Avacta : Results for the Year Ended 31 December 2023

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30 April 2024

Avacta Group plc

("Avacta", the "Group" or the "Company")

Preliminary Results for the Year Ended 31 December 2023

Avacta appoints new Chief Executive Officer Christina Coughlin, MD PhD

Clinical proof-of-concept demonstrated for Avacta's lead programme AVA6000 and proof-of- mechanism for the pre|CISIONTM platform presented this month at the American Association for Cancer Research (AACR) Annual Meeting

New leadership and strong clinical momentum positions Avacta well for its evolution into a

therapeutics-focused business

Avacta Group plc (AIM: AVCT), a life sciences company developing innovative, targeted oncology drugs and powerful diagnostics, is pleased to announce its preliminary results for the twelve months ending 31 December 2023 ("FY23").

Operating highlights

Therapeutics Division - Encouraging clinical data for AVA6000, the Company's lead pre|CISION™ peptide drug conjugate

• Data from the three-weekly study confirm the ability of the pre|CISIONTM platform to concentrate a therapeutic warhead in the tumour microenvironment (TME) to transform the safety profile of in patients with advanced cancers
• The results to date show that AVA6000, the first peptide drug conjugate in the Avacta pipeline, has a favourable safety profile with concentration of the warhead in the TME resulting in multiple responses in patients with high levels of Fibroblast Activation Protein (FAPhigh), thus delivering clinical proof-of-concept for AVA6000 and proof-of-mechanism for the proprietary pre|CISIONTM drug delivery platform
• In the three-weekly dose escalation study for AVA6000 the seventh dose cohort was successfully completed and, in light of the highly positive safety data, patients are now being dosed in a two-weekly dose escalation study with the aim of defining the recommended Phase 2 dose (RP2D), allowing dose expansion cohorts to begin in H2 2024 followed by the Phase 2 efficacy study in a selected orphan indication
• AffyXell Therapeutics ("AffyXell"), the joint venture between Avacta and Daewoong Pharmaceutical ("Daewoong") continued to progress well with the triggering of a second

milestone payment. This has resulted in an increase in Avacta's shareholding in AffyXell to 25%

• The growing body of clinical and pre-clinical data validating the pre|CISIONTM platform has supported an acceleration in the Group's commercial activities including the appointment of
  Dr Simon Bennett as Chief Business Officer of the Therapeutics Division

Events after the reporting period

• Appointment of Christina Coughlin MD, PhD as Chief Executive Officer, effective May 1 2024, replacing Dr Alastair Smith. Chris was appointed to the position of Head of Research & Development in February 2024.
  o Dr. Coughlin has served as a Non-executive Director of Avacta Group plc since March 2022 and Head of Research & Development. She trained as an oncologist and immunologist and has been pivotal in driving the clinical development strategy for AVA6000, Avacta's lead pre|CISION™ tumour targeted therapy, and the broader drug pipeline strategy at the Company.
• The Board will also evolve to meet the increased demands of being a clinical stage oncology company alongside the need to more clearly communicate with shareholders and other key stakeholders. An individual with sector, commercial and listed company experience will be the ideal addition.
• Data from the AVA6000 Phase 1 clinical trial three-weekly dose escalation study reported at the AACR annual meeting in San Diego, USA, providing Clinical Proof of Concept for AVA6000 with multiple patient responses and a favourable safety profile.
• AVA6000 update

1. The Company announced that patients are now being dosed in a two-weekly dose escalation study with the aim of defining the recommended Phase 2 dose (RP2D), allowing dose expansions to begin in H2 2024 followed by the Phase 2 efficacy study in a selected orphan indication

1. Avacta receives approval to enrol patients in the UK in the ongoing two-weekly dose escalation study

1. Patients in the two-weekly study in each cohort can be dosed in parallel allowing the Company to remain on track to begin the dose expansion studies in the second half of 2024.

Diagnostics Division - Second acquisition completed and integration progressing to build a profitable Diagnostics Division

• Avacta's Diagnostics Division completed the acquisition of Belgium-based Coris Bioconcept SRL ("Coris"), a developer and manufacturer of rapid tests focused on infectious diseases, on 1 June 2023 for an upfront consideration of £7.3 million with an earnout based on future business performance of up to £3.0 million payable in cash, adding a broad range of marketed professional-use rapid tests to the Diagnostics Division.
• The Diagnostics Division, which also includes Launch Diagnostics ("Launch"), a leading UK IVD distributor that was acquired in October 2022, reports revenue of £21.2 million (2022: £4.2 million) and an adjusted EBITDA loss of £1.18 million (2022: £5.13 million).
• The Group continues its focus on consolidating the Diagnostics Division post the Launch and Coris acquisitions. After the period end Avacta announced that it is exploring strategic options for the division in a manner which maximises shareholder value and benefit for the Company in creating a pure-play oncology biopharmaceutical company that the Board expects will be more attractive to specialist international biotech investors.

