Advanced Oncotherapy Regulatory News (AVO)

3 June 2015

ADVANCED ONCOTHERAPY PLC

("Advanced Oncotherapy" or the "Company")

Final Results for the year ended 31 December 2014

Advanced Oncotherapy (AIM: AVO), the developer of next generation proton therapy systems for cancer treatment, announces audited results for the year ended 31 December 2014, a year of significant progress in the development of the Company's LIGHT system.

A number of key milestones in the development of the LIGHT system have also been completed following the close of the financial year in line with expectations. The Company remains on track to install its first unit in Harley Street by the end of 2016 with first patient treatment expected in 2017.

Highlights:

· Reorganisation of business focused on the development of the LIGHT system

· Completed the formation of a management team to deliver LIGHT through to commercial launch and operation

· Key supply chain partners appointed: ScandiNova (RF Power), Toshiba (Klystron), VDL (CCL module), Pyramid (beam focusing nozzle) and ICT (software)

· Exclusivity agreement with SUNY Upstate Medical University Hospital in New York State

· Over £12 million raised during the period to fund development and debt significantly reduced

· Revenue for the year of c.£0.106 million (2013: £0.068 million)

· Loss per share from continuing operations for the year of (0.75)p (2013: (0.86)p)

Post Period End Events & Key Milestones

· Oversubscribed placing to raise £20 million (net) to develop and install first LIGHT system

· First commercial sale of the LIGHT system in China to Sinophi Healthcare

· Harley Street lease agreement for the UK's first Proton Therapy Centre using the LIGHT System

· Manufacture of first CCL module complete and delivered

· Successful RF Power tests of the first CCL module

· Sale of Southampton property for £290k

Sanjeev Pandya, CEO of Advanced Oncotherapy, said: "The outlook for the Company is very positive. Already in 2015 we have successfully completed delivery and testing of some key components and we have reached a number of key milestones as planned. There is a broad and growing market opportunity that Advanced Oncotherapy, with our unique combination of technology and strengths, is ideally placed to take advantage of. I believe the opportunity is substantial − this is good news for our people, our patients and our shareholders."

About Advanced Oncotherapy Plcwww.avoplc.com

Advanced Oncotherapy's team based at CERN in Geneva focuses on the development of a proprietary proton accelerator called Linac Image Guided Hadron Technology (LIGHT). LIGHT accelerates protons to the energy levels achieved in legacy machines but in a unit that is a quarter of the size and between a quarter and a fifth of the cost. This compact configuration delivers proton beams in a way that facilitates a greater precision and electronic control which is not achievable with older technologies

Advanced Oncotherapy is a provider of particle therapy with protons that harnesses the best in modern technology. As a result, Advanced Oncotherapy will offer healthcare providers affordable systems that will enable them to treat cancer with an innovative technology as well as better health outcomes and lower treatment related side effects. Therefore, the disruptive technology of the Company changes the financial model of proton therapy now that LIGHT is expected to have a comparable cost to conventional radiotherapy.

The Company has signed a purchase agreement with Sinophi Healthcare Limited for one LIGHT proton therapy system to be installed in a hospital in China and has further Letters of Intent from other healthcare providers.

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.

Chairman's statement

OVERVIEW

Being a stakeholder in Advanced Oncotherapy whether it is as a shareholder, a Director or an employee is part of a very exciting journey. We continue to build a company dedicated to providing cancer patients with more effective and affordable radiation treatments, through the delivery of a ground-breaking proton therapy system, called the LIGHT system, and by implication provide superior returns.

The first stage of that journey for us was accomplished following the acquisition of ADAM in 2013, which laid the foundations for what Advanced Oncotherapy is today. ADAM is the first medical UK spin off from CERN. It is composed of a team of 25 experts in accelerator and detector technology formerly working at CERN; it remains today at the CERN campus near Geneva, home of the Large Hadron Collider, the most powerful particle accelerator in the world. The successful integration of ADAM means the Company is in a unique position to leverage not only a hands-on commercial experience in healthcare but also a revolutionary technology.

The second stage of the journey was to build a team with a successful track-record as well as an integrated network of global suppliers needed for manufacturing the LIGHT system. A number of important appointments were made in 2014, their key priority and remit being to develop the first accelerator and operational LIGHT system as quickly and safely as possible. The various agreements signed over 2014 with industry leaders who continually strive for excellence in service mean the Company has also now all the building blocks to create a game-changing proton therapy system. The Company is therefore one step closer to offering a new treatment solution that is anticipated to disrupt the market and its key forces. In parallel, the Company has reorganised its operations and implemented a financial strategy to fund its growth plan in order to ensure the delivery of the first LIGHT system in 2016.

