Advanced Oncotherapy PLC (LON:AVO)

Advanced Oncotherapy PLC (LON:AVO)


Share Price
39.00 p
Change
-2 (-4.88 %)
Market Cap
£78.17 m
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Advanced Oncotherapy PLC RNS Release

Half-year Report


RNS Number : 2543C
Advanced Oncotherapy PLC
28 September 2018
 

ADVANCED ONCOTHERAPY PLC

("Advanced Oncotherapy" or the "Company")

 

Half-year Report

 

Advanced Oncotherapy (AIM: AVO), the developer of a next generation proton therapy system for cancer treatment, announces its unaudited results for the six months ended 30 June 2018 and post-period events. 

 

Highlights:

·     LIGHT system now generating proton beams with energies sufficient to treat superficial tumours

·     Improved financial position thanks to the completion of c. £40m financing since January 2018 and the elimination of financial pledges over the Company's assets

·     Science and Technology Facilities Council agreement to establish a UK testing and assembly site at the Accelerator Science and Technology Centre in Daresbury, home of the Cockcroft Institute

·     Harley Street site building work on schedule, first patient treatment expected by the second half of 2020

·     Completion of commercial distribution agreement with Liquid Harmony for China and other parts of Asia

·     Ongoing commercial discussions with sites in the USA, Europe, Asia and Middle East

·     Non-Executive Director appointments to the Board

 

Nicolas Serandour, CEO of Advanced Oncotherapy, said: "We are delighted with the progress we have made over the first six months of 2018, especially in terms of the significant advances in the beam testing and our reinforced financial position following the further funding received. We have strengthened the Board with some key changes and we have total confidence in our ability as a team to deliver on our milestones. The sub-structural work at the Harley Street facility remains on schedule and we are pleased with the progress at the site. We have exciting plans for the future commercialisation of the LIGHT system once completely developed, and our discussions with potential partners around the world are ongoing. On behalf of the Board, we would like to thank all of our shareholders for their continued support and belief, and we look forward to further success ahead."

 

 

Advanced Oncotherapy Plc

www.avoplc.com

Dr. Michael Sinclair, Executive Chairman

Tel: +44 20 3617 8728

Nicolas Serandour, CEO




Stockdale Securities (Nomad & Joint Broker)


Antonio Bossi / Edward Thomas

Tel: +44 20 7601 6100



Stifel Nicolaus Europe (Joint Broker)


Jonathan Senior / Ben Maddison

Tel: +44 20 7710 7600



Walbrook PR (Financial PR & IR)

Tel: +44 20 7933 8780 or [email protected]

Paul McManus / Anna Dunphy

Mob: +44 7980 541 893 / Mob: +44 7876 741 001

 

 



 

About Advanced Oncotherapy Plc www.avoplc.com

 

Advanced Oncotherapy is a provider of particle therapy in the treatment of cancer, which harnesses the very best in modern technology. Advanced Oncotherapy's R&D team, ADAM, in Geneva, focuses on the development of a proprietary proton accelerator - LIGHT (Linac Image Guided Hadron Technology). LIGHT accelerates protons to the energy levels achieved in legacy machines but in a compact and truly modular unit, offering significant cost advantages. LIGHT also delivers proton beams in a way that facilitates greater precision and electronic control, which are not achievable with currently available alternative technologies.

 

Advanced Oncotherapy offers healthcare providers affordable systems that will enable them to treat cancer with an innovative technology, intended to offer better health outcomes and lower treatment related side effects.

 

Advanced Oncotherapy continually monitors the market for any emerging improvements in delivering proton or particle therapy and actively seeks working relationships with providers of these innovative technologies. Through these relationships, the Company remains the prime provider of cutting edge, cost-effective systems for particle therapy.

 



 

EXECUTIVE CHAIRMAN'S STATEMENT

 

I am pleased to update shareholders with our report for the six months ended 30 June 2018 and to provide a review of the further progress the Company has made in the technical development of our next generation proton therapy system, as well as an update on the establishment of our UK testing and assembly site, the building work at the site of our first installation in Harley Street, and the securing of additional financing to provide a stable platform to support our continued progress.

 

Technology update

 

We are delighted with the ongoing progress being made in the technology development and manufacture of our first LIGHT system.

 

The first system under development at the Company's testing facility at CERN, Geneva is now generating a proton beam with sufficient energy required for treating some superficial tumours. This follows the substantial progress made during the period with the successful testing and integration of the key accelerating structures of the LIGHT accelerator. This installation and integration process continues to confirm our modelled expectations with proton beams accelerated through the integrated proton source, RFQ and SDTLDs at the design-anticipated energy.