Financial and corporate highlights

• Revenues increase to £23.25 million (2022: £9.7 million).
• Adjusted EBITDA loss (before non-cash and non-recurring items) of £20.14 million (2022: £15.1 million).
• Operating loss reduces to £28.36 million (2022: £32.6 million).
• Reported loss from continuing operations of £24.95 million (2022, restated: £37.0 million).
• Loss per ordinary share from continuing operations of 9.15p (2022, restated: 14.48p).
• Cash and short-term deposit balances at 31 December 2023 of £16.6 million (31 December 2022: £41.8 million).
• Shaun Chilton joined Avacta's Board of Directors as Non-executive Director in June 2023.

Events after the reporting period

• Fundraise completed in March 2024 raising £31.1 million (gross proceeds) from quality institutions, including a European healthcare specialist investor, and private shareholders to significantly extend the Group's cash runway.

Outlook

During the reporting period and after the period end, the ongoing Phase 1a clinical study of AVA6000, demonstrated Clinical Proof of Concept, with multiple patient responses and a favourable safety profile. This not only builds confidence in AVA6000 but underpins future clinical development of this peptide drug conjugate in orphan and other indications and validates investment in a broader pre|CISIONTM peptide drug conjugate and ADC/AffDC pipeline.

The recent growing body of clinical data is critical to the realisation of significant commercial opportunities with major partners in order to monetise the pre|CISIONTM platform.

Based on this favourable three-weekly dosing safety profile, Avacta continues to enrol patients in a two- weekly dosing safety study in order to determine the dosing regimen for the expansion studies, planned to start in the US in the second half of 2024 to be followed by the Phase 2 efficacy study, once agreed with regulatory authorities.

The appointment of Christina Coughlin MD as Chief Executive Officer, effective May 1 2024, signals a new period of focus on Avacta's Therapeutics division and on driving forward AVA6000 and the wider pre|CISIONTM peptide drug conjugate and ADC/AffDC pipeline. As indicated, Avacta plans to focus its resources on its therapeutic programmes and will therefore look to divest the Diagnostics Division in a manner that maximises value for shareholders and the strategic benefits of a focused biotech strategy.

Dr Eliot Forster, Chairman of Avacta Group plc, commented:

"As a Board and Company, we are dedicated to improving the treatment outcomes of patients with cancer through focused investment in the lead programme AVA6000 and the growing oncology pipeline which we believe is a driver of significant value.

"The clinical momentum demonstrated by AVA6000 during the reporting period and into the post-period has significantly enhanced our confidence in AVA6000 and the broader pre|CISIONTM platform.

"We're delighted to welcome Chris as Chief Executive Officer of Avacta. Chris brings many years' experience and training as an oncologist and immunologist and has worked in significant senior development roles in leading biopharma companies. She has also been closely involved in the clinical journey of pre|CISIONTM and has deep insight into the peer landscape and the opportunities.

"I would also like to extend my thanks to Alastair for the huge role he has played in the foundation and development of the Company. On behalf of the entire Board, we wish him the best for the future."

For further information from Avacta Group plc, please contact:

Avacta Group plc	Tel: [phone]
Christina Coughlin, Chief Executive Officer designate	www.avacta.com
Tony Gardiner, Chief Financial Officer
Michael Vinegrad, Group Communications Director
Stifel Nicolaus Europe Limited (Nomad and Joint	Tel: [phone]
Broker)	www.stifel.com
Nicholas Moore / Nick Adams / Samira Essebiyea /
Nick Harland / Ben Good
Peel Hunt (Joint Broker)
James Steel / Chris Golden / Patrick Birkholm	www.peelhunt.com
ICR Consilium
Mary-Jane Elliott / Jessica Hodgson / Sukaina Virji	[e-mail]

About Avacta Group plc - www.avacta.com

Avacta Group is a UK-based life sciences company focused on improving healthcare outcomes through targeted cancer treatments and diagnostics.

Avacta Therapeutics is a clinical stage oncology biotech division harnessing proprietary therapeutic platforms to develop novel, highly targeted cancer drugs.

Avacta Diagnostics focuses on supporting healthcare professionals and broadening access to diagnostics.

Avacta has two proprietary platforms, pre|CISION™ and Affimer®.

