TIDMAVO
RNS Number : 4695N
Advanced Oncotherapy PLC
30 September 2021
30 September 2021
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
ADVANCED ONCOTHERAPY PLC
("Advanced Oncotherapy" or the "Company")
Interim Results
Continued operational and financial advancements towards
delivering the first fully operational LIGHT system with a 230MeV
beam
Further scientific research highlights superiority of LIGHT
system
Advanced Oncotherapy (AIM:AVO), the developer of next-generation
proton therapy systems for cancer treatment called LIGHT systems
(LIGHT), today announces its unaudited results for the six months
ended 30 June 2021.
Key highlights:
-- Significant progress made towards completing the first fully
operational LIGHT system capable of accelerating protons at 230
MeV:
-- Finished manufacturing of all critical hardware for the LIGHT system.
-- Fully integrated medical software suite in place, providing
customers with seamless user experience.
-- Optimised installation process to enable quicker set-up of future LIGHT systems.
-- LIGHT system capable of supporting a proton beam pulse every 5 milliseconds.
-- The Company's target of delivering the first LIGHT system may
still be achieved by the end of 2021 as previously communicated.
However, due to external factors impacting the supply chain, such
as the international shortage of semi-conductors and
thermo-switches, this could slip into Q1 2022.
-- Study based on research from Mayo Clinic demonstrated the
potential superiority of LIGHT in treating radio-resistant
cancers.
-- Signed a lessor financing partnership with Kineo Fin ance
(formerly known as DiaMedCare), providing potential customers with
easier access to the Company's LIGHT system as it reduces the need
for large initial upfront payments.
-- Signed a letter of intent (LOI) with Saba Partners SA for the
proposed purchase of a three-treatment room LIGHT system in
Switzerland.
-- Completed a c.GBP5.9 million equity fundraise which
contributed towards progressing the LIGHT system's assembly,
documentation, verification and validation activities.
-- Post period end, announced the Company's largest fundraise to
date comprising a subscription and issuance of shares to the value
of GBP40 million, significantly bolstering the Company's balance
sheet.
Nicolas Serandour, CEO of Advanced Oncotherapy, said:
"We are pleased with the Company's continued development which
would not have been possible without the hard work and dedication
of our staff. Despite the impact of Covid-19, we have made
excellent progress towards the commissioning of a LIGHT system with
a 230MeV beam. LIGHT's potential to be the leading proton therapy
technology in the market was reinforced by the publication of a
research study by the Mayo Clinic which further highlighted the
potential advantages of LIGHT in comparison to other radiotherapy
technologies and the need for proton therapy in treating
cancers.
"We also recently strengthened our financial position following
the announcement of the Company's largest equity fundraise to date,
comprising a subscription and issuance of shares to the value of
GBP40 million which are supporting us in the final steps of the
assembly, documentation, verification and validation activities and
the purchase of the remaining components of the LIGHT system in
order to obtain regulatory approval of Advanced Oncotherapy's first
LIGHT system.
"In line with our strategy, we have also continued to develop
partnerships with key stakeholders such as Kineo Finance and Saba
Partners in order to support future sales of additional LIGHT
systems. With Covid-19 restrictions now being lifted, we remain
confident with the Company's outlook and our ability to deliver the
first LIGHT system."
Notes for editors
Advanced Oncotherapy plc www.avoplc.com
Dr. Michael Sinclair, Executive Chairman Tel: +44 (0) 20 3617 8728
Nicolas Serandour, CEO
Allenby Capital Limited (Nomad and Joint Broker)
Nick Athanas / Liz Kirchner (Corporate Finance) Tel: +44 (0) 20 3328 5656
Amrit Nahal / Matt Butlin (Sales and Corporate Broking)
SI Capital Ltd (Joint Broker)
Nick Emerson Tel: +44 (0) 1483 413 500
Jon Levinson Tel: +44 (0) 20 3871 4066
FTI Consulting (Financial PR & IR) advancedoncotherapy@fticonsulting.com
Simon Conway / Rob Winder Tel: +44 (0) 20 3727 1000
About Advanced Oncotherapy Plc
Advanced Oncotherapy, a UK headquartered company with offices in
London, Geneva, The Netherlands and in the USA, is a provider of
particle therapy with protons that harnesses the best in modern
technology. Advanced Oncotherapy's team "ADAM," based in Geneva,
focuses on the development of a proprietary proton accelerator
called, Linac Image Guided Hadron Technology (LIGHT). LIGHT's
compact configuration delivers proton beams in a way that
facilitates greater precision and electronic control.
