Avacta Group Plc (AVCT) Earnings Call Transcript & Summary

Good morning and welcome Avacta Group plc post AGM presentation and investor Q&A session. Throughout recorded meeting, attendees will be a listen-only mode. [Operator Instructions] The company may not be in a position to answer every question submitted today. Have all questions will be reviewed with response published on the Investor [indiscernible] company platform. The meeting will begin shortly.

[Audio Gap] for just over 30 years. [indiscernible] the big pharma of Lilly and Wash and then [indiscernible] officer and other consulting [indiscernible].

Very quickly because we've hit 11 to spectrum live on IMC now. I'm not going to let Craig and Matt get away with it. So if you could just stand up very quickly. Craig is the Chief Operating Officer in the Diagnostics division and Matt Johnson, Chief Scientific Officer of Diagnostics division. Both around for the rest of the day to answer questions. Sorry, David. The [indiscernible] was obscured. [indiscernible]. Thanks, David. Sorry. Okay. So -- do we know if we're live on the IMC? Michael is there a way of me knowing or should I just plow in. Okay. Excellent. Then I will get into the business review. So I mean, firstly, just to echo Elliot's comments. I mean thank you very much. It's genuinely fantastic to see so many people here. We continue to break records in terms of the number of attendees at these online presentations and AGMs. And it's wonderful. It's great. And the feedback is, I mean, genuinely, well received. So thank you for that as well. Let me plow on past the disclaimer. You've all read that, obviously. And I think the first place I was going to start with this rearview mirror. It sounds like something on -- have I got news for you. But the place I thought I would start is just to say, well, what targets did we set ourselves for this year and how well have we done? So from a therapeutics perspective, one of the key objectives, as Elliot mentioned, was to get proof of concept of the platform as well as AVA6000 in human. I mean you can't underestimate the change that, that has brought to [indiscernible] of its conversations with potential partners with the potential investors. The other key objective was to build value in the preclinical pipeline. And I'm sure we'll have plenty of time to talk about AVA3996 and we have a poster where you can dig into the science a little bit more as well. and then to continue to progress the Affimer platform towards the clinic and clearly, in the last few years, we're focused on pre|CISION for obvious reasons because getting human data has made a huge difference to the reputation and the value of the business. But nevertheless, progressing the Affimer platform, and we do that primarily with partners as well as with our internal programs is hugely important. From a diagnostics perspective, the objective over the last 12 months or so has been to really build that business -- really build that business into a -- and we'll talk about that after lunch a little bit more than we are this morning, but to build that into a European a significant European IVD business that has value for the group. And that has to be a profitable business that delivers cash into the group and gives us some optionality in the future. So there's a lot on this slide, but I just wanted to point out that across those particular objectives, getting the proof-of-concept for pre|CISION in human, I mean what you see is the news flow, which is why I've highlighted it. What you don't see is what sits behind the news flow. So a huge amount of work that goes on the preclinical work to get these sort of assets into the clinic, the regulatory work, the CMC work, the clinical work. There is a huge amount of activity gets us collectively to being able to talk about moving into the sixth dose cohort. So you see the sort of tip of the iceberg, if you like. But just to emphasize, and obviously, Francis and David and Fiona can talk more about this when you get a chance to mingle later. The amount of activity that has to go on in order to be able to deliver this news flow. We'll talk later about the proof of concepts and the data and Andrew will go through the clinical data as well. We have certainly built value in the preclinical pipeline. Primarily through AVA3996, of course, primarily through our activities or I should say, Fiona's activities and Neil's activities around the world at significant conferences that has generated a lot of attention which is really important for us. Progressing the Affimer platform towards the clinic. As I say, the focus really on our resources in the last few years has been on pre|CISION for understandable reasons. We will get a chance to talk about the Affimer pipeline at lunchtime around the posters. We've been focusing our resources and our support with our partners who are LG and [ Daewoong ] AffyXell who are pushing the Affimer platform towards hopefully IND filings next year, which is, again, hugely important for the company to get safety and tolerability on a new biologic platform effectively off our balance sheet through partners is tremendously important. And then you're all aware of the progress in the last, well, 6 months, really. And we have super representation here from launch but to be able to start that journey of building a European IDD business with real scale is very exciting. So that's the sort of rearview mirror. I just wanted to make sure that we covered off our Board as well. So I mean, Elliot, you've now met, I won't read through the bios obviously they're in the presentation, which you can download. But in Chris and Mark, we have huge drug development experience. These are both hematologist oncologist, if I'm correct. But what they brought to the Board is immense in terms of the value. They spent careers developing drugs in businesses like this, being able to be as swift and efficient as possible into the clinic, making the right decisions in terms of clinical design and so on. And the network, of course, that they bring is tremendously important. So the Board has both that drug development experience but also extensive commercial experience with obviously the execs, but the nonexecutive which is Elliott. And Shaun, Elliot mentioned who many of you will know, and probably many of you were investors in Clinigen. So you'll know Shaun and his track record is commercial background extremely well. Paul is here in the audience. He'll answer all the deep technical questions, I'm sure, later on. But Paul has a very impressive track record in the likes of Vodafone, GSK and more recently [indiscernible] Argenta. So Paul brings a very, very high degree of financial acumen and runs the Audit Committee and so on. And then last but absolutely not least, Trevor, who's been an outstanding nonexec for many years and runs the RemCom. Trevor has, again, a really extensive commercial background. So just to fill in the team and talk about the Board a little bit, which we never tend to do. So, okay. So I'm going to spend, I don't know how long I've got. So give me a kick if I start to run out of time, but it's only lunch next, I don't worry. I thought I'd spend a little bit of time on therapeutics. I'll spend less time on diagnostics, but only because I'm going to talk about that after lunch. So the vision, which Shelly asked about, and we had an opportunity earlier on to think sort of longer term, the clear vision right now is to deliver drugs -- innovative drugs that actually make a difference to patients' lives. And I would add to the comments we made earlier, personally, I think it's also extremely attractive to be looking at a mix of types of drugs where some of the drugs are actually going to be