Good morning and welcome to the Avacta Group investor presentation. Throughout the call to presentation, investors will be in the scenario mode. Questions are encouraged and can be submitted at any time by the Q&A tab, situated in the right corner of your screen. Simply type in your questions and press send. Due to the high attendance on today's call, the company may not be in a position to answer every question it receives in the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. I would now like to hand you over to CEO Christina Coughlin.
Good morning.
Good morning, and thank you for having us. I'm joined today by our Chief Financial Officer, Brian Hahn, and we will be presenting the fiscal year 2024 preliminary results for Avacta Group. Let's jump in. We will be making forward-looking statements, and our disclaimer is noted here on the second slide. Let me start with a few of the highlights for Avacta. The company has essentially, over the last year, undergone a complete transformation, and we are now positioned as a pure-play oncology biopharmaceutical company. When we joined you last year, this was a joined-up diagnostics and therapeutics company. Over the course of this last year, with the divestment of one of the aspects of the diagnostics company, with the second one coming, we are now focused on our proprietary precision peptide drug conjugate platform within the company and are poised to move this into the next stage.
Let me tell you a little bit about that and how we are accomplishing that. Our first entry into the clinic, and really the program that created all the buzz and all the excitement around precision, is FAPDOX. This is a FAP-enabled doxorubicin. It is the first precision program. There are two highlights for this one. The first is that we completed the phase 1A, the dose escalation portion of the clinical trial, and multiple presentations have been made in peer-reviewed settings with those data. We opened the phase 1B expansion cohorts. We will show you a bit more on the design of these today, and we anticipate releasing the initial data in salivary gland cancer in late 2025. We have also, over the course of this year, moved our Exatecan, our Topo 1, our second program. That one has moved into the IND-enabling status.
What that means is that we have selected the clinical candidate late last year and have begun GMP, or good manufacturing practice, manufacturing of this drug for use in patients, and we anticipate filing this IND and getting this clinical trial started early in 2026. Importantly, we entered into a strategic collaboration with Tempus. This has been leveraging AI to capture the full market opportunity, but also to drive smarter trials. I'll describe during the presentation exactly how we're going to use these Tempus data, both capturing the market opportunity, but also that concept of driving a smarter trial with the FAP Exatecan program. You'll see there our cash at December 31, GBP 12.9 million, and as of April 30, 2025, this year, GBP 17.3 million. This was following the divestment of the diagnostics cash runway into the first quarter of 2026. We have strengthened our leadership of the company.
We have our new Chief Financial Officer here with me today, Brian Hahn. We have added our Chief Scientific Officer, Michelle Morrow, and we have also appointed very recently two non-executive directors that will help direct the company into the next stage. Let's dive in a little bit further. Our two new additions to the leadership team, Brian Hahn, joined us after a long successful career with a NASDAQ-listed biotechnology company, GlycoMimetics, and Michelle Morrow joins us as our Chief Scientific Officer last year after coming to us from F-Star that was acquired by invoX. Both of them have had very successful careers and join Avacta and will help take us to the next stage of the company. Let's dive into our research and development highlights and show you a bit of the pipeline progress that we are making.
Just to reset the stage here, the precision platform is a peptide drug conjugate that leverages the enzymatic activity of a protein that is expressed specifically in the tumor microenvironment known as fibroblast activation protein, or FAP. While the peptide does bind to FAP, the important part, or the important aspect of our platform, is the ability of FAP to then cleave the drug and remove that peptide from the drug, releasing essentially that free payload into the tumor microenvironment. This happens extracellularly, so outside of the cell. Importantly then, the released payload is able to leverage the bystander effect, meaning it can now move into a FAP-negative tumor cell, a FAP-positive CAF. That released drug is now able to move into and kill those local tumor cells.
Our highlights now of the precision platform, first, our Tempus collaboration really allowed us to define the addressable population for the precision platform, and it also allowed us in the second part of that collaboration to really refine indication selection for our FAP Exatecan program, essentially leveraging AI to drive these smarter clinical trials. Describing that a little bit further, it allows us to now walk into the trial with Exatecan knowing what are those tumor types where we really expect that greater activity. The intellectual property for the precision platform saw a big boost in that we developed and invented a sustained release mechanism. We were able to take that foundational IP and move it now into a whole new realm where we can now dial in the exact kinetics that we want of that release mechanism.
That IP was filed in September and now essentially creates a reset for the company in terms of our intellectual property. The first program that will come out with that new IP is the FAP Exatecan program. Our two programs that we'll talk about today, FAPDOX, ABA 6000, we have advanced into the expansion cohorts for this one. We have achieved a safety proof of concept. We have essentially eliminated the cardiac toxicity. This was a main goal as we were walking into this clinical trial, and one of the reasons that doxorubicin was selected is it is one of those therapeutics with a really problematic toxicity, the cardiac tox.
We felt at the time of moving pre|CISION into the clinic for the first time that if we were able to eliminate that cardiac toxicity, this would be a big gain and essentially show the proof of mechanism of the pre|CISION platform being able to reduce the toxicity. The clinical development path for AVA6000 has been defined with both salivary gland cancer and triple-negative breast cancer, and we are in the planning stages towards the phase 2 trial, and that phase 2 planning is as well subject to funding. The AVA6103 highlights this one has moved now into IND-enabling status. The clinical candidate has been selected. It is in manufacturing, and the manufacturing process is being defined and worked on for that drug to be moved into clinical trials.
The IND is anticipated late this year with the clinical trial of this one beginning in the first quarter of 2026. I like to think of our IP and our pipeline almost like an iceberg, and what we can see out there are two of the medicines that have been invented by Avacta: FAPDOX and FAP-EXD. These are the two that we have shown the preclinical work. We have shown now multiple times the clinical work with FAPDOX. FAP-EXD will go to the clinic in months, and this is what we can see, but what we cannot see is the rest of that iceberg. We do have a confidential pipeline, and we have a number of aspects of this. We held onto and did not disclose our FAP-EXD program until we had filed that important new foundational IP for the platform, that sustained release mechanism.