Advanced Oncotherapy will offer healthcare providers affordable
systems that will enable them to treat cancer with innovative
technology as well as expected lower treatment-related side
effects.
Advanced Oncotherapy continually monitors the market for any
emerging improvements in delivering proton therapy and actively
seeks working relationships with providers of these innovative
technologies. Through these relationships, the Company will remain
the prime provider of an innovative and cost-effective system for
particle therapy with protons.
EXECUTIVE CHAIRMAN'S STATEMENT
I am pleased to update shareholders with our report for the six
months ended 30 June 2021 and to provide a review of the progress
the Company has made over the period towards the completion of its
first LIGHT system with a 230MeV beam, the maximum energy required
for treating all tumours regardless of their depth in the body.
Despite the continued uncertainty brought by the Covid-19 pandemic
during the period, the team has made significant progress towards
the delivery of the first LIGHT system.
Technology development update
Over the past six months, the Company has made significant
progress in the technical development of the LIGHT system and now
has all the key infrastructure in place to support the assembly and
testing activities for the first machine operating at 230 MeV. In
order to achieve this milestone, the Company has had to organise
the seamless collaboration of various disciplines and specialities
including; Environmental Health and Safety, radiation safety,
electromagnetic compatibility and electromagnetic interference,
beam dynamics, electrical engineering, electronics, mechanical
engineering, vacuum technology, magnet technology, RF (radio
frequency) technology, power converters, IT, radiation protection,
cooling and ventilation, survey and alignment, electrical networks,
and civil and structural engineering.
During the ongoing clinical routine testing, the aim is to
ensure patients are exposed to a homogenous and curative dose to
ensure that the targeted area is treated whilst preserving
surrounding healthy tissue. As such, an important parameter for
proton therapy is the ability to change the intensity of protons
per pulse. During the initial conditioning process undertaken
during the period, the LIGHT system has reached the full intensity
of 300 u A as per the design. This is a significant step in the
integration process as it provides the basis for an optimised
treatment plan. The more versatile the LIGHT system can be, the
wider the range of efficient treatments plans that may be offered.
In addition, over the period, we announced that the LIGHT
accelerator is capable of varying the proton beam energy
continuously from 70 MeV to 230 MeV in only five milliseconds; an
important breakthrough for the Company showcasing the superiority
of LIGHT in comparison to other systems which have a significantly
slower energy modulation.
In March 2021, we announced that a study published by the
Company demonstrated the potential capability and superiority of
LIGHT in "biologically enhanced particle therapy"(1) to treat
resistant cancers, which are responsible for most relapses and
remain one of the major causes of death in cancer. The Company's
findings build on research at the Mayo Clinic published in the
American Association for Cancer Research's journal Cancer Research.
The research demonstrated the benefits of combining proton therapy
with targeted small molecule damage repair inhibitors. Findings
outlined that cancer cells with defects in their DNA repair
pathways are more effectively killed using proton therapy combined
with a damage repair inhibitor, therefore reiterating the potential
superiority of the LIGHT system. In addition, due to its proton
minibeam capability, the LIGHT-based study indicated increased dose
weighted linear energy transfer (dLET) in comparison to cyclotrons,
with higher dLET believed to be a critical factor in the biological
enhancement of lethal cancer cell damage.