The pre|CISION™ platform is a highly specific substrate for fibroblast activation protein (FAP) which is upregulated in most solid tumour compared with healthy tissues. The pre|CISION™ platform harnesses this tumour specific protease to activate pre|CISION™ peptide drug conjugates and pre|CISION™ antibody/Affimer® drug conjugates in the tumour microenvironment, reducing systemic exposure and toxicity, allowing dosing to be optimised to deliver the best outcomes for patients.

The lead pre|CISION™ programme AVA6000, a peptide drug conjugate form of doxorubicin, is in Phase 1 studies. It has shown a dramatic improvement in safety and tolerability in clinical trials to date compared with standard doxorubicin and preliminary signs of clinical activity in multiple patients.

To register for news alerts by email go to www.avacta.com/investor-news-email-alerts

Chairman's Statement

I believe that Avacta has reached a pivotal point in its history. The clinical progress of the pre|CISION™ platform and of AVA6000 enable the company to bring singular focus to the therapeutics division, though clinical development and partnering.

We are also aware of the need to continue to evolve the Board of Directors to best suit the needs of an AIM-listed clinical stage cancer treatments company, to strategically manage the diagnostics division for the best outcome for our staff, customers and shareholders alike and, to create financial optionality with respect to the company bond. The Board of Directors and I are excited about what is to come for Avacta.

The AVA6000 clinical data continue to impress. As we begin to progress into the expansion cohorts and Phase 2 study and hopefully continue to demonstrate clear patient benefits, I am confident this will further open up the commercial partnering opportunities for AVA6000 and the pre|CISION™ technology platform.

During the year there have been some changes to the Board, including the appointment of Shaun Chilton as Non-executive Director in June 2023. Shaun has held a number of senior and executive

commercial positions, with more than 30 years' experience in the pharmaceutical and pharmaceutical services industries, most recently as Chief Executive Officer of Clinigen. We believe he will bring invaluable experience to the Company.

Christina Coughlin MD, who joined the Board as a Non-executive Director in March 2022 and acted as Medical Advisor in the latter half of the year has now joined the Board on a full-time basis as Head of Research and Development in February 2024 and more latterly was appointed as Chief Executive Officer. Chris, a talented oncologist and immunologist, has been pivotal in driving the clinical development strategy for AVA6000 and will be responsible for all pre-clinical research and clinical development activities. Her appointment signals a new period of growth for Avacta.

The Board will need to continue to evolve to meet the demands of being a clinical stage oncology Company and to more clearly communicate with shareholders and other stakeholders.

Dr Eliot Forster

Chairman

29 April 2024

Chief Executive Officer's Statement

The clinical data emerging from the AVA6000 Phase 1 study during 2023 clearly validate the pre|CISIONTM platform as a leading tumour targeting mechanism. Targeting tumour tissue and reducing systemic exposure are key objectives in oncology drug development allowing more potent therapies to be utilised. The potential of a successful tumour targeting platform is huge.

AVA6000, Avacta's first pre|CISIONTM peptide drug conjugate, has been shown to target doxorubicin to FAP-rich tumour tissue, dramatically improving the safety and tolerability of this well-established chemotherapy. Early signs of anti-tumour activity have been seen in a number of patients on the trial meaning that clinically effective levels of the drug are being released in the tumour microenvironment. This also reflects the tumour biopsy data which show doxorubicin being present in the tumour tissue at many times the level measured in the blood stream at the same timepoint showing effectiveness in the tumour whilst minimising the debilitating side effects characteristically experienced with chemotherapy.

Avacta has been able to leverage this excellent progress in the clinic to progress conversations with potential commercial partners. The commercial strategy is to continue to develop AVA6000 through the Phase 2 efficacy study to maximise value. However, there are significant partnering opportunities for the broader pre|CISIONTM platform. The body of positive clinical data we have seen will support our commercial activities.

The Group's focus is on growing shareholder value through its oncology drug programmes. The Diagnostics Division has been executing the plan that was set out to shareholders in October 2022 to build a valuable in-vitro diagnostics business serving the needs of healthcare professionals. It has grown through two acquisitions, resulting in a combined revenue of £21.2 million, and is on a trajectory to become EBITDA positive in the near future with the acquired businesses showing 10% growth during 2023.

The fundraise completed post-period end in March 2024 amounting to £31.1 million (gross proceeds) from new and existing institutional and private shareholders has enabled us to significantly extend the Group's cash runway, creating a strong negotiating position in future commercial discussions and providing the funds to progress AVA6000 into Phase 2 clinical trials, subject to FDA approval.

