Avacta Group PLC on Wednesday said it sold its veterinary division Avacta Animal Health to veterinary company Vimian Group AB.

The Cambridge, England-based drug developer and diagnostics company said that Avacta Animal Health was acquired by Nextmune Holdings BV, one of Vimian’s subsidiaries. The division was merged into Vimian’s Specialty Pharma segment on Tuesday.

Avacta will receive £900,000 up front, plus an additional deferred payment of up to £1.4 million. The second amount is dependent on the performance of the merged businesses.

Avacta Animal Health made an operating loss of £300,000 in 2020. As at December 31, 2020, the carrying value of the business in Avacta books was £1.0 million.

Avacta said the sale proceeds will provide further funds for the development of its Diagnostics and Therapeutics divisions.

‘The sale of the Avacta Animal Health business allows the group to focus entirely on growing its core businesses; diagnostics and therapeutics. Having had our Animal Health division since 2009, we are delighted that Vimian will be retaining the entire Avacta Animal Health team and are well placed to grow the business,’ Chief Executive Alastair Smith said.

Magnus Kjellberg, the chief executive of Nextmune, added: ‘This acquisition significantly strengthens Nextmune’s competitive position in the UK. With our own laboratory for veterinary allergy diagnostics in the country and a full-service offering covering all veterinary dermatology needs, we see significant opportunities to accelerate sales and improve customer experience in the UK. The cross-selling opportunities via this business existing customer base as well as the increased laboratory capacity for Nextmune are also key components in driving incremental growth.’

Shares in Avacta were up 3.1% at 56.75 pence each on Wednesday morning in London.

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