affordable drugs, okay? So there's a huge amount of interest and activity in cell and gene therapy and immunotherapies. And these are relatively expensive drugs, many of which aren't approved in the U.K. or Europe for cost reasons. So one of the things that I think is also attractive around the pre|CISION platform is that it can yield relatively affordable drugs that will be broadly used around the world. So our vision is to genuinely make a difference to patients' lives. And we're already seeing that because we're seeing the difference in the quality of life that patients are experiencing when they're on treatment. The strategy, and we'll talk a lot more as we go through the next few slides about strategy, but we have 2 therapeutic platforms, may be unique, I'm not sure. But those platforms do, as we said earlier, give us just an unbelievable breadth of opportunities. The challenge is to focus on to the right ones that are going to deliver progress near term, build that durable platform, which I think we have done over a period of time to be able to then do some of the more expansive things when we're in a position to do that. We have a very clear strategy of working with partners as well as growing our own preclinical pipeline. We are, I have to say, relatively selective about our partnerships. So we're now just getting into that commercialization phase with pre|CISION because of the data that we're generating and believe me, the human data, clinical data is what really changes the conversations with potential pharma partners. Platforms are great, but people want to see clinical proof-of-concept. And then finally, combining that sort of in-house capability to develop drugs with those partnerships like AffyXell and LG, which we'll say a little bit about later on, but very happy to answer questions on that, of course, when we break for lunch. I'm not going to spend long on this slide, but just as a sort of preamble to the commercial strategy later on, doxorubicin, which is the basis for AVA6000 that is a reasonable size market, albeit a generic that's been around for many years, and I was chatting to someone before we started about the limitations of that market because the limitations, the number of cycles patients can receive the limitations on the eligible patient population. So what we are able to do with the pre|CISION platform is to reduce that systemic exposure to broaden that potential patient population increase the number of cycles, potentially that patients are given. So the commercial opportunity isn't just around soft tissue sarcoma. That's -- I couldn't tell you actually what fraction that is of that GBP 1.4 billion current sales. But soft tissue sarcoma is a relatively rare cancer and one that's quite heterogeneous actually. So it's a very complex disease. But it is the disease. It is the cancer for which doxorubicin is the -- is single agent first-line therapy. So that's the clear one where we're focusing is good rationale for focusing on that in our clinical development. But I'm sure you get a chance to talk to Fiona or Andrew, we are thinking, and we have a vision that lies outside soft tissue sarcoma in areas such as breast and ovarian, where doxorubicin is used in combination with other therapies. So that sort of represents the entire market, and that's what we are heading towards. Andrew is going to talk in a lot of detail about the clinical data. So again, I'm not going to preempt too much of that, but I'll give you a sort of summary of where we sit today. Andrew is going to present the detailed data from the Science Day. So this is a slightly more up-to-date summary in terms of the number of patients that we've now treated 29 patients through and I think if we just focus on the headline for a moment, a very positive safety profile. In fact, one of the clinicians on the study has said that he can't help when the patients have been dosed. So that makes a huge difference to the quality of lives of patients compared to being on doxorubicin, and I'm clearly not a clinician, but Andrew can. I've no doubt sort later about the sort of side effects that the patients do experience when they're on a drug like doxorubicin. So we're seeing a very positive safety profile. Of course, that could be, and we've talked about this many times, but just to go over it again, and I could be because we're locking up doxorubicin and never releasing it. So we've got a super safe drug, but it's useless. Unfortunately, the biopsy data that we published today that again, Andrew will cover shows very clearly that we are getting release of doxorubicin in the tumor tissue from those biopsies at therapeutically relevant levels. Okay. So there's been quite a few questions we'll hopefully, it will come out in the room later after the presentation about how much doxorubicin do you need to get into patients for it to be effective. So hopefully, we can cover that later on. So we've got a very, very favorable safety and tolerability profile. The quality of life of the patients whilst on the drug is much better than it would have been. So the incidents and the severity and the sort of side effects that they see, particularly the hematological toxicities, which are -- what are responsible for defining the 3 weekly dosing that you have to use doxorubicin, we see very little of those. So again, Andrew will go through that in a lot more detail. And the biopsy analysis really is the icing on the cake when we published that data, the data that we had in hand in January or February, I can't remember, that's the sort of overview before Andrew goes through his more detailed presentation later. So as I said earlier, we're now entering the commercialization phase for the pre|CISION platform for these assets because of the clinical data that we're getting. I will make the point that efficacy data is still a really important milestone, and that will be very influential in terms of deal values and potential to do deals. So people are still asking about efficacy data. As of course, many of you have asked. And this group of patients in the safety study, of course, have not been selected to deliver efficacy. So that is not something we have been expecting to see in this group of patients. So that will come slightly later, as Elliott mentioned, but running down our options now for commercialization of the pre|CISION platform. Now AVA6000, we talked about vision. Our view is we don't want to license AVA6000 too early. We want to take that through clinical development ourselves for obvious reasons in terms of creating shareholder value. But also, it's really important that we maintain that lead clinical program and maintain our clinical status as a biotech. So we would not want to license or partner, AVA6000 in any sort of comprehensive way. As I say, efficacy data is really, really key in terms of being able to do good deals for that asset. I think it's reasonable to think about potentially partnering it for the Phase II study. But again, if we have the resources to do that, I'm sure the Board would take the view that being able to run that Phase II study. Certainly, we would like to have the resources to be able to run that study ourselves because otherwise, we're in a less strong position in terms of negotiating a partnership for that phase of development. In terms of earlier pipeline and the only drug earlier in the pipeline that we talked about is AVA3996 and poster outside at lunch. So we're progressing that through now to an IND filings. That's a very early stage asset. But nevertheless, I think there is potential to partner that. So that would not be partnering our lead asset. And depending on how the development proceeds, there could be a number of indications that could be