Avacta Group (LSE:AVCT) — Business Update and Q&A

0:02 Good morning, ladies and gentlemen, and welcome to the AVACTA GROUP PLC Pre AGM Business Update and Investor Q and A. Questions are encouraged and could be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just please simply type in your question and press send. Given the number of investors attending today's presentation, the company will not be in a position to answer every question it receives during the meeting itself. Have the company have confirmed that they will review all questions submitted today and publish responses

0:33 where it's appropriate to do so? These will be available by via your investment company dashboard, and we'll send you an e mail to notify you when they are ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we'd like to submit the following poll, and we'd be very grateful if you could give that your kind attention. And I'd now like to hand over to Alastair Smith, CEO from AVACTA. Good morning, sir. Thanks, Mark. Thanks very much. Good morning, everyone. Thank you very much for attending this pre AGM update for the AVACTA GROUP. I'd like this morning to get through as many shareholder questions as I possibly can given the guidance not to physically attend the AGM. So I'm gonna get straight into the update. And I'm gonna begin with the diagnostics division and obviously focus on the COVID testing opportunity.

1:27 So a brief bit of background. As many of you will be aware, the Afema platform offers a wide range of market opportunities in immunoassays. But we have a clear of the we're market seeing the And

1:59 we're looking the also market for for separations in bioprocessing. So that that model of licensing with in house and partner diagnostic development was will will be something that you'll see going forward.

2:21 And again, just another brief bit of background. Our diagnostics focus, we have a an in house pipeline, which you see there headed up by the highest priority, which is the COVID testing we'll talk about in in a moment, and several other diagnostic test products that we have in development behind the SARS CoV two antigen test. But we will continue. So that's a wholly owned pipeline of AVACTA tests, which will be launched under the AffiDx brand. But we continue to have a number of evaluations ongoing in a pipeline of of potential partnerships such as the one we announced with Biokit recently, and I just mentioned Australia.

3:06 But we have a a a very clear focus now on developing partnerships with medium sized and large diagnostic partners. So as I said before, that's a model you'll see over the coming months and and years, a strong in house pipeline delivering products under the AfroDx brand as well as a number of partnerships bringing bringing products to market through partners. And the the reason that we have made such progress with partners and ourselves on the on the COVID test and others is because of the benefits of AVACTAMAs in in in diagnostics and immunoassays. So very briefly, we can generate highly specific diagnostic reagents. We have a great sensitivity. I mean, the showcase, you know, the global showcase that we've enjoyed through the COVID testing development is extremely high profile. That's already generating more interest from external partners in the AVACTAMA platform for diagnostics, as you can imagine.

4:11 Other benefits around security of supplies, these are what we call recombinant proteins. We we make them as opposed to derive them from from animals. So you have great security of supply. We can generate Aframas against targets that are difficult or, in fact, impossible for antibodies to be generated against. They're very robust and stable, so a broad range of applications from straightforward diagnostics to to more infield use where the conditions are more challenging. We can modify the aphimas to have some, you know, very interesting diagnostic properties. They have a a low cost to manufacture relative to monoclonal or polyclonal antibodies. And an interesting commercial angle is that because they are not related at all in any way to an antibody, we have freedom to operate where there is quite complex antibody based IPR in this diagnostics market.

5:12 Okay. So let me focus, as I said I would, on the COVID testing opportunity. And I'm obviously delighted to be able to say that we have one of the best, if not the best, antigen tests available. And as I said, it's been a global showcase for the AVACTAMA platform that's really put us on the map in terms of our discussions with global partners in the diagnostics market. The market now for COVID testing is moving very rapidly, as I'm sure you see from the from the news. And that's driven by some really diverse legislation and policies around the world for general population testing, for outbreak investigation and so on. And that market continues to move very quickly, you know, almost on a weekly basis in different European states and The UK as testing policies and priorities are changed.

6:12 The the normally very distinct professional use and consumer self testing markets are overlapping a bit with what's called supervised testing, which still falls in the professional use bucket. But the the regulatory and legal distinction absolutely remains in place. So a professional use test cannot be sold for consumer self testing direct to individuals. In the market, the the test performance is highly variable, and adoption at the moment is being driven by supply rather than quality. The end user price has been driven down by by that influx of of cheap tests. So $3.03 to €4 is is typical across Europe. It's a little bit more in The UK, actually, but typical across Europe. So margins are tight.