That sustained release mechanism is almost a plug-and-play. The cap and the linker can be adjusted, and we can dial in the exact kinetics that we want of different therapeutic classes. What we can see now, that tip of the iceberg, we have two cytotoxic drugs. What we now have in the pipeline are multiple therapeutic classes. This isn't just a delivery mechanism for cytotoxics. We can deliver targeted therapies as well. Our Tempus collaboration was started to really allow us to understand the addressable market, the patient populations that we can help with this pipeline. Turning then to our Tempus collaboration to understand the full scope here, we then started this collaboration with our first question to Tempus, which is, where are we seeing the FAP-positive cancer types? How can we understand the exact patient populations that we can address?
We developed two what we call cut points. This is RNA-seq data, and we have essentially taken our immunohistochemistry protein data and layered it now to understand, using AI, where are the FAP-positive cancers? It turns out that it is essentially all of them. Solid tumors express a tremendous degree of FAP, which allows us now to essentially understand that FAP-positive disease setting. With that tip of the iceberg, our two first programs, FAPDOX and FAP-EXD, let me call out for you now, here are the disease settings that we will be going into. Think triple-negative breast cancer and salivary gland cancer. Let us look at some of the top indications that we are thinking about for FAP-EXD: pancreatic cancer, gastric cancer, small cell lung cancer.
These aren't the only ones that we will be taking forward, but if you just add up there the FAP-positive disease settings, we will be impacting with just these two drugs over 1 million lives a year. Now, to address the other diseases that you can see here, it will require additional precision medicines, and that's where this reset that we did with the intellectual property is so important because we now understand to a much greater degree how to deliver individual medicines with the exact kinetics that we want in the tumor and the plasma. We can dial in exactly what we want with that new foundational IP that was filed in September of 2024, just a few months ago for the company. A big important development for us was that sustained release mechanism. We'll talk a little bit about that later.
First, let's do a little bit of a dive into FAPDOX and where we are with this program. We've seen this slide before. This is the design of the completed dose escalation trial that happened with FAPDOX in the clinic. We will be showing you the updated data that was just published in April of this year in the salivary gland indication, and you can see there the number of cohorts that have been enrolled and the recommended dose for expansion, the RDE, has been identified. We will be looking at these doses and these cohorts that have been analyzed for efficacy. It's important to note in a phase 1 trial such as what was conducted for FAPDOX that there is a heterogeneous patient population.
Multiple disease settings were enrolled in this particular trial, and we will now analyze the efficacy based on those indications that we will be taking forward. You can see now we are enrolling the expansion cohorts in triple-negative breast cancer, high-grade soft tissue sarcoma, and salivary gland cancer. We'll take you through the design of these cohorts as well moving forward in the presentation. As I mentioned earlier, we have achieved a safety proof of concept with pre|CISION. Walking into the clinic with this first drug program, FAPDOX, we took doxorubicin forward as the first entry into the clinic for a number of reasons, one of which is depicted on this slide. We knew that there was a key toxicity with doxorubicin that if we could eliminate it, it would essentially show proof of mechanism, proof of concept of the pre|CISION platform, and it was the cardiac toxicity.
Now, there were a few steps that we had to take to get to this conclusion. The first is entering the clinic and going through the dose escalation where we achieved nearly four times the dose level of this extremely toxic drug in the clinic and extending beyond the key lifetime maximum that we usually use, we in oncology, with doxorubicin. Doxorubicin is usually halted at a lifetime maximum of 450 mg per meter squared, but because of the cardiac safety that we were observing through the course of the trial, we have been able to extend that to the lifetime maximum of 550 mg per meter squared. In the doxorubicin label there, noted by the arrow, is that the cardiac toxicity would be observed in 6-20% of patients treated at that lifetime maximum.
If we compare that with the other arrow, it is zero with ABA 6000, and we call that proof of concept of precision in terms of eliminating toxicities. We also see a dramatic reduction in the bone marrow toxicities. We see a dramatic reduction in alopecia or hair loss, and there are zero, no reports of ADC-linked toxicities, probably the most important one being the pneumonitis or the lung toxicity that is seen with pretty much all of the ADCs, and that is because of nonspecific release. The key difference with precision is our release mechanism based on FAP is going to be highly tumor specific, and we do not see release of the active free payload in organs such as the lung to create that lung toxicity. Several important safety conclusions for FAPDOX.
Importantly, we also want to see that this impacts efficacy, and here we need to look at specific indications, and that allows us to make predictions of what will happen when we move into expansion cohorts phase 2. What we see here in an indication, salivary gland cancer, that is known to be highly chemorefractory, we see patients with multiple minor responses, one patient with a deep durable partial response, and a disease control rate of over 90%. These data are very exciting to our investigators, very exciting to our team at Avacta, mainly because the unmet need here is so high. There is really no standard of care here other than androgen deprivation therapy, and most of these patients on this slide have received that. You can note the asterisks, which are indicating patients who are still ongoing.
Their bars can only get better, and the patients with the diamonds where we are still observing them for PFS p rogression-free survival, how much time will patients get out of this drug? How long will these responses last is important for us. Patients generally don't ask, "How much did my tumor shrink, Doc?" They usually ask, "How much time do I have?" That is where progression-free survival as an endpoint is so important. We have not reached the median PFS in this cohort of patients being observed, but it is at least 5.9 months, which compares very favorably and is almost doubling the benchmark 3.5 months that was published by the EORTC last year in a large cohort of 54 patients at ESMO. We are very excited about these data and look forward to moving into the expansion cohort data, which will be later this year.
We will also continue to update on these patients as we have not reached median PFS. Let's now move to, this is my favorite slide in the deck. Second favorite, as I noted, is that Tempus slide at the beginning, but this one is my favorite. Why? It shows proof of mechanism. This is exactly how we designed the precision platform to work in the clinic. On the left-hand side, what we see are the tumor biopsy data. Now, these biopsies were taken across the phase 1 and so across different doses, and the biopsies were taken, they were optional for patients, and they were taken 24 hours after the first dose.