partnered in. So there's some opportunity there for AVA3996 now that we have validated the pre|CISION platform in human. Then I think the most likely to be frank, is to be able to partner the pre|CISION platform at this point. And by that, I don't mean a comprehensive global partnering with the platform. What I mean is partners who may have their own toxins. And there are many toxins out there that are far too potent to be given systemically as a chemotherapy. So there is -- in my view, and Fiona has a strong view on this as well, there is certainly potential for partnering of the pre|CISION platform specifically with a third party to work with their particular toxin. And then finally, our current commercial approach to the pipeline is to focus our attention on those more potent toxin. So of course, we could go down a list of generic chemotherapies and look at which one of those were amenable to the chemistry, which is many of them and think about making other forms of pre|CISION chemotherapies from generics. But our view is there is more value both clinically and commercially. To looking at more potent toxin, so the sort of toxins that may only be used as warheads in ADCs, for example, because they're simply too potent to give systemically. So that's our -- the commercial picture that we're looking at now, a number of opportunities. As I said, I think the pre|CISION platform and licensing that with third parties to take their drugs forward as pre|CISION tumor targeted drugs is the most likely to yield results in the near future. Couple of very brief slides on the partnerships I don't know how I'm doing for time. I think everybody is -- excellent -- I think everybody is relatively up to speed on AffyXell and LG and obviously very happy to talk in more detail about these outside. AffyXell is a super demonstration of an application of [indiscernible] that we wouldn't do internally where the modified stem cells produce and secrete the immunomodulatory [indiscernible] the therapeutic Affimer in the environment around the stem cell. The objective for AffyXell is to develop its first program, which is in CD40 Ligand Affimer is to develop that through to IND filing next year, and we'll see how that progresses. We work very closely with AffyXell. We work less closely with LG Chem. They are developing PDL1 with half-life extension using Affimer. So that's a bispecific Affimer. If that gets through to an IND filing and into the clinic, that's a massive proof-of-concept for bispecific Affimer structures of our balance sheet. Let me just press on because I don't want to run out of time to talk about the Diagnostics Vision, only 3 or 4 slides. So again, we spoke very briefly before we went live about Vision, and we talked about that sort of integrated benefit of diagnostics and therapeutics in terms of the benefit to patients as well as the benefit that it's been to Avacta over the last few years. So our vision is to on the screen is to build a full spectrum focused on professional use, so not particularly consumer use but focused on professional use, a full spectrum IVD business focused in Europe. And being able to broaden access to diagnostics, being able to bring high-quality diagnostics through innovative platforms like the Affimer platform, bringing that to a broader market through professional use. We're going to talk a lot about this after lunch, so just a couple of very sort of brief slides. And of course, everyone is up to date with this anyway. The review of the last year is -- we're now in a position with the acquisitions of Launch and Coris. We have a very strong sales channel with the launch team who are here, and you can ask questions later on. Now that is a preeminent European IVD distributor or a sales channel for us, which we can grow into Germany. We've talked about that previously. We can grow that through expansion into Germany. That gives us a route to market for our own products that we develop, products that we acquired, such as the Coris portfolio and then products that we acquire and improve with the Affimer platform. So the strategy we'll talk about this afternoon is the one that we published and I spoke about and is online a couple of months ago, which is very straightforward. It's to buy the routes to market and then develop and buy the products to go down those routes to market. So I may regret this. But since we talked about the objectives we set for last year and delivery today, I think it's worth looking forward for the objectives for the next phase, which is from a therapeutic perspective, now initiate and progress to Phase Ib, it is absolutely critical to get that efficacy data and not just -- it's a low hurdle to do as well as doxorubicin. What we'd really like to do is demonstrate not just an improvement in quality of life, but a better objective response with AVA6000 to commercialize the pre|CISION platform. So I believe we're now at the point with the human data that we have to be able to do deals for that platform. To get the first Affimer through an IND filing. That's a big ask, okay? So but that is within partners grasps and potentially our grasps if we have the resources to do it, but that is a big ask, okay, just because of the work to do to get there, not any other particular challenge. And of course, to progress AVA3996 to the point of IND filing towards the -- I would imagine, the back end of next year. From the Diagnostics Division perspective, we set out a very clear target when we acquired the business of expanding that business into Germany -- launch, as you're beginning to learn, has a fantastic reputation across Europe, it's been an extremely well-run business for many years. And to say that launch brand into Germany creates a huge opportunity for us to grow that business organically. It's really important that we demonstrate the synergies between the businesses. So we demonstrate that we can develop products with Coris, with Affimers that potentially can go down the launch sales channel. Developing products takes time in diagnostics as well as therapeutics. So we're not going to be able to launch new products in the next 12 months. But we've got to demonstrate those synergies through the acquisitions that we've made. And of course, the business has to show good financial performance, which I'm absolutely confident it will. So in summary, then, we have validated the pre|CISION platform in human, which has made a huge difference, as I said, to the sorts of conversations we can now have. So we have a method of targeting therapies -- chemotherapies we're focused on now. There are potentially other therapies we could think about targeting with pre|CISION, but targeting the release or the activation of those therapies in tumor tissue in FAP rich tissue to be accurate. AVA3996 has generated a lot of interest. I'm sure there'll be questions later on about that. And we're in the middle of IND-enabling studies and hoping to be in patients by the back end of next year. The -- on the diagnostic side, the first 2 acquisitions we've completed. Now the challenge now, as I've just said on the last slide, is finding the synergies is generating the organic growth and integrating those businesses, we are not focused on another imminent acquisition. The focus for the foreseeable has got to be making these businesses work together and getting value add out of them. So no more M&A for the foreseeable. And then the fund raise that we executed last October which was predicated on the M&A activity, but of course, gives us funding for the entire group. That gives us the balance sheet flexibility to be able to drive therapeutics for as well as diagnostics. That's all I have. So I'm happy to stop there, and take questions. No questions.