7:09 But demand is very high, and I'm confident that it will remain high for three to five years. And probably, COVID testing will be around for a very long time indeed. So the the way in which the sample is collected, I'm sure those of you who've suffered a nasopharyngeal swab as most of us have, the specimen collection is really important, and the simplicity of the test is really important in terms of differentiating from competitors.

7:41 The performance of our test, as you know, clinically is is excellent, and that will that is driving our deal making and will drive longer term deal making as well. The fact that it is a UK originated test is also an important factor, particularly in Europe and The UK, of course.

8:06 So on to the test itself. So the, AfiDX SARS CoV two antigen test is a lateral flow test. It's a twenty minute test that uses, anterior nasal swab samples, which are just from the from the nostrils. So, painless, not not unpleasant, at all. And the test is designed to be used to identify individuals who are infectious, who have higher viral loads and therefore have a higher likelihood of transmitting the infection to to others. The CE mark that we have, which I'll talk about in a moment, is for professional use. And the the key benefits I touched on the preview previous slide, you know, very clear. There's a very clear

8:52 opportunity here around the nasal sample collection, painless, patient friendly, helps patients to not only, stick to the testing regime that they're supposed to, but also do it properly, which is really important. The nasopharyngeal swabbing is painful and unpleasant and, is often not done correctly because of that. I mentioned The UK developed, UK manufactured UK technology, as I said, putting Afema Afema reagents on the global stage. It's a very high quality test with excellent clinical performance. We'll touch on that in a moment. Rapid and simple, and we are constantly monitoring emerging variants, which, of course, those will continue to to emerge. There'll be new variants into the future as well as the ones we're already currently aware of.

9:49 Just one quick comment on what infectious means, and I I realize those of you who follow the company closely will let me talk about this before. But it's really important to emphasize the fact that the AfoDx COVID test is able to identify infectious individuals. And so the the question is what what does infectious mean? And and it is it it is difficult to pinpoint that because this is biology, so it's not black and white. But generally speaking, if you look at the the gold standard, which is PCR, and the results from PCR are quoted in what's called CT value or cycle time value, then a a CT value of 27 or below is widely regarded as meaning that's a viral load in the patient that is that is infectious.

10:47 So just bear that in mind as we talk through the performance of the test. So as I said a couple of times, a market leading clinical performance really creating a fantastic showcase for the AVACTAMA platform, but, you know, well beyond the COVID testing opportunity. The clinical performance was determined with around 200 samples, 98 positives, a 102 negatives, benchmarked against PCR as the gold standard. The clinical sensitivity for tests for for samples with a CT value less than 27, so that that sort of infectious range that I've presented was a hundred percent.

11:34 The clinical sensitivity then up to the low thirties where the infectiousness infectivity is is starting to drop off at ninety eight percent. That really is really is outstanding. And the clinical specificity, ninety nine percent, we continue to test more negative samples to be able to get the decimal point on that specificity better defined, obviously, in a 100 samples. You know, one one false positive is is point point one percent, isn't it? So in terms of cross reactivity with common coronaviruses, so the most closely related, There is no cross reactivity with those that I've listed.

12:21 And the variance of concern that you're aware of, the the Kent, South Africa, and Brazil, the test detects all of those. We are in the middle of the process of detecting of establishing whether the test detects the Indian, the delta variant, but I am very confident that it will. In terms of new variants that emerge, there is always the possibility, no matter what test we're talking about, that a variant could emerge with significant mutations that tests, you know, ours and others don't detect. But the real strength of the AVACMA

12:57 platform is that we can very quickly I think it took us five weeks to generate the AVACMAs in the first place. We can very quickly generate new AVACMAs against a new variance. And, of course, now that we've gone through the extensive process of developing this lateral flow test, we can drop those new AVACMAs in very quickly and get get the product back on the market, detecting whatever new variant emerges.

13:24 So in terms of commercialization, which is absolutely the focus now and has been for several months, we have the CE mark for professional use in The EU and UK, and the products have been registered across the EEA and the The UK. We are manufacturing products with global access diagnostics, and we are in the middle of the process with Abingdon Health establishing equivalent manufacturing processes, and that'll take a few weeks. BBI Solutions that we've worked with for for quite a while couldn't get to the the cost of goods in a in a time scale that worked for us. So we are focusing on having them and other UK, EU, and, also overseas manufacturers.

14:18 So the I'm I'm often asked about the combined UK manufacturing capacity. So for for what's available to us to AVACTA for this test, the number is somewhere between five and thirty million tests per month, which obviously is a very broad range. But that higher number depends on us being able to get access to equipment and infrastructure that has been and is being installed in UK manufacturers through through government funding. We are quite a long way down the route now of securing additional overseas capacity that we control, and we're not relying on the on the government equipment.

