AVO.L Regulatory News (AVO)

ADVANCED ONCOTHERAPY PLC

("Advanced Oncotherapy" or the "Company")

Operational Update

Advanced Oncotherapy (AIM: AVO), the developer of next-generation proton therapy systems for cancer treatment, provides additional clarification surrounding the update provided on 24 November 2016.

The Company is confident that the technical development of its first LIGHT system has been proceeding as expected, with the first proton beam fired through the initial low energy beam transport system in June. The Company is also advancing the arrangements with its manufacturing partner Thales to establish two custom designed series production lines for volume production. As announced in the update on 24 November 2016 following the granting of planning permission on 19 October 2016, building work at Harley Street is expected to start in early January 2017 and complete by March 2018.

The Company reiterates that despite the recent news that two Chinese customers are not now proceeding with LIGHT installations, the sale and purchase agreements between Sinophi Healthcare Limited and Advanced Oncotherapy for two machines remain in place. As part of these agreements Advanced Oncotherapy was due certain milestone payments, with the first payment received last year and recognised as customer order deposits received in the Report & Accounts for the year ended 31 December 2015 (see Note 21 to the Accounts). The purchase agreements also state that Sinophi will install the LIGHT system in the specific planned facility sites in Changchun or Huai'An or, if not, in alternative locations in China.

The Company notes the recent statement from Sinophi in relation to proton therapy projects in China. The Company believes that this differs from its own understanding of Sinophi's position outlined in a recent meeting with Advanced Oncotherapy management ahead of the announcement on 24 November. The Company is therefore seeking to meet with Sinophi to discuss its position as per the existing binding sale and purchase agreements.

The Board of Advanced Oncotherapy remains focused on delivering the technical development of its first LIGHT system and remains confident that the long-term commercial success of the LIGHT machine will follow. Since signing the lease for the Harley Street site in January 2015, Advanced Oncotherapy has maintained and emphasised that its first LIGHT installation would be in the UK. The principal reason is proximity to the Company's key Clinical and Scientific advisors and ready accessibility for its ADAM technical team based in Geneva and the Thales team based in Thonon, France. It was and remains the Company's view that this is unquestionably in the best interests of future installations (including China) and their safe and effective operation. Moreover, CE Mark regulatory approval that will be associated with this first integrated system tested for the UK installation is a prerequisite of regulatory approval in China. 

The Company believes that demand for its next-generation proton therapy system, which has numerous advantages over existing technology, will be strong and that additional commercial sales will be secured either through the existing Sinophi sale and purchase agreements and its distribution agreement in China, or through the conversion of existing letters of intent and other expressions of interest received by the Company for additional sites in the UK, the US, Europe or elsewhere in Asia. There are currently only 62 proton therapy centres worldwide and the number of treatment rooms available is expected to increase by over ten times by 2030.

Commenting, Nicolas Serandour, CEO of Advanced Oncotherapy, said: "On my appointment as CEO I stressed that I would be assessing and implementing new initiatives to allow us to sharpen our execution and commercial focus. On the execution side I'm pleased to say that the team remains resolutely focused on the successful technical development of our first LIGHT system and installation to our first site in Harley Street. At the same time, I am determined that our commercial expansion not only moves forward with our manufacturing partner, Thales, to produce a manufacturing site ready for full commercial roll-out, but also that we are always seen by the global Healthcare and Investment community to be adopting the highest possible ethical and professional standards in our work.

"Whilst this issue with Sinophi is disappointing it does not take away from the high demand we expect to see for our product and I am confident that as we further advance towards the completion of development and our first installation we will take advantage of the very considerable commercial opportunities available to us. We are aware of investors' concerns over a more detailed roadmap for the final stages of development and installation at our first site and I expect to be in a position to outline these to shareholders in Q1 2017."

About Advanced Oncotherapy Plc www.avoplc.com

Advanced Oncotherapy 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 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 greater precision and electronic control which is not achievable with older technologies.

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.

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.