Avacta Group (LSE:AVCT) — Post AGM Presentation and Investor Q&A

0:00 Good morning, and welcome to the AVACTA GROUP PLC post AGM presentation and investor q and a session. Throughout this recorded meeting, attendees will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question submitted today. However, all questions will be reviewed with responses published on the InvestoMe company platform. The meeting will begin shortly.

1:43 For just over thirty years. Worked with big pharma, Lillian Roche, and then several small biotechs and Chief Medical Officer and other consulting roles. Thanks, guys. And very quickly because we've hit eleven, so I'm suspecting we're 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 Chief Operating Officer in the Diagnostics Division and Matt Johnson, Chief Scientific Officer in Diagnostics Division, both around for the rest of the day to answer questions. Thanks, guys. Oh, sorry, David. The lectern the lectern was obscuring. David Wilson, our Chief Commercial Officer for diagnostics. Thanks, David. Sorry. No problem.

2:30 So do we know if we're live on the IMC?

2:37 Michael, is there a way of me knowing, or should I just plow on? 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 is it's genuinely fantastic to see so many people here. You know, we we continue continue to to break records in terms of the number of attendees these online online presentations and the AGMs and yeah. It's wonderful. It 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 with that, obviously. And I I think the first place I was going to start with this rear view mirror sounds like something on have I got news for you? But, you the know, place I thought I would start is just to say, well, what what targets did we set ourselves for this year and and, you know, how well have we done? So from a therapeutics perspective, you know, one of the key objectives, as Elliot mentioned, was to get proof of of concept of the platform as well as 6,000 in human.

3:45 I mean, you you can't underestimate the change that that has brought to AVACTA in terms of its conversations, you know, with potential partners and with with 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 three nine nine six, and we have a poster where dig into the science a little bit more as as well. And then to continue to progress the AVACTAMA platform towards the clinic. Mean, clearly, in the last few years, we've focused on precision for obvious reasons because getting human data has made a huge difference to the, you know, to the reputation and the value of the business. But, nevertheless, progressing the AVACTAMA platform, and we do that primarily with partners as well as with our internal programs, is is hugely important.

4:33 From a diagnostics perspective, the objective over the last twelve 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 will this morning, but to build that into a, you know, a European a significant European IVD business that has value for the group. And that has to be a that has to be a profitable business that delivers cash into the group and gives us some some optionality in the future. So there's a lot on this slide, but, you know, I just wanted to to point out that, you know, across across those particular objectives, getting the proof of concept for precision in human I mean, see is the news flow, which is why I've highlighted it. What 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 sorts of assets into the clinic, the regulatory work, the CMC work, the clinical work.

5:35 There is a huge amount of activity gets us collectively to being able to talk about moving into the sixth dose cohort. So you you see the sort of tip of the iceberg if you like. But, you know, just to emphasize, and and, obviously, Francis and and David and Fiona can talk more about this when you get a chance to mingle later, know, the amount of activity that has to go on in order to be able to deliver this news flow. We'll talk later about, you know, the proof of concepts and the data, and Andrew will go through the the clinical data as well. We have certainly built value in the preclinical pipeline primarily through 03/09/1996, 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.

6:29 Progressing the Afema platform towards the clinic. As I say, the focus really on our resources in the last few years has been on precision for understandable reasons. We will get a chance to talk about the Afema pipeline at lunchtime around the posters. We've been focusing our resources and our support with our partners who are LG and Dae Young, AVACTAL, who are pushing the Afema 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, six months, really.

7:15 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 is very exciting. So that's the sort of rearview mirror. I just wanted to make sure that we we covered off our 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, you know, in in Chris and Mark, we have huge, huge huge drug development experience. These are both hematologist oncologists, if I'm if I'm correct. But what they brought to the board is immense in terms of the the value.

8:02 They've spent careers developing 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 is tremendously important. So the board has both that that drug development experience, but also extensive commercial experience with, obviously, the execs, but the the nonexecs, which is Elliot and Sean that Elliot mentioned, who many of you will know, and probably many of you were investors in in Clinigen. So you'll know Sean and his track record, his commercial background extremely well. Paul is here in the audience. He'll answer all the deep technical questions, I'm I'm sure, later on. But Paul, you know, Paul has a a a very impressive track record in, you know, the likes of Vodafone, GSK, and more recently, what's the company you work for now, Paul?

8:59 Argenta. So, you know, 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 a an an outstanding non exec for many years and runs the RemCom. Trevor has a, again, a really extensive commercial background. So just just to, you know, 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 gonna spend I don't know how long I've got, so you give me a kick if I start to run out of time. But it's it's only lunch next, so don't worry. I thought I'd spend a little bit of time on on therapeutics. I'll spend less time on diagnostics, but only because I'm gonna talk about that after lunch. So the vision, which, you know, Shelley asked about, and we we had an opportunity earlier on to, you know, to think sort of longer term, the, you know, the clear vision right now is to deliver drugs, innovative drugs, that actually make a difference to patients' lives.