Only a single dose of drug was administered in these patients, and we asked the question, "Are we seeing concentration of the released free payload or doxorubicin in the tumor versus plasma?" The answer was a resounding yes. The animals would have predicted a 10-20x, and what we see is a median of 100-fold concentration of doxorubicin in the tumor microenvironment. Why was this so exciting? We knew that conventional doxorubicin in red here was going to produce about a one-to-one ratio. That's what we expect with cytotoxics. There's no concentration mechanism. It is with the precision peptide attached, that micropeptide to amino acids, that we now see this concentration of the warhead in the tumor microenvironment. This is 24 hours later. We did not need a sustained release mechanism because the half-life of doxorubicin alone is so long. It's a full 35 hours.
Why is that important, and why did we now have to develop and invent? Why did we go after that sustained release mechanism? Why did we develop all of that new IP? It was to be able to take payloads that have a half-life mechanism, that have a pharmacokinetic problem, and be able to take those forward, and that's exactly what has happened with our next drug. Let's look now at FAPDOX. How are we going to take this one forward? Here are our projected timelines. We are now in 2025 enrolling the phase 1 expansion cohort in salivary gland cancer, and that is to set us up for that next trial that you can see there as we move towards a phase 2, 3.
The idea here in a rare disease such as salivary gland cancer, being able to go forward in a pivotal trial, this one would be designed as a phase 2, 3. The two endpoints would be progression-free survival and overall survival, and as we project it now, we could be in an NDA in 2028 with launching then in 2029. That would be based on something called an accelerated approval strategy. Again, all of these conversations will have to be had with health authorities. What will happen then, and the second part, would be the triple negative, and we are enrolling that expansion cohort currently, looking at a potential setting of a non-registrational phase 2 trial that would set up then that phase 3. This development scheme is based on exactly how Trodelvy just moved into that first-line setting, opening up a very nice market opportunity in the second-line setting.
We have been clear that we are looking for and having many conversations around a potential partnership around this FAPDOX program. Our phase 1B expansion cohorts are enrolling now. A little bit more about the design here. They are designed to provide us additional clinical data that will allow us to better understand and better plan those next trials. Additional patients understanding exactly what is the progression-free survival we would be seeing, how many responses are we seeing. All of these data will then be used to plan the statistics around the next trial. All of the expansion cohorts are using the same dose. The recommended dose for expansion that was selected is 310 mg per meter squared, and it is being dosed every three weeks in three different expansion cohorts.
The first one being triple negative breast cancer, up to 30 patients will be treated here, and patients are being treated in the first to the third-line setting, so up to two prior lines of therapy. The second and the third cohort are high-grade soft tissue sarcoma, again up to 30 patients, UPS or undifferentiated pleomorphic sarcoma and dedifferentiated liposarcoma. Patients are treated here in the first and the second-line setting, so zero or one prior lines of therapy, and salivary gland cancer, up to 30 patients. Any histologic subtype, important to note that this is somewhat of a heterogeneous disease setting. One of the key questions we have here is, do we need to limit those histologic subtypes, or can we treat every patient with salivary gland cancer?
Some important questions that will be answered in the expansion cohorts, allowing us to then essentially plan out and understand better, be able to risk manage those next trials that we will move towards. We are knee-deep in our ongoing commercial analysis of the FAPDOX program. There's a couple of key highlights here. We intend to seek an initial approval in a small population. This is a rare cancer, salivary gland cancer. Rare cancers can often garner a high price point that will then move into the triple negative breast cancer in an approval that is slated now based on data that were released at ASCO just a couple of weeks ago in terms of the second-line setting. In terms of the price point, the advantages of that first indication, rare cancers often get orphan pricing.
It could potentially avoid the IRA, and we are unlikely to see diminution of that price given the high price point that we see in triple negative breast cancer with that ADC Trodelvy there. We are currently ongoing and working on label expansion opportunities for ABA 6000, an important analysis for us to be doing now as we move through the expansion cohorts. That is our update on FAPDOX, our first program. Let's talk about a little bit around our second program. I mentioned earlier that given some of the data with FAPDOX, we were going to be able to take now much more potent payloads into the clinic with our precision mechanism. Exatecan is an ideal payload for us to move forward for three key reasons. The first is it was tested. It was never approved, but it was tested in many patients. Many phase 2 trials were run.
A single phase 3 trial was enrolled in pancreatic cancer, and so we see single-agent activity of this drug. It is the most potent Topo 1 inhibitor out there. You may ask, why Topo 1? You know, we know that Topo 1 is a very active ADC payload. It is on multiple ADCs that have been very successful in the clinic. That gives us, you know, a leg up. Deruxtecan, very similar to Exatecan in terms of their potency and their molecular structure. We have evidence that Deruxtecan works in a couple of disease settings, gastric and breast cancer, and that is an important piece of evidence for us taking this one forward. Finally, are the inventions made over the course of 2023 and 2024 that form the basis of that new IP?
We're now able to take a drug with a very limited therapeutic index and significant PK issues because we have that new sustained release mechanism that could now be implemented in the clinic to take a drug with a significant half-life liability into precision and completely transform it in the clinic. What do I mean by that? This is a key figure, and this is a key experiment that was run. These are modeled data based on animal studies that have been conducted, and I choose this one because it is a low-dose experiment. We are taking 15 mg per kg forward when we can dose up to 40 in patients with this program. We know that the half-life there that we depict in the concentration time plot is only nine hours of Exatecan, and so what the new invention does is depicted right here.
We take the precision mechanism, which includes high tumor concentration, low plasma concentration, which you can see comparing the blue and the red lines concentration time plot. What's important is that we now extend the half-life from only nine hours out to over 60 hours in the tumor, and we take it from only hours to days with this sustained release mechanism. We did not talk about this until we first published it in October of last year, and that was because the IP was filed in September. This IP now forms almost a reset for the company in terms of the intellectual position. What this allows us to do is to implement this new IP across all of the programs going forward. This was a very exciting figure. I can still remember the day that these data came in showing that the sustained release mechanism works.