[indiscernible] see the key inflection point. As mentioned in the [indiscernible] several patients had basically no disease progression. Could you say anything about the time line of how long one be would take and also whether we'd have to wait to the end to see some form of proof of efficacy or would that be seen during?

Yes. so Andrew might want to chip in here as well. So one thing to say is, we shouldn't read too much into the Phase Ia, and I know you're not doing, but just to make that point for all the reasons we've spoken about before. In terms of the Phase Ib, we still have to complete the Phase Ia, I'm sure there'll be a question about that, but it makes no sense to start an efficacy study when we don't know what the dosing should be in the efficacy study. It would be a reckless use of funds to start what could be a suboptimal Phase Ib, so we start to finish the Phase Ia. In terms of how long the Phase Ib would take, if all -- when I say all go smooth, like patient agreement is the key thing, which is the benefit of having sites, the sites in the U.S., for example, that are sarcoma and specialist sites that do have the patient throughput. So we think it's at 12 months, possibly 15 months, but 12 months would be a good result if we could complete it in that period of time. Then in terms of how soon, I'm going to defer to Andrew here, so I don't overstretch. But the patients, if they respond to doxorubicin and do so in 3 to 4 cycles, Andrew. The problem is, if you then immediately think well after the first 2 patients or 2 and 3 to 4 cycles, we'll have -- you've got to have statistically meaningful efficacy. There's an 18% ORR for doxorubicin. So you've got to get enough patients through to know that you're statistically seeing a response. So I would say I'm going to defer to Andrew, but we should not have to wait until the very end of the Phase Ib to have any indication of efficacy maybe halfway through.

Yes, I mean it is difficult because the Ib has a [indiscernible] Ib will also have a modest number of patients. So it depends that we probably would have 15 or 20 patients at a given dose of AVA6000 and this would be in a dedicated uniform population such as soft tissue sarcoma. And that is because we can then expect to know what the reference response would be with doxorubicin and you've heard response rate mentioned, but we need to look at lots of different parameters, not just the response rate, how long patients remain in response. And then we have things that we call like disease control where patients who don't achieve response, but their tumor does not exceed a certain growth threshold. So it's quite nuanced its objective, but it's nuanced and we're at the mercy of numbers to a degree. But certainly, we will judge each patient as they go through Ib. And of course, we typically do CT scans to look at the size of the tumor every 2 months -- every 2 cycles, that will be every 6 weeks. So baseline, week 6, week 12 and so on. Each of those junctures will have a readout for that particular patient. So obviously, the data will emerge and we'll have a readout and the story will build through Ib. But I think the overall time line of about a year is what we're looking to do.

I do have some questions that have been submitted on the Investment Company platform as well. So I'll pick 1 or 2 of those.

I am. First of all, I just want to say, I think probably all the shareholders thinking you're doing astonishing work in terms of curing cancer. And I think everybody [indiscernible] somebody who suffered and just thank you for your relentless pursuit of that. I think you're just a brilliant professional team going but things the right way. I have a question. I do have a couple of quick yes, no questions, clarification questions. When I say a couple, I mean stakes. They are very quick clarification. And it may sound a little silly, but I think it would just help the non sort of pharma specialists in the room and online to understand a bit more of the opportunity. So firstly, when AVA6000 is clearly by a [indiscernible] are there any stray or waste molecules left on that -- left on the doxorubicin or is it actually identical to stray [indiscernible].

No. There's nothing left on the doxorubicin. It is exactly doxorubicin.

So on that basis, is there any medical, chemical or biological reason why cleave dox won't act identically to [indiscernible] tumor.

Not that I can think of, no.

Very simple, yes. Well, let's hurry on the journey and get to that destination. Given the safety profile and biopsy data showing the level of dox in tumors from AV6000, would you agree that the chance of success is successfully completing all trials and replacing dox as the standard of care is very high or at least 50%?

Yes.

So [indiscernible] sales of, as you said, GBP1.4 billion last year. If AVA6000 is successful, with greater dosing possible for greater efficacy. Is there any reason why it wouldn't take 100% of that market overnight as a standard of care?

Yes, I think there are commercial reasons. But the market, I would expect could be expanded because of the nature of AVA6000 compared to doxorubicin. And so if your question is, is it a mulit-billion -- GBP 1 billion-plus sales drug potentially? Then I think the answer is yes. Otherwise, we wouldn't be developing it.

I think that's exactly my next question. What does your analysis show is the potential market size if you expand that population to those who couldn't tolerate straight dox or recent MTD. Also noting that AVA6000 will be on patent rather than a generic drug.