The results we present today are proof that great strides have been made. The time is now right to move to the next stage of our journey.

MAXIMISE THE IMPACT OF OUR FOUNDATIONS

Our next stage is to maximise the impact of our foundations and leverage more of our assets in order to meet our mission.

As part of the developmental plan of the LIGHT system, we have engaged with a wide range of stakeholders who serve as ambassadors for the important milestones ahead of us. These include:

· Patients - No stakeholder is more influential than patients. One of our core values is commitment to patients and this drives all the key strategic decisions we take.

· Employees, opinion leaders and renowned experts who are supporting our project.

· Suppliers and other partners - 2014 marks the year when we have built an integrated network of suppliers. All of them have been carefully selected based on their expertise and their ambition to make a difference to how cancer should be treated. Other stakeholders who embrace our project include property development companies. In that regard, the Company is pleased to have signed in early 2015 an agreement with Howard de Walden Estate to lease a prestigious location in London, which will become the UK's first Proton Therapy Centre using the Company's LIGHT System.

· Customers - Customers are obviously our first champions. They are deeply interested in the long term health of the Company and we are delighted to report that our relationship with our customers has gone from strength to strength. In December 2014, Advanced Oncotherapy extended its collaboration with SUNY Upstate Medical University Hospital. As a result, SUNY is working exclusively with the Company to install a multi-room proton treatment facility in the highly-sought after area of Syracuse, Central New York State.

PEOPLE

Investing in our people is, without doubt, the most important investment we make in the future of our business. The development, motivation and well-being of staff is vital to the success of Advanced Oncotherapy, and their dedication, professionalism, knowledge and enthusiasm is always of the highest standard. On behalf of all our stakeholders, we would like to thank all our employees for their hard work and their contribution to the Company's success during a year in which Advanced Oncotherapy once again demonstrated its ability to meet its objectives whilst constantly striving for innovation.

We look forward to their continued support as we enter what promises to be a transformational period for the Company.

GOVERNANCE

Our business operates in highly regulated markets, requiring that the Board has a continuous focus on good governance and oversight. An area of particular focus for the Board during 2014 was to ensure that the business is unencumbered by legacy issues and well-funded. This is why the Company successfully raised approximately £12 million in 2014 and implemented a restructuring programme which is on track to deliver significant benefits, further demonstrating our key focus on the LIGHT system.

In the year ahead we will continue to focus on risk management to ensure that our processes remain appropriate as the business grows. The risk report and governance report in our Annual Report provide further information.

OUTLOOK

In closing, the journey in 2015 promises to be exciting as we underpin the advancements we have made to date and seek to capture the opportunities that are in front of us. We truly believe that the Company is at a clear inflection point in a radiation therapy market that is set to transform itself. With ever increasing health demands from a growing and ageing population for a more affordable and targeted proton therapy, we believe that the LIGHT system will provide a key role in helping contain costs and at the same time improve overall patient care.

Enormous opportunities lie ahead of us, and we are confident that Advanced Oncotherapy will go from strength to strength, for the benefit of all its stakeholders.

CEO's Review

OVERVIEW

We operate in an attractive and dynamic marketplace that is opening up a bigger and broader opportunity, one that we are uniquely positioned to take advantage of. The healthcare market is characterised by ageing populations and skyrocketing costs which are putting unprecedented financial pressure on healthcare providers as well as payers. The result is often a decreasing level of care. In response, fundamental changes are taking place in the manner in which healthcare is administered. This change, towards a more patient-centric system, is made possible by advances in technology and the need to reduce healthcare costs.

With that in mind, our strategy is to disrupt the traditional business model associated with proton radiotherapy equipment. The advantages of proton therapy - in particular over conventional radiation therapy - have been appreciated for some decades. As the proton travels through the body, only a small amount of energy is delivered along and most of the dose can be delivered at a precise distance in the tissue; so protons deposit very little of their damaging energy going in and deliver most of their punch when they come to a stop at the tumour site. As a result, proton therapy overcomes one of the major limitations associated with conventional radiotherapy, that of irradiating healthy tissue leading to unwanted side effects. However, a proton technology that is comparable to best-in-class X-rays and at a similar price has so far proven impossible. It is therefore no surprise that there are only 54 facilities in the world practising proton therapy treatment at present - each facility costing up to $250 million, and each clinical treatment radiotherapy course costing up to $100,000.