10:01 And I would add to the comments we made, earlier. The the 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 UK or Europe for cost reasons. So one of the things that I think is also attractive around the Precision platform is that it can yield relatively affordable drugs that will be broadly used around the world. So our vision is 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.

10:54 The strategy, and we'll talk a lot more as we go through the next few slides about strategy, but we have two therapeutic platforms that may be unique. I'm not sure. But those platforms do, as we said earlier, give us just an unbelievable breadth of opportunities. The the challenge is to focus on to the right ones that are gonna deliver progress near term, you know, build that durable platform, which I think we have done over a, you know, 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 partnership. So we we you know, we're now just getting into that commercialization phase with Precision because of the data that we're generating. And believe me, the the human data, clinical data is what really changes the conversations with potential pharma partners. You know, platforms are great, but people want to see clinical proof of concept.

12:03 And then finally, you know, combining combining that sort of in house capability to develop drugs with those partnerships like AVACTAL 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 gonna spend long on this slide, but just just as a, you know, just as a a sort of preamble to the commercial strategy later on, you know, doxorubicin, which is the basis for AVACTA six thousand, now that that that is a reasonable sized market, albeit a generic that's been around for for many years. And I was chatting to someone before we started about the limitations of that market because of the limitations, the number of cycles patients can receive, limitations on the eligible patient population.

12:52 So what we are able to do with the Precision 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 a I couldn't tell you actually what what fraction that is of that 1,400,000,000 current sales. But but soft tissue sarcoma is a a relatively rare cancer and 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 agent first line therapy. So that's the clear one where we're focused. There's good rationale for focusing on that in our clinical development.

13:42 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 in areas such as breast and ovarian where doxorubicin is used in combination with other therapies. So that that that sort of represents the entire market, and that's what we are heading towards. Andrew's gonna 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 sort you 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. Twenty nine patients through. And I think, you know, if we just focus on the headline for a a moment, you know, a very positive safety profile. In fact, one of the clinicians on the the study has said that he can't tell when patients have been dosed.

14:41 Okay. So that makes a that makes a huge difference to the quality of lives of patients compared to being on doctor Rubison. And I I'm clearly not a a clinician, but Andrew can, I've no talk later about the the sorts of side effects that the patients do experience when they're on a drug like doxorubicin. So we're seeing a very, very positive safety profile. Of Of course, course, that could be, and we've we've talked about this many times, but but just to go over it again, you know, it could be because we're locking up doxorubicin and never releasing it. So we've got a super safe drug, but it's, you know, it's useless. Unfortunately, the the biopsy data that we published today, again, Andrew will will cover, shows very clearly that we are getting release of doxorubicin in the tumor tissue from those biopsies at therapeutically relevant levels.

15:30 Okay? There's So been quite a few questions, and we'll hopefully, it'll 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 got a very, very favorable safety and tolerability profile. The quality of life of the patients whilst whilst on the drug is is much better than it it it would have been. So the incidents and the severity of the sort of side effects that they see, particularly the hematological toxicities, which are what are responsible for defining the three weekly dosing that you have to use with doxorubicin, see very little of those. So, again, Andrew will go through that in a lot more detail. And the biopsy analysis really, you know, really is the, you know, is the icing on the cake when we publish that data, the data that we had in hand in January or February. Can't remember. That's that's the sort of overview before Andrew goes through his more detailed presentation later.

16:29 So as I said earlier, we're we're we're now entering the commercial commercialization phase for the Precision platform and for these assets because of the clinical data that we're we're getting. I I will make the point that efficacy data is still, you know, a a really important milestone, and that will 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 and this group of patients in the safety study, of course, have not been selected to deliver efficacy. So that that is not something we have been expecting to see in this group of patients.

17:15 So that that'll come slightly later as as Elliot mentioned. But just running down our options now for commercialization of the Precision platform. Now AVACTA GROUP, we talked about vision. Now our view is we don't want to license AVACTA GROUP too early. We want to take that through clinical development ourselves for for obvious reasons in terms of creating shareholder value. But also, it's really important that we maintain that lead clinical program and and and, you know, maintain our our clinical status as a biotech. So we would not want to license or partner AVACTA six thousand in any sort of comprehensive way. As I say, efficacy data is really, really key in terms of being able to do good good deals for that for that asset.

18:07 I think it's reasonable to think about potentially partnering it for the phase two study. But again, if we had the resources to do that, I'm sure the board would take the view that being able to run that phase two 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 the only drug earlier in the pipeline that we talked about is 3,996 and poster outside at lunch. So we're progressing that through now to an IND filing. So it's a a very early stage asset. But nevertheless, I think there is potential to partner that. So that would not be partnering our lead asset.

