Avacta Group Plc

Good afternoon, ladies and gentlemen, and welcome to the Evactor Group PLC Final Results Investor Presentation. Throughout this recorded presentation, attendees online will be in listen-only mode. Before we begin, we'd like to submit the following poll, and if you give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand over to the management team from Evactor PLC, Christina, Tony. Good afternoon. Good afternoon.

Thanks, Mark, and thanks to everyone who has dialed in to listen today. My name is Christina Coughlin and I am the new CEO of AVACTA. Let me take just a moment to introduce myself to all of you. I am an oncologist and an immunologist. I trained at the University of Pennsylvania now a number of years ago. The serendipity of my first year oncology career as a fellow was that Penn recruited a gentleman by the name of Carl June, who is the scientific pioneer behind the CAR T-cell. I spent a number of years working with Carl and training with him in science and practicing pediatric oncology before then leaving for an industry career. So I spent about 10 years in large pharmaceutical companies. Wyeth was acquired by Pfizer, Novartis, and then moved over to biotech. You can see there our chairman, Elliot Forster, was my first CEO at Immunocore when I first moved over to biotech as the chief medical officer there. I did a couple of rodeos as a chief medical officer, one as a CEO with an NK cell company. And I've been on the board of Avacta now for just over two years and really have fallen in love with the technologies here. I'm looking forward to telling you a little bit more about our technologies as we get to the business update. But first, let me also introduce Tommy. who is our CFO, who will be taking us through the preliminary results.

Hi, thanks everybody. Let me just take you through those numbers now and just to bring those up to date. So we're reporting on the year ended December 23 relative to the prior year. And as you can imagine, our income statement looks very different compared to a year ago. given the two acquisitions which have now embedded into the Diagnostics Division, with Launch being acquired back in October 2022 and Chorus back at the beginning of June last year. So revenue growth is up to £23 million and it's obviously got a knock-on impact through to our gross profit number for Research costs is probably one of the most important parts in the P&L in terms of the spend on the development programmes, and we'll talk through the plans on those later. From an SG&A perspective, we've obviously got increased costs there given the additional businesses, but on an underlying basis, excluding the two acquisitions, SG&A costs are down about 3.5% year on year. We have an operating loss of 28 million, which is slightly lower than last year's figure. And then we have the financing and tax costs where we have the R&D tax credits that we reclaim in cash every year. And there's a net non-cash charge of about a million pounds from the two components of the convertible bonds as we take them through the finances section. So we end up with a retained loss of 25 million. and that there's a loss per share of just over nine pence per share if i um just break the the income statement down a little bit further into our segments um therapeutics uh the the income coming through from here is the fxl milestone that we had during the year that takes our percentage ownership of that jv up from 19 through to 25 percent um obviously that's a non increases from that perspective, and the 13 million research costs compared to just under 9 million the previous year. SG&A costs and therapeutics are broadly flat year on year, so the adjusted EBITDA, and that's our non-cash, non-recurring items measurement that we use, so 13 million loss of therapeutics compared to the 6 million for the previous year, and that is purely the the drive on the research costs as we head through the clinical programmes. I'll move on to the diagnostics division. Obviously, we've grown massively from 4 million revenue to 21, and that gives us 9 million of gross profit to contribute towards the group. Our important bit is we're striving to make diagnostics gone from a loss of 5 million EBITDA to just over 1 million in that period. We believe that the division will be EBITDA positive in the second half of 2024 and it will be cash generous relative to 2025. So all the investment that goes into DRIVE is essentially the therapeutics part of the business with diagnostics covering itself and starting to contribute cash to the business as we move forwards. I'll move on to the cash flow statement. We started 2023 with 45 million, operating cash outflows of 15 million. The investing activities reflects the payment for our chorus business and there's some with just under 17 million of cash, but the fundraise in March contributed a net 29.4 million to cash. So at the end of March, we had circa 38 million cash. That cash based on our current runways takes us through probably to the start of 2026, which is what we've indicated previously. From a balance sheet perspective the non-current assets has increased year on year because of the chorus goodwill cash we've talked about previously. The other item to just mention there is the convertible bond has two elements to it and it's reduced from just under 58 million down to 34 million at the end of the year in terms of how the two components of it have been valued. The sixth monetisation happened on the 22nd of April this year, so the principal amount at the bottom is now reduced from £55 million down to £35.7 million as we sit here today. Thank you very much for that, and I will now hand over to Chris to pick up on the business update.