Looking at the timeline for the FAP-EXD program, we will be moving into the GMP. We're moving through the GMP manufacturing over the course of 2025. Toxicology studies, all of these form the basis of the IND enabling studies. As well, the clinical trial is being written, conversations had with health authorities, with we expect then the IND to be filed late this year with a phase I start in the first quarter of next year.
This trial is going to be driven by another part of our Tempus collaboration, looking at what are those sensitive tumor types for us to move into, and that converts the essentially the empiric nature that we used of the FAPDOX trial of looking for those indications, those sensitive indications, allowing us to understand payload sensitivity using AI, and that allows us to walk right into a clinical trial limited to those disease settings where we anticipate seeing activity. We expect to have the initial data from the phase 1 trial at the end of next year and potentially be moving in the first quarter of 2027 to the expansion cohorts for this one. I mentioned we have an enviable IP position in the company. Let me explain why. There are three main IP families that we talk about.
Our foundational IP, which formed the basis of the therapeutics company as it was started, was licensed from Bac Bio, which grew out of Tufts University, and this is the foundational IP. This is the IP around the peptide drug conjugate, which has now hit a reset button with the filing date in September. This is the sustained release mechanism where we implemented the cap and the linker, allowing us to essentially design in to dial in the exact kinetics that we want of the precision program. It opens up a number of different therapeutic opportunities, not only cytotoxic, but as I mentioned, targeted therapies. Multiple other types of therapies can now be used because we can implement multiple different linkers, multiple different capping groups, and dial in those exact kinetics that we would like. This IP is not just FAP-EXD.
It's now going to go across the entire pipeline. The third patent family that we have is the biologic drug conjugate IP, and what that allows us to do, think of this linker, think of precision as being a linker in an ADC-like mechanism, and that is deep in the research. That's part of that, part of the iceberg that isn't necessarily always seen, but deep and enviable IP position for the company moving forward. I'm going to turn it over now to Brian for our financial highlights. Brian, the floor is yours.
Thank you, Chris. Can you so top priority is to establish Avacta sustainable long-term financing strategy in order to realize tremendous opportunity going forward, which requires additional funding. We've invested GBP 14.27 million in 2023. It was GBP 13.11 million restated and researched in line with expectations relating to the precision and aftermarket therapeutic programs.
Admin expenses increased to GBP 12.05 million compared to GBP 7.89 million in 2023, primarily related to executive management changes and professional expenses related to shift toward a pure-play biotech company. Overall loss from continuing operations was GBP 28.98 million compared to a loss in 2023 of GBP 29.15 million. Operating cash outflows from continuing operations was GBP 24.5 million compared to GBP 14.87 million in 2023. This reflects elevated R&D expenditures and one-off costs associated with organizational realignment that occurred during the year. Net cash inflow from continuing financing activities of GBP 26.1 million as compared to GBP 1.3 million in 2023. This was primarily from proceeds of issue of share capital of GBP 31.1 million compared to nil in 2023, plus repayment of convertible bonds of GBP 3.1 million in July of 2024. Cash and cash equivalents was GBP 12.87 million at December 31st, 2024, compared to GBP 16.63 million as of December 31st, 2023.
Cash as of April 2025 was GBP 17.3 million following the divestment of the Launch Diagnostics business, which extends the cash runway into the first quarter of 2026. I'll now hand it back to you, Chris.
Hi, Chris. We can't currently hear you. I don't know if you've popped yourself on mute there.
Apologies.
Perfect. Thank you.
There we go. Avacta has now moved into significant progress, and we have multiple catalysts to deliver on. We have transformed the company into a dedicated oncology biotechnology company. We are developing our proprietary precision technology for the treatment of multiple solid tumor indications. We have made significant operational progress over the past year, essentially transforming the company again into that dedicated biotech. We are basing this on the tremendous data that have been generated with the precision platform, both in the clinic with FAPDOX, but as well in the preclinical setting with multiple programs in the pipeline and FAP-Exatecan moving quickly, the beast towards the clinic. There are multiple data catalysts upcoming with the two programs for FAPDOX and FAP-EXD. We have multiple goals for the company moving forward. We have established our enviable intellectual property position.
I described our proprietary sustained release mechanism that was invented in the company over the course of 2023 and 2024. That IP was filed in September. We do have another 10 years of exclusivity of our foundational IP, and essentially what we are seeing with the sustained release mechanism is a reset button there, a novel IP there taking that peptide drug conjugate into an entirely new mechanism of the sustained release. Cash management for us is critical. We tightly manage the cash burn. We look at every pound that we spend, and our long-term strategy is really the key focus in order for us to move this exciting pipeline forward. We do have upcoming key data catalysts in 2025 and in 2026. Our first program, FAPDOX, is moving through its expansion cohorts.
We expect to have updated data in late 2025 in salivary gland cancer and the initial data in triple-negative breast cancer in the first half of 2026. Those data sets will allow us then to move forward into that next stage of trials. FAP-Exatecan, our program two, will move to IND, and we anticipate opening that phase I trial in the first quarter of 2026. Our third program, which we have not disclosed yet, part of that iceberg, we expect to be able to advance the candidate selection later this year with a goal of an IND in late 2026. That concludes our presentation, Alessandro. We will hand it back over to you.
That's great. Thank you very much for your presentation. As mentioned at the beginning, we have received a number of questions, both pre-submitted and a number throughout today's presentation. Thank you to all the investors for submitting those. Let's start the Q&A session with the first question here, which reads as follows. You spoke about the commercial side of AVA6000 and potential deals. Can you describe the commercial strategy for the company and why it's taking so long to accomplish anything?
We have talked about this one before. It's a very good question. It's a very important aspect of the company. There are two elements I break it down to understand the commercial strategy. The first is, you know, what is the long-term game plan for commercializing an individual program such as AVA6000, FAPDOX, that gets approved after that pivotal trial is successful? The second part, as mentioned there, is our business development strategy and the partnering deals on the assets themselves. Let me mention the first one first. AVA6000, this is our lead program. We have successfully completed phase 1A, the dose escalation. We have an excellent tolerability profile. The progression-free survival is very encouraging in that first indication, salivary gland cancer. No cases of severe cardiac toxicity, as I mentioned, proof of mechanism at the safety level. This drug has extraordinary potential.