One of the main challenges faced by proton therapy systems to
date is the lack of an integrated control software suite. To tackle
this issue, the Company has been working in partnership with
RaySearch Laboratories AB to develop a seamless software suite
customised for the LIGHT system which will support personalised
precision proton therapy. As such, the software suite provides
users with a single interface for patient preparation, treatment
and follow-up processes, limiting potential risks whilst
facilitating a better user experience for clinicians and healthcare
workers.
Building strategic partnerships to accelerate the
commercialisation of LIGHT
In line with the Company's strategy and mission, we have
continued to build strategic partnerships to accelerate the
commercialisation of the LIGHT system and democratise proton beam
therapy for cancer treatment.
In January 2021, we announced a lessor financing partnership
with Kineo Finance (formerly known as DiaMedCare). Under the terms
of the agreement, we are now able to offer our customers easier
access to LIGHT through flexible financing solutions which reduce
the need for large initial upfront payments. As part of the
partnership agreement, Kineo Finance will acquire LIGHT systems and
then lease them back to the Company's customers that are
commissioning the LIGHT system for oncology treatments. In
addition, Kineo Finance will also be able to bridge manufacturing
costs until delivery of the LIGHT system to customers. This
partnership is a key step in the Company's commercialisation
strategy as it removes the customer's hurdle of paying upfront
costs by converting those into operating expenses.
In June 2021, we announced that we had signed a LOI with Saba
Partners, an investment advisory and asset management firm based in
Geneva, for the proposed purchase of a three-treatment room LIGHT
system for a total contract value of up to US$107 million
(c.GBP75.5 million). Saba Partners and their high-net-worth
investors have significant experience in healthcare services and
healthcare real estate. Saba Partners has acquired a site in Glion,
close to Montreux, Switzerland, where they plan to start building a
medical centre of excellence. Under the terms of this agreement,
the Company may also benefit from Saba Partners' presence in the
Gulf region to make the LIGHT system available in countries
including Bahrain, Egypt, Kuwait, Oman, Qatar, Saudi Arabia and
United Arab Emirates. This LOI follows the commercial partnerships
and agreements announced previously with the London Clinic,
University Hospitals Birmingham NHS Trust and the Mediterranean
Hospital in Cyprus with the aim of increasing the availability of
proton beam therapy. Installation of a three-treatment room system
in the Mediterranean Hospital in Cyprus is due to commence before
the end of 2023, subject to customary conditions and documentation
being in place.
The proton therapy market has seen accelerated growth over the
past few years in both the number of centres in development and
also the number of patients being treated. With the introduction of
the Company's first operational LIGHT system, the Board expects a
much higher growth and adoption rate to follow worldwide.
Strategic equity fundraises to support the commercialisation of
LIGHT and bolster Company's balance sheet
Despite the challenging market conditions brought by Covid-19
over the period, the Company raised GBP5.9 million in January 2021.
This transaction bolstered the Company's working capital position
at a lower cost of capital than if we had to draw down further on
the Nerano Pharma debt facility. The proceeds raised helped us to
progress the LIGHT system assembly activities.
Then, in August 2021, we announced our largest fundraise to
date, an equity fundraise of GBP37.4 million, before expenses, from
new and existing investors through the issue of 93,529,166 new
ordinary shares at a price of 40 pence per share through a placing
and subscription. In addition, 6,470,880 new Ordinary Shares with
an aggregate value of GBP2.6 million at the Issue Price were issued
by the Company which included payments due to Cosylab D.D.
("Cosylab"), an experienced developer, manufacturer and integrator
of controls systems in particle therapy facilities and large
physics facilities. Philippe Glatz, a professional investor with
significant interests in the health and life science sector, was a
cornerstone investor in the transaction and other key investors
included Ahlström Invest BV, one of Finland's largest investment
companies, and Paris-based DNCA Investments. Proceeds raised from
this subscription are supporting the progress of the assembly,
documentation, verification and validation activities and the
purchase of the remaining components of the first LIGHT system in
order to obtain regulatory approval of Advanced Oncotherapy's first
LIGHT system.