Current machines in operation utilise cyclotron technology to generate and accelerate the proton beams. These are the current "best available" proton machines. Problems arise from their huge and unwieldy nature and slow way in which beam energies change during therapy. Our team has disrupted and tackled this issue by developing a linear accelerator technology.

We believe that our approach and our ground-breaking LIGHT technology will significantly change the current market dynamic we are seeing in proton therapy, enabling more machines to be installed, more patients to be treated, and ultimately significant value for shareholders to be created.

OUR GROWTH OPPORTUNITIES

Our willingness to embrace this change, innovate and take on this challenge is opening up exciting new opportunities and giving us significant ways to grow. This opportunity for growth lies in three areas.

· First and foremost, we see an opportunity to provide a ground-breaking proton therapy technology not only to large cancer centres, but also to smaller healthcare units located in large cities where proton therapy is still largely unavailable. This will allow patients to be treated in closer proximity to their families, providing social and emotional support in a familiar environment, clearly of paramount importance when treating cancer.

· Second, we see significant potential by delivering a more affordable proton therapy system. We can unlock new pockets of demand and extend our reach in cancer centres which operate in a tightly cost-constrained environment.

· Third, the design of our LIGHT system as a complete turn-key solution together with its ability to "spot paint" each "point" (or voxel) of the tumour opens up new possibilities. The LIGHT system allows re-treatment of the voxels (by the spot beam) up to 200 times per second and with rapid changes in energy and dose (proton numbers deposited) different parts of the tumour can receive different amounts of radiation. This results in hypo-fractionated radiation schedules, where a higher dose per fraction is delivered in a smaller number of sessions, leading to lower toxicity and fewer hospital visits.

This represents a huge opportunity for treating patients closer to where they live, at a more affordable price and with superior clinical outcomes. This in turn offers a route to building a solid platform for sustainable and profitable growth.

OUR STRENGTHS

Advanced Oncotherapy's success in exploiting the growth opportunity that lies ahead rests on our unique combination of strengths in many areas. These are ones in which we have developed significant capabilities and in areas which are hard to replicate.

We operate in a segment of the cancer market that offers huge potential, one which is supported by long-term growth drivers. In addition, the proton therapy market is at a clear inflection point with an increased market awareness and many clinical advances likely to lead to double-digit growth for the next two decades.

Since the development of the first LIBO prototype, we have made huge strides to leverage our world-leading technology and differentiate our LIGHT system with significant advantages over "first generation" systems. These advantages include its lower cost compared to cyclotrons or synchrotrons; greater precision of the beam which allows to more accurately target cancer cells and avoid healthy tissues; lower shielding requirements which help to significantly reduce the size and construction cost of the facility required to house the accelerator; and its modular nature which provides healthcare operators greater freedom to customise their service to particular cancer treatments.

As a medical spin-off from CERN, we also benefit from a proven innovation capability which we are uniquely positioned to exploit thanks to a clear development path. As a testimony of our innovation excellence, we have signed our first commercial contract with Sinophi Healthcare Limited and we have executed Letters of Intent with highly recognised cancer institutions to supply and provide LIGHT systems. These prospective partnerships with the Upstate University Hospital at Syracuse New York, and two of the best recognised and sizable UK hospital groups (Spire and BMI) align perfectly with what the Company is building: innovation at the heart of a patient-centric model.

Advanced Oncotherapy also takes great pride in working with suppliers who have the right track-record and regulatory expertise, necessary skills to deliver the first LIGHT system in line with the market's expectations and ensure that our long-term growth remains profitable and sustainable. As such, we have built an integrated and collaborative supply chain. These various collaborations with established global suppliers also give further confidence to patients, customers and shareholders that Advanced Oncotherapy is committed to choose not the easy path, but the right path.

Underpinning our strength is our desire to develop a business that is for the long-term. To achieve sustained success, we have built a team that brings decades of experience, knowledge, and expertise spanning all aspects of healthcare services and disciplines. In addition, the leadership team is supported by an experienced Board of Directors, which benefits from strong connections in the medical and financial community as well as distinguished scientists and leaders at world-renowned medical research and physics institutions.

OUR PERFORMANCE

2014 was a year of significant progress for Advanced Oncotherapy.

Successful implementation of a collaborative supply chain, with positive results already visible

A key aspect of the success of the Company is its ability to draw upon the expertise of our partners. Our whole approach and procurement process is designed to engage supply chain partners who work with us over the long term, and always to the highest standards. In practice, this means that we are careful about who we choose, because we plan to work together for many years as we ramp up production year on year, investing in each other's success. The rewards offered by a partnership with Advanced Oncotherapy mean that, in return, our partners are able to offer us significant added value in the services they provide. Such a partnership only works with organisations that are similarly committed to both an open, honest and long term relationship. Consistency and reliability are the watchwords when it comes to selecting our supply chain partners.