The topo 2 mechanism, though, is limited to breast cancer, salivary gland cancer, and soft tissue sarcoma. These are the three expansion cohorts. They're underway. The data are expected later this year, early next, that will allow us to have a little bit more clarity on what is the exact strategy to get this one on the market and essentially to commercialize this drug. We have been clear that we are seeking a partnership around that one, and there are multiple conversations going on. People are waiting to see that next set of data coming forward. Because of the activity of a topo 2 inhibitor, it is limited to a few of those disease settings, makes that kind of deal a little bit easier because we know the exact diseases that we would be essentially partnering on.
As I mentioned in that Tempus collaboration earlier, there's a number of tumor types that we could be looking at. Now, a topo 1 mechanism like exatecan is a much broader mechanism in terms of the solid tumor population and the addressable population. There is that second opportunity, business development, to partner other assets such as AVA6103, our exatecan program. Recall that iceberg analogy. There are multiple programs. We are able to FAP-enable other mechanisms, not just cytotoxics, but there are complexities here. With AVA6103, the activity of the topo 1 inhibitor is so broad that any partner there would be looking to license and essentially gain exclusivity in a number of the disease settings.
Doing a preclinical deal with that one, because it forms such a big opportunity for us, while we are having conversations, we prefer to get that one into the clinic and see what we can actually deliver there by the end of next year. Based on what we observe, it will become much more evident what the game plan is for that asset going forward. We keep all options on the table with that one. If we think about more short-term options, the opportunity there is to collaborate on the development of another precision medicine. This would be with a potential partner. This means then potentially licensing the technology to a partner, working together, collaborating on the development of a new medicine. It would be based on a partner's proprietary payload and our precision technology, more to come here in the not-too-distant future.
Now, a key aspect of the question was really, why is this taking so long? The key IP that we have, and I talk about this as an enviable IP position, it's important to note that that IP was not filed until September. Conversations could not start until October with that one. The conversations that we're having with potential partners here have not been going on for very long. It's only been months. These kinds of deals often start with a collaboration, preclinical. Think back to that iceberg analogy. There's a lot going on. I call it sort of under the surface that we can't disclose. We will disclose as soon as we can when we have an announcement there.
Just to summarize, having conversations around both of the assets that we have disclosed, FAPDOX and FAP-EXD, the timing of those were really going to be driven by the clinical development of each and then the potential for a platform deal.
Perfect, Christina. Thank you very much. We do have another question here, and perhaps it's one for you, Brian. What is the strategy for the Heights convertible bond going forward?
Listen, we understand that the Heights Capital bond is a source of ongoing frustration for shareholders. Importantly, at this critical stage in our development with the transition to a phase two trial on the horizon, strategically managing our cash runway to fund R&D pipeline advancement is a primary focus for the company. The board does make quarterly decisions on whether to repay the convertible bond in cash or through share issuance based on a number of factors, but principally the need to maintain adequate working capital for operations. The board is committed to actively managing the legacy Heights Capital bond issue, balancing the needs of all stakeholders.
That's great. Thank you very much, Brian. Turning to the next question here. The AVA6000 trial started in 2021 and has taken four years. Why was this trial so long, and why would we think there will be any results in the AVA6103 in less than one year?
It is very true, and we take that criticism. The AVA6000 trial did start in 2021. It has taken quite some time. It's important to note that this was the first trial of a brand new platform, a brand new mechanism. Peptide drug conjugates really were not around yet in 2021. They are all the rage now. There is a number of companies. It was a whole new mechanism to leverage an enzyme. The trial started with a low dose. It escalated to standard dose doxorubicin. With that new technology, low starting dose, it is sometimes hard to recruit that first group of patients. We definitely saw that. I was not even on the board yet at this point. I joined the board in 2022.
As we reported in April of last year at AACR, there was a single dose-limiting toxicity in that next cohort after standard dose doxorubicin, and that did slow things down a bit. Once we hit those higher dose cohorts, the enrollment started to become a little bit more smooth. As I've mentioned, it was an empiric search for what are the disease settings where we were going to see activity of AVA6000, of FAPDOX. Essentially, as we were moving through the cohorts, we weren't enrolling those, I'll call them diseases, where we were going to see that activity. When we started to enroll soft tissue sarcoma and even salivary gland, I can still remember that first patient with salivary gland cancer. Now with breast cancer, these are diseases where we expect nice activity of doxorubicin.
It taught us a really important lesson in that trial that we then implemented in our Tempus collaboration. I take on that question, why would we think that we could get FAP-EXD data in a little under a year? It is because we know what are those disease settings that we should be going into. We know where the topo 1 mechanism is active. We expect to see activity in those cohorts. Instead of an empiric search for what are the disease settings, we have leveraged AI and used AI to drive much smarter trials. There is a lot of buzz, and we have a number of sites that are quite excited about FAPDOX. They are all asking for the FAP-Exatecan program to be at their clinical trial sites. We also are not going to have to have that sort of convincing investigators.
We're excited about moving this one forward. I think we are making a bold prediction that we are going to be able to get this trial moving very quickly. It's really leveraging AI, but also leveraging those key relationships that we have with a number of really great medical centers. We have opened MD Anderson in the US as our third site here. We have Memorial Sloan Kettering, the Christie. We just have fantastic clinical trial sites, and all of them have asked to be able to participate in the FAP-Exatecan. It's both AI, but also leveraging those relationships that we have.
That's great. Thank you very much, Christina. The next question we have here, what will it take to sell FAPDOX? If we have fixed the toxicity of doxorubicin, why has this drug not started to be sold on the market? What is the accelerated approval, and can we use it, or do we need that?
