Last checked at 30 Sep 2021 07:00
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 Finance (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.£5.9 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 £40 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 £40 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) Amrit Nahal / Matt Butlin (Sales and Corporate Broking) | Tel: +44 (0) 20 3328 5656 |
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 µA 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.£75.5 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 £5.9 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 £37.4 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 £2.6 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 £12.8 million in the six months to 30 June 2021 (H1 2020: £12.2 million), with net assets decreasing to £36.3 million over the same period (H1 2020: £49.6 million). Cash and cash equivalents at 30 June 2021 were £725k (as at 30 June 2020: £5.7 million). Post period end, the Company repaid two short term loans totalling £4.1 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 to | 6 months 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 capital | Share premium reserve | Share option reserve | Reverse acquisition 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 capital | Share premium reserve | Share option reserve | Reverse acquisition 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 | |||||
Exchange movement reserve | Accumulated losses | Total equity shareholders 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 | ||
Exchange movement reserve | Accumulated losses | Equityshareholders 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.