Dr Alastair Smith

Chief Executive Officer

29 April 2024

Avacta Therapeutics Division Update

The pre|CISIONTM Platform

In the form of a peptide drug conjugate with a chemotherapy, the pre|CISIONTM platform prevents the chemotherapy from entering cells rendering it relatively harmless until the drug conjugate encounters fibroblast activation protein (FAP) which is upregulated in many solid tumours compared with healthy tissues. preCISIONTM is cleaved by FAP, releasing the chemotherapy warhead in the FAP-rich tumour microenvironment, thus concentrating the chemotherapy in the tumour and reducing the exposure of healthy tissues. This leads to improved safety, tolerability and the ability to therefore improve the dosing schedule, in terms of dose, dose frequency and number of cycles, with the aim of improving the efficacy of these potentially powerful anti-cancer agents and delivering better outcomes for patients and quality of life whilst on treatment.

pre|CISIONTM can further be incorporated into the linker in an antibody/Affimer drug conjugate (ADC/AffDC) producing dual targeting of potent warheads both to a tumour specific antigen and to FAP- rich tumour tissue with several advantages over conventional ADCs. The clinical validation of the pre|CISIONTM platform with AVA6000 now justifies investment in a broader pipeline of peptide drug conjugates and ADCs/AffDCs.

AVA6000 FAPα-activated doxorubicin - the lead pre|CISION™ programme

Avacta's lead programme, AVA6000, is a pre|CISION™ targeted form of doxorubicin, an anthracycline that is used as part of standard of care in several tumour types including soft tissue sarcoma. Its dosing schedule and long-term use is limited by severe systemic toxicities, in particular, by haematological toxicities and cardiotoxicities.

The ALS-6000-101 Phase 1 clinical trial involves a dose-escalation Phase 1 study in patients with locally advanced or metastatic solid tumour, known to be Fibroblast Activation Protein α (FAP) positive, in which cohorts of patients receive ascending doses of AVA6000 initially at three-weekly intervals to determine the maximum tolerated dose. For more information visit www.clinicaltrials.gov(NCT04969835).

The Phase 1a three-weekly dose escalation study has been carried out at several sites in the UK and United States and completed the seventh and final dose escalation cohort at 385 mg/m2, which is approximately 3.5 times the normal dose of doxorubicin. A number of patients in several different cohorts remain on the trial.

The data emerging from the three-weekly dose escalation study show an excellent safety profile and that the pre|CISION platform is functioning as expected. The key findings of the study are:

• The pre|CISIONTM platform targets the release of a chemotherapy to the tumour as intended. The data show that the pre|CISIONTM modification is cleaved specifically by FAP, an enzyme present in high concentrations in many solid tumour compared with healthy tissue. In the case of AVA6000, this targets the release of doxorubicin to the tumour microenvironment, concentrating the active cytotoxic drug within the tumour microenvironment and limiting systemic exposure to the chemotherapy.
• AVA6000 has significantly improved the safety and tolerability of doxorubicin. A significant reduction in the frequency and severity of the known doxorubicin toxicities has been observed across the dosing range. A maximum tolerated dose has not been reached in the three-weekly dose escalation study despite dosing approximately 3.5x the normal level of doxorubicin in the highest and final dose cohort in this part of the Phase 1a study.

• AVA6000 has shown encouraging preliminary clinical signs of anti-tumour activity. Preliminary results in the Phase 1a trial demonstrate activity of AVA6000 in patients with tumour with high FAP activity and anthracycline sensitivity, validating the mechanism of action of AVA6000.

Post-period end the Company announced that patients are now being dosed in a two-weekly dose escalation study with the aim of defining the recommended Phase 2 dose (RP2D), allowing dose expansions to begin in H2 2024 followed by the Phase 2 efficacy study, subject to FDA approval, in a selected orphan indication.

Pipeline of pre|CISION™ chemotherapies

The next most advanced pre|CISION™ pre-clinical candidate is AVA3996, a tumour-activated proteasome inhibitor based on an analogue of Velcade.

Avacta is developing other pre|CISION™ drugs incorporating more potent toxins, the details of which have not yet been made public, but which the Company intends to disclose during 2024.

POINT Biopharma Inc.

Early in 2021, Avacta signed a licensing agreement with POINT Biopharma Inc. ("POINT"), to provide access to Avacta's pre|CISION™ technology for the development of tumour-activated radiopharmaceuticals.