Yep. Good question. This one comes up frequently. In order to sell a drug on the market, we can't just prove that it is safer than the existing drug. Because we've attached the peptide, it is what is called a new molecular entity. It needs to be approved first by the health authority of the country where those sales will happen. Think in the U.S. FDA, think in the U.K., the MHRA. The regulatory strategy or approval in Europe sort of goes across. As you saw in the development slide with FAPDOX, with AVA6000, we are looking at the earliest, absolute earliest approval being late 2028. We would be developing that, we call it an NDA or a new drug application in 2028, launch the drug after that. That's when we would be able to start selling it on the market and booking revenues.
This is assuming this concept of an accelerated approval in the U.S. This is where we can use essentially an expedited program to seek approval based on an earlier event. That is the whole idea of accelerated approval. Essentially, we are looking at a possible approval based on an earlier endpoint, progression-free survival, and then needing to bring back that overall survival. Both of those endpoints will work together to form an accelerated and then a final approval. Accelerated approval is usually only available in the U.S. That is one of the reasons that we break down the commercial analysis into U.S. revenue versus when we go more global with this.
Once we have the expansion cohort data and once we get closer to moving into those potential pivotal trials and we have said subject to funding, subject to partnerships and whatnot, we would not disclose our regulatory interactions with any health authorities. It is not something that is disclosed publicly. It is part of that iceberg that is beneath the surface. I can tell you that the planning and the conversations are very much ongoing, even if they cannot be publicly disclosed.
Thank you very much, Christina. Changing gears slightly and maybe back to you, Brian. All of the science is going to require a large amount of funding. What's the strategy for the long-term financing for the company?
The management team and board recognize that this is a source of frustration for our shareholders. Given the global market complexity and the stage of our business now, we are managing cash tightly in the company. Like any biotech, we will need to raise additional money to fund the programs. We think about managing this in three different ways. First, the cash runway. The company's cash position, enhanced by careful resource allocation and divestment of non-core operations, now extends into 2026. To support the continuing development across the company, we will need to secure additional funds in due course. Secondly, capital market strategy. Avacta continues to explore potential dual listing on NASDAQ to broaden its investor base, access deeper pools of specialist biotech capital, and fund its growing pipeline beyond the capacity of the AIM market.
Short-term aim market and longer-term moving to the NASDAQ to access the pools of capital needed to sustain the company. Lastly, partnerships. Throughout the year, we've been actively engaging with interested industry parties who have the potential to bring complementary expertise and resources to the table. These discussions have focused on identifying collaborative opportunities to accelerate the development and commercialization of our precision platform assets. Recall, however, that we would surrender a valuable piece of the IP with any partnership we sign, and thus we must be highly selective as we proceed forward. We continue to pursue this option in parallel, but again, as mentioned, these deals do take time to come together. It is important to note that preclinical partnership will not have a significant upfront cash associated with it, so it will not impact the runway tremendously.
These are usually drawn up with shared risk and later milestone payments versus a large cash upfront payment.
Understood. Thank you, Brian. The next question is really around share price and asks why the share price is not improving.
Yes. We do get asked this one. Avacta is operating right now, as every biotech and pharma, in a challenging and really a volatile environment. The biotech indices are down significantly. The XBI on NASDAQ over the last period is down more than 9%. Avacta is down 15% year to date. This is due to macroeconomic. There is policy pressures around the world. We are not the only ones whose shares have been impacted here, but we hear this and we know that this is another source of frustration for our shareholders. Over time, though, the way for Avacta to deliver long-term value for shareholders is through the value in the pipeline. It will be incremental. We are building on the positive data that we are generating. I think that the iceberg analogy here is really important. The data that we published at AACR this year, there were three important presentations.
For our first program in the clinic, we feel that we've achieved proof of concept with this one. We have a disease control rate of over 90% in patients with salivary gland cancers, a marked improvement in the safety profile. We've eliminated the cardiac toxicity. We have nearly doubled the PFS, and we haven't even reached median PFS there. We are very excited about that first indication. We're dosing at nearly four times the dose of conventional dox, but the exposure in plasma and normal tissue is still consistently lower. That demonstrates proof of concept, proof of mechanism of the platform. The value in this pipeline is going to become much clearer the longer that we continue to generate both the data with FAPDOX, the data with FAP-Exatecan, and the data with the programs that are beneath the surface, the next ones coming forward.
Given the data presented at AACR, our most recent clinical data, the data that formed the basis of that new IP, we are very confident that this platform can generate significant value over the long term, and we are fully focused on executing on this. It is one of the reasons that the board made the bold decision to take this to a pure-play biotechnology company. Day-to-day share price movements do not reflect necessarily the overall value in the company. It will take some time. It will take some time. Biotech across the board is having the same struggles. While we know that this answer is frustrating, biotech is a marathon and not a sprint. We are incredibly excited about this platform and just the sheer breadth of the potential here.
Thank you very much for that, Christina. Moving on to the next question. Why was the presentation moved twice? Is there a problem in the accounts?
Yeah. The audit of the financials for the calendar year 2024 was very complex. It included two discontinued operations, Launch and Chorus, the valuation of the bond. As Brian mentioned, there were management change shifts. You can understand there's a lot of work to do with our auditors to complete the audit. We underestimated the amount of time that was required to get it exactly right. No, there's no impact to the financial statements, no additional issues over what we have discussed here. It was an underestimate of the amount of time that it was going to take for this really complicated audit. I've been in pharma for 19 years. Brian's been here for way more than that. For both of us, this was the most complicated audit that we've ever gone through.
Okay. Thank you for clarifying that, Christina. We do have another question. Last year, we heard about specific goals for the company. Can you please highlight what are the goals this year and how we should measure you against these?
Yes. This is one of the last slides in the deck. Let me expand on this just a little bit. First, we have the data with ABA 6000, the expansion data with salivary glands, and that is going to be a patient population that will include both the 11 that we've already been talking about and then the expansion cohort. That will be the initial data book there, which will be late in 2025. The first half of 2026 will be the triple negative breast cancer data there. These data outputs are really important as they're going to drive the strategy for the next set of trials. FAP-Exatecan, IND filed and trial opening in the first quarter of 2026. We do hope to have that initial data late next year. Let's get into that trial, but we have very excited sites ready to rock and roll with that one.