18:54 And depending on how the development proceeds, there could be a number of indications that could be partnered partnered in. So there are so there's some opportunity there for for AVACTA three nine nine six now that we have validated the Precision platform in human. Then I think the most the most likely, to be frank, is to be able to partner the Precision platform at this point. And by by that, I don't mean a a comprehensive global partnering of 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 a strong view on this as well, there is certainly potential for for partnering of the Precision platform, specifically with a third party to work with their particular toxin.

19:53 And then finally, our current commercial approach to the pipeline is to focus our attention on those more more potent toxins. 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, making other forms of precision chemotherapies from from generics. But our view is there is more value both clinically and commercially to looking looking at at more potent toxins. So the sort of toxins that may may only be used as warheads in ADCs, for example, because they're simply too potent to give systemically. So but that that's our, you the know, commercial picture that we're looking at now.

20:40 A number of opportunities. As I say, I think the Precision platform and licensing that with third parties to take their drugs forward as Precision Tumor Targeted Drugs is the most likely to yield results in the near future.

20:58 Couple of very brief slides on the partnerships. I don't know how I'm doing for time. I think everybody's oh, excellent. I think everybody's relatively up to speed on AVACTAL and LG, and and, obviously, very happy to talk in more detail about these outside. Now AVACTAL is a super demonstration of an application of AVACMAs that we wouldn't, you know, we wouldn't do internally where the modified stem cells produce and secrete the immunomodulatory aphema, the therapeutic aphema in the environment around the stem cell. The objective for AVACTAL is to develop its first program, which is in c d forty ligand aphema, is to develop that through to IND filing next year, and we'll see how that that progresses. We work very closely with AVACTAL. We work less closely with LG Chem. They are developing PD L1 with half life extension using Afema. So that's a bispecific Afema.

22:02 Gets through to an IND filing and into the clinic, that's a massive proof of concept for bispecific Afema structures off our balance sheet. Let me just press on because I don't wanna run out of time to talk about the diagnostics division. It's only three or four four slides. So, again, we spoke very briefly before we went went live about vision, and we talked about that sort of integrated benefits of diagnostics and therapeutics in terms of the benefits to patients as well as the benefit that it's been to AVACTA over the last few years. So our our vision is to you can see on the screen is to build a a full spectrum focused on professional use, so not 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 AVACTAMA platform, bringing that to a broader, you know, a broader market through professional use.

23:10 We're gonna talk a lot about this after lunch. So just a couple of very sort of brief slides. And, of course, everyone's up to date with with this anyway. You know, the review of the last year is, you know, we're now in a position with the acquisitions of Launch and Chorus. We have a very strong sales channel with, the Launch team who are here, and you can ask questions, later on. Now that that is a a preeminent European, IBD distributors or 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 acquire such as the Chorus portfolio products that we acquire and improve with the AVACMA platform.

23:55 So the 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 may regret this, but since we talked about the objectives we set for last year and delivery today, I think it's worth looking, you know, looking forward for the objectives for the next phase, which is from a therapeutics perspective, now initiate and progress to phase one b. That it is absolutely critical to get that efficacy data. And and and not just you know, 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 a better objective response with with AVACTA 6,000 to commercialize the Precision platform. So, you know, I 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 Afema through an IND filing, that's a that's a big ask. Okay? So but that that is within partners' grasp and potentially our grasp if we have the resource to do it, but that is a big ask.

25:12 Okay? Just just because of the work to do to get there, not not any other particular challenge. And, of course, to progress 03/09/1996 to the point of IND filing towards the, I would imagine, the back end of next year. From the diagnostics division perspective, you know, 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 take 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.

25:57 So So we demonstrate that we can develop products with Chorus, with Afimas that potentially can go down the the the launch sales channel. Developing products takes time in diagnostics as well as therapeutics. So we're we're not gonna be able to launch new products in the next twelve months. But we've got to demonstrate those synergies are there 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, you know, we we have validated the Precision platform in human, which which has made a huge difference, as I said, to the sorts of conversations we can now we can now have. So we have a a method of targeting chemotherapies we're focused on now. There are potentially other other therapies we could think about targeting with precision, but targeting the release or the activation of those therapies in tumor tissue, in FAP rich tissue, to be accurate.

26:58 Three nine nine six 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 the back end of next year. The on the diagnostic side, the first two acquisitions we've completed. Now the 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. You know, 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 and a for the foreseeable. And then the fundraise that we executed last October, which was predicated on the m and a activity, but, of course, gives us funding for the entire group. That that gives us the balance sheet flexibility to be able to drive therapeutics forward as well as as well as diagnostics.