15:03 And that can provide up to a million tests a day, so 30,000,000 a month with quite a short technology transfer and lead time, and probably, to be frank, lower cost of

15:13 goods as well. So we are pushing forward, getting the tech transfer done with overseas manufacturers so that we can switch on that supply as demand requires. So then in terms of route to market, we have a lot of commercial negotiations with end users, customers, and distributors ongoing throughout the EEA and The UK as well as actually territories outside of that, such as the some of the APAC countries as well where the the extra regulatory approvals required are actually quite quite minimal beyond CE marking. So there's a number of other overseas markets which look very attractive.

16:05 So you'll have seen this morning that the first distribution agreement was put put in place with Caliber Scientific, which I mean, that's a a global very high quality global partner. Very pleased to get that distribution agreement in place. And they will be able to focus in The EEA and The UK on, you know, relatively large numbers of customers of varying sales volume sizes, whereas AVACTA will focus on very high volume, large corporate customers with direct sales for workforce testing as well as service providers for workforce testing, travel industry, so airlines and airports in particular, events companies, and the health and and social care sector. So the the model, the route to market going forward is one of direct sales by AVACTA to

17:05 large corporates, you know, single entities with very large volume requirements whilst going through distribution partners into overseas territories and for those, you know, very, very large numbers of smaller volume sales. So we we continue to be engaged with the UK government and and pull them down, working on that procurement pathway for the Department of Health in in The UK. And as as soon as I have anything to, you know, material to update the markets on, I I will do in that regard. And as I said earlier on, there's a number of of markets which have emerged actually approaching us, particularly in the APAC region, looking for high quality high quality tests of UK and European origin.

18:01 Okay. So I I'm going to hand over to Neil Bell, our chief development officer, to take us through next over And the the quickly this morning our slide. Precision platform and where we are with our AVAC6000 project. We're about to actually enter the clinic. So I think it's a really important crossroads for the company.

18:39 So in terms of precision, precision is a fat activated technology, pro drug technology. The technology itself comprises of a substrate, which is actually a dipeptide, which is sensitive to cleavage by an enzyme known as fibroblast activation protein alpha. And we know that this particular enzyme is highly expressed or regulated within tumors, compared to healthy tissues and organs. So, when we are able to attach the substrate to a chemotherapy, it actually renders the chemotherapy inert within the body when it's infused into the body until it reaches the tumor microenvironment where it's exposed to the FAP and it's cleaved.

19:34 Then the actual chemotherapy is released within the tumor micro environment. So, what we're doing in terms of the chemotherapy is we're actually targeting the tumor and sparing healthy tissues and organs from damage. In terms of FAP itself, it is actually found in higher concentrations in the tumor compared to other tissues. And as you can see here on the right hand side, the red bars indicate the level of fat activity found in different tumor types. And these have been matched to the serum within those animals.

20:22 And you can see it's actually

20:25 in a very low levels within the serum compared to within the tumor type itself. Now, we need this substrate to be specifically cleaved by FAP. And there are a very closely related group of enzymes, which can potentially cleave the substrate. But, in fact, we've done a number of experiments and demonstrated that FAP is very specific to the substrate. As you can see here, another enzyme called PrEP actually has no activity on the substrate at all. And in this case, this is another precision drug that we're actually developing, 3996,

21:18 where we can see the FAP is actually digesting the substrate at different concentrations. So, let me turn to AVA6000 now. So AVA6000 is our fat activated prodrug, and it's our first precision development into the clinic. It's based on doxorubicin. Doxorubicin has been around for many years. However, it's actually a very successful drug. It's particularly successful in soft tissue sarcoma,

21:57 as a treatment of monotherapy, but it's also used in combination in other cancer regimens. However, it is limited by its toxicity, specifically to the heart, but also to the bone marrow. And in the clinic, it's actually limited to about six cycles of doxorubicin at seventy five mgs per square meter every three weeks. Now it does cause irreversible heart damage, so it's very serious.

22:35 But nonetheless, it still has significant utility within the clinic and has a significant market, as you can see here. So the market opportunity really for AVACTAL is very significant if we can demonstrate that we can, treat these patients with a lower level of toxicity.

