Avacta: early AVA6103 data show promise

Avacta is increasingly defined by the continuing progress with its second-generation pre|CISION tumour-activated Peptide Drug Conjugate (PDC) platform. The investment case centres on pre|CISION’s ability to reduce the efficacy/toxicity trade off seen with many potent oncology therapeutics, thus broadening their clinical utility. The platform employs a small-molecule masking chemistry designed to only specifically release the cytotoxic payloads in the tumour microenvironment (TME) through cleavage by Fibroblast Activation Protein (FAP), an enzyme highly expressed across c 90% of all solid tumours. AVA6103 (FAP-activated, controlled-release exatecan), the lead Gen Two programme, is in Phase Ia dose-escalation studies. Preliminary data corroborate the preclinical translational models, confirming targeted tumour localisation and reduced systemic toxicity compared to both conventional exatecan and AstraZeneca/Daiichi Sankyo’s market-leading antibody-drug conjugate (ADC), Enhertu.  Our updated Avacta rNPV valuation, based on conservative assumptions, is £525m ($671m), equivalent to 111p/share (105p fully diluted).

Avacta is developing a portfolio of peptide-drug conjugates (PDCs) that use its pre|CISION technology to improve the therapeutic index of highly potent yet systemically toxic oncology drugs. Traditional chemotherapies and existing PDCs have historically been constrained by dose-limiting systemic toxicities, often caused by premature payload release in peripheral circulation. pre|CISION addresses this by using a specific peptide sequence – cleavable only by FAPα (fibroblast activation protein-α) – to deliver the payload precisely, preventing cell entry and exposure to healthy tissue until it undergoes enzymatic cleavage in the tumour microenvironment (TME). FAP expression is seen in c 90% of all solid tumours, where it is localised on Cancer-Associated Fibroblasts (CAFs) within the stroma and is virtually absent in healthy mature tissue.

Exhibit 1: Avacta’s development portfolio

Source: Avacta

Beyond the immediate commercial value of the individual pipeline assets (Exhibit 1), the true inflection point for our equity arc relies on proving the widespread utility, and potential scalability, of the pre|CISION platform. A successful clinical demonstration of the Gen Two capping group and linker stability in human plasma would clear the primary conceptual and biological hurdles for the entire technology. This would open up a much broader therapeutic landscape, allowing Avacta to address, for example, established, highly effective drugs that may have historically failed in development solely due to dose-limiting toxicities. By restricting active exposure strictly to the TME, the pre|CISION platform can optimise the therapeutic index of numerous payload classes, creating significant development opportunities across the wider oncology therapy space.

The clinical proof-of-concept for this masking mechanism was established with Avacta’s first-generation programme, faridoxorubicin (AVA6000, FAP-Dox), a doxorubicin payload. In clinical evaluations, AVA6000 demonstrated sufficient peripheral stability and reduction in cardiotoxicity for US regulatory authorities to lift the lifetime maximum dose cap mandated for doxorubicin in subsequent trials. It also delivered durable RECIST responses in salivary gland cancer, reported at ASCO 2026. These provide the initial human validation that the peptide conjugate remains intact in systemic circulation while releasing the active payload within FAP-positive tumour stroma (with a tumour to plasma concentration of 100:1).

AVA6103: the first of the next generation is in Phase I

AVA6103 (FAP-EXd) is the lead Gen Two pre|CISION-enabled PDC. It has an exatecan payload and is intended to address the known limitations of this potent topoisomerase I (Topo I) inhibitor, ie severe dose-limiting toxicities (neutropenia, thrombocytopenia) and short half-life, through modifying its PK profile. It also improves tolerability by reducing systemic exposure to released exatecan. The shift from Gen One (AVA6000) to Gen Two (AVA6103) adds an engineered capping group that is designed to bind in the FAP active site and a self-immolative linker that can be selected from different chemistries to tailor drug delivery from slow release to rapid cleavage. Many different classes of payload can be attached with Gen Two PDCs offering a great versatility in potential applications (Exhibit 2).

Exhibit 2: Gen Two pre|CISION structure brings benefits over Gen One

Source: Avacta

In AVA6103 the capping group increases binding affinity to anchor the intact molecule to stromal fibroblasts. This design clears the parent conjugate (exatecan is the released payload in this case) from plasma within four hours, resulting in a highly favourable tumour-to-plasma ratio, and basically converts the tumour mass into a localised payload reservoir, delivering therapeutic exatecan concentrations for more than five days. The result is extremely targeted delivery to the TME with sustained release of the now active payload directly into the tumour. The goal is for Avacta’s PDCs to achieve the robust efficacy of traditional ADCs but using small molecule chemistry, with added benefits such as improved specificities and/or toxicities, tailored kinetics, and a straightforward bystander effect that addresses both FAP+ve and FAP-ve tumour cells. Additionally, the small molecule science should allow easier, and cheaper, manufacturing.