In addition, we also are setting ourselves the goal of business development, a deal, and then the long-term financing of the company, all of which are coming together in the background right now.
That's great. The next question really around communication. Why are communications to the shareholders so poor?
Let me say first to the shareholders, Avacta greatly appreciates the support and the engagement. We know that there are frustrations. We hear directly from many of you. We take the feedback very seriously. The company does have a large percentage of private rather than institutional shareholders, but we take the feedback from all of our shareholders. We have entered a period now where there are not frequent updates from the FAPDOX trial. In the case of expansion cohorts, we would not be announcing enrollment figures, just our guidance as to when we would expect to have the data ready to publish. We did see a hiccup with enrollment with the macroeconomic problems that we have had in the US.
We've even seen that if we go back just days, the ASCO conference that was held in Chicago, that's held in Chicago every year, it was just decimated by some of the macroeconomic. The travel bans have been put in place in a number of institutions to try and deal with the loss of funding. With this stage of the ABA 6000 trial, there won't be regular cohort updates. It's just not standard practice. It's more standard in a phase I trial even to not publicly declare every cohort that clears. Even as we approach the ABA 6103, the FAP-Exd phase I, we will move to more standard communications. Our approach has really been to provide informative deep dives into our progress with both the clinical and the preclinical programs. We will have regularly scheduled points throughout the calendar year, investor engagement events.
The AGM coming up is an important one. We will then be hosting our science day again. That provides then many months later sort of a deeper dive into the preclinical programs as well. In addition, we've also developed our spotlight series. Those videos come to both LinkedIn and Twitter or X. It's called X now. That allows us to educate on pipeline development. That's the first place that we disclosed the sustained release mechanism and the Exatecan program. In addition to that, we have now transitioned. We are going to have a roughly quarterly schedule of market updates. There will be a regularly scheduled R&S market update that comes every quarter. The next one will be right around the AGM. Outside of these events, I hope you can understand we can't communicate directly with individual shareholders.
We can't discuss strategy, ongoing corporate activities, or even progress in clinical development when people ask, "How is the enrollment going?" We provide as much detail as we can in the shareholder investment forums, and we do commit to being transparent. That quarterly update, we will disclose as much as we can on decisions, on strategy, which impact your investment. We really do have to ask that you bear with us. We can't selectively disclose company information, and some of our progress for a number of reasons must remain confidential. Let me give you an example. Any progress that would feed into a patent application, it must be kept confidential until that application is final and submitted. Our conversations with the health authorities, which are ongoing on the programs, those have to remain confidential.
I do say I did intentionally say programs because those conversations are happening with both FAPDOX as well as FAP-Exatecan. We commit to transparency as far as we can and very regular communications with our shareholders.
Thank you for that. We have had a number of questions on ABA 6103. Perhaps let's take this one here. The new drug that you refer to as FAP-Exd, can you explain why you're so bullish on this drug and when will you monetize it? Why are you not doing a deal around this asset right now?
Yes. We are all excited about this program. I've nicknamed it the beast. There's three reasons why we're so excited about this one. First is really the new IP. And the new intellectual property here really creates a reset button almost for Precision, the platform. We've invented an entirely new delivery mechanism for Precision. This has been a development that's been happening in the labs over 2023 and 2024. We couldn't talk about it because it fed into that patent application filed in September last year. We had to secure the IP. We knew that this IP, as we were developing it, was absolutely critical because it's going to essentially impact every part of the pipeline other than FAPDOX. We do think of it as that sort of reset button. It is a very broadly applicable patent.
The second part of this one is that it's a topo 1. Why is that so different? Doxorubicin is a topo 2 inhibitor. These are two different enzymes in the process of replicating DNA. The topo 1 mechanism of Exatecan is much more broadly applicable than the topo 2 mechanism of doxorubicin. Just the sheer number of disease settings that we can take a topo 1 into, it's huge. Let's just look at lung cancer alone. We could take this into non-small cell, small cell. Both of those disease settings have very high, think back to Tempus, very high FAP expression. The addressable market for FAP-Exatecan is much bigger than we see with FAP doxorubicin. The third reason that we're excited about it, again, think back to that Tempus collaboration and some of the data.
It did not actually make it into today's presentation, but some of the data that we presented at AACR, how we leveraged the Tempus collaboration to predict disease settings for us, and really those optimal indications. We can run a faster, smarter trial, but it really allows us to understand the addressable market opportunity for Exatecan. What are those exact cancers that we should be targeting? Again, it was an empiric discovery of that within ABA 6000, and it did take quite a bit of time. We are going to walk right in, leveraging AI, so using AI to drive those smarter trials, walk right into the clinic knowing what are the disease settings, being able to answer that question very quickly. What are the disease settings that we expect activity of this one? The second part of that question is really important. Why not do a deal?
Why not do a deal right now? There are two reasons. One is a program with clinical proof of concept is so much more valuable than a preclinical program. Just by getting to the, we are so close to the IND. We are in manufacturing right now. We are watching the data come out on the manufacturing. We are so close to getting this into patients. The real catalyst for this one is not the filing of the IND. Some people think of that, our scientists often think of that as sort of the end game. It is not. That is the beginning. That is where the value in this asset really gets unlocked. When we can show that we can dose it, we get the tumor to plasma. All of those data that we will be generating over the course of 2026 dramatically increase the value of this one.
That's the first reason. The second, the potential partner, just thinking about that broad addressable patient population, think about it as a double-edged sword. A potential partner will not want to compete with anyone in some of those disease settings. The deal becomes much more challenging because topo 1 is such a broadly applicable mechanism. The best thing for the company right now is to get that one into the clinic and then start to think about what that deal is. With publishing those data at AACR, we actually disclosed on both Twitter or X and LinkedIn that the crowds were five deep looking at that. It was not just academic. There were multiple companies looking at it.
We are having conversations, and there are companies thinking about what, but for us, the value really gets unlocked with patients being treated. We are going to be very deliberate in any partnership on this one. Yes, we are very bullish on this program.
