about previously we reclaim R&D tax credits and that helps us continue with the development costs so that 2.8 million will come back as cash into the business later on this year. The retained loss for the year is just over 26 million compared to 19 million in the prior year and that gives a loss per share of just under attempt move on just in terms of the um segmental analysis in terms of the different businesses to give you a bit of a flavor around the the revenues of these teams so the diagnostics revenue um includes license fees from our partner australia by separations uh there are some custom um after reagent projects there and some revenues from the uh anti-natural flow tests whereas the therapeutics revenues come from our collaborations and milestones with LG Chem, some licensing fees from Point Biopharma and some FTE income from the collaborations that we've got with LG Chem. and AFI Excel, and we'll update you on progress on those later on. The research costs, as you can see, centre primarily around the therapeutics business as the developments there scale up. Just a brief note just to pick up on the animal health side. Obviously that was sold in March. We receive an upfront payment of just shy of £900,000 and then there is contingent deferred consideration of up to a further £1.4 million and that'll be based on the sales of that division as it combines with NextMeans UK business over the coming 12 months. Moving on to the cash flows. The cash flows during 2021 was basically an outflow of 21 million covering all the development activities of the group. There was no fundraising that took place during the course of the year. So from a cash perspective, the cash position at the end of the year was 26 million. moved on from the 48 million that was there at the end of 2020. We have net assets of 41 million and that cash flow there takes us through well into 2023 to continue to develop the programmes that we have and we do appreciate there is a significant amount of discretionary and committed and non-committed spend on the different development projects as we move through those. So there's a good opportunity to manage that cash flow very carefully as we always have done. I will now hand you back over to Alistair to pick up on the therapeutics division.