The validity of this Gen Two architecture is being tested in the clinic. Initial data from the ongoing Phase I FOCUS-01 trial of AVA6103 provides the first human proof of these optimised kinetics, demonstrating that the structural modifications successfully replicate the targeted tissue localisation seen in preclinical models without triggering the severe systemic myelosuppression historically associated with Topo I inhibitors. FOCUS-01 is designed to generate robust data in six selected solid tumours: pancreatic ductal carcinoma (PDAC); gastric cancer (GC/GEC); colorectal cancer (CRC); cervical/vulvar cancers; small cell lung cancer (SCLC); and HR+ breast cancers. These indications have been specifically selected as part of the collaboration with Tempus AI to identify patients with the greatest likelihood of benefitting from targeted exatecan delivery to a FAP sensitive TME.

FOCUS-01: a two-part Phase Ia and Ib study

FOCUS-01 is expected to recruit c 140 patients across seven to nine specialist US centres. It consists of two elements: (1) the Phase Ia dose escalation portion (c 50 patients) with parallel arms dosing every three weeks (Q3W) and every two weeks (Q2W), these should determine MTD (maximum tolerated dose) and guide the RDE (recommended dose for expansion); and (2) the Phase Ib dose expansion which will consist of six cohorts of c 15 patients each, evaluating AVA6103 in these high prevalence cancers (Exhibit 3).

Exhibit 3: AVA6103 Phase I FOCUS-01 trial design

Source: Avacta  Notes BOIN Bayesian optimal interval design, MTD Maximum Tolerated Dose, and RDE Recommended Dose for Expansion

Phase Ia is currently underway, with the first two dose levels (DL1 1.5mg/m² and DL2 3.0mg/m², equivalent to 0.72mg/m² and 1.4mg/m² exatecan payload respectively) successfully completed and DL3 patients assigned. Already the early results are confirming preclinical data showing rapid uptake from the plasma and localisation at the tumour site, with sustained release of active exatecan and the products of the cleaved linkage. Phase Ib is planned to start in early-2027 and will assess indication-specific safety and provide early signs of efficacy, with overall response rate (ORR), progression-free survival (PFS), overall survival (OS), disease control rate (DCR), and duration of response (DoR) as the secondary endpoints.

FOCUS-01: first human data support preclinical results

As of the September 10, 2026 data cutoff, FOCUS-01 has enrolled and dosed 19 patients across the first three escalation cohorts of the Q3W schedule. The baseline demographics represent a heavily pretreated patient population with high tumour burden and advanced metastatic disease:

• Dose Level 1 (1.5mg/m² AVA6103/0.72mg/m² exatecan): Enrolled five patients. The median age was 50 (range 46–75), with a sex split of four males and one female. The Eastern Cooperative Oncology Group (ECOG) performance status was 0 for one patient and 1 for three patients. The median number of prior systemic therapeutic regimens was four (range 1–5), and all four patients (100%) were classified as heavily pretreated. Indications included pancreatic ductal adenocarcinoma (three patients) and gastric cancer (one patient). Two patients remain on ongoing treatment, and two have discontinued. Three patients are evaluable for pharmacokinetics (PK).
• Dose Level 2 (3.0mg/m² AVA6103/1.4mg/m² exatecan): Enrolled seven patients. The median age was 47 (range 44–64), with one male and six females. ECOG status was 0 for two patients and 1 for five patients. The median number of prior regimens was four (range 2–8), and all seven patients (100%) were classified as heavily pretreated. Indications included pancreatic ductal adenocarcinoma (one patient), colorectal cancer (four patients), and cervical cancer (two patients). Six patients remain on ongoing treatment, and one has discontinued. Two patients are currently PK evaluable, with additional sample processing in progress.
• Dose Level 3 (4.5mg/m² AVA6103/2.1mg/m² exatecan): Also enrolled seven patients. Median age was 58 (range 42–68), with two males and five females. ECOG performance status was 0 for one patient and 1 for six patients. The median number of prior systemic therapeutic regimens was five (range 2–8), with four out of seven patients (57%) classified as heavily pretreated. Four patients had received prior irinotecan, with single instances of prior Enhertu and Trodelvy exposure. Indications included pancreatic ductal adenocarcinoma (two patients), colorectal cancer (two patients), and HR+ breast cancer (three patients). All seven patients remain ongoing on active treatment with no discontinuations.