Yes. We've not done that full analysis. We have -- and I don't know if anyone wants to jump in at all with an answer to this as well. We have done quite an extensive piece of work looking at the existing market, and we did that with an external consultancy. And the conclusion of that, and I've said this before, actually, it's in deck that I've used before. The conclusion of that was that in soft tissue sarcoma in Europe and the U.S. and not rest of world then peak sales could be GBP 1.5 billion. So that was the piece of work that we did externally. I mean there's so many assumptions in that. I refer you to my previous answer, which is, does it have significant commercial potential? Absolutely.

And so my understanding of AVA3996, if that follows the same clinical path in terms of safety and efficacy, the potential market for us for that is even greater than AVA6000?

Yes, I mean, that would be my gut feeling. But the first question you asked was, is it precisely doxorubicin that's released from AVA6000 and the 1 word answer was, yes. . Is it precisely Velcade that's released from AVA3996. The answer is no. It's an analog of Velcade because the chemistry required to attach the pre|CISION platform to Velcade, if you like, required some modification. So when precision is removed, it's an analog of Velcade. So that then you can obviously sort of follow the train of thought that means the regulatory pathway is different. And so some of the answers I gave don't necessarily apply to 3996. The market size, if we can demonstrate utility in solid tumors, which is work that we are obviously doing and need to do, then the potential is very, very significant.

Great. And so coming to my question...

I knew there was a punch line.

Given that those 2 drugs are potentially worse however many billions, you pick your number.

Sorry, just to interrupt you, with however many billions in 7 years' time at peak sales.

On patents.

Yes.

You've got a profitable diagnostics business. You've got exciting JVs. You have a whole precision platform, the potential to take on the ADC market as well. Why do you think your market value is only GBP 300 million today? .

So I mean this is a dilemma that early-stage biotechs face. I'm a shareholder, okay? So the same as you, having a very high share price on the one hand makes a big difference to me. My personal wealth is entirely locked up in this. However, we do have to think about -- and sorry, this isn't supposed to sound condescending. We've got to think about the facts of life. We have to look at the sort of the peer group and the comparators. Eliot and I have a really good sort of comment on this as well. If you looked at the landscape of just listed biotechs, and you can do this. And when I've out done the analysis, you can do it very easily. If you look at the sort of market cap of biotechs list in the U.S., just narrow it down and there usually the valuations are a little bit higher than in the U.K., not at the moment. But you'll find that biotechs with 1, 2, 3 clinical assets, even Phase III clinical assets, the average market cap is nowhere near what our market cap is. So that's fine. We have platform technologies. We have enormous potential, and that is reflected in our valuation. The point I was going to make is we do have to be careful, and I hope we've demonstrated this over the last few years that we build value durably based on really solid clinical, preclinical commercial progress. So there's some real substance underneath our share price. So I'm not from minute arguing it's too high. But we also then have to think about what's critical to us is not being starved of resource of capital. We got to convince specialist healthcare investors to invest in a vector and not in something over here that's got potential that's a lot cheaper. So there is a balance. So I'm not arguing the share price should be low, obviously. And I would argue it should be higher. Clearly, Steve will set the target at [ 85 ], I think [ Trinity ] is set Tony, correct me, but [ 225 ] or something like that. So that's their vision of 12 months from now. I have no doubt that this is a multi-billion dollar business when we got to those sunny uplands that you were describing. But we need to do that in a very measured way because we need to raise capital, and we can't do that if we consider to be, let's say, hugely over value compared to our peers. So why don't we have a share price that's double what it is now? It's very difficult to answer that question, isn't it? But I think we have to be sensible about how we see that path over time. Eliot, I'm floundering now, have you got...

Let me just -- so I think I agree with all of that also. I would add a couple of things. So one is, culturally, and we're adamant about this at board level and it translates through to the rest of the company, is we're not inflators of information. So what you get from this company, and you've certainly, all of the time I've been in the chair since 2018, is what it is. Sometimes the what it is, is hard to hear. Sometimes it's good to hear, AVA6000 days are emerging, but it's always what it is. And so we're not boosters and I've worked in the U.S. for a long time with U.S. biotech, CEO of several. And boosting is something that can go on to drive share price. We haven't done that. We won't do that. So that's just the way in which we are. You can either like that or not, but it is what it is. So what you hear from us is what it is. The second thing is the comparison. The way in which biotechs and forgive me if this -- I call it a teaching my grandmother to suck eggs as they say. But the way in which they grow is actually by inflections. And as I said right at the beginning, and I made some remarks before the online group joined us is that these are really hard yards to get to the point we're at right now. And you folks and others have stuck with us through that journey. But we're beginning to hit those growth, so shareholder growth inflection points that come. We've, Eliot has mentioned a couple of times, already clinical data that leans in towards efficacy, notwithstanding what Andrew has said, which is it again comes gradually. There's not a kind of a hard moment you leave out of the path saying I have it, but that will come as well. And those inflections begin to change the journey. And when the share price -- when we get to those, the share price will follow because we'll then get the big biotech specialists leaning in particular from the U.S. They'll lean in and look and see our backrooms. Now it's time. Now we started some of that campaign. So the team have been out to some of the big U.S. oncology conferences beginning to get engagement. But we're not quite there. We're very, very close within the next 12 to 18 months, as Andrew and Eliot have said. But I think they are the 2 things. So one is we're not boosters. So we -- so if you want boosters, you need a different company. And we're also in a position where we're just about at that inflection point. You've described all of the elements very, very well. We agree 100% with those descriptions. We just need a little more information and time and you can, I hope, share that journey with us.

Just to -- sorry, just to add to that, those sort of value inflection points those milestones. We're talking about some of those in the next 12 months, commercial progress, early signs of efficacy. We're at that point now that I described as getting into commercial phase with the pre|CISION platform. So...

