Trinity Delta AffiDX LFT sales paused to improve Omicron detection

AffiDX LFT sales paused to improve Omicron detection

Lighthouse | 10 January 2022

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Avacta has announced it has paused sales of its AffiDX SARS-CoV-2 lateral flow test (LFT). This move follows Avacta’s analysis of laboratory testing of the LFT’s performance against the Omicron variant at lower viral loads. Performance was as expected at higher viral loads; however, the sensitivity fell short of expectations at lower viral loads.
The issue appears to lie with one of the test components, a commercially sourced antibody. The AffiDX LFT contains both a proprietary Affimer reagent and a commercially available antibody. Reassuringly, the Affimer reagent appears to retain the same high sensitivity, across differing viral loads, to the Omicron variant as to previous COVID variants; however, the performance of the antibody component is impacted by Omicron’s diverse mutation profile.
For context, clinical validation studies have demonstrated that the AffiDX SARS-CoV-2 LFT has a clinical sensitivity of 98.0% and clinical specificity of 99.0% (later data showed a specificity of 99.6%) and it is proven to be effective in detecting the Alpha, Beta, Gamma, and Delta variants (Omicron was not a variant of concern when the approval filing was made). The test is simple to take, with a single nasal swab from the anterior nasal area (not the nasopharyngeal area) showing consistent and reliable results within less than 20 minutes.
While AffiDX SARS-CoV-2 sales are paused, Avacta will work on replacing the antibody within the test to ensure that test performance with the Omicron variant is comparable to that demonstrated with other mutations. These efforts aim to improve test sensitivity to Omicron, the dominant variant in many regions globally, and create a next generation antigen test with greater resilience to future mutations to maximise the long-term COVID-19 commercial opportunity. Development and regulatory timelines for the new LFT are at present uncertain.

Trinity Delta view: This clearly disappointing news effectively pushes back the commercialisation of the AffiDX SARS-CoV-2 LFT. The positives are that management has identified the issue and responded promptly and, importantly, the issue does not lie with the Affimer technology. Avacta’s Diagnostics business demonstrated its technical abilities and the ability to react rapidly to problems when creating the original LFT, hence it will hopefully resolve this issue quickly too. We note that there is also the possibility that the sensitivity of other marketed COVID-19 LFTs to Omicron may be similarly impacted. The uncertainties around timelines, in addition to the challenging market environment, prompt us to suspend our forecasts and valuation until there is greater visibility. Our prior Avacta valuation was £710m (280p per share), with the Diagnostic opportunities representing £133m. We continue to view the Therapeutics pipeline as the greater driver of long-term value; our £559m rNPV for the Affimer and pre|CISION platforms is unaffected by this announcement.

Lighthouse

10 January 2022


Price	115p
Market Cap	£292m
Primary exchange	AIM
Sector	Healthcare
Company Code	AVCT

Corporate client	Yes

Company description

Avacta owns two novel technology platforms: Affimer and pre|CISION. Affimer proteins are antibody mimetics being developed as diagnostic reagents and oncology therapeutics. pre|CISION improves potency and reduces toxicity of cancer drugs by only activating them inside the tumour. Successful clinical trials would be transformative for Avacta.

Analysts

Lala Gregorek
lgregorek@trinitydelta.org
+44 (0) 20 3637 5043

Franc Gregori
fgregori@trinitydelta.org
+44 (0) 20 3637 5041

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