27:57 That's all I had. So happy to stop there and and take questions. No questions? Ex oh. We'll put the lights up if we can. I don't know what that efficacy key inflection point. Yep. And you mentioned in the, that several patients had, basic, no disease progression. Could you say anything about the timeline of how long 1b 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? Yeah. So Andrew might want to chip in here as as well. So, you know, one one thing to say is we we shouldn't read too much into the phase one a, and I know you're not doing, but just to make make that point for all all the reasons we've spoken about before.

28:54 In terms of the phase one b, we we still have to complete the phase one a. I'm sure there'll be a a question about that, but it, you know, it it makes it makes no sense to start an efficacy study when we don't know what the dosing should be in that efficacy study. It would be a a reckless use of funds to start what could be a suboptimal phase one b. So so we still have to finish the phase one a. In terms of how long the phase one b would take, if if all go when when I say all goes smoothly, patient recruitment is the key thing, which is the benefit of having sites the sites in The US, for example, that are sarcoma and specialist sites that do have the patient throughput. So we we think it's a twelve months, possibly fifteen months, but twelve months, you know, would be a a good result if we could complete it in that that period of time. And then in terms of how soon would you and I'm gonna defer to Andrew here so I don't overstretch.

29:51 The patients, if they respond to doctor Rupson, do so in three to four cycles, Andrew. So the the the problem is if you then immediately think, well, after the first few patients are through in three to four cycles, we'll have a you've got to have statistically meaningful efficacy. There's an eighteen percent ORR for doxorubicin. So you've gotta get enough patients through to know that you're statistically seeing a a response. So I would say I'm gonna defer to Andrew, but we should not have to wait until the very end of the phase one b to have any any indication of efficacy, maybe halfway through. Yeah. No. I mean, it it is difficult because the one b has a modest the one b will also have a modest number of patients. So it depends. You know, we probably would have fifteen or 20 patients at a given dose of AVACTA six thousand, and this would be in a dedicated uniform population such as soft tissue sarcoma.

30:45 And and that is because we can then expect to know what the reference response would be with doxorubicin. You've heard response rate mentioned. But we need to look at lots of different parameters, just the response rate, how long patients remain in response. And then we have things that we call, like, disease control where patients don't achieve response, but their tumor does not exceed a certain growth threshold. So it's quite nuanced. It's 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 one b. And, of course, we typically do CT scans to look at the size of the tumor every two months every two cycles. So that would be every six weeks. So baseline, week six, week 12, and so on. Each of those junctures will have a readout for that particular patient.

31:37 So obviously, the data will emerge and we'll have a readout and the story will build through one one b. But I think the overall timeline of about a year is is is what we're looking to do. Thanks, Andrew. I do have some questions that have been submitted on the investment company platform as well. So I'll pick one or two of those. Hi. First of all, I just want to say, I think what probably all the shareholders are thinking is you're doing astonishing work in terms of curing cancer. And I think everybody you know, there's no somebody who's suffered. And just thank you for your relentless pursuit of that. I think you're just a a brilliant professional team going about things the right way. Thank you.

32:23 Have a question. I do have a a a couple of quick yes, no questions, clarification questions. When I say a couple, I mean six. They are very quick, clarification ones. And they may sound a little silly, but I think it would just help the the non sort of pharma specialist in the room to and online to to understand a bit a bit more of the opportunity. So firstly, when AVACTA six thousand is cleaved by FAP alpha, are there any stray or waste molecules left on that, left on the doxorubicin, or is it actually identical to stray DOCS? 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 cleaved docs won't act identically to straight ox in tumor?

33:15 Not as I can think of. No. Very simple. Yes. Very simple. Yes. Well, let let's let's hurry on the journey and get to that destination. Given the the safety profile and biopsy data showing the level of docs in tumors from AVACTA would you agree that the chance of success of successfully completing all trials and replacing DOCS as the standard of care is very high or at least fifty percent? Yes. So DOCS made sales of, as you said, $1,400,000,000 last year. If AVACTA is successful, I. E, with greater dosing possible for greater efficacy, is there any reason why it wouldn't take a 100% of that market overnight as a standard of care?

34:04 Yeah. I think there are commercial reasons. But but but the market, I would expect, be expanded because of the nature of AVACTA thousand compared to doxorubicin. So if your question is, is it a multibillion, you know, a billion plus sales drug potentially, then I think the answer is yes. Otherwise, we wouldn't be developing it. That's exactly my next question, which was what what does your analysis show as the potential market size if you expand that population to those who couldn't tolerate straight docs recent MTD, also noting that AVACTA GROUP will be on patent rather than a generic drug? Yeah. We've we've not done that full analysis. We we have and I don't know if Fiona 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. We did that with an external consultancy.

