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#AVCT Decided to top up over the last 2 days following the 52% retracement in SP from 210p. Before doing so, I re-examined the bear case and weighed up the risk reward as follows: The bear case (as espoused by TW at Shareprophets): 1) AVCT is in danger of missing the boat on CV19
testing with RLFT mass production not likely before Sept. 2) Global CV19 pandemic has peaked and cases are already falling in developed markets. The CV19 SP bubble has been skewered , precipitating a derating in CV19 SPs (AVCT et al) to pre CV19 levels (ie 10-20p) 3) Since the
1990s when it became clear that there were limitations to MAbs, more than 50 non-antibody protein scaffolds have been worked on as alternatives. A LOT of money has been burnt here! MAbs are now a $100bn+ market, and not one has got close - YET! Avacta’s Affimers haven’t been
proven to overcome one major hurdle yet - mass production! 4) None of the licensing agreements that AVCT has signed (Moderna, LG Chem, Daewoong Pharma) has led to affimer based therapeutics being commercialised 5) AVCT's immuno-oncology therapy (AVA6000) has yet to even pass
Phase 1 trials 6) AVCT's £300m mkt cap is based on hype rather than realistic earnings potential. The bulk of AIM listed biotech companies (cf Alizyme) don't make it and AVCT is likely to follow suit when it runs out of cash! Compelling reasons not to invest in AVCT, right?
No - wrong imo for the following reasons: 1) SP correction looks overdone. SP fell 52% from its 210p ATH and 20% below the rights issue price despite +ve newsflow from the company 2) CEO AS remains confident that AVCT will meet required RLFT Spec and Sens targets and be in
mass production by the end of the summer 3) There remains little competition to AVCT's antigen test with Sona's test only achieving an 80% sensitivity level. 4) Even if global CV19 infection cases decline, Gvts will have little alternative but to stockpile CV19 antigen tests to
contain further outbreaks 5) RLFT POC CV19 tests will be the cheapest and most viable means of containing future outbreaks. Global demand is likely to be in the 100s of millions. AVCT is well placed to take a significant share of the market. 6) AVCT is likely to have the mfg
capacity and supply chain structures (Medusa19) to exploit the market opportunity if and when target Spec and Sensitivity levels are reached. 7) CV19 vaccine - unlikely to be a silver bullet due to low take up/infection protection rates . 8) Therapeutics pipeline - the £48m
cash raise mean that AVCT is fully funded until 2H2023, de-risking the therapeutics pipeline and providing w-c to facilitate and scale CV19 test production. 9) BAMS CV19 testing - the Adeptrix partnership is on track to generate significant revenues in 2H2020 10) Strategic
shareholder (Ruane) have taken a significant stake in AVCT and believe in the l-t potential of the affimer platform. In conclusion the risk reward stacks up after the recent SP weakness. With 2.5% of my overall p-f allocated to AVCT I'm confident that news flow over the next 2
mnths will drive an SP re-rating and optimistic that CEO AS will "deliver the goods" on CV19 testing. Even if he doesn't, the recent £48m cash raise gives AVCT a fighting chance of commercialising multiple other affimer based therapies over the next 3 years in multi $bn mkts.