22:59 In terms of the actual distribution of doxorubicin, conventional doxorubicin is actually distributed within the body, very quickly. And as you can see here on the right hand side, the distribution between tumor and heart is one to one for, a concentration of two mgs per kg of conventional doxorubicin. However, when you actually, treat with AVACTA GROUP we can treat higher doses of AVACTA GROUP for example, here, in this model up to twelve mgs per kg. And we can actually get much more concentration of doxorubicin within the tumor compared to the heart, for example. And so this is a really significant,

23:50 point to remember around the precision model. So let's turn to the phase one study that we're actually planning now. So it means we've made significant progress. All the approvals are actually, in now for this study, and, we are rapidly, moving into clinic. And we plan to move into clinic and and actually enroll our first patient by, mid July of this year. The study itself is split into two parts, a phase one a and a phase one b. The phase one a is the dose escalation part where we'll be actually assessing the safety and the tolerability of AVAC6000, and we'll also determine what we call the maximum tolerated dose and also the recommended dose for further development.

24:49 At the same time, we're going to characterize the pharmacokinetics of AVACA6000, doxorubicin, and also the metabolites of doxorubicin. And we're also going to be characterizing the leaving group, which is the substrate which is attached to the chemotherapy as well. So this is a classic three plus three design for Part a. We expect to take the drug through approximately four cohorts of four dose levels to achieve our maximum tolerated dose. And in terms of the patient population, we're looking approximately around about fifteen to twenty patients with a whole range of tumor types in in that first part.

25:37 Once we've established MTD and our recommended phase two dose, we'll move into part one b, and then we will be looking at a range of tumor types, which I can explain, on the next slide. I think it's worth, actually pointing out that we will complete the Part A of this study, hopefully by July of next year, hopefully earlier than that, and then we'll be able to go into the dose expansion part. And the other point, which isn't on this slide at the moment, but we are preparing an IND. We're actually in discussions with the FDA now, and we expect to have our IND submitted by Q4 of this year.

26:31 So this is the study design in a little more detail. We will be starting with cohort one, obviously, with the starting dose of eighty mgs per square meter, which equates to approximately fifty four mgs of doxorubicin. It'll be administered every three weeks intravenously. And then subsequent doses of AVAC6000 will be guided both by the the safety data and the PK data. We're looking at, as I said, fifteen to twenty patients in that first part of the dose escalation. There'll be a minimum of three patients up to six patients where we'll examine safety and tolerability.

27:17 The first cohort is going to be really important because we are going to be looking at the pharmacokinetics, not only in that first cohort, but also in subsequent cohorts. But the first cohort is really important for us because we want to actually demonstrate that what we're seeing in the animal work is actually translated into the human situation. So we should, if all goes well, be able to actually talk about that data at the end of Q4 of this year. So in terms of the wider precision prodrug opportunity, I think it goes without saying this is a significant opportunity to apply the Precision technology across a range of chemotherapies.

28:05 Many chemotherapies have dose limiting toxicities, which restrict their utility in the treatment of cancer patients. But despite these toxicities, these chemotherapies still retain significant market share and continue to increase their market share, due to the improved cancer detection rates that we're seeing. Just as an example, Takeda's Velcade is an effective therapeutic agent, but its true potential really has never been fulfilled due to dose limiting toxicities, mainly damage to the nerves, what we call peripheral neuropathy. Similarly, taxanes, such as paclitaxel, has significant sales potential through to 2025, as we've highlighted here, but the market share is constrained due to significant toxicities,

28:59 such as myelosuppression, bone marrow damage and peripheral neuropathy again. So the Precision platform really does have the potential to increase the therapeutic index for these agents, allowing them to find a greater utility in a wider set of patients. So I'll stop there, and I'll hand back to Alastair. Thanks, Neil. Thanks very much. Okay. So in in summary then, we are poised now with a market leading COVID testing test poised with an opportunity to roll that out throughout Europe and The UK and also some other territories.

29:49 We are working with Medusa nineteen on the consumer self testing opportunity. Remember, the

29:57 CE mark that we have in place now is for professional use testing. And over the next weeks and months, we expect to report a number of commercial deals both through distributors and with directly with with end users. And behind that, there is a a strong pipeline of future AffidX diagnostic tests utilizing the AVACMA platform, and I'm I'm sure we will see exactly the same demonstration of high performance, high sensitivity, high specificity with those tests as we have done with the with the COVID nineteen test.

30:43 So as I said several times through the presentation, this opportunity has provided us with a, you know, a a global stage, which has attracted a lot of attention and has really put the AVACTAMA platform on the map from a a diagnostic testing testing perspective because of the performance we've achieved with the AfiDX antigen test. On top of that, and I hope I hope you got from, you know, Neil's presentation, there is tremendous excitement within the company around the dosing of patients with AVACTALZ. So the Precision platform, you know, if I wanna put it in in really simple terms, the Precision platform allows us to produce chemotherapy without the side effects.