34:59 And the the conclusion of that and I've said this before, actually. It's in it's in decks that I've used before. The conclusion of that was that in in soft tissue sarcoma in Europe and The US, so not not rest of world, then peak sales could be 1,500,000,000. So that that was the piece of work that we did externally. I mean, there's there's so many assumptions in that. I refer you to my previous answer, which is, you know, does it have significant commercial potential? Absolutely. And so my understanding of a b a three nine nine six, if that follows the same clinical path in terms of safety and and efficacy, the potential market size for that is even greater than AVACTA six thousand?

35:46 Yeah. I mean, that would my that would be my gut feeling. But the first question you asked was, is it precisely doxorubicin that's released from AVACTA six thousand? And the one word answer was yes. Is it precisely Velcade that's released from three nine nine six? The answer is no. It's an analog of VELCADE. So it because the chemistry required to to attach the precision platform to VELCADE, if you like, required some modification. When precision is removed, it's an analog of VELCADE. So that then you 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 03/09/1996.

36:31 The market size, now if if 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, knew there was a punch line. Given that those two drugs are potentially worth however many billions, you you know, you pick your number. Sorry. Just to interrupt you. Worth however many billions in seven years' time at peak sales Yeah. On patents. Yeah. You've got a profitable diagnostics business. You've got exciting JVs.

37:18 You've a whole precision platform, the potential to take on the ADC market as well. Why do you think your market value is only £300,000,000 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, you know, makes a big difference to me. I I you know, my personal wealth is entirely locked up in in this. However, we we do have to think about and sorry. This isn't supposed to sound condescending. We gotta think about the facts of life. We have to look at the sort of the peer group and the comparators.

38:03 I don't know. Elliot will have a, you know, really good sort of comment on this as well. If you look at the landscape of just listed biotechs, and you you can do this. I mean, I've done it. I've done the analysis. You can do it very easily. If you look at the sort of market cap of biotechs listed in The US, just narrow it down. And that there, usually, the valuations are a little bit higher than in The UK, not at the moment. But, you know, you'll find that biotechs with one, two, three clinical assets, even phase three 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.

38:52 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 for a minute arguing it's too high. But we also then have to think about, you know, what's critical to us is not being starved of resource of capital. We've we've got to convince specialist health care investors to invest in AVACTA and not in something over here that's got potential that's a lot cheaper. So there is there is a balance. So I'm not arguing the share price should be lower, obviously. And I would argue it should be higher, clearly. Steve will set a target of $18.05.

39:39 I think Trinity has set Tony will correct me, but $22.05 or something like that. So that's their vision of twelve months from now. I have I have no doubt that this is is a a multibillion 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're considered to be, let's say, hugely overvalued compared to our our peers. So, you know, you know, 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 I think we have to be sensible about how we how we see that path over time. Elliot, I'm floundering now. Have you got Yeah. No. No. Let me just put so so I think I agree with all of that, Alastair. I would I would add a couple of things. So one is culturally, and 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.

40:39 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. AVACTA 6,000 data as it's emerging, but it's always what it is. And and so we're not boosters, and I've worked in The US for a long time with US biotech CEO of several. And, you know, boosting is something that can go on to drive share price. We 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 and is is the comparison. The the the way in which biotechs and forgive me if if this I'm teaching my granite to suck eggs, as they say, but the way in which they grow is is actually by inflections.

41:32 And 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 and you folks and 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 Alice has mentioned a couple of times already clinical data that leans in towards efficacy, notwithstanding what Andrew said, which is it, you know, it it again comes gradually. There's not a kind of moment you leave out of the bath saying I have it. But that will come as well, and those inflections begin to change the journey. And 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 US. They'll lean in and look and see AVACTA and say, now it's time. Now we started some of that campaign. So the team have been out to some of the big US oncology conferences. We're beginning to get engagement, but we're not quite there. We're very, very close, you know, within the next twelve to eighteen months, as as Andrew and Alice have said. But I think they're the two things.

42:43 So one is we're not boosters. So we're not 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 a 100% with those descriptions. Just need a little more information and time, and you can, I hope, share that journey with us? Just to just to add sorry. Just to add to that. You know, those those sort of value inflection points, those milestones, you know, we're talking about some of those in the next twelve months, commercial progress, early signs of efficacy. We are, you know, we're at that point now that I described as getting into commercial phase with the Precision platform. Brilliant. Thank you for indulging me, Oliver. No. No. No. Hand the right back to the room. By the way, that was eight questions.

43:30 There's a gentleman here. I'll set another one. Just 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 19 p, and I have a fairly significant shareholding. The director's report refers to encouraging nonexec directors to maintain their shareholding. The executive directors are expected to build a share stake in the company. The the the the transactions of the directors in the company shares has been notable by, well, pretty well, its absence. And I think you're referring to, the success of the company, and we we we all in this room, I think, are seeing tremendous progress.