Under the terms of the agreement, Avacta received an upfront fee and will receive development milestone payments for the first radiopharmaceutical FAPα-activated drug totalling $9.5 million. Avacta will also receive milestone payments for subsequent radiopharmaceutical FAPα-activated drugs of up to $8 million each, a royalty on sales of FAP-activated radiopharmaceuticals by POINT and a percentage of any sublicensing income received by POINT.

Avacta is bound by confidentiality clauses in the license agreement with POINT and is therefore unable to provide a detailed update on progress outside of the information that has been placed in the public domain by POINT (POINT has named its pre|CISION™ based programmes CanSeekTM).

POINT's acquisition by Eli Lilly has not affected the licensing arrangements.

Affimer® Immunotherapy Programmes

Avacta has also developed Affimer® immunotherapies, the most advanced of which (AVA032) is in pre- clinical research phase and is a bispecific molecule comprising an anti-PD-L1Affimer® fused to IL-15,a cytokine that regulates the activation and proliferation of immune cells (T-cells and natural killer (NK) cells). Data presented at the AACR AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in October 2023 demonstrate encouraging in-vitro and in-vivo efficacy.

Translation of the Affimer® platform into the clinic to demonstrate the safety and tolerability of this novel therapeutic protein platform represents a key value inflection point for the Affimer® technology. Limited resources for internal Affimer programmes are complemented by external partnerships for the Affimer platform with Daewoong Pharmaceutical and LG Chem Life Sciences.

AffyXell Therapeutics

AffyXell was established in January 2020 by Avacta and Daewoong as a joint venture to develop novel mesenchymal stem cell ("MSC") therapies. AffyXell combines Avacta's Affimer® platform with Daewoong's MSC platform such that the stem cells are genetically modified to produce and secrete therapeutic Affimer® proteins with immuno-modulatory effects in situ in the patient. The Affimer® proteins are designed to enhance the therapeutic effects of the MSC creating a novel, next generation cell therapy platform.

Avacta has successfully developed and characterised Affimer® proteins against the second target of interest for AffyXell and has filed a patent application for the associated intellectual property triggering the second milestone in the agreement during the reporting period. The second milestone resulted in an increase in Avacta's shareholding in AffyXell, from 19% to 25%.

LG Chem Life Sciences

Avacta has a strategic partnership with LG Chem Life Sciences focused on the development of Affimer® based therapeutics. The partnership provides LG Chem with rights to develop and commercialise a number of Affimer® and non-Affimer biotherapeutics combined with Affimer XT® half-life extension for a range of indications.

The Company will provide further updates on the partnership with LG at the next material milestone.

Avacta Diagnostics Division Update

Avacta's Diagnostics Division is focused on supporting healthcare professionals and broadening access to high quality diagnostics.

In October 2022 Avacta set out a strategy to grow its Diagnostics Division through acquisitions to build a stand-alonein-vitro diagnostics ("IVD") business taking advantage of post-pandemic opportunities to develop products in-house and to capture proprietary routes to market to maximise profitability. The focus of the Division is on professional healthcare in both the centralised setting such as hospital pathology laboratories and the decentralised setting such as primary healthcare, clinics and pharmacies. The strategy also has the potential to benefit from the competitive advantages of the Affimer® platform to differentiate immunodiagnostic products, such as lateral flow tests, in what is a competitive market. Avacta has focused its acquisitions on businesses with clear growth opportunities through product portfolio or geographic expansion, improved commercial processes and partners.

Avacta has successfully executed two acquisitions of businesses that fit with this strategy: Launch Diagnostics Ltd ("Launch"), a leading independent distributor of IVDs to the professional, centralised hospital laboratory testing market in the UK and France, and Coris Bioconcept SRL ("Coris"), a developer and supplier of rapid diagnostic test kits, mainly lateral flow tests. These acquisitions have allowed the Division to build scale and put it on a trajectory to become EBITDA positive in the near future

The Diagnostics Division now has well-established routes to market in the UK and France and is expanding into other European countries including Germany. Alongside third party products it has a market leading portfolio of AMR test products that form part of the clinical workflow in many countries. From this base it is possible to build a significant, full spectrum, European IVD business through organic growth which is likely to be attractive ultimately to both strategic and financial acquirors.

As announced on 28 February 2024, the Avacta Board has taken the strategic decision to focus its cash resources on growing the Therapeutics Division which the Board believes is now the main value driver of the Group. Whilst the Diagnostics Division is expected to be cash generative in the near future, it is strategically important for the Group to simplify its structure in order to attract specialist healthcare investors with the ability to support the growing pre-clinical and clinical pipeline of pre|CISIONTM and Affimer® therapeutics and it will do so in a manner which maximises value for its shareholders.