The latest Avacta share price (LON: AVCT) tells little about the story of the company. Whilst biotech stocks are renowned for having a little more volatility than most, picking the trend in London listed AVCT has been tricky.
Long term bulls and holders over the past 5 years will have seen impressive gains of more than 160% in Avacta shares, whilst those entering at the beginning of 2024 will be nursing wounds, with a 40%+ drop. Since the lows of mid June however, the stock is now more than 70% in the green.
With such a whipsaw performance, let’s take a closer look at what markets think about Avacta shares, and what kind of forecasts analyst hold on the stock over the short and medium term.
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Where Will Avacta Group plc’s Stock Price Be in 12 Months?
What is the Avacta forecast for the mid-term future? It would be speculation at this juncture to pinpoint a value with certainty but analysts get paid to do just that.
According to TradingView, there are only two analysts covering Avacta, with one assigning the stock a Buy rating and the other a Hold rating. The average price target is 59.5p. The highest target is 79p, and the low target is 40p per share.
Regardless of the lack of coverage, the progress of the firm’s clinical trials and the development of products in its pipeline will be the major factors that impact the Avacta share price this year.
During the pandemic, Avacta made a name for itself, with its share price surging, topping out at roughly 262p. Avacta has been the cause of much debate among investors. Such are the rollercoaster rides that come with investing in biotechnology stocks that you and the experts never quite know what might happen.
It takes a special breed of investor to dip their toe in biotech waters. There is always the potential for enormous gains but also devastating losses. Many of these companies are small with limited staff. It is easy to get caught up in the dream, especially when the company’s offerings sound impressive. One announcement could send the stock soaring, while a single slip-up in a clinical trial can send it spiralling into purgatory.
Avacta Group plc is one of those companies trying to grab the golden ring.
Is Avacta a good stock to buy at the moment? It has demonstrated that it can excite an investor base in what it is doing, as technically sounding as that might be. It has a number of development partnerships with large key players in the industry, but is that enough to see its stock surge once again?
Avacta Group News
In June, Avacta confirmed that Arm 2 of the Phase 1 trial for AVA6000 has successfully completed its second cohort without dose limiting toxicities observed. It added that patients are now being dosed in the third cohort.
Also in June, the company said Shaun Chilton has been appointed Non-Executive Chairman replacing Eliot Forster, who is also stepping down from the Board.
In May, Avacta announced the successful completion of the first cohort and dosing of 3 patients in the second cohort in the dose escalation study of Arm 2 of its Phase 1 trial for AVA6000.
In May, Avacta released its full-year results for the year ended 31 December 2023 and announced the appointment of Christina Coughlin as its new CEO. Revenue for the year increased to £23.25 million from £9.7 million in 2022. Its adjusted EBITDA loss (before non-cash and non-recurring items) came in at £20.14 million compared to £15.1 million the previous year. Its operating loss reduced to £28.36 million from a loss of £32.6 million in 2022.
Who Is Avacta Group plc?
Avacta has around 120 employees at last count, according to Zoom Info. The company offers and develops cancer therapies and diagnostics in the United Kingdom, France, North America, South Korea, and the rest of Asia and Europe, operating through its Diagnostics and Therapeutics segments.
Christina Coughlin is the chief executive officer of Avacta Group plc. Founder Alastair Smith stepped down in 2024 after 19 years as CEO. He founded the firm in 2003, and it is based in Wetherby, United Kingdom. It also has an office in London for its therapeutics division. Smith has a PhD in Physics and served ten years as the lead for Molecular Biometrics. After leaving academia, he worked tirelessly managing Avacta. Raising around £50m for the development of Avacta’s proprietary Affimer programme and its pre|CISION targeted chemotherapies’ platform. The firm’s IPO occurred on the FTSE Alternative Investment Market (AIM) in 2006.
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The Affimer platform is a “novel class of biotherapeutic based on a naturally occurring human protein,” the primary platform offered by the company and protected by several intellectual patents. The firm’s pre|CISION targeted chemotherapies’ platform is also proprietary, protected, and uniquely targets a tumour directly without coincident damage to other nearby tissues. The company’s pipeline is filled with a number of applications derived from these two protocols, which primarily focus on cancer therapies and diagnostic tools.
The mission of the Avacta Group, as stated on its website, is “to shape the future of medicine by developing novel cancer therapies and powerful diagnostics using our proprietary Affimer® and pre|CISION™ platforms.”
The company has a number of projects in its pipeline, with the first candidate to reach Phase I of clinical trials being AVA6000, which has since shown some positive results.
Overall, its pipeline is robust, and the management team plans to conduct a number of trials for its various cancer-preventing therapies while generating revenues from licensing and its diagnostic business. Eventually, the firm hopes to leverage its partnerships with major pharmaceutical companies to broaden its revenue base, thereby driving long-term shareholder value.
As mentioned, biopharmaceutical stocks can be risky. Nevertheless, the Avacta management team has developed two rather unique approaches to supplement existing cancer therapies. The company may succeed or fail, or it may even be acquired if its pipeline and client base is attractive to a major pharmaceutical firm. The risk is yours to call.
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Avacta Group plc’s Long-Term Forecast
Is Avacta Group a buy or sell for the long term? The current market for antibody-driven immunotherapies is said to be worth in excess of $100bn by the management team at Avacta. The team also states that its various platforms using its proprietary protein-based approach counters many of the shortcomings of the alternative.
Former CEO Alastair Smith has previously stated: “What drives us all at Avacta is the opportunity to realise the incredible potential of the Affimer and pre|CISION platforms to create new tools for life sciences and, in our own drug development programmes, to make a measurable difference to patients’ lives through clinically superior cancer immunotherapies” (source: Avacta).
Analysts have given Smith high marks for bringing his firm to its present stage, but, as mentioned earlier, the company’s long-term viability and attractiveness will depend on how well its products deliver on his promise. Will their approaches be superior and make a measurable difference in those who receive them? Is the firm’s pipeline as robust as it says it is?
As a Biotech firm, it must deliver increasing revenues year after year for its various products. Avacta has already had its long research and development phase, starting in 2003 and moving forward.
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Is Avacta Group plc a Good Buy?
Is Avacta Group plc a good stock to buy at this time for the long term? If you have a portion of your portfolio devoted to high-risk special situations, then you might find shares of AVCT to your liking. Biotech stocks can be a fun ride, but it is easy to get caught up in the company’s narrative. This company’s diagnostic tools have caught the attention of many investors, while its pipeline is also seen to have potential. Its therapies could take off, or they could fail.
The jury is still out on the company’s shares. It is still early days for Avacta, and the stock is viewed as risky. In addition, it remains loss-making. When assessing a potential investment in Avacta, it is best to proceed with caution and risk only what you are prepared to lose.