44:31 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. It's a fair It's an observation. No. It's a perfectly fair observation, but just what you won't be aware of because you can't see because it would be behind nominee accounts is that I I have the neck end of 500,000 shares, but I've either bought at fundraisers a while ago, I can't remember how much, or or hold. So so I do hold significant equity. The the other point to make is that the certainly, the executive management are significant option holders. So that's the that's one of the ways in which we, you know, we deal with that. Yeah. Yeah. So there is a there is another problem. I'll let Tony comment about this or or or Elliot as well. But once nonexec directors hold shares or options, some of the voting is an issue because they're regarded as nonindependent.

45:34 So for example, there is some Elliot does hold shares. I do. I've got a lot. And and he is regarded as not independent because of that, and, therefore, his reelection is voted against by some people. So on on a very mechanical way, it's just hold hold shares, not independent, vote against. It's not a a choice. So I it's a completely fair observation. There's some nuances to it is all I'm saying. Yeah. And I I would I would simply add that I get ISS recommends against my reelection every single time I come around because I am 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 ridiculous rule. Just this is a personal statement now on behalf of The UK companies. I think it's absolutely nuts that nonexecutive directors cannot have their interests through shareholdership aligned with the company and all of you folks as shareholders, but it's it's not in the rules, and they and we get nonindependents.

46:40 All of The US companies I've been involved with, we 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 countercurrent of principle here, which is which I think is bonkers, Frank. So thank you for the observation, Howard. So I'm just gonna just before I come to I'm just gonna read some off Yeah. The online thing just to just to sort of be even handed. So AVACTA suspect they have found their r p two d already, why isn't phase one a and phase one b being run-in parallel? Other companies do so, e g Shaski.

47:28 So given the importance of speed to market, why is AVACTA not taking this approach? Okay. So the the there's obviously a very good answer for that. You know, I don't think we should be suspecting that we found our RP two d, by the way. Don't think that would pass muster when we we move forwards. And we certainly haven't made any decisions on what our, you know, what our dosing levels or dosing regimen should be for the phase one b at this point. But then the substantive question is why don't we run phase one a and phase one b in parallel? And that question's 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 it what to to say say other companies do so, Andrew, correct me if I'm wrong, that's not true. I mean, it's a rare occurrence that people companies go into a an efficacy study without having completed the, you know, the dose finding phase of the work.

48:26 I I have no idea why Shaski took that approach. The the presumably is a a sensible reason for that. But in my opinion, certainly, the team's opinion, it would be reckless to go into a phase one b, 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 and run the risk of not getting the the outcome that we want or for the sake of waiting for another another cohort or two, you know, whatever it turns out to be. So so the answer to the question is, yeah, it's it's true to say that the companies, you know, have very occasionally in the past run these two types of studies in in parallel. That's not appropriate for for us. I don't know, Andrew, anything to add? Or Yeah.

49:13 I mean, I I think it's it's completely it's It's standard practice for us to characterize two doses of a given schedule of a drug like AVACA6000 to take into 1b because it's not clear what's the best dose and it's a balance of safety and efficacy. And clearly, we detect two doses into 1b, 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 either the maximum tolerated dose or something approaching that, and then we'll choose two doses to characterize in one b in a focused way to look at efficacy. So you can either you you could 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, but do it as steadily and as fast as you can do. But choose the optimal dose and schedule because once that is done, it's really difficult to go back.

50:29 Thank you. Next question. I I didn't see exactly who it There's a chart here, and then there's another one in the middle here. Yeah. Barry, yes, please. So Bear in mind the approval for six thousand as a orphan drug. Could you in The USA, have you made any supplies under the orphan regulations in The USA which you've got for AVACTA GROUP Fiona, do wanna take that? We've got ODD status in The US, and are we supplying I I guess the question is under the on the right of use on named patient basis in The US AVACTA 6,000. The answer is no. But Okay. No. No. That's fine. No. And are there any limitations of the formation which are going to result in a limit on the upper level administration that you can make during the So I just say So are there any any limits for on the formulation which are going to limit the amount of drug you can administer during the phase one a? No. I don't believe so. Fiona, do wanna add?

51:35 No. Not as we know right now. You can't you can't endlessly administer that job. There's nothing in we're we're nowhere near doing it in terms of what we can practice with this. And there's a gentleman in the middle here. Is it working? Oh, hi. My name is Albert. Sorry. My name is Albert. Could you comment on what you said is the obvious question, which is the endpoint for p one a? That's sort of not yet been answered. What is the endpoint for Or where we are right now? Because earlier in the year, you'd mentioned it would be complete by the summer or thereabouts. When when we actually designed the study, we designed it for four cohorts. I mean, know, we're all we're all surprised and pleased at the, you the fact that we've escalated into a fifth and now six cohorts. So and I I when you say what is the endpoint, you mean when is the endpoint?

