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Advanced Oncotherapy on track to treat first LIGHT patient in 2020

Last updated: 10:15 26 Jun 2017 EDT, First published: 02:53 26 Jun 2017 EDT

cancer cells under a microscope
AVO says the LIGHT machines will be smaller, cheaper and more accurate than current technologies

Advanced Oncotherapy PLC (LON:AVO) has told investors it is on track to treat the first cancer patient using its next-generation LIGHT proton therapy system in 2020.

READ: Full-year report in full

The AIM-quoted company is currently developing the first machine and refining the technology that it will house.

AVO said the first system will be installed in its Harley Street facility, which is also in the construction process and scheduled to be ready for installation by the first half of 2019.

'2016 not without challenges'

“We made significant progress in 2016 in the commercialisation of our next-generation technology in the treatment of cancer - LIGHT, and while the year was not without its challenges, we have overcome these obstacles and look forward to successfully executing on the timelines that we outlined in March 2017,” said chief executive Nicolas Serandour.

“We should see further considerable progress in the company and are confident that we are in a position to deliver against our timetable for success.”

The ‘challenges’ that Serandour refers to are largely to do with AVO’s collaboration with Sinophi Healthcare which was supposed to install two LIGHT units in two Chinese hospitals but backed out of the agreement earlier this year.

Commercial opportunities

The company has moved on pretty fast though and has a “number of commercial opportunities” in the pipeline.

In the USA, it is in discussions with three different sites about installing LIGHT machines, while there are also potential projects in Spain in Italy. AVO is also in talks to build one of the systems at a new hospital in Birmingham.

“Based on this, we are confident that we will secure additional commercial sales in the near future,” said executive chairman Michael Sinclair.

Technical progress

From a technical standpoint, Advanced Onco achieved its first successful acceleration of the proton beam through the proton source and Radio Frequency Quadrupole (RFQ) earlier this year.

Sinclair said the significance of this first acceleration “cannot be overemphasized as this is, by far, the hardest part of the acceleration process” and carries the highest risk.

READ MORE: AVO making good progress on development of first LIGHT machine

Well-funded

The company raised £10mln in 2016 and had £34mln in shareholder funds as of the end of the period. It also arranged a £24mln financing deal with Metric Capital although it has yet to draw down from this.

Since the turn of the year AVO has signed a £26mln financing agreement with Bracknor, with the option of a further £26mln on the same terms.

Given the pre-revenue stage AVO is at, the firm reported an operating loss of £13.1mln for the 12 months to 31 December 2016, up from £8.5mln a year earlier.

Directors putting money where their mouth is

The AVO share price has struggled over the past year or so, but one group of people to take advantage of that weakness is the board.

AVO directors have been snapping up shares left, right and centre over the period, obviously trying to build their position while the stock is, in their opinion, undervalued.

Dr Nick Plowman, a non-executive director, has built up a 4.58% stake in recent months, investing hundreds of thousands of pounds into the company.

Fellow non-exec Enrico Vanni recently snapped up another 100,000 shares worth £27,500 to take his interest to 1.4%.

On top of this, during the £10mln fundraise in 2016, a group of directors and senior management subscribed for a combined total of 3.16mln shares.

From an investor’s point of view, it’s always good to see the top brass putting their money where their mouth is.

Experts brought on board

Some of those who have been plowing their own cash into Advanced Onco are relatively new to the board and bring with them a wealth of knowledge and experience.

For example, Cambridge-educated Plowman was appointed to the board back in February. He’s the UK’s senior radiologist and is also a senior physician at both St Bartholomew’s Hospital and Great Ormond Street Hospital.

Another industry veteran to join the senior management team was Dr Jonathan Farr, who is the group’s new senior president of medical physics.

Farr’s appointment came only this month but he has an extensive background in the cancer treatment space and he specialises in proton therapy.

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