Thank you for indulging me, Eliot -- on the right to the room. .

By the way, that was 8th question. Because I handle them here and I see another one .

Yes, just an observation, if I may. Really about the share price. I've been a shareholder now for many years. In fact, I think my first share purchase was when the share was [indiscernible] and I have a fairly significant shareholding. The directors' report refers to encouraging non-exec directors to maintain the shareholding. The executive directors are expected to build a share take in the company. The transactions of the directors in the company's shares has been notable by well, pretty well, it's absence. And I think you're referring to the success of the company. And we're all in this room, I think are seeing tremendous progress. And I, for one, expect the company to do extremely well. And I am -- I must say, it's an observation, surprised at the fact that the directors do not seem to be buying shares in the company. Is it fair?

No, it's a perfectly fair observation, but just what you won't be aware of because you can't see because of look behind nominee accounts is that, I have the neck end of 0.5 million shares but I was at board at fundraisers a while ago -- I can't remember how much or hold. So I do hold significant equity. The other point to make is that certainly, the executive management are significant option holders. So that's one of the ways in which we deal with that yet, yes. So there is another problem. I'll let Tony comment about this or Eliot as well, that once non-exec directors hold shares or options, some of the voting is an issue because they're regarded as non-independent. So for example, -- there is some -- Eliot does hold shares and he is regarded as not independent because of that and therefore, his reelection is voted against by some people, on a very mechanical way is just hold shares, not independent vote against. It's not a choice. So it's a completely fair observation. There's some nuances to it, is all I'm saying.

Yes. And I would simply add that I get -- ISS recommends against my reelection every single time I come around because I am a fairly substantial shareholder, again, hidden behind firewalls that you can't necessarily see. But I'm not classified by ISS as independent as a result of that. I actually believe it's a ridiculous rule. Just -- this is a personal statement now on behalf of the U.K. companies. I think it's absolutely not that nonexecutive directors cannot have their interest through shareholdership align with the company and all of you folks as shareholders. But it's not in the rules and we get nonindependent. All of the U.S. companies have been involved with, we actually give our directors, nonexec directors and executive directors options or shares on an annual basis to incentivize them in the same way as you are. We have this counter current of principle here, which I think is bonkers. So thank you for the observation.

So I'm just going to -- just come to -- I'm just going to read some of online here just to sort of be even handed. So given a vector suspect they have found their RP2D already. Why isn't Phase 1a and Phase Ib being run in parallel. Other companies do so, e-g [indiscernible] So given the importance of speed to market, why has Avacta not taken this approach? Okay. So there's obviously a very good answer for that. I don't think we should be suspecting that we found our RP2D, by the way. I don't think that would pass muster when we move forward, and we certainly haven't made any decisions on what our dosing levels or dosing regimen should be for the Phase Ib at this point. But I think the substantial question is why don't we run Phase Ia and Phase 1b in parallel. That question has been asked a lot. So it's useful to deal with that one. And I think I touched on it when I was speaking. So what to say other companies do so, Andrew, correct me if I'm wrong, it's not true. I mean it's a rare occurrence that people -- companies go into an efficacy study with our and completed the dose finding phase of the work. I have no idea why [indiscernible] took that approach that presumably is a sensible reason for that. But in my opinion, certainly, the team's opinion, it would be reckless to go into a Phase Ib, which was potentially suboptimal because we don't know how high a dose we can give to then spend a considerable amount of money doing that and run the risk of not getting the outcome that we want or for the sake of waiting for another cohort or to whatever it turned out to be. So the answer to the question is yes, it's true to say that companies have very occasionally in the past run these 2 types of studies in parallel. That's not appropriate for us. I don't know, Andrew, anything to add on?

Yes. I mean I think it's completely -- it's standard practice for us to characterize 2 doses of a given schedule of a drug like AVA6000 to take into Ib because it's not clear what's the best dose and it's a balance of safety and efficacy. And clearly, if we detect 2 doses into Ib to know which is the higher dose, we need to characterize the highest possible dose and that can be a measure sometimes of a toxicity limit, what's the highest level of tolerability and the balance of efficacy and the [ PK ], the exposure. So the vast majority of companies will take a drug to what we call the maximum tolerated dose or something approaching that. And then we'll choose 2 doses to characterize in 1b in a focused way to look at efficacy. So you can rush to a suboptimal end or maybe failure or you can do it in a more rigorous way, which I think we are doing the more traditional way to do it steadily and as fast as we can do but choose the optimal dosing schedule. Because once that is done, it's really difficult to go back.

Next question.

I didn't see a chat here and then there's another one in the middle here. Yes. yes, please. .

Bear in mind the approval for 6000 as an orphan drug. Could you in the U.S.A? Have you made any suppliers under your regulations in the U.S.A., which you've got for AVA6000?

[ John ], do you want to take that...

We've got ODD status in the U.S. and are we supplying? I guess the question is on the right of use on in-patient basis in the U.S. AVA6000. The answer is no, but...

Are there any limitations of the formulation, which you're going to result in a limit on the upper level of administration that you can make during the -- so there anyone on the formulation, which are going to limit the amount of drug you can administer during the Phase Ia?

No, I don't believe so. Fiona, do you want to add?

No, no, can do the nothing or no [indiscernible] .

Listen gentleman in the middle here. .

[indiscernible] in that example. Could you comment on what you said is the obvious question, which is the endpoint of Q&A that still have not yet been answered.

What is the endpoint for...

Where we are right now? Because earlier in the year, you've mentioned it would be complete by the summer or thereabouts. .