52:27 Or because the what is the endpoint? Is is safety tolerability? No. Didn't mean what. I mean, roughly when. When. Yeah. You know what I'm gonna say. I mean, it it it depends entirely on where we get to in cohort six. I mean, we have the potential to go into cohort seven. We just talked about the sort of, you know, impatient approach of just saying, you let's 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, you know, ad ad nauseam. So we we can see from the PK what sort of systemic levels of doxorubicin are appearing. We haven't published that that data yet, but that that gives us a a feeling for how far we can go.

53:18 So, you know, I I still believe. I don't believe we're gonna escalate into cohorts eight, nine, and 10 is is the answer. But, you know, we have to see where the data take us, and we've got to see where the regulators also take us. I don't if you're only a father to qualify to add color to that. It's exactly right. So we're we're we're looking at the pharmacokinetics with the. Yeah. So I can see who asked the question. Yeah. Right in the middle. Okay. So we're looking at the PK. So with each patient, almost in real time, we look at the pharmacokinetics, and we measure levels of AVACTA thousand doxorubicin. The major metabolite doxorubicinol in what we call the leaving group in the plasma and the urine. 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's what will drive each of these decisions. So as I also said, we don't know how high we'll go, but there will be a point where you'll you'll start to see doxorubicin driven toxicity. The person asked the question earlier, is exactly doxorubicin.

54:27 And at some point, you're going to start to see myelosuppression. 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 sarcoma module, we had an MTD for doxorubicin of two mgs per kg, and a VVA of six thousand to twelve mgs per kg. So you do reach MTD, at least in an animal, And it would be highly unlikely that we wouldn't reach MTD in a human sometime. So I'm just going to just for the sake of the lay participants in this who are not pharmaco specialists, I'm going to just translate both of those responses into into English. So Thank you. So so PK or pharmacokinetics is is just the way in which we measure how much drug is in the patient.

55:14 So either in their blood or in the tumor or in their 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 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 gonna get to that level. We don't know to get to that level in in the patients, and that's why we will measure how much drug there is in the 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 have had, I I hope not personal, but but maybe close experiences where you you your hair falls out with doxorubicin. So that's a sign you begin to see that you're getting toxic levels.

56:20 And then the other one is it causes your white blood cells, so the the cells that fight diseases to go wrong. And and that going wrong is also a sign of this toxicity. And we've seen a couple of hints of both of those, so we know we're getting, you know, somewhere close, which is why I think Alastair was saying we may have one more dose step or maybe another dose step after that, but we can't envisage another four dose 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 but they're funny peculiar in that there are cancer cells in the very mix of there are cancer cells in the middle of them, And outside is a thing called the stromas. It's it's almost like a barricade that cancers build around themselves, and those barricades are quite sophisticated.

57:19 And the really cool thing about our technology, and there aren't many companies on the planet who have this, so lots are saying we want it, that we hit the barricade and the actual cancer cells themselves both at the same time. And that's that's a very, very cool thing. So FAP, if you go into the 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 treatments is the barricade prevents them from working, and we're going straight after it. So that's also really cool. Thanks, Elliot. No worries. Just on on that note 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?

58:04 Will it be at the end of the phase one eight 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 both, unfortunately. So we'll we'll publish the data when the study's finished in the highest impact way we can possibly do. We've got two more. There's a gentleman on the end there and another gent here and and one over here. We'll make those the last three, Alastair, if that's okay. Just Yep. Based on timing. So my question is about translation, which you kindly offered just now. How how to how to begin this question?

58:56 My background is medical and also in communications with patients and carers. Now the, thing is despite that background, I have great difficulty in understanding some of the 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 dare I say, Yorkshire English for us. I'm not Thank you. Is that a compliment?

1:00:00 That that is a brilliant observation and question. And and the answer is yes. You know, I think we we do we do quite a lot to try and present things in a digestible form. We do we do lapse into jargon, PKMTD, but we do not I would like to think we do a reasonable amount of things like the the videos that I do to try and explain stuff. But we we we can can definitely definitely do do more. So we'll, you know, we'll definitely take that on board. The the other and I know there's a question in this pile because I read it earlier about media. What why why aren't we on the front page of every newspaper given that we've now cured cancer? Which is but, you know, that sort of expectation, we all know, is not realistic, but some people some people don't. And the 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.

1:01:01 So we have multiple audiences, shareholders, technical publications, technical technical media where we actually get a lot of stuff out, always have done for obvious reasons, the more mainstream media has been more challenging because the stories they want are human stories. They're, you people know, who've who've got a benefit from the treatments and so on, we're not quite there yet. But the quality of life improvement, I mean, that that's, you know, that's an angle that we can, you know, we can with the data we now have talked about. So So so, so, yeah, yeah, thank you. That's that's good feedback. We should just take two more questions. I'll suggest it's down. There's a gentleman here, and there was another just there. Thanks very much. Hi, Alistair. Given the reduction of side effects you're seeing so far, is it possible, and for phase one b, that you can reduce the dosage timeline from three weeks to, say, two weeks or a week? In principle, yes.