Financials
The Company recorded a loss of GBP12.8 million in the six months
to 30 June 2021 (H1 2020: GBP12.2 million), with net assets
decreasing to GBP36.3 million over the same period (H1 2020:
GBP49.6 million). Cash and cash equivalents at 30 June 2021 were
GBP725k (as at 30 June 2020: GBP5.7 million). Post period end, the
Company repaid two short term loans totalling GBP4.1 million.
Outlook - continued progress towards delivering the first
operational LIGHT system
Despite the ongoing impact of Covid-19, we have continued to
make strong operational progress towards the delivery of our first
LIGHT system with a 230MeV beam. The spread of the virus has had
some impact on our timelines for the delivery of the first LIGHT
system. Whilst the first system may still be operational with a
230MeV beam by the end of H2 2021 as previously communicated, this
timing could slip into Q1 2022. This is a result of increased
supply chain lead times for further ancillary items for the LIGHT
system due to the knock-on effects of previous Covid-19
restrictions, namely the international shortage of semi-conductors
and thermo-switches. We are in ongoing discussions with suppliers
to attempt to find ways to mitigate this effect on the timeline. We
will provide further update announcements at the appropriate
times.
In line with our strategy, we have continued building strategic
partnerships with key stakeholders, and we continue to seek further
opportunities for partnerships to democratise proton beam therapy.
We remain confident with demand for the LIGHT system and future
orders, and we expect the acceleration of our commercial pipeline
when the machine is fully operational.
On behalf of the Board and the rest of the staff, I would like
to thank our shareholders for their continued support, and I look
forward to updating the market on further progress in due
course.
Dr. Michael Sinclair
Executive Chairman
30 September 2021
1 - Inhibition of ATM induces hypersensitivity to proton
irradiation by upregulating toxic end joining; Qin Zhou, Michelle
E. Howard, Xinyi Tu, Qian Zhu, Janet M. Denbeigh, Nicholas B.
Remmes, Michael G. Herman, Chris J. Beltran, Jian Yuan, Patricia T.
Greipp, Judy C. Boughey, Liewei Wang, Neil Johnson, Matthew P.
Goetz, Jann N. Sarkaria, Zhenkun Lou and Robert W. Mutter; Cancer
Res February 17 2021 DOI: 10.1158/0008-5472.CAN-20-2960
Consolidated statement of profit or loss
and other comprehensive income Unaudited Unaudited Audited
6 months to 6 months to year to
30-Jun-21 30-Jun-20 31-Dec-20
Revenue - - -
Cost of sales - - -
Gross loss - - -
Administrative expenses (11,049,439) (9,785,032) (20,269,788)
Operating loss (11,049,439) (9,785,032) (20,269,788)
Finance income 578,130 3,350 3,297
Finance costs (2,292,177) (2,403,223) (5,032,981)
Loss on ordinary activities before taxation (12,763,486) (12,184,905) (25,299,472)
Taxation - - -
Loss after taxation (12,763,486) (12,184,905) (25,299,472)
Loss for the period
Equity of shareholders of the parent company (12,763,486) (12,184,905) (25,299,472)
Non-controlling interests - - -
(12,763,486) (12,184,905) (25,299,472)
Other comprehensive income
Items that will or may be subsequently reclassified to profit or loss:
Exchange differences on translation of foreign operations (2,294,818) 3,205,831 1,902,660
Total comprehensive loss for the period net of tax (15,058,304) (8,979,074) (23,396,812)
Total comprehensive loss attributable to:
Equity of shareholders of the parent company (15,058,304) (8,979,074) (23,396,812)
Non-controlling interests - - -
(15,058,304) (8,979,074) (23,396,812)
Consolidated statement of financial position Unaudited Unaudited Audited
6 months 6 months
to to Year to
30-Jun-21 30-Jun-20 31-Dec-20
Non-current assets
Intangible assets 58,612,197 54,615,037 56,869,415
Property, plant and equipment 7,435,137 5,989,439 6,710,777
Right of use assets 32,790,930 31,993,087 31,437,161