With this philosophy at the heart of our business model, 2014 represents the year when we signed up a number of critical supply partners and ensured that we have the best components for our system. These partners include industry leaders such as:

· ScandiNova which develops the power system, or Modulator;

· Toshiba Electron Tubes and Devices which supplies the Klystron - a wave-based particle accelerator component. This component provides the necessary frequency to protons in the accelerator and is key in accelerating the protons to high speed before they are targeted at tumours within the patient's body;

· VDL - a spin-off from Philips which develops the Coupled Cavity Linac ("CCL") accelerating structures, a series of cells which accelerate the protons from energies of 37.5 Megaelectron Volts (MeV) to the 230MeV required to treat all radiosensitive tumours found in a typical clinical setting;

· Pyramid Technical Consultants which develops the dose delivery system also referred to as the Beam Focusing Nozzle. The Nozzle − which is positioned at the end of the accelerator − ensures that the proton beam is both measured and targeted to maximise its effectiveness; and

· ICT which develops the software systems that will manage the patient workflow and integrate the LIGHT system into the hospital's IT systems.

We have already reaped the benefits of our collaborative supply chain with the manufacture of the first CCL module, which was shipped to Advanced Oncotherapy's facilities at CERN in January 2015. We are pleased with the progress we made in 2014 and we remain confident that progress will continue throughout 2015.

Stronger ties with customers, further strengthening the role of Advanced Oncotherapy as a pioneer in proton therapy

2014 also marks the year when we strengthened our relationship with prospective customers:

In December 2014, the SUNY Upstate Medical University Hospital ("SUNY") signed an agreement to work exclusively with Advanced Oncotherapy to install a three-room proton treatment facility incorporating the first operational LIGHT system in the highly sought after area of Syracuse, Central New York State. Under this agreement, SUNY - the leading academic medical centre in Central New York - is set to become Advanced Oncotherapy's US hub for research and development, manufacture and treatment.

In parallel with the US installation, we also signed an agreement to lease a prestigious Harley Street location, which will become the UK's first Proton Therapy Centre using the Company's LIGHT System. The centre will become a hub where patients from London, the rest of the UK and others from further afield can have their cancers effectively treated with a leading-edge proton therapy system. As part of the 50-year lease agreement for the whole of 141 Harley Street and part of 143 Harley Street, Howard de Walden Estates will bear the £6/7 million cost to redevelop the buildings. Work is expected to start in July 2015, with the property expected to be handed over to Advanced Oncotherapy by the end of 2016 when the first LIGHT System will be ready, enabling patients to start treatments in 2017.

This agreement highlights a number of benefits of the LIGHT system:

§ It will be the first next-generation cancer treatment centre;

§ A proton therapy system will be installed into two standard row houses in a central city location, totalling 8,000 sq. ft. This has not been done with any of the existing proton systems currently operational and further validates the safety features and compactness of our LIGHT machine; and

§ The project cost is estimated at approximately £30 million, of which £6/7 million relates the redevelopment of the buildings. This is significantly lower than the costs in other projects using other technologies. In comparison, the cost of construction of a proton therapy centre at the Christie in Manchester and UCLH in London has been estimated at more than £100 million each.

A simpler and more transparent organisation, well-funded for delivering the next stage of the Company's evolution

An essential step in creating a commercially focussed business, was to put in place a management team with the skills to deliver on the development of our LIGHT system and bring it successfully through to commercial launch and operation. In June I became Chief Executive Officer and Dr Michael Sinclair became Executive Chairman. We appointed Nicolas Serandour to the Board as Chief Financial Officer. Nicolas brings with him over 15 years of healthcare investment banking experience at leading investment banks. Euan Thomson also joined our Board of Directors. As a physicist and ex-CEO of Accuray, the company that developed and produced the CyberKnife, Euan is a great supporter of emerging disruptive healthcare technologies, and his appointment complements the skills and advice that are brought by our other Non-Executive Directors.

Not only has the PLC Board been strengthened, but we are now benefitting from the very practical expertise brought through key senior management appointments last year in the areas of project management, global manufacturing, procurement and supply chain management. These appointments, alongside the high calibre Medical Advisory Board that we have built to support us, provide a wealth of experience and high level advice for the Board, as well as the skills necessary to execute our plans.