The initial human data from the first cohort offer promising early signs of how the PK of the modified platform is tracking as predicted in preclinical studies. The rapid decline of the intact parent drug in peripheral circulation is consistent with the expected tissue retention profile anticipated by the non-clinical models This clearance is accompanied by a low, sustained appearance of both free exatecan and the companion release peptide in plasma. While the patient numbers are small, this directional pattern indicates that the engineered modification to reduce the platform’s cleavage efficiency is functioning in line with the underlying design concept of containing the systemic payload exposure while ensuring tumour-localised drug activation (Exhibit 4).

Exhibit 4: Phase Ia showing AVA6103 plasma profile replicates preclinical data

Source: Avacta  Notes: Preliminary PK profile for Cohort 1 Patients (Cycle 1, n=3, 1.5mg/m² I/V over 30 mins)

Exhibit 5 summarises the FOCUS-01 safety data to date. Benchmarking against historical data for Topo I ADC Enhertu (trastuzumab deruxtecan) and exatecan is not straightforward due to the inherent variances in patient baselines and trial protocols. Nevertheless, these exploratory findings offer valuable directional insights into AVA6103’s comparative safety and potential therapeutic index.

Exhibit 5: AVA6103 safety comparison with Enhertu and exatecan

Source: Avacta Notes: ¹ Phase I Enhertu safety in Q3W IV schedule as per Doi et al (2017). One case of febrile neutropenia reported as neutropenia; ² Phase I exatecan safety in five-day CVI (continuous venous infusion) schedule as per Rowinsky et al (2000). Safety measured by courses of therapy, reported % of courses per Rowinsky (2000) at the MTD in patients heavily pre-treated (HP), 0.3mg/m² QD. HP defined as >4 courses prior platinum therapy. Nausea and vomiting reported as a single event across doses. All patients treated with AVA6103 considered HP; ³ The safety data are reported as % of patients experiencing treatment-emergent adverse events of any CTCAE grade across AVA6103 (n=19), Enhertu x 3 dose levels (n=9) and exatecan x2 MTD dose levels QDx5 (n=13)

AVA6103: why the therapeutic window is so important

Exatecan is an extremely potent Topo I inhibitor, but its clinical utility as a free small molecule was compromised by its narrow therapeutic index. In early clinical evaluations (Rowinsky) free intravenous exatecan was evaluated in heavily pretreated solid tumour patients matching those enrolled in FOCUS-01. The results established a strict safety ceiling. Even at modest doses for five days, the treatment caused near-universal, severe myelosuppression. Profound Grade 3/4 neutropenia and thrombocytopenia were the primary dose-limiting toxicities, aggravated by a short plasma half-life that required frequent and challenging dosing schedules. For fragile patients who had already sustained bone marrow damage from multiple lines of platinum-based chemotherapy, free exatecan was simply too toxic to tolerate at therapeutic levels.

Daiichi Sankyo, and AstraZeneca, employed an ADC design to combine deruxtecan, an exatecan derivative, with a HER-2 targeting monoclonal antibody to create the market-leading Enhertu (trastuzumab deruxtecan). Enhertu aims to shield healthy tissue from Topo I inhibitor-related systemic toxicity through tethering to a HER2-targeted monoclonal antibody. Despite the greater tumour targeting, plasma instability results in off-target exposure and haematological adverse events remain the most common Grade 3 or higher toxicities seen. Less common (c 10% to 15%), but clinically challenging, is the risk of interstitial lung disease (ILD), which is the cause of the FDA’s Black Box warning.

The off-target effects are compounded by how Enhertu attaches to the HER2 receptor through the slow process of cell-surface antigen binding and receptor-mediated internalisation. This typically creates a 24-hour lag before peak payload accumulation is achieved within the tumour mass, resulting in the Enhertu ADC circulating in plasma for longer. Avacta’s Gen Two approach attempts to address these specific ADC vulnerabilities by shifting the targeting mechanism from the tumour cell surface to the surrounding microenvironment. Since FAP cleavage happens in the TME, the delivery alters the kinetics in two distinct ways:

• Mitigation of plasma instability: Because the parent peptide conjugate clears from peripheral circulation within four hours, its exposure to plasma enzymes is too brief to permit significant premature payload release. Early FOCUS-01 pharmacokinetic data confirm that at equivalent payload doses, the systemic plasma exposure of free exatecan from AVA6103 is 3.38x lower at Dose Level 1 and 3.9x lower at Dose Level 2 than the circulating deruxtecan payload from Enhertu. This reduced peripheral exposure correlates directly with the absence of severe myelosuppression in the heavily pretreated FOCUS-01 cohorts.
• Resolution of the internalisation lag: By targeting FAP-positive stromal fibroblasts rather than cell-surface receptors AVA6103 bypasses the intracellular trafficking bottleneck entirely. The capping group pairs high binding affinity with a reduced enzyme turnover rate. This anchors the intact molecule to the tumour stroma, effectively using the tumour mass as a localised, slow-release reservoir that maintains therapeutic exatecan concentrations for over five days.