Trade and other receivables 917,804 944,395 934,834
99,756,068 93,541,958 95,952,187
Current Assets
Inventories 24,125,861 18,799,153 22,138,323
Trade and other receivables 1,550,735 1,010,608 1,885,224
Cash and cash equivalents 724,696 5,747,913 2,317,451
26,401,292 25,557,674 26,340,998
Total assets 126,157,360 119,099,632 122,293,185
Current liabilities
Trade and other payables (10,530,997) (6,860,301) (6,438,217)
Lease liabilities (1,366,801) (630,616) (2,731,920)
Borrowings (16,996,691) (9,914,247) (10,039,316)
(28,894,489) (17,405,164) (19,209,453)
Non-current liabilities
Licence Fee Received (16,500,000) (16,500,000) (16,500,000)
Lease liabilities (31,271,501) (31,617,958) (29,604,809)
Borrowings (9,172,782) (4,000,000) (8,258,435)
Embedded derivative (4,000,080) - (4,578,210)
(60,944,363) (52,117,958) (58,941,454)
Total liabilities (89,838,852) (69,523,122) (78,150,907)
Net assets 36,318,508 49,576,510 44,142,278
Equity
Share capital 87,458,683 76,592,811 83,359,894
Share premium reserve 63,414,218 60,560,535 61,442,782
Share option reserve 8,819,914 6,341,155 7,675,332
Reverse acquisition reserve 11,038,204 11,038,204 11,038,204
Exchange movements reserve 597,368 4,195,357 2,892,186
Accumulated losses (135,009,879) (109,151,552) (122,266,120)
Equity attributable to shareholders of the
Parent Company 36,318,508 49,576,510 44,142,278
Total equity funds 36,318,508 49,576,510 44,142,278
Consolidated statement of changes
in equity
Six months to
30 June 2021
Share premium Share option Reverse acquisition
Share capital reserve reserve reserve
Balance at 01
January 2020 61,105,852 60,452,065 7,853,803 11,038,204
Loss for the
year - - - -
other
comprehensive
income
exchange
movement - - - -
Total
comprehensive
Income - - - -
Shares
Issued in
the period 22,254,042 2,003,103 - -
Expenses
deducted
from
share
premium - (1,012,386) - -
Lapsed
options - - (510,950) -
Lapsed
warrants - - (1,026,788) -
Share based
payments - - - -
- Share
option
charge - - 704,533 -
- Share
warrants
charge - - 654,734 -
Balance at 31
December
2020 83,359,894 61,442,782 7,675,333 11,038,204
============== ============================ ============================ ============================ ============================
Share premium Share option Reverse acquisition
Share capital reserve reserve reserve
Balance at 01
January 2021 83,359,894 61,442,782 7,675,333 11,038,204
Loss for the
year - - - -
other
comprehensive
income
exchange
movement - - - -
============== ============================ ============================ ============================ ============================
Total
comprehensive
Income - - - -
Shares
Issued in
the period 4,098,789 2,286,223 - -
Expenses
deducted
from
share
premium - (314,787) - -
Lapsed
options - - (19,726) -
Share based
payments
- Share
option
charge - - 1,164,307 -
- Share
warrants
charge - - - -
Group
provision
for
minority
interest - - - -
Balance at 30
June 2021 87,458,683 63,414,218 8,819,914 11,038,204
============== ============================ ============================ ============================ ============================
Consolidated statement of changes in equity (continued)
Six months to 30 June 2021
Total equity
Exchange movement Accumulated shareholders
reserve losses interest
Balance at 01 January 2020 989,526 (98,504,386) 42,935,066
Loss for the year - (25,299,472) (25,299,472)
other comprehensive income
exchange movement 1,902,660 - 1,902,660
Total comprehensive Income 1,902,660 (25,299,472) (23,396,812)
Shares Issued in the period - - 24,257,145
Expenses deducted from share
premium - - (1,012,386)
Lapsed options - 510,950 -
Lapsed warrants - 1,026,788 -
Share based payments - -
- Share option charge - - 704,533
- Share warrants charge - - 654,734
Balance at 31 December 2020 2,892,186 (122,266,120) 44,142,278
================================ ================= ============================ =============
