Biotech firm Avacta Group PLC (LON:AVCT) is to raise £9mln to push ahead with a first clinical trial of anti-cancer treatment Pro-Doxorubicin.

Avacta will use the funds to accelerate the collaboration with Tufts University Medical School on the drug, which is a new form of standard cancer drug Doxorubicin combined with Avacta’s affimer delivery technology.

Doxorubicin has been a standard of care for soft tissue sarcomas for 40 years, but its use is limited by the heart damage it causes. Even so, the drug still generates US$1bn a year in revenues.

AVA6000, the combination with Avacta’s affimer, is inert until activated by a tumour, which reduces the heart’s exposure to the chemotherapy and concentrates the active drug in the tumour.

Testing of ‘AVA6000 Pro-Doxorubicin’ has been limited to mice so far, but Avacta plans to start dosing patients in a phase 1 clinical trial in the second quarter of 2020, pending application and regulatory approval.

Affimer molecules can bind to and target cancer cells like antibodies, but are easier to produce and use.

Avacta had previously said its first drug into human trials would be a PD-L1 inhibitor cancer treatment known as AVA004, but it now estimates manufacturing will cost US$5mln so has decided to focus on Pro-Doxorubicin.

The £9mln of new money is being raised through a placing at 15p though there is also a small subscription.

Alastair Smith, chief executive, said that it was an “exciting time on all fronts” for the group and not just Pro-Doxorubicin.

Seven evaluations are ongoing with possible partners, he said, which includes four out of the top ten global diagnostics companies.

Heavier research spending meant a loss before tax of £11.1mln, in the year to July.

Gross profits though jumped 72% to £3.2mln, which included US$2.5mln received from new partner LG Chem Life Sciences.

Last December, the Korean group agreed to fund development and eventually license Affimer technology in a deal potentially worth over US$300mln.