That's great. Thank you very much. This question has also kind of come in via a few angles, so I've just summarized it. What steps is Avacta taking to position its therapeutics or the platform for commercialization, particularly in terms of engaging with global congresses or key stakeholders to attract commercial partners?
There are three key activities, and we continue to pursue these as an active biotech. The first is presentations of data. Think back just to April. We had three presentations at AACR: platform, FAPDOX, and FAP-Exd. Peer-reviewed presentation of our data at these congresses is really important to engage with investigators as well as potential partners and all of the stakeholders there. In addition to that, there are congresses that are focused primarily on business development opportunities. Probably the best-known one is the BIO series. We are at almost every one of those. Those focus—there are not presentations of data there. They are designed for BD folks and R&D folks to sit down together. We do attend these on both sides of the Atlantic Ocean. The next one is coming up in Boston in just a few days.
Those two actually work very well together in that we do have a number of conversations that are ongoing. If you think about it, some of these leading settings, one was just held at ASCO, a partnership forum. That was really a forum for introductions. We have a large number of conversations that are ongoing, a number of potential partners looking at our data as it comes out. As you can imagine, these are ongoing, but really could not start on the sustained release mechanism before October of last year. There have not been very many bios since then, let's say. It does take a number of meetings for a potential partner to become comfortable with the platform, understand that we are a company that does what we say we are going to do.
If we can't reach those goals that we stated for ourselves, that we specifically communicate exactly why. It takes some time for a partner to become comfortable with a biotech. Yes, we continue to progress that at the same time as we continue to progress our pipeline.
Thank you. The next question here, is the Chorus deal going to go through to make us a pure-play biotech?
I'll turn that one over to Brian.
Yeah, the deal is progressing well, and it's anticipated to close soon. It's underway.
Thank you very much, Brian. Next question we have here.
Short and sweet.
Exactly. The next question we have here, the strategy for FAPDOX appears to be changing. We do not hear updates from the sarcoma arm anymore. Is this changing, and why?
We have placed three bets on the table with our expansion cohorts as we describe their design and the dose in the presentation. Those three bets are salivary gland cancer, triple-negative breast cancer, and soft tissue sarcoma. There are two things that happened late in 2024 outside of Avacta and inside of Avacta that essentially define the strategy. Now, we have to be very in tune to anything that happens out there in the public domain in oncology and how it impacts our programs. The first thing that I'll describe is the indication of soft tissue sarcoma did take, I'll call it a little bit of a regulatory influence that happened in that there was a data set that was published late 2024 with the Boehringer Ingelheim MDM2 inhibitor in dedifferentiated liposarcoma. It was a randomized phase III trial that failed to meet its primary endpoint.
The comparator arm in that trial, important to note, was monotherapy doxorubicin. The progression-free survival there was over eight months. That is an important development because it is much better than anyone anticipated. Excuse me, the regulatory bar then in that indication is elevated. Our probability of regulatory success drops when we see because that will be the comparator for ABA 6000 for FAPDOX. At the same time, we started to see some really nice activity in a rare tumor type, salivary gland cancer. Our investigators that were working with us on that continued to, I'll call it beat the drum or tell us, like, "This drug seems to really be working in this rare tumor type." The unmet need here is huge.
I've mentioned before that if you open up the NCCN guidelines, which drive the therapies that are administered in a given setting in the United States, the preferred regimen for this tumor type is none. There isn't one. That's regulatory speak kind of for we would then be able to use something called an investigator choice arm. We wouldn't have to necessarily compare to doxorubicin alone. Doxorubicin alone isn't actually used. It is both of those, sort of an external factor with the data in doxorubicin and soft tissue sarcoma, but also our own data in salivary gland cancer that, yes, we will always adapt to both external data, but also things that we are seeing. Our probability of success, we think, with salivary gland cancer is just much higher based on both of those factors that I mentioned.
The expansion cohorts are ongoing, and we look forward to those data really helping us to drive the next step.
Okay. Thank you very much, Christina. We have nearly run for an hour and a half now. We have had over 1,000 investors kind of register for this meeting. Potentially just one final question here. You've mentioned the potential for a Nasdaq dual listing. Is this primarily to unlock valuation upside in a more biotech-savvy market, or is it tied to strategic capital and partner access?
I'll ask Brian to take that one.
Biotech like Avacta will grow its cash requirements as we begin to pursue additional programs in the clinic and additional. As many are aware, the cost of running the company increases the more success we see. Actively pursuing global specialist biotech investors and exploring the potential Nasdaq dual listing helps us access deeper capital, the capital markets, and the broader investor base. You do know, as Chris said earlier, this is a marathon, and drug development is very expensive. The wider net we can cast, the more capital, the more successful we can make the company.
That's great. Brian, Christina, thank you very much for answering all of those questions from investors. Of course, the company can review all the questions. Mr. Damon will publish responses on the Invest in Me company platform. Just before we redirect investors, pride you their feedback, which is particularly important to you both at the company. Christina, could I just ask you for a few closing comments?
Absolutely. We are very grateful to our shareholders who have provided an incredible amount of support for the company. We understand the frustrations among our shareholders. We understand that the company is in a position, however, to deliver on incredible long-term value. I like the analogy of the iceberg. FAPDOX and FAP-Exd are only the tip of the iceberg in what we can achieve with the precision platform. We are excited about the opportunity. We are excited about what we can deliver for patients. When we deliver for our patients, we will be delivering that long-term value for our shareholders where everyone wins. We understand the frustration. We understand the time that it takes. Biotech and drug development absolutely is a marathon. We're grateful for the support of the shareholders.
We wake up every morning knowing that this company has the opportunity to do something very, very important for patients with cancer, which is what I've spent my entire life on. I am so excited about the next chapter for Avacta. We are grateful for all of you coming with us on that journey.
That's great. Christina and Brian, just like to thank you once again for updating investors today. Could I please ask investors not to close the session? As you know, you'll be automatically redirected to provide your feedback and all the management team can better understand your views and expectations. On behalf of the management team of Avacta Group, we'd like to thank you for attending today's presentation. Good afternoon to you all.