Equity
Exchange movement Accumulated shareholders
reserve losses interest
Balance at 01 January 2021 2,892,186 (122,266,120) 44,142,278
Loss for the year - (12,763,486) (12, 763,486)
other comprehensive income
exchange movement (2,294,818) - (2,294,818)
================================ ================= ============================ -------------
Total comprehensive Income (2,294,818) (12,763,486) (15,058,304)
Shares Issued in the period - - 6,385,012
Expenses deducted from share
premium - - (314,787)
Lapsed options - 19,726 -
Share based payments
- Share option charge - - 1,164,307
- Share warrants charge - - -
Group provision for minority
interest - -
Balance at 30 June 2021 597,368 (135,009,879) 36,318,508
================================ ================= ============================ =============
Consolidated statement of cash
flows Unaudited Unaudited Audited
6 months
to 6 months to year to
30-Jun-21 30-Jun-20 31-Dec-20
Group Group Group
Cash flow from operating activities
Loss after taxation (12,763,486) (12,184,905) (25,299,472)
Adjustments to cash flows from
non-cash items
Depreciation of property, plant
and equipment 472,561 467,618 1,000,115
Amortisation of right of use assets 641,707 679,205 1,331,698
Finance income - (3,350) (3,297)
Finance costs 1,871,515 1,262,101 5,032,981
Taxation - 1,768,593 -
Share based payments 1,164,308 859,060 1,340,949
Foreign exchange (2,472,666) 578,526 471,204
Cash flows from operations before
changes in working capital (11,086,061) (6,573,152) (16,125,822)
Changes in inventories (1,987,538) (3,750,925) (7,090,095)
Change in trade and other receivables 351,519 1,100,592 235,537
Change in trade and other payables 3,047,397 1,183,539 968,798
Cash (used) / generated from operations (9,674,683) (8,039,945) (22,011,582)
Corporation Tax Receipt - - 1,768,591
========================================
Cash flows from operating activities (9,674,683) (8,039,945) (20,242,991)
Cash flows from investing activities:
Other Income (578,130) 3,350 3,297
Purchase of buildings plant and
equipment (1,196,921) (722,431) (1,656,335)
Capital expenditure on intangible
assets (1,742,782) (2,569,850) (5,781,884)
Cash flows from investment activities (3,517,833) (3,288,931) (7,434,922)
======================================== ===================== ============ ============
Cash flows from financing activities:
Proceeds from issue of ordinary
shares 6,385,012 10,319,521 18,040,021
Costs of share issue (314,787) (287,683) (728,853)
Interest paid (45,750) (148,822) (327,086)
Long term loan receipts - 4,729,620 7,621,951
Lease payments (1,363,460) (801,800) (1,865,946)
Short term loan receipts 6,957,375 - 4,000,000
Cash flows from financing activities 11,618,390 13,810,836 26,740,087
======================================== ===================== ============ ============
Increase/(decrease) in cash and
cash equivalents (1,574,127) 2,481,959 (937,825)
Exchange gain/(loss) on cash and
cash equivalents (18,628) 30,786 20,109
Cash and cash equivalents at the
beginning of the period 2,317,451 3,235,167 3,235,167
Cash and cash equivalents at the
end of the period 724,696 5,747,913 2,317,451
======================================== ===================== ============ ============
Notes to Tables
The same accounting policies, presentation and methods of
computation are followed in the interim consolidated financial
information as were applied in the Group's latest annual audited
financial statements except for those that relate to new standards
and interpretations effective for the first time for periods
beginning on (or after) 1 January 2021, and will be adopted in the
2021 annual financial statements. There have been no new standards
or interpretations issued which are expected to have a material
impact on the financial statements.
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