31:29 And as you can imagine, you know, that that is potentially hugely valuable. Chemotherapy is a a very effective, as as Neil said, but they're limited or, you know, pretty much all of them are limited by their toxicity and the the ability for patients to tolerate those those treatments. So to be able to reduce or or even eliminate those side effects and open up a pipeline of safer chemotherapies that can be used standalone or used in combination with immunotherapies, which may be Afram immunotherapies, that is a that is a huge opportunity for the company. And we're we're extremely excited to be dosing first patients next month. As Neil said, we should see the, you know, first meaningful pharmacokinetic data that allows us to say whether we're getting that activation in the tumor in humans the same way we have done in the preclinical models, and we'll see that before before the end of the year.

32:35 So that that that is a big value inflection point for the group, as you can imagine, because it opens up that entire pipeline of precision chemotherapies. We we are aiming to file IND this year as well to be able to begin clinical studies in The US for AVACTA 6,000. And as Neil described, there is a pipeline, AVACTA 3,996 being the most advanced, a pipeline of precision candidates as well as the AVACTAMA therapeutic programs, which we haven't got time to talk about today. And I hope we'll have an opportunity later in the year to update the market specifically on the therapeutic programs. Finally, we are in a strong position with regards balance sheet to support the core businesses to deliver everything that we've just described across the therapeutic and diagnostic divisions, notwithstanding the significant COVID testing revenue opportunity that lies ahead of us.

33:41 So I'll leave it there. We've done quite well for time, so we should be able to take a lot of questions, Mark. That's great. Thank you, Alastair, and to both Neil and Tony for updating investors this morning. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. We just want the company to take a few moments to review investor questions. I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard. I'd also like to remind you that your feedback is important to the company. And immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order the company can better understand your views and expectations. Alastair, as you know, investors have the ability to pre submit questions, and obviously, they've submitted questions during the meeting itself. Just And to remind investors that the company will be reviewing all the questions that you've submitted. So thank you indeed for all of those that have taken the time to submit questions.

34:35 But in order to make best use of the time that we have, I know, Alastair, you and the team has spent some time running through the 150 odd questions that we received ahead of today's meeting and feel that these questions will identify or relate to a good majority of those. So without further ado, the first question that we received was, has AVACTA started to produce LFT kits for overseas sales in anticipation of CE Mark approval? If so, which territories? And will this likely lead to US FDA approval? Yes. So as I mentioned in in the presentation, we are producing FVDX lateral flow test kits through Global Access Diagnostics, a U UK manufacturer based in in Bedford. And we will continue to scale production with them and with Abingdon and potentially others in The UK and EU to meet demand.

35:33 But there are other overseas manufacturers that we are working with, and we'll bring those on stream gradually and be able to switch them on quickly when the demand, you is there. So that that's all in place. So we have CE marks for professional use both in The UK and EU markets. And, obviously, we're we're working to secure sales right across all all all of those territories. So right right across the EEA and The UK, both directly, as I mentioned, ourselves, so selling into large corporates and and through distributors like Caliber that we announced today. So AVACTA is not set up to have hundreds of thousands of customers buying modest volumes of product, but we are absolutely set up to be engaging, for example, with an airline, providing large numbers of tests into a into an airline that will rely on distributors for the, you know, for the other types of of sales.

36:39 So other markets have their own additional regulatory requirements, but quite often, CE marking is a significant is step towards meeting those additional requirements. So for some, for example, I mentioned a couple of times in the APAC region, the additional regulatory requirements are minimal. So we are absolutely focused on those markets as well and already in negotiation in some of those overseas markets outside Europe. FDA approval is different, and it's an entirely separate process and is, to some extent, more onerous. We've got more than one possible route to FDA approval at the moment.

37:25 And I'll update the market when we've made progress and, you know, have a clear, you know, clear single route to the FDA approval, you know, as soon as I can. But right now, totally focused on European and other markets and getting the test the test rolled out commercially. Thank you very much indeed. The next question reads as follows. Are there still plans to combine AVACTA spike antigen test and MoLogic's neocapsid antigen based technology? Yep. So AVACTA's spike antigen test, as we've said, has been demonstrated to have really excellent clinical performance. I mean, really good. A 100% sensitivity for CT values of 27 and below.