 

Furthermore the simulation of the treatment plan of a periocular tumour case based on the data and the proton acceleration reached with the LIGHT system showed an excellent iso-dosimetry profile: the current LIGHT system comfortably covered the simulated clinical case, as well as some marginally deeper tumours whilst the healthy tissue was dramatically spared from radiation dose. This result further supports some of the advantages of the LIGHT system which is designed to offer a higher beam precision and targeting as well as more conformal dose and greater adjustability at source. The progress made to date and the conclusive test results also reduce the already known low risk in the technological development process.

 

We have made further advances in the development, integration and testing of the Patient Positioning System ("PPS") software, which is designed to prepare and position patients for the high accuracy and dose sparing proton treatments produced by the LIGHT system.

 

During the period, we announced the successful development of our system's Time-of-Flight ("TOF") measurement system which measures the speed of the beam and allows us to evaluate the energy of each proton pulse, an important clinical parameter. Successful TOF testing has demonstrated good results for beam control and adjustment, which is a crucial part of our ability to offer a system with superior precision and adjustment sensitivity to provide more accurate and versatile patient outcomes. 

 

In addition, we entered into a strategic collaboration agreement with RaySearch AB, a global leader in software solutions for x-ray and particle therapies, to provide the treatment planning software ("TPS") for the LIGHT system in Harley Street. RaySearch's software will provide superior functionality for treatment planning, encompassing patient positioning through to treatment solutions. The software is well established and familiar to oncologists, having been installed in 466 centres across 31 Countries in the last year alone.

 

We have also made strong progress in establishing our UK testing and assembly site within the UK Government's Science and Technology Facilities Council's Daresbury Laboratory in Cheshire, home to the UK's Accelerator Science and Technology Centre. Building work for site preparation continues as per the plan.

 

Harley Street update

 

Progress at our 141/143 Harley Street site remains on track. The sub-structural work continues to advance, and we continue on schedule to create central London's first compact proton therapy centre with site work expected to conclude by the first half of next year to enable first patient treatment by the second half of 2020.

 

A time-lapse video of the construction work on site is available on our website and was most recently updated in August 2018 (see: www.avoplc.com/Our-Technology/Toward-the-First-Installation-of-LIGHT)

 

The Howard de Walden Estate, the site freeholder, continues to bear the costs of construction.

 

Future plans for commercialisation

 

Whilst the technical development of our first LIGHT system is the key focus of the Group, we continue in our efforts to prepare to meet the demand that we anticipate for an advanced, affordable proton therapy technology that can be easily installed and safely operated in areas of high patient population density. Our key supply partners are extremely supportive in regard to the increased capacity, shorter delivery lead time and cost reduction based upon our ongoing dialogues.

 

Discussions for a second UK site in Birmingham are ongoing, and we remain in discussions regarding the installation of our LIGHT system, once fully developed, in sites in the USA and others across in Europe, Asia and the Middle East.

 

We are very pleased with the exclusive distribution agreement signed with Liquid Harmony Ltd. ("Liquid Harmony") to market and sell our LIGHT system across China, Macau, Taiwan, Hong-Kong and South Korea. In addition, the support provided through their direct equity investment demonstrates our shared vision that China and other geographies in Asia represent a significant commercial opportunity for our technology; we are very happy to benefit from the knowledge, contacts and experience of the Han family, who ultimately owns Liquid Harmony.

 

Financing

 

Having secured £39.3m of funding during the period and concluded a placing to raise an additional £6.4m following the period end, our assets are now free of any financial pledge, which provides us with greater flexibility in our ongoing financing strategy.

 

During the period we completed the subscription by Liquid Harmony who invested £13.5m in equity in the Company. The Company also received payment of the £16.5m license fee associated with the exclusive distribution agreement from Liquid Harmony who is providing a valuable commercial partnership for the roll-out of our LIGHT system in Asia.

 

In addition, we placed all the remaining Bracknor shares with a long-term shareholder, M3T PTE Ltd, a Special Purpose Vehicle created by a Singaporean Family Office.

 

Following the period end we announced the completion of a successful funding round which raised £6.4m (before

expenses) and attracted participation from several prominent Swiss Private Banks, including healthcare providers based in Switzerland. This investment by stakeholders of the Swiss medical space is of paramount importance for the Company as another acknowledgement of the LIGHT system. AVO through its wholly-owned subsidiary ADAM has strong links with Switzerland given the roots of the technology grew out from CERN and that our ADAM testing facility is based on the CERN campus, and so we were delighted to receive support from this investment base.