Throughout 2014, it has also become clear that shareholders expect all of the future value of the business to come from the successful development of the LIGHT system. To ensure that we remain focussed on delivering this value and as highlighted in our interim results, we have taken the decision to review strategic options for our non-core business assets. We sold a medical property in Southampton for £290,000. The sale of another medical property in Folkestone, which is currently being marketed, will mark the complete transition away from the original business's history of property investment.

In addition, we are looking at strategic options for Oncotherapy Resources Ltd, our subsidiary focused on distributing an innovative brachytherapy device.

In order to accelerate focus on the successful development and launch of the LIGHT system, we have also launched a series of initiatives to create a stronger focus for the business, shorter decision-making processes, clearer division of responsibilities within the organisation and, not least, sharper customer and market focus. These initiatives were aimed at:

§ Setting a customer-focused agenda by, for example, shifting the role of key scientists from developing the LIGHT machine and building their capability to facilitating greater customer orientation, understanding and connection throughout the entire business. In addition, we restructured the team so that scientific outputs, deliverables and economic constraints are more closely connected;

§ Engaging creative energy. This encompasses the recruitment of people from other industry sectors to provide fresh perspectives and different experience and personality profiles or a more open forum to develop an insightful culture where people naturally exhibit a curiosity to understand customers at a deeper level;

§ Being more transparent to the market. During our Investor Day held in London in November 2014, we outlined in greater detail our strategy and key milestones for the development and commercialisation of our LIGHT system; and

§ Adapting our organisational structure through the implementation of a new review system and incentivisation scheme.

We were also very active in the capital markets, raising over £12 million in 2014 in order to fund our growth in a balanced manner. We believe that we are taking the right actions to ensure that all of our financial resources will be channelled into the development of LIGHT. In March 2014 we announced an agreement with Bank of Ireland (UK) plc for them to receive 20 million shares in lieu of £1.3m of mortgaged debt on our investment property in Folkestone. This has significantly reduced our level of debt with overall borrowings reduced to £987,832 as at 31 December 2014, compared to borrowings of £3,190,315 at the same time last year.

POST PERIOD END EVENTS

The strong momentum we have seen in 2014, coupled with strong progress on all the initiatives being implemented by the Company, paints a bright picture for 2015 and this has materialised into two major events in the first half of 2015:

§ In March 2015, we signed a purchase order with Sinophi Healthcare Limited for one LIGHT proton therapy system to be installed in a hospital in China. The initial purchase price for the accelerator is around US$40m (the final price will be dependent on customisations) and once the milestone payments have all been received and the LIGHT machine is up and running, our Company will provide long-term maintenance and support. The LIGHT system is part of a US$200m project Sinophi expects to start in early 2016 and will support up to three treatment rooms. As Sinophi and its backers (which include Morgan Stanley Private Equity Asia) undertook an extensive due diligence as part of this process, this purchase order represents a huge endorsement of our LIGHT system. Sinophi intends to be a market leader in the provision of regional oncology hospitals in China, which is one of the biggest cancer markets in the world, so there is scope for a substantial number of LIGHT system orders in due course. Indeed, Sinophi signed an additional exclusive 15-year agreement to be our first tier distributor in China and other South East Asian countries; and

§ In May 2015, we raised £21 million of new equity. The placing was oversubscribed with support from existing and new institutional investors. The funds will be used to develop and install our LIGHT system in Harley Street, and to support the working capital requirement of the group.

CONCLUSION

Of course, none of what we do would be possible without the dedication and hard work of our people. They are vital to our success and I would like to thank each and every one of them for their contribution in the last 12 months.

With their continued support, the outlook for the Company is very positive. There is a broad and growing market opportunity that Advanced Oncotherapy, with our unique combination of strengths, is ideally placed to take advantage of.

I believe the opportunity is substantial − this is good news for our people, this is good news for our patients and this is good news for our shareholders.

Sanjeev Pandya

Chief Executive Officer

3 June 2015

Consolidated statement of comprehensive income

For the year ended 31 December 2014 - Financials in £

Consolidated statement of financial position

As at 31 December 2014 - Financials in £

Consolidated statement of changes in equity

For the year ended 31 December 2014 - Financials in £

Consolidated statement of cash flows

For the year ended 31 December 2014 - Financials in £

A copy of the full statutory financial statements will be available from the Company's website on today at www.advancedoncotherapy.com and is being posted to shareholders shortly.

Annual General Meeting

The Annual General Meeting will be held at 10.00am BST on 29 June 2015 at the offices of Westhouse Securities Limited, 110 Bishopsgate, London EC2N 4AY.