38:10 So that that is market leading. So right now, we're focused on the commercial rollout, as I said, and scaling scaling manufacturing, which is key to meet demand. But we will continually review with the logic the market need and the clinical need for a combined test. And we're ready inside the logic to bring that product to market if there is a clear demand for it. That's very kind. Thank you very much. A multi kind of question here. In terms of the diagnostics arm and the non COVID in house diagnostic test due for launch in 2020, is it the intention to launch first of the twenty two. Two.

39:01 Then the the second AVACTA GROUP brand will cover all of our in house AVACTA IVD products in the future. So it's the it's the AVACTA GROUP PLC product brand rather than specifically this COVID test, which is the which is the first of our own CE Mark tests. So we we are, as the questioner said, developing a a range of additional products, and I I briefly listed them early on. And we'll do that as quickly as we possibly can, taking into account the demand on our resources right now. And we'll make announcements on timing later in the year when we can when we can see what 2022 is gonna look like. But we will develop those products and bring them to market as quickly as we possibly can.

39:49 And those revenues will grow, of course, as you know, alongside the COVID testing revenues that that we've been talking about. So we've we've got a a strong pipeline already. Those tests that I mentioned are already in development. We've made good progress with those. And it's from that pipeline that the new products, new AffiliDx products will emerge, but we're also going to continue working with larger strategic diagnostic partners to to get Aframas into their product pipelines. And I guess that's what the questioner means by white labeling. So to get Aframas licensed to diagnostic partners who will bring products to market under their own brand but with Aframas Aframas inside. The next couple of questions, I think, will relate to manufacturing.

40:39 The first one reads as follows: Are you still in discussions with overseas manufacturers regarding capacity for the LFT? And if so, when do you anticipate these discussions will be concluded? Also, is it possible to give an indication of the approximate capacity these overseas manufacturers could potentially offer to AVACTA? Thanks. Yes. So I think we've covered down the presentation, I'll be very brief. Yes. We are well advanced. We're now focused on two manufacturers in particular, but with with backups, actually. And and the the those manufacturers would increase our capacity to around a million a day if required, so very significant. I can't give a definitive timeline timeline on concluding those, you know, those deals now as it obviously, it's driven by demand. It's driven by technical due diligence, commercial due diligence, and so on.

41:34 But it's it's important that we're able to switch on that overseas manufacturing capacity, you know, as soon as demand requires it. So we will go through the process of tech transfer. We will get those partners ready so that we can switch them on when they're needed. That's great. Thank you very much indeed. The other question relating to manufacturing reads as follows. What is the total UK capacity for test manufacturing without government support now and anticipated to be in six months? Yes. So it's around 5,000,000 available to us, as I said. It's obviously higher than that in total, but we can't, obviously, can't access the entire UK capacity.

42:20 I don't anticipate that changing much in The UK until and unless the government funded infrastructure comes on on stream and is is available. And it'll take us it'll take us a couple of months to ramp up from where we are now to that 5,000,000 tests per month. And of course, that will also be driven by demand. I noticed there's a couple of questions that have come in the live event, and this ties up nicely. Can investors have an update on the Medusa relationship? Yes. Of course. I mean, the the details of that are covered by confidentiality agreement, which, you know, we intend to honor, of course. But what I can say is that we are working very closely with Medusa nineteen.

43:06 We have a joint goal of COVID nineteen consumer self testing. That is very important actually extremely important to both companies. And as soon as there is material news, I'll provide an update to the market as I'm sure Medusa 19 will. But right now, it's covered by confidentiality, and it's not appropriate to give a, you know, a week by week product development update. Thank you. Why have sales of AffidX for self use not commenced following The UK and EU registration confirmations? Okay. Thanks. So that's a useful question. Just to let me say, again, and I've made this really clear on a number of occasions, consumer self testing is very different legally and from a regulatory perspective, from a professional use testing. So the c marks that we have and the product registrations that we have in Europe and The UK allow us to sell the AfrodX test for professional use only.

44:09 We cannot sell those tests. No one can sell those tests with the current CE mark for consumer self testing. So as soon as that consumer self test CE mark is achieved, then we will be selling to to consumers. But the the availability of the AfiDX SARS CoV two antigen test for professional use that cannot be sold to individual customers as it were for for self testing. That's brilliant. Thank you very much indeed, Arthur. The next number of questions relate to the AVACTA And again, obviously, there's a number of questions that have come in the live event. So I hope this goes some way to give in that clarity. The first one reads is, when is AVACTA GROUP first dosing due?