 

Board changes

 

Having announced several proposed Board appointments in July we were able to confirm the appointments of five Non-Executive Directors last month. Mr Peter Sjöstrand, who has a long career as an independent Non-Executive Director for many public and private companies within the Healthcare, Industrial and Financial areas has joined as Non-Executive Director and Vice-Chairman. A long-term supporter of the Company, Gabriel Urwitz, founding Partner and Executive Chairman of Segulah Advisor AB, a Nordic private equity firm, has been involved with a large number of successful listed and private companies during his career. Mr Urwitz, who is a Director of AB Segulah which owns a 3.8% of the Company, has joined as a Non-Executive Director. In addition, Mrs Zhang RenHua, Mr Chunlin Han and Dr Yuelong Huang, representing Liquid Harmony, have all joined the Board as Non-Executive Directors. Liquid Harmony and the Han family's extensive knowledge and experience of rolling out high-end medical equipment in China and internationally is of great benefit to the Company's commercialisation strategy.

 

Mr Sanjeev Pandya, Dr Euan Thomson and Prof Chris Nutting have stood down from the Board. Dr Thomson and Prof Nutting will continue to contribute to the Company's development by becoming members of the Medical Advisory Board. On behalf the Board, I would like to thank Chris, Euan and Sanjeev for all they have contributed to the Company. Chris's medical background provided the Company with useful insights from a practitioner point of view, Euan's Board experience has been invaluable to the Group and both will remain close with the Company acting as advisors going forward. Finally, I would personally like to thank Sanjeev for the tremendous contribution he has made to the business over the past five years and I wish him all the very best for his next venture.

 

Financials

 

The Company recorded a loss of £11.48 million in the six months to 30 June 2018 (H1 2017: £7.14 million), with shareholder funds increasing to £34.79 million over the same period (H1 2017: £32.01 million).

 

Cash and cash equivalents at 30 June 2018 were £3.32 million (as at 30 June 2017: £235,437), excluding the fund raising of £6.41 million and a tax credit of £2.92 million, both being post-period events.

 

Outlook

 

To conclude, we believe the we have the necessary technology to deliver a system which offers more affordable, adaptive and precise proton therapy treatment. The LIGHT system is designed to have clear advantages over current proton therapy technologies in terms both of cost and clinical effectiveness. The technological development of our LIGHT system remains on-track with our given timetable. Our ability to generate proton beams with energies required to treat superficial tumours and the key intermediary steps to achieve such result - all as per the schedule communicated 18 months ago - have been significant steps forward. The additional funding we have received has contributed to de-risk the business model and provides a better position and security to pursue longer-term financing options. As indicated in the directors' report of our latest annual report, the Board remains committed to maintain the pace of our development and manufacture activities in order to treat first patients in the second half of 2020. This will involve further funding to include - in particular - the cost of software development and the testing assembly centre at STFC, two key activities required for successful commercial deployment. Yesterday's announcement is placing the Company on a stronger foothold to deliver such a strategy.

 

Finally, work at our Harley Street facility remains on track and we have complete confidence in our ability to deliver on our plan. 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 with positive news very soon.

 

 

Dr. Michael Sinclair

Executive Chairman

 

28 September 2018



 

Consolidated statement of profit or loss and other comprehensive income

 









Unaudited

Unaudited

Audited


6 months to

6 months to

Year to


30-Jun-18

30-Jun-17

31-Dec-17


£

£

£

Revenue

                      -  

                      -  

                      -  

Cost of sales

                      -  

                      -  

                      -  

Gross profit

                      -  

                      -  

                      -  

Administrative expenses

(11,309,701)

(7,320,943)

(14,492,595)

Operating loss

(11,309,701)

(7,320,943)

(14,492,595)

Finance income

                      -  

51

                      -  

Finance costs

(173,239)

(535,616)

(1,994,891)

Loss on ordinary activities before taxation

(11,482,940)

(7,856,508)

(16,487,486)

Taxation

                      -  

712,295

2,827,115

Loss after taxation from continuing operations

(11,482,940)

(7,144,213)

(13,660,371)

Discontinued operations




Loss for the period from discontinued operations

                      -  

                      -  

                      -  

Loss after discontinued operations

(11,482,940)

(7,144,213)

(13,660,371)

Equity shareholders of the parent Company

(11,482,940)

(7,144,213)

(13,660,371)

Non-controlling interests

                      -  

                      -  

                      -  





Other comprehensive income




Items that will not be subsequently reclassified to profit or loss:



Exchange differences on translation of foreign operations

444,122

368,922

(1,065,130)

Total comprehensive loss for the period net of tax

(11,038,818)

(6,775,291)

(14,725,501)





Total comprehensive loss attributable to:




Equity shareholders of the parent Company

(11,038,818)

(6,775,291)

(14,725,501)

Non-controlling interests

                      -  

                      -  

                      -  


(11,038,818)

(6,775,291)

(14,725,501)



 

Consolidated statement of financial position

 


