The funding, which totals roughly £42mln, will go towards the development of the company’s LIGHT system and advance the manufacturing of up to 30 LIGHT systems.
The company has entered into a €20mln unsecured loan agreement with VDL Participatie, a member of VDL Groep, an industrial family-owned group of companies that manufactures kit used in the Advanced Oncotherapy's LIGHT System.
It has also entered into an interest-bearing secured convertible facility with Nerano Pharma, a financing vehicle wholly owned by existing Advanced Oncotherapy shareholder Seamus Mulligan, for up to US$30 million
Both loans carry an interest rate of 5% a year. The Nerano Pharma arrangement allows for Mulligan to convert the outstanding loan amount into Advanced Oncotherapy shares at 25p a time, provided his stake does not rise above 29.9%; the mid-market closing price for Advanced Oncotherapy on Friday was 24.9p.
Advanced Oncotherapy has also granted Nerano 5mln warrants to subscribe for new Advanced Oncotherapy shares at 50p a throw. The warrants are exercisable until 28 June 2025 at an exercise price of 50p.
Advanced Oncotherapy will pay to Nerano Pharma a cash commitment fee of 2% of the total facility upon the first drawdown or at maturity.
"We have a long-standing relationship with VDL ETG Precision as a current supplier to our business and we look forward to strengthening this partnership as they help build our business for future orders. In addition, we are delighted with the continued financial support provided by Seamus Mulligan, a significant shareholder in the company,” said Nicolas Serandour, the chief executive officer of Advanced Oncotherapy.
"The proton therapy market is still characterised by a highly unmet medical need due to rising populations, only 200 treatment rooms today globally but a need of at least 10,000 treatment rooms if only 20% of patients undergoing radiotherapy are treated with proton therapy. This additional funding will help us build further LIGHT systems to assist patients across the world, lowering the cost of proton therapy whilst providing more opportunities for treatment and improving patient outcomes," he added,
Proton Therapy reduces the risk of a second cancer diagnosis by 69% vs other forms of radiation treatment according to a new study.https://t.co/yNzfk1g6jY— Advanced Oncotherapy (@AdvOnco) June 26, 2020
The pre-revenue company also announced its results for 2019 in which it revealed a more or less unchanged loss before tax of £21.9mln.
"We have made tremendous progress with the LIGHT system over the past 12 months as we remain focussed on our vision of democratising access to proton therapy for patients across the world by lowering the cost of providing this treatment modality and so improving cancer patient outcomes. Following the impact of COVID-19, we are now in the progress of restarting work with social distancing implemented at our Daresbury facility and will update the market in due course on progress made,” Serandour said.
The company believes 2020 will be an important year for Advanced Oncotherapy and the development of the LIGHT system. The company expects to achieve first patient treatment in 2021.