Abzena PLC (LON:ABZA) has announced the formation of a JV company, Denceptor Therapeutics, and an agreement with Faron to manufacture Clevegen (an Abzena inside product). Both deals validate the rationale behind expanding the company last year to provide a broader range of services. Meanwhile, Annexon Biosciences has recently raised funds and indicated it will be taking ANX-005 (another Abzena inside product) forward. We have increased our valuation to £143m (vs £133m) to reflect FX changes.
Formation of a JV: Denceptor Therapeutics
Abzena has announced the formation of a JV with Baylor Scott & White Research Institute, focusing on dendritic cell (DC) receptor-targeting antibodies. There is potential to target autoimmune (tolerogenic DC) or oncology (cytotoxic t-cells) indications. The lead programme is preclinical, targeting head and neck cancer (HPV E6/E7), and is expected to be in the clinic (funding dependent) in H117. Abzena has indicated that it has planned for the JV over the past year by adding to its management team to enable Abzena’s CSO to head up the JV. The JV will independently raise capital. We consider this move positive as it enables Abzena to retain a licence interest, generates service revenues (because Denceptor will outsource development and manufacturing activities), and gain potential upside by retaining a small equity stake. Importantly, it achieves this while retaining its core business model (service and technology provider), thereby lowering the risk profile.
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