When we actually designed the study, we designed it for 4 cohorts. I mean, we're all surprised and pleased at the fact that we've escalated into a fifth and now sixth cohorts. So -- and I -- when you say what is the endpoint you mean, when is the endpoint because what is the endpoint [indiscernible] tolerability.

I didn't mean what, I mean roughly when.

You know what I'm going to say. It depends entirely on when we get to in cohort 6. And when we have the potential to go into cohort 7. We just talked about the sort of inpatient approach of just saying, let's give ourselves a biologically effective dose and move on, which we don't think is the right thing to do but the counter to that is clearly, you're not going to continue to escalate at nauseam. So we can see from the PK what sort of systemic levels of Doxorubicin are appearing. We haven't published that data yet. But that gives us a feeling for how far we can go. So I still believe -- I don't believe we're going to escalate into cohorts 8, 9 and 10 is the answer. But we have to see where the data take us and we've got to see where the regulators also take us only have Fiona to qualify and turn that color to that. .

At that rate, we were looking at the [indiscernible]

In the middle.

All right. So we're looking at the PK. So with each patient, almost in view of time, if you look at the pharmacokinetics that we measure levels of [indiscernible] and doxorubicin as the major metabolites or doxorubicin what we call the leader in the plasma and [indiscernible]. So we do that for each patient. And we actually use that as decision-making for giving them multiple cycles based on what we think the doxorubicin exposure would have been. And that is what will drive each of these decisions. So as [indiscernible] how high will go, but there will be a point where you start to see on doxorubicin driven toxicity to personalize the questions earlier, it is exactly doxorubicin. And at some point, you're going to start to see mild supression. We don't know exactly what point that is. But of course, we -- for those of you who can see the poster outside in the coma model. And we had an MTD production of a 2 mg per kg and you 6 days or 12 weeks per kg. So you do [indiscernible] maybe in an animal and highly unlikely that we wouldn't beat MTD in a human in some time.

So I'm just going to -- just for the sake of the lay participants in this who are not pharmaco specialist. I'm going to just translate both of those responses into English. So PK or pharmacokinetic is just the way in which we measure how much drug is in the patient. So either in their blood or in the tumor or in their pee, in their urine because it comes out like that as well. So we measure all of those things. So we're able to see how much is given and how much comes out and what comes out. And so we do that for every single patient that goes along. What Fiona said is in the animal models, you do reach a point at which the drug becomes too toxic. So the animals can't tolerate it anymore. But it's a very high level because of the way in which these drugs work because of that cleavage at the site of the tumor, it's a very high level. So we don't think we're going to get to that level. We don't know to get to that level in the patients, and that's why we will measure how much drug there is in the patients in order to assess what the right time to stop that higher and higher doses is. One of the -- there are a couple of things that doxorubicin does and some of you, unfortunately, will -- I hope not personal, but maybe close experiences where you have falls out with doxorubicin so that's a sign you begin to see that you're getting toxic levels. And then the other one is it causes white blood cells, the cells that fight diseases to go wrong. And that going wrong is also at time of this toxicity. And we've seen a couple of hints of both of those. So we know we're getting somewhere close, which is why I think [indiscernible] was saying, we may have 1 more dose that or maybe another dose step after that, but we can't envisage another 4 of those steps simply because of how much we're measuring and the first signs of that early general toxicity. Now bearing in mind our general toxicity is mirrored by a really high dose of doxorubicin, which has been released at the site of the tumor. And tumors are kind of funny things. They're not funny haha, but the funny peculiar in that there are cancer cells in the very mix up and the cancer cells in the middle of them. And outside is a thing called the stromal cysts. It's almost like a barricade that cancers build around themselves. And those barricades are quite sophisticated. And the really cool thing about our technology, and there aren't many companies on the planet who have this a lot of saying we want it, is that we hit the barricade and the actual cancer cells themselves both at the same time. And that's a very, very cool thing. So FAP, if you go into the pharmaceutical and biotech journals, you see there's beginning to be a lot of excitement about FAP because it hits the barricade. And one of the things about modern cancer treatment is the barricade prevents them from working, and we're going straight after it. So that also really...

Just on a before we get the next one in the room. One of the questions online is when will the full PK that data? When will that data be published at the end of the Phase Ia study, and I suspect we will want to try and get that into a peer-reviewed journal or at a significant conference as well. So if you publish stuff partially in advance, it impairs your ability to publish in peer-reviewed journals, so you can't do both, unfortunate. So we'll publish the data when the study is finished in the highest impact way we can possibly do.

We've got 2 more there's gent on the end and another gent. And one over here, and maybe we'll make those the last 3 answers, if that's okay based on time.

So my question is about translation, which you kindly offered just now. How to begin this question? My background is medical and also in communications with patients and carriers. Now the thing is, despite that background, I have great difficulty in understanding some of communications of the company, and I do my best. But today, I'm a very happy shareholder. I understand a lot more from your presentation. And my thoughts were about what Steve Jobs said about making a dent in the universe and the kind of work you're doing in general is making a dent .But for those who do not have medical advisers, scientific advisers and those investors, there is an issue, I think, about translation. And my question about communication is whether it would be possible on your website or elsewhere for the non-scientific, non-medical investors to have a blog in plain English or there I'd say plain Yorkshire English for us.

