Key points:
- Avacta's AVA6000 has passed that second dosage test
- This is still just Phase I, but it allows progression to the next stage
- This is still near the beginning of a long process
Avacta Group (LON: AVCT) shares are up 14.5% this morning on news about an increase in second dosage of AVA6000 in the Phase I trial. The big question about Avacta shares though is have they – finally – managed to get over that excitement about covid tests?
The big point to realise about Avacta is that while it did indeed get caught up in all that covid testing excitement that's not, in fact, the base of the company. As opposed to, say, Abingdon Health. This matters, for of course at the beginning of the pandemic the government opened its – our – wallet and spent freely on getting covid tests designed and ready for manufacture. Some succeeded at this task, others were perhaps a little late to the party and so on. This produced considerable excitement in the shares of Avacta, Abingdon and several others of course. Vast government contracts awaited!
As it turns out for many of these companies they didn't. Then there was the thought that applying for a CE Mark would boost prospects. Which they didn't to any great extent. For those only doing covid testing missing the boom is painful. But Avacta was always more than just covid tests. It develops other treatments as well, covid testing was a byway, not the core of the company.
So, the future value of Avacta shares is going to be determined by how well those other developments work, not the receding tide of covid testing. Which is what today's announcement is about.
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This will sound a little too detailed but it's a vital part of the drug development process: “Avacta's Safety Data Monitoring Committee (SDMC), comprised of clinicians currently recruiting patients, has completed its review of the safety data from the second cohort dosed with AVA6000 at 120mg/m2 in the ongoing Phase I trial. Following this review, the SDMC has recommended that the clinical trial continues as planned and escalates to the next dose of AVA6000 at 160mg/m2.”
Phase III trials tell us whether there are side effects among a large population dosed with the drug. Before that are the Phase II, which tell us whether it actually treats the condition that's the target. Before that comes Phase I, as here. This is to give the drug to volunteers (often students making a little extra) to see whether it has significant side effects. That is, we test whether the drug makes people ill, then whether it works, then whether there are side effects.
What today's announcement says is that the volunteers being dosed are not all falling over like ninepins. So, we can up the dose to where we might think it could treat something. Pass this next stage and then we'll go see whether it actually works or not.
That description does show that this is all very early stages as yet. We're not even testing whether it cures cancer yet, just that it doesn't kill people. So while it's good to recall that Avacta is more than simply a coivid test maker, this is all at a very early stage of development still.