These early Phase Ia data provide initial human validation that AVA6103 successfully decouples payload potency from systemic toxicity. By reducing peripheral plasma exposure by three-fold compared to market-leading ADC benchmarks, AVA6103 has demonstrated a clean safety profile across the initial escalation cohorts, avoiding the severe myelosuppression that historically limited free exatecan. We caution that whilst these pharmacokinetic parameters are directionally encouraging, they remain exploratory. Nonetheless, it is reassuring that preclinical findings are being replicated in these early trial results.

AVA6103: why FOCUS-01 results will define pre|CISION

In our view, the critical clinical transition for Avacta will occur in H127, when the Phase Ib expansion cohorts across the six Tempus-selected indications begin to deliver more robust RECIST efficacy data, shifting the equity arc for the Gen Two platform from clinical tolerability to therapeutic utility. Confirming targeted tumour localisation and a reduction in systemic toxicity in multiple solid tumour clinical settings should serve as the foundational validation step required to de-risk the wider pre|CISION platform. A successful proof-of-concept for AVA6103 would not just open up these sizeable clinical indications but should act as a template for other currently suboptimal compounds.

To provide context, we believe the shift from the Gen One chemistry typified by AVA6000 to the Gen Two PDC construct of AVA6103 is a larger and more significant event than from Gen Two to the clinically and commercially highly relevant dual payload constructs of Gen Three. AVA6000 successfully validated the FAP-cleavage mechanism using relatively straightforward chemistry with a doxorubicin backbone, whereas AVA6103 introduces a highly potent and toxic exatecan payload within the targeted and controlled-release conjugate structure. This requires exacting systemic stability in human plasma to prevent off-target toxicities, hence the importance of the Phase Ia PK data and the upcoming Phase Ib results as the defining validation events for the pre|CISION platform.

Once the architecture of the Gen Two construct is validated then the step to the Gen Three dual constructs is, in our view, one of chemical engineering optimisation rather than the conceptual leap between Gen One and Gen Two. If the Gen Two linker and capping groups safely navigate the human circulation and release the payload exclusively in the TME then the fundamental biological hurdle is cleared and, as a result, the multi-payload variations are de-risked materially.

pre|CISION: clinical data will unlock partnerships

Assuming the baseline operational runway will be funded to cover these crucial clinical readouts, we view the maturation of these clinical datasets as the key driver for long-term corporate development. Rather than pursuing premature, low-value arrangements, management continues to maintain active dialogue with multiple global pharmaceutical companies. The emergence of robust human clinical data from AVA6103 (Gen Two) should act as the natural catalysts to evolve these exploratory discussions into meaningful, well-validated commercial partnerships that will likely address Gen Two and Gen Three constructs.

Nonetheless, whilst we view continuing corroborating AVA6103 data as the defining events for the roles, and value, of the pre|CISION platform, other key near-term events include:

• Gen Three candidate selection (H226): payload disclosure and clinical candidate selection for AVA6207 is expected to be announced by end-2026. Advancing its dual-payload technology closer to formal IND-enabling studies is another major step for Avacta. The ability to deliver two distinct therapeutic warheads simultaneously to the TME through a single FAP-mediated cleavage event is clinically attractive and confers clear commercial appeal for pharmaceutical companies with existing, established oncology franchises. Dual-payload constructs could address complex solid tumours that elude single-agent platforms and/or reduce, or even eliminate, resistance through established escape mechanisms.
• Maturing Phase I data for AVA6000 (late 2026/early 2027): The Phase Ib results expected over the coming quarters will help complete the faridoxorubicin clinical package. The FDA agreement of the design of a single pivotal Phase II trial in SGC was reached in mid-2026. Management has made clear its capital allocation priorities, hence AVA6000’s progression into registrational trials is contingent on securing a suitable out-licensing partner to fund this further work.

The coming 12 months, arguably six months, should define the clinical utility of the pre|CISION platform. The AVA6103 Phase Ia data, which we emphasise is still early, does provide directional insights that suggest the preclinical promise may be replicated in the clinic. In our view, it will be the Phase Ib results that should signal whether it can deliver the robust cell-kill of a potent ADC while minimising systemic exposure and employing far simpler, small-molecule manufacturing.

