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(Sharecast News) - Avacta announced on Friday that it had raised about 9m through an oversubscribed placing with institutional investors and existing shareholders, with the proceeds to be used to reduce its convertible bond debt.
The AIM-traded clinical-stage biopharmaceutical company said it had conditionally placed 12,792,859 new ordinary shares at 70p each, equal to the previous day's closing mid-market price.
One institutional cornerstone investor accounted for the majority of the funds raised.
Chief executive Christina Coughlin and non-executive director Mark Goldberg also subscribed for 32,142 new shares each at the placing price, representing investments of about 22,500 apiece.
Avacta said the net proceeds would allow it to pay deferred repayments under its convertible bond in cash, as well as an additional quarterly payment if required.
The company said that, if the deferred repayments were accelerated and another quarterly repayment was paid in cash, the outstanding convertible bond would fall to about 11.5m, representing around 3.6% of Avacta's market capitalisation immediately before the announcement.
The company said the fundraise followed amendments to the convertible bond announced in August 2025, under which certain repayments and interest due in January and April 2026 were deferred until October 2027.
The bondholder had the right to accelerate those deferred repayments after the earlier of Avacta publishing Phase 1b data for FAP-Dox, also known as AVA6000, in triple negative breast cancer, or 30 June 2026.
Avacta said the lowest electable reference prices for any share-based payment of the January and April deferred repayments would have been about 48.75p and 64.65p respectively.
It said raising new equity at 70p therefore reduced potential shareholder dilution while strengthening the balance sheet.
"This placing enables Avacta to retain the value of our equity while further reinforcing our financial position by reducing the outstanding debt in the convertible bond," Coughlin said.
She said the group's cash runway was sufficient to progress both clinical drug candidates from its preCISION tumour-activated oncology delivery platform through major clinical milestones, while moving its third-generation molecule into IND-enabling studies.
Coughlin added that initial clinical data from the second-generation AVA6103 programme were expected in late second half 2026, while further phase 1 data on first-generation AVA6000 would be presented later this month at the BIO International Convention.
She said Avacta expected the data to help validate the preCISION platform in patients and added that partnering discussions were continuing with multiple parties across all three generations of the platform.
At 0940 BST, shares in Avacta Group were up 4.07% at 72.85p.
Reporting by Josh White for Sharecast.com.
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