I'm not -- as a complement -- That is a brilliant observation and question. And the answer is yes. I think we do quite a lot to try and present things in a digestible form. We do lapped into Jargon PK MTD. But we do -- I would like to think we do a reasonable amount of things like the videos that I do to try and explain. But we can definitely do more. So we'll definitely take that onboard. The other -- and I know there's a question in this pile because I read it earlier about media. Why aren't we on the front page of every newspaper given that we're now cured cancer. That sort of expectation we all know is not realistic that some people doubt -- and the sensible answer to that is actually, we're now just getting to a point where we can engage with more of that sort of media. So we have multiple audiences; shareholders, technical publications, technical media, where we actually get a lot of stuff out. I always have done for obvious reasons. The more mainstream media has been more challenging because the story is they want are human stories there -- people who've got a benefit from the treatment and so on, and we're not quite there yet. But the quality of life, improvement. And that's an angle that we can with the data we now have talked about. So yes, thank you. That's good feedback.

We should just take 2 more questions asked just from as a gentleman here, and there was another just there.

Given the reduction in side effects we're seeing so far, is it possible and for Phase Ib that you can reduce the dosage time line from 3 weeks to say, 2 weeks or a week?

In principle, yes.

And secondly, what are the minimum milestones you would need to progressed a second indication for AVA6000, for example, breast cancer, given the size of the market versus the [ STS ] and the point where you look to do that?

Yes. I mean obviously, there's resource constraints because to take it into another clinical trial in an indication like breast and ovarian would [indiscernible] look to Eliot and Fiona to comment would be far more expensive going into soft tissue sarcoma. So -- but yes, I mean, we certainly are thinking about what those other indications are that we can go into. And I would say, post Phase Ib when we have a good efficacy signal, I hope, from patients in soft tissue sarcoma, then we can think about our opportunities to go into other indications. So Fiona?

Yes. I think soft tissue sarcoma is actuallly a no-brainer, right? Because it's doctors' business first line. It's a single agent. And it's also high impact. So don't forget we have to have FAP when we don't have doxorubicin. Breast cancer is a really interesting because we know that many of the breast cancer drugs themselves cause cardiac toxicity to it's recipients. One of the most successful biologics because it had [indiscernible]. People with breast cancer would get triplets with chemotherapy,[indiscernible]. And each of those chemotherapies has toxicity. So what we would be looking to do would be to replace the anthracycline in that triplet in breast cancer to significantly reduce because if you think a lot of breast cancer patients are 20 to 30 years old downstream [indiscernible] early possibility in toxicities. . So that's for me, that's a really strong area to go in to be. You're not going to single agent here. You go In a combination. So you have to have a different type of trial design with a lot more patients for that to be successful. So that's something we do again after a significant amount of financial backing to do that study, but I definitely think breast and ovarian, are truly as we would have in amount of interest to do these trials.

Thank you. And there was 1 more I didn't see a...

Sorry, I'd just like to stay with the Phase Ia on 6000. Cohort 5, the amount of dox was approximately 2.2 normal treatment. Cohort 6, you're talking about 2.7. You've looked at the results through blood plasma, urine and see what's going in, what's coming out, you've said there's significant amounts of dox in the tumor. How does that compare to normal dox? Is it greater? Is it less? Is it about the same?

It's a really good question and funny enough it's in this list here. So the problem is that, that data, in other words, how much -- what's the -- how much dox is in the blood stream, how much dox is in the tumor and so on. That data has not been published. So despite the fact that it's a drug that's been around for years, we can't go, you can't go anywhere and find that in the literature. I guess that doesn't mean it's never been done. The experiment has not been done. It's just never been published, so it's not accessible to us. So the honest answer is we don't know. Which is why the important comparison is -- and you'll have seen on previous slides and you'll see it this afternoon, I think in Andrew's deck, you can see the comparison of what we're seeing in the biopsy, how much dox is there compared to how much dox is required to an [indiscernible] paraphrase to kill cells. And that is known because that's known from experiments, outside of people. So you can do things as simply as put cells into a petri dish and add doxorubicin until you see that you're killing them and then you've got a measure of the amount required. So that is solid data taken by us and in the literature. Unfortunately, nobody is added on the experiment with people and taken biopsies, which is why we're building that into our Phase Ib, there is an arm with doxorubicin planned for exactly that reason.

Excuse me, a hand at the back. Based on what you know will actually kill the tumor, are you seeing a level now which is equal to or greater?

Yes, we talked about...

So it's significant. .

Yes. Yes. So when we said again, maybe communication. When we announced the biopsy data, we said there were therapeutically significant levels in the tumor biopsies. That was our expression of we are seeing therapeutically significant levels, right? So maybe there's other ways of describing that. But in the data on the slide, what it does is it gives you 4 mechanisms of cell killing, if you like 4 mechanisms that are involved in how dox works. And it tells you the concentration required. So then you look up in the table and you can see the concentrations in the tumor biopsies are higher than all of those. So that's what we can say factually right now, which I think is behind your question, you know what and how wouldn't it work? .

Yes I think the -- I'm sorry, we're going to have to -- you can catch us over lunch, if that's okay. I think the gents suggestion at the end is coming through loud and clear as well that we need -- we can only do explain and do better. We -- you will all be the same in all of your industries, you kind of drift into whatever the jargon and TLAs are that you use etcetera. And we -- I can hear have been very guilty of that as well, and we'll improve it. Okay. We've now got lunch and some posters...

Just before we -- sorry to interrupt you -- for the folks online to say, thank you for attending, everyone online and everyone in the room. We look forward to another update very shortly. Thanks very much.

Thank you for updating attendees today. Can I please ask attendees not to close this session as you'll now be automatically redirected to [indiscernible] your feedback in order that the Board can better understand your views and expectations. It only takes a few moments to complete but I'm sure it'll be greatly valued by the company. On behalf of the Board of Avacta Group Plc, we'd like to thank you for attending today's meeting, and good afternoon to you all.