Exhibit 6: Key portfolio events over the next 12 months

Source: Avacta  Notes EMSO=European Society for Medical Oncology, Madrid, 23-27 Oct 2026; FPI=First Patient In; PhIa: Phase Ia; SGC=Salivary Gland Cancer; AACR-Panc= AACR Congress on Pancreatic Cancer, San Diego, 25-28 Sept 2026; TIP=Trial in Progress; TM=triple meeting (AACR-NCI-EORTC=International Conference on Molecular Targets and Cancer Therapeutics), Barcelona, Nov 2026.

Valuation and Financials

We value Avacta using a sum-of-the-parts rNPV model for the disclosed pipeline assets, combined with an indicative placeholder value for the underlying pre|CISION platform chemistries. The individual asset rNPVs are summed and netted against unallocated corporate operating costs and net cash positions. Proof of mechanism data prompts us to revisit assumptions for our pre|CISION platform valuation given potential for pipeline expansion.

Our valuation is now £525m ($671m), equivalent to 111p per share (105p fully diluted for the future share issuance required to settle the outstanding convertible bond liability), vs £475.0m ($608.0m), or 101p per share (94p fully diluted) previously). We deliberately employ conservative assumptions throughout; our discount factor is 12.5% and the £/$ FX rate is 1.28.

Exhibit 7: Avacta sum of the parts valuation

Source: Trinity Delta   Note: assumptions include a 12.5% discount factor; £/$ FX rate of 1.28; * blended valuation comprising an orphan opportunity at 60% and a larger partnering opportunity at 20%

AVA6000 (faridoxorubicin, FAP-Dox): Valued at an rNPV of £76.7m ($98.1m), or 16.3p per share. This incorporates a blended probability of success (PoS) comprising an orphan opportunity at 60% and a larger commercial partnering opportunity at 20%, assuming an 18% royalty tier, peak global sales of $1.5bn, and a projected launch timeline from 2029 onwards.

AVA6103 (FAP-EXd): Valued at an rNPV of £129.8m ($166.2m), or 27.5p per share. Reflecting its current early clinical status, we continued to apply a standard Phase I PoS of 15%. Assumptions include a 20% tier-one royalty structure, a projected market launch from 2031 onwards, and peak global sales of $2.5bn across the broad solid-tumour indications currently under evaluation.

AVA6207 (Gen Three Dual-Payload): Valued at an rNPV of £67.5m ($86.3m), or 14.3p per share, applying a preclinical/IND-enabling PoS of 7.5%. Assumptions include a 20% royalty tier, commercial launch from 2033 onwards, and unadjusted peak sales of $3.5bn, recognizing its potential to mitigate common tumour resistance mechanisms.

pre|CISION Platform: Proof of mechanism data for the new linker and capping group chemistries employed in AVA6103 prompts us to revisit our underlying platform assumptions given the potential for pipeline expansion with multiple payloads. The indicative platform value rises to £240m ($307m), or 50.8p per share, vs £190.0m ($243.2m), or 40.3p per share, previously applying a blended pipeline modifier across unallocated future candidates targeting the wider 90% of FAP-expressing solid tumours.

Our July 2026 Update reviewed Avacta’s FY25 results and June 2026 fundraise. The latter was a strategic equity placement that raised £8.5m net specifically to settle three upcoming quarterly convertible bond (CB) repayments (ie the January 2026 and April 2026 payments that were deferred to October 2027, and the scheduled July 2026 quarterly payment). These three payments have now been satisfied, and the outstanding CB principal is £12m. Our model assumes the CB and associated coupons will be fully extinguished by October 2027 through issuing shares (either directly or indirectly).

Financial forecasts are presented in Exhibit 8. We expect increasing R&D investment as clinical progress is maintained, and larger trials are initiated and progressed for Gen Two and Three assets. Our forecast includes R&D spend of £17.7m in FY26e and reaching £18.6m in FY27e as AVA6103 Phase Ib expansion cohorts initiate. SG&A expenses are projected to grow incrementally from £9.3m in FY26e to £9.5m in FY27e.

Last reported net cash was £16.4m at end-April 2026, providing an operational runway extending into early Q127. To bridge the funding requirement ahead of key data milestones, our model shows an illustrative £25m cash inflow in each of FY26e and FY27e (treated as short-term debt). However, this funding shortfall is likely to be addressed via a combination of licensing proceeds, non-dilutive collaborations, traditional equity raises, or a targeted dual NASDAQ listing.

Exhibit 8: Summary of financials

Source: Avacta, Trinity Delta. Note: Adjusted numbers exclude exceptionals. FY26e and FY27e each include £25m of cash inflows (as illustrative short-term debt) which could come from various sources.