1:01:58 And secondly, what are the minimum milestones you would need to progress a second indication for AVACTALZ, for example, breast cancer, given the size of the market versus SDS? At what point will you look to do that? Yeah. I mean, there's there's resource constraints because to take it into another clinical trial in a, you know, in an indication like breast and ovarian would and again, I'll I'll look to Elliot and Fiona to comment would be far more expensive than going into soft tissue sarcoma. So but, yeah, I mean, we we we certainly are thinking about what those other indications are that we can go into. And I I would say post phase one b, when we have a good efficacy signal, I hope, from from patients in soft tissue sarcoma, then then we can think about our opportunities to go into other indications. So, Fiona?

1:02:53 Yeah. I think soft tissue sarcoma is really a a no brainer, right, because it's doxorubicin is first line. It's a single agent, and it's also high in fat. So don't forget we have to have fat when we don't have doxorubicin. Breast cancer is really interesting, because we know that many of the breast cancer drugs themselves cause cardiac toxicity. Herceptin, one of the most successful biologics, causes significant cardiac tox. People with breast cancer get triplets of chemotherapy added onto Herceptin, and each of those chemotherapies has toxicity. So what we would be looking to do would be to replace the anticyclin in that triplet in in breast cancer to significantly reduce. Because if you think a lot of breast cancer patients are 20 and 30 years old. Right? So downstream secondary mil militants is a a real possibility and toxicities.

1:03:48 So that's for me, that's a a really strong area to go into, but you're not going as a single agent here. You're doing 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 that we do again, after a significant amount of financial backing to do that study, but I I definitely think breast and ovarian are two areas where we would have a significant amount of interest to do those trials. Thank you. And there was one more. I didn't see where Sorry, it I'd just like to stay with Phase 1a on 6,000. Cohort five, the amount of docs was approximately 2.2 normal treatment. Cohort six, you're talking about 2.7.

1:04:34 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 docs in the tumor. How does that compare to normal docs? Is it greater? Is it less? Is it about the same? It's a really good question. And funnily enough, it's in this this list here. So the the problem is that that data, in other words, how much doc what's the PK? What what how how docs are in the bloodstream? How much docs are in the tumor and so on? That data's 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 that doesn't doesn't mean mean it's it's never never been been done. The experiment's not been done. It's just never been published, so it's not accessible to us. So the the honest answer is we don't know, which which is why the important comparison is and have seen it on previous slides, and you'll see it this afternoon, I think, in Andrew's deck.

1:05:34 You can see the comparison of what we're seeing in the biopsy, how much docs is there compared to how much docs is required to, and I'll paraphrase, to kill cells. And that, you know, that that is known because that's known from experiments outside of people. So you can do things as simply as put cells into a pet tradition, add doxorubicin until you see that you're killing them, and then you've got a, you know, got a a measure of the the amount required. So so that is solid data taken by us and in the literature. Unfortunately, nobody's ever done the experiment with people and taken biopsies, which is why we're building that into our phase one b. There is an arm with doxorubicin planned for exactly that reason. Excuse me. I handed it back.

1:06:21 Based on that based on what you know will actually kill the tumor, are you seeing a level now which is to or greater? Yeah. Yeah. And we talked about that. So it's significant? Oh, yeah. Yes. Yeah. So when we when we said, you know, and, again, maybe communication, you know, when when we announced the biopsy data and we said there were therapeutically significant levels in the tumor biopsies, that was our expression of we are seeing therapeutically significant levels. Right? So so maybe there's maybe there's other ways of describing that. But in the data on the slide, what it does is it it gives you four four mechanisms of of cell killing, if you like, four mechanisms that are involved in how docs works, and it tells you the concentration required.

1:07:16 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 that's what we can say factually right now, which I think was behind your question. You know, why the hell wouldn't it work? Yeah? I I think the I think the I'm sorry. We're gonna have to we've ran out time. You can catch us over lunch. That's okay. I think the gents suggestion at the end is coming coming through through loud and clear as well that we need a We can always do better. Explain as and and do better. We it it's be it 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, etcetera. And we, I can hear, have been very guilty of that as well, and we'll reprove it. Okay. We've we've now got lunch and some posters. Ellie, just before we sorry to interrupt you, but we should just folks online just to say thank you attending.

1:08:09 Everyone online and everyone in the room, well, look forward to another update very shortly. Thanks very much. Thank you for updating attendees today. Could I please ask attendees not to close the session as you'll now be be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the board of AVCTOR Group PLC, we'd like to thank you for attending today's meeting, and good afternoon to you all.