Advanced Oncotherapy Regulatory News (AVO)

10 September 2014

Advanced Oncotherapy plc

("AVO" or the "Company")

Placing and Subscription to raise £4.7 million

Advanced Oncotherapy (AIM: AVO), the developer of innovative medical technology for cancer treatment, is delighted to announce that it has raised approximately £4.7 million before expenses, through a placing and subscription of 145,565,000 new ordinary shares of 1 penny each (the "New Shares") at 3.2 pence per New Share. For every five New Shares, placees and subscribers will receive a warrant which will allow them to subscribe to one New Share at 6 pence for a period of five years. The New Shares have been placed with institutional investors (the "Placing") and subscribed for by existing shareholders of the Company and other investors (the "Subscription") (the Placing and Subscription together the "Fundraising"). It is expected that the New Shares will be admitted to AIM on or around 17 September 2014 (the "Admission").

Highlights

· Fundraising of £4.7 million in cash, by Westhouse and Beaufort, as joint brokers to the Company;

· Funds to be used for the development of the LIGHT system for cancer treatments;

· Accelerate Advanced Oncotherapy's plan to become the global provider of cost-effective proton therapy systems by reducing both the capital and operational costs in a clinical setting;

· Reshape the proton therapy market such that it is no longer reserved for a minority of patients, but becomes available to many more patients.

Sanjeev Pandya, CEO of Advanced Oncotherapy, said:

"I am delighted to announce this successful Fundraising. With this Placing and Subscription, we have now raised more than £13 million since the acquisition of ADAM, the first medical spin-off from CERN, which has laid out the foundation of what Advanced Oncotherapy is today: the developer and provider of next -generation particle therapy systems. The funds raised so far have enabled us to make significant progress in the development of our LIGHT machine, sign agreements to provide eight LIGHT machines to well-established institutions and recruit high calibre individuals. We expect to see the benefits of all of this in the years ahead. These new funds will enable us to lead the Company through this next phase of growth and we are confident we have a sensible strategy to succeed in delivering our game-changing machine. This is clearly demonstrated by the fact that new investors have participated in the Fundraising and we are delighted that several of our largest existing shareholders have similarly shown their support and belief in the Company by investing further.

I would like to welcome all of our new shareholders who have supported this Fundraising and thank our existing shareholders for their continued support."

Contacts:

Background to and reasons for the Fundraising

Advanced Oncotherapy is focused on proton therapy, a highly-targeted type of radiotherapy that can treat hard-to-reach cancers with a lower risk of damaging surrounding healthy tissues and causing harmful side effects.

It is now widely accepted that the physical property of protons gives them an intrinsic advantage over traditional high-energy X-rays as a source of therapeutic radiation. This is because protons stop once they hit their target - the tumour site - whereas X-ray beams carry on through the body. Cancer cells are harmed whilst healthy tissue is spared. However proton therapy remains today a rare resource with only 45 centres in the world offering such treatments. Use of proton therapy has been limited by two factors: the massive size of the machines needed to accelerate the protons to the required killing energy and speed, and the cost of the bunkers to house the equipment often over three storeys tall. This means that the current underlying economics of proton therapy remain largely unattractive today.

With its LIGHT (Linac for Image Guided Hadron Therapy) system - being developed by Advanced Oncotherapy and ADAM (a spin off from CERN acquired in 2012) - the Company is focused on delivering a new generation unit which will accelerate 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. The compact configuration of the LIGHT system allows it to deliver proton beams in a way that facilitates a greater precision and electronic control which is simply not achievable with older technologies.

The Company believes its LIGHT accelerator will deliver significant clinical, cost and physical advantages over "first generation" proton therapy systems. In so doing, it is expected that it will make them virtually obsolete. Key features of the LIGHT system include:

· Lower cost: The cost of a LIGHT system is expected to be in the region of US$40m vs. US$160-200m for those using cyclotrons or synchrotrons, which will support up to three fully equipped treatment rooms;

· Precision: The beam energy from a LIGHT machine can be varied during therapy, allowing the beam to more accurately target cancer cells and spare healthy tissues;

· Compact: LIGHT will be smaller and materially lighter than conventional proton therapy solutions, significantly reducing the size and construction cost of the facility required to house it;

· Modular: LIGHT will be modular in nature providing healthcare operators greater freedom to customise their service to particular treatments, i.e. providing lower energy accelerators for eye, head or neck treatments, and having the flexibility to increase this to higher energies by adding modules for other tumour types;

· Lower shielding requirements: LIGHT will require less shielding than conventional proton therapy solutions.

Use of proceeds

The funds raised from the Placing and Subscription will be used to support the development of a complete LIGHT accelerator and will allow the Company to carry out the first installation of a LIGHT machine at SUNY Upstate Medical University in Syracuse, New York.

In addition to the agreements to deliver the LIGHT system to hospitals such as the Upstate University hospital, Spire or BMI, to name a few, the Company is currently in discussions with a number of other hospitals and healthcare organisations. Furthermore, Advanced Oncotherapy has made various applications for grant funding in the US and Europe which will help support its working capital needs until it is able to generate a positive cash flow.

As part of its strategy to deliver long-term value to its shareholders and focus on excellence in execution, the Board of the Company will also be considering strategic alternatives for Oncotherapy Resources Limited which provides a fully managed radiotherapy service to the NHS and private sector for the treatment of early stage breast cancer, colorectal cancer and veterinary cancers.

Fundraising Statistics

Total Voting Rights

Following Admission, the Company's enlarged issued share capital will comprise 1,015,103,424 ordinary shares, with voting rights. The Company does not hold any ordinary shares in treasury. Therefore the total number of ordinary shares in the Company with voting rights will be 1,015,103,424. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Conditionality

The Fundraising is conditional upon, inter alia, Admission becoming effective and the Placing Agreement between the Company and Westhouse Securities becoming unconditional and not being terminated in accordance with its terms.