Unaudited

Unaudited

Audited


6 months to

30-Jun-18

£

6 months to

30-Jun-17

£

Year to

31-Dec-17

£

Non-current assets




Intangible assets

35,198,019

26,701,419

30,569,979

Property, plant and equipment

1,198,155

1,372,943

1,180,937

Investment property

310,000

310,000

310,000

Trade and other receivables

850,592

-

838,887 



37,556,766

28.384.362

32,899,803

Current Assets




Trade and other receivables

1,327,881

2,255,581

1,964,792

Corporation tax R&D refund

2,850,000

3,786,094

2,850,000

Cash and cash equivalents

3,321,835

235,437

56,479

Inventories

9,681,042

9,024,226

7,629,292



17,180,758

15,301,338

12,500,563

Total assets

54,737,524

43,685,700

45,400,366






Current liabilities




Trade and other payables

(3,445,434)

(4,979,171)

(7,491,290)

Borrowings

                       -  

(6,695,000)

(9,247,218)



(3,445,434)

(11,674,171)

(16,738,508)

Non-current liabilities




Borrowings

                     -  

-

                     -  

Deferred income

(16,500,000)

                    -  

                       -  

Deferred tax

                     -  


                     -  

Total liabilities

(19,945,434)

(11,674,171)

(16,738,508)

Net assets


34,792,090

32,011,529

28,661,858






Equity





Share capital

38,907,308

20,192,132

20,233,799

Share premium reserve

47,405,823

43,301,056

43,259,389

Share option reserve

6,100,016

4,843,698

5,743,609

Reverse acquisition reserve

11,038,204

11,038,204

11,038,204

Loan note conversion reserve

                       -  

1,950,000

5,650,631

Exchange movements reserve

558,762

1,894,461

460,410

Accumulated losses

(69,218,023)

(51,208,022)

(57,724,185)

Equity attributable to shareholders of the Parent Company

34,792,090

32,011,529

28,661,858

Non-controlling interests


-

-

-

Total equity funds

34,792,090

32,011,529

28,661,858

 



 

Consolidated statement of cash flows


Unaudited

Unaudited

Audited

Audited


6 months to

6 months to

Year to

Year to


30-Jun-18

30-Jun-17

31-Dec-17

31-Dec-17




Continuing

Discontinued




operations

operations


£

£

£

£

Cash flow from operating activities





Loss after taxation

(11,482,940)

(7,144,213)

(13,660,371)

                    -  

Adjustments:





Taxation

                   -  

(712,295)

(2,827,115)

                    -  

Finance costs

173,239

535,666

1,994,891

                    -  

Finance income

                   -  

(51)

                   -  

                    -  

Depreciation

182,858

180,863

365,470

                    -  

Share based payments

2,411,351

644,050

1,543,961

                    -  

Cash flows from operations before





changes in working capital

(8,715,492)

(6,495,979)

(12,583,163)

                    -  

Changes in inventories

(2,051,750)

(1,586,718)

(191,784)

                    -  

Property deposits made

(11,705)

                   -  

(838,887)

                    -  

Change in trade and other receivables

636,911

(1,701,887)

(2,139,752)

                    -  

Change in trade and other payables

(3,157,737)

2,326,427

4,341,687

(8,530)

Cash (used) / generated from operations

(13,299,773)

(7,458,157)

(11,411,899)

(8,530)

Interest paid

(644,947)

(340,008)

(568,667)

                    -  

Convertible loan costs paid

(229,589)


(721,327)

                    -  

Change in deferred income

16,500,000

                   -  

                   -  

                    -  

Corporation tax receipt

                   -  

74,207

3,125,121

                    -  

Cash flows from operating activities

2,325,691

(7,723,958)

(9,576,772)

(8,530)

Cash flows from investing activities:





Capital expenditure on intangible assets

(4,628,040)

(3,346,354)

(8,437,115)

                    -  

Purchase of buildings, plant and equipment

(200,076)

(89,542)

(123,597)

                    -  

Interest received

                   -  

51

                   -  

                    -  

Cash flows from investment activities

(4,828,116)

(3,435,845)

(8,560,712)

                    -  

Cash flows from financing activities:





Equity share capital raised

14,415,000

250,000

250,000

                    -  

Convertible loans

                   -  

3,794,967

7,800,000

                    -  

Other short term loans

(8,647,218)

5,901,750

8,703,968

                    -  

Intra Group Cash Transfers

                   -  

                   -  

(9,163)

9,163

Cash flows from financing activities

5,767,782

9,946,717

16,744,805

9,163

Increase/(decrease) in cash and cash equivalents

3,265,357

(1,213,086)

(1,392,679)

633

Cash and cash equivalents at the beginning of the period

56,478

1,448,523

1,431,502

17,021

Cash and cash equivalents at the end of the period

3,321,835

235,437

38,824

17,654






 

 

 

 

A copy of the unaudited interim accounts for the six months ended 30 June 2018 is available from the Company's website at www.avoplc.com   


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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