45:00 And when will the first read about be? So, yeah, I mean, Neil covered that quite well in the presentation. So we expect to dose, the first patient, before the end of July, mid July. And, as Neil described, we expect to see the initial, what's called pharmacokinetic data. So, again, in in simple terms, the distribution, of of the drug, around the body. Because clearly, what is, what is really important here is that we can show that whilst AVACTA six thousand, the inactivated inert form of the drug that's delivered to the patient, whilst that will be, everywhere in the body, so systemically, it will only get or or or the majority of the activation of that into doxorubicin will be in the tumor. So the the the trial that Neil described is partly designed to to get that data to show that the, doxorubicin active chemotherapy, is predominantly activated in the tumor and not in healthy tissue, such as the heart, where where the serious cumulative damage occurs.

46:24 And and we should see that first meaningful, what's called pharmacokinetic data, by the end of this calendar year. So by by the end of twenty twenty one, we should have, we hope, data to show that Precision platform works in human. And and that, as as both Neil and I mentioned, is is not just a huge milestone for the AVACTA six thousand asset, but it's also a significant milestone for the valuation of the group as a whole, the therapeutics business as part of the group as a whole because it opens up that pipeline that Neil described with 3,996, the the product form of of ALKADE analog and paclitaxel, xaliplatin. It opens up that pipeline.

47:15 We will be in a position to very quickly then take those candidates forward. Thank you very much, Alastair. The next question reads as follows. Is AVACTA anticipated to see delays as a result of employees engaged with electrophotests? Okay. I mean, that's a good question. It's very easy to answer. No. Not at all. So the the two divisions in the group, the diagnostic division and the therapeutic division are entirely distinct, and the resources are entirely distinct. So the diagnostic division based in in whether it in Yorkshire, around 40 individuals there, quite distinct from the team in Cambridge, a similar number, around 40, and the clinical development team, which Neil has built very quickly since joining the company last fall who who has spread around the country. So the resources are entirely distinct, and there is no delay caused on either side actually by the demands of the other.

48:19 Thank you. Excuse me. And the final question around the AVACTALIOZ reads as follows. At which data point in the AVAC6000 trial do you expect to be able to decide on taking the next PRECISION candidate into the clinic? And when do you roughly expect to realize that data point time wise? Actually, I'll hand that to Neil if I can, and it's not a monologue by me. Can you answer that one, Neil, please? Yes, of course, Alastair. So as Alastair indicated, the AVAC6000, we've got a very important point in q four where we have all the pharmacokinetic data and the safety data as well from AVACTA PLC. And it's at that point we'll be able to actually confirm the mechanism of action of AVACTA of all the data that we've seen in the preclinical setting that it's translated into the human setting.

49:11 So we actually have, planned out, the next, Precision product, and we'll make the decision at that time on that one, and we'll actually trigger it so that that will move forward into what we call IND enabling studies. All of those studies and documentation that will be required to actually submit an IND to the FDA. That will take approximately a year, just over a year probably. And then we'll be able to move the next Precision Pro drug into clinic by 2023. Thank you very much indeed, Neil. Just moving on, the next question, which we've condensed because it was fairly long, but really focuses on the differing language used across the industry with regards to lateral flow test sensitivity.

50:03 And the questioner asked whether or not a uniform system could or should be introduced. Yeah. I I understand it is. I mean, it's it's complex for the industry, let alone for shareholders looking in. So, know, we we have focused on on PFU per mil. I won't bother explaining the science behind it, but that's that is a real measure, if you like, of the amount of virus in the sample that can go on to replicate, grow grow, and multiply. So we we we use that. We also use CT value because it it is a comparison then against the PCR gold standard. But, you know, the the the question implies and is correct that there's a lot of variability around CT values. So it is it is complex.

50:50 We've tried to be focused in the way we've described things. And I if if I do get time, I may produce a podcast on this topic, which we can put on our website to try and help shareholders. Thank you very much. The next question reads, when will the ISO 13,485 be completed? Oh, it is completed. So we have had confirmation from our notified body that the ISO thirteen four eight five certification will be awarded. We are waiting for that sort of formal process, the paperwork. We expect to receive that formal written notification over the summer, and then we can announce it. So, it has been completed. We just don't have the formal notification of that yet.

51:37 Thank you very much indeed. I'm obviously mindful of time. We've about eight minutes, so we've probably got time for a couple more questions. And just to really thank everybody for submitting the questions that they've done so during this live event. And I do reiterate just for clarity that obviously everything will be reviewed, and we will publish the responses where it's appropriate to do so, and an email will be sent to you in due course. Couple more questions. You explained that AVACTA GROUP will be immediately placed on the market following The UK and EU registration confirmations. How do customers buy AVACTA PLC? Yeah. So we've touched on this point. We AVACTA itself does not have the infrastructure to support, you know, very large numbers, millions of individual sales of small volumes.

52:23 But that's gonna be done through distributors, and we announced the agreement with Caliber Scientific today. So that provides a route to market. I'm gonna sound like a broken record, but just to reiterate, that is for professional use. So individual consumers well, CALIBOR Scientific cannot sell to individual consumers, obviously. So we we we need to get to that point of being able to sell a consumer self test, you know, as quickly as we possibly can, and we're focused on that. And we, AVACTA, will focus on our resources on those large corporates that I mentioned for workforce testing and airlines and so forth. That's great. Thank you very much indeed.

53:10 I guess a couple more questions if we can squeeze these in. The first one reads, you have indicated that the likely price point for the LFT would be in the mid single digit GBP range for governments and higher to corporates. Are you able to give an approximate expected margin on these sales? Yeah. So the the market has moved extremely quickly. As we pointed out in the presentation, the the influx of cheap tests has driven the price the average price, end user price somewhere between 4 and €5. And and there are, of course, cheaper tests selling for for less than €3. So fortunately, we have one of, if not the best antigen test in the world. So we we're not in any sort of, you know, price competition in in that sense.

54:07 But the cost of goods is critical to maintain a a good margin, especially if you go through distributors, of course. So we we would expect to make a gross margin on sales between 1 and €2 depending on whether it's, you know, it's direct sales or through distributors and critically dependent on on cost of goods. So hence hence, the work that we've been through and we'll continue to go through getting access to a range of different distributors with different cost models in The UK, Europe, and overseas to not just get the supply that's required, but to to get to the cost of goods. That means there's a decent margin for both those and distributors if that's the if that's the route to market.

54:53 That's great, Alastair. And then perhaps a final question ahead of of, obviously, me sending investors to give you feedback. And a number of questions have come in the live event as well around this. Is the company planning a U. S. Listing to diversify its investor base? So we're I mean, we're well supported on AIM, and we've got very strong balance sheet as I described. So that funds all of our plans through into 2023 regardless of the additional diagnostic revenue contribution through the the COVID testing sales. So but I will say that, you know, as a board, we obviously continually assess whether diversifying our investor base is gonna help the business and help current shareholders. So we will we'll obviously continue to review that.

55:43 That's great. Thank you. Well, look, we're coming up to the Actually, Mark, sorry to interrupt. There is one more question. Sorry, I do apologize. We're very happy to take it as well. It's an important Oh, perfect. Thank you, sir. Can AVACTA comment on the accuracy of time scales it has provided in the last twelve months? Yeah. No. I'm I'm very happy to answer that. And I I, you know, accept and and and sympathize with no criticism around trying to forecast. And we we provide our shareholders in the market with expected timelines, and we do so absolutely to the very best of our ability with the knowledge that we have at the time. And as I'm sure everyone realizes, product development is of any sort, let alone diagnostic products, is is is complex.

56:34 Timelines are dependent on the science working the first time, which often doesn't happen, as I'm sure you're aware. And we often rely on third parties who who sadly occasionally let us down. So we we always try to caveat our timings so that the market understands that there is uncertainty in those. But we we'll we'll continue to give the best possible guidance that we can, honestly, at the time. But I'm afraid we don't have a a crystal ball to make precise forecasts. You, Alastair. Apologies for missing that last one. Alastair, I know investor feedback is important, and you've got a tremendous following just given by the number of attendees that we've actually of made progress the progress progress And we've Well, I think the I hope we've been able to get across, and we have done over the the last few months that we are at an extremely exciting transition point for the company. Not not only do we have probably one of, if not the biggest diagnostic sales opportunity that will will ever come along until the next pandemic, I guess.

58:03 But we also are poised to dose first patients with what could be a a revolutionary approach to safer forms of chemotherapy, unlocking a pipeline of drugs, many of which are coming off patent, a pipeline of chemotherapies that we can drive quickly into the clinic over the coming few years. So it it you know, you would expect a CEO to say this, of course, but I think everyone can objectively see that it's the next six months will be full of really key milestones, significant significant news flow, and I'm really looking forward to it. Alastair, Tony, Neil, thank you very much indeed for updating investors today. Can This will only take a few moments for you to complete, and I'm sure will be greatly appreciated by Alastair, Tony and Neil.

59:03 On behalf of the management team of AVACTA PLC, I'd like to thank you very much for attending today's presentation. That now concludes the session, and good morning to you all.