TIDMAVO
RNS Number : 3705A
Advanced Oncotherapy PLC
29 September 2020
29 September 2020
ADVANCED ONCOTHERAPY PLC
("Advanced Oncotherapy" or the "Company")
Interim Results
Continued progress towards commissioning of first complete LIGHT
System
Advanced Oncotherapy (AIM: AVO), the developer of
next-generation proton therapy systems for cancer treatment, today
announces its unaudited results for the six months ended 30 June
2020.
Key highlights:
-- Strong advancement towards completing the first operational
LIGHT system capable of accelerating protons at 230 MeV in 2021
-- Delivered all the high-precision accelerating structures for
the LIGHT system to the Daresbury assembly site; manufactured
hardware required for the patient positioning system, which has
subsequently passed factory acceptance testing; timely delivery of
all technical files for the certification process
-- Development of the infrastructure in Daresbury to support the assembly of future machines
-- Signed multiple commercial partnership agreements with
external stakeholders including The London Clinic, The
Mediterranean Hospital of Limassol and University Hospital
Birmingham NHS Foundation Trust
-- Successful equity fundraise of GBP14.9 million, before
expenses, from new and existing investors; two financing agreements
secured with VDL and Nerano Pharma, giving the Company access to up
to GBP42 million of additional funding; post-period, initial draw
down of $10 million from interest-bearing secured convertible
facility with Nerano Pharma
-- Post-period, announced today the appointment of Lori Cross as
a Non-Executive Director on the Board
Nicolas Serandour, CEO of Advanced Oncotherapy, said:
"We are delighted with the progress achieved over the past six
months despite the impact that COVID-19 has had on our business. As
previously announced, we have added more focus on and made
excellent progress with the documentation and software development.
During the half year under review, we also signed a number of
significant collaborations with partners for further LIGHT systems
to be constructed at world leading hospitals, and we look forward
to updating the market in due course on the progress of these
agreements.
"We are pleased to have recently resumed activities at the
Daresbury site, and are expecting to be in line with our
operational plan for completion of the first LIGHT system in 2021.
We will be holding a virtual Investor Day in October when we will
update the market on our patient-centric business model, the
broader strategy and operational deliverables for the next year,
including our LIGHT system being fully conditioned and generating a
full-energy beam that is necessary to treat patients with our
clinical partner, the University Hospital Birmingham NHS Foundation
Trust."
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) Tel: +44 (0) 20 3328 5656
Amrit Nahal / Matt Butlin (Sales & Broking)
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
Notes for Editors
About Advanced Oncotherapy Plc www.avoplc.com
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 2020 and to provide a review of the continued
progress the Company has made over the period towards commissioning
its first complete LIGHT system. The Company has successfully
navigated the issues presented as a result of COVID-19 and whilst
some uncertainty remains regarding the future impact, we have used
this opportunity to progress our documentation workstreams and
continue to advance our LIGHT system.
Technology development update
The LIGHT system includes innovative linear accelerators which
are integrated with a fully functional treatment room system and
operated through a suite of software components. Whilst the proton
therapy market is still characterised by a highly unmet medical
need due to rising population, t he LIGHT system is designed to
have clear advantages over current proton therapy technologies in
terms of both cost and clinical effectiveness.
In June, we announced that all of the high-precision
accelerating structures, which include: (i) the proton source; (ii)
the radio-frequency quadrupole; (iii) the side-coupled drift tube
linacs and; (iv) the coupled cavity linacs, had been delivered to
the Daresbury assembly site and the hardware required for the
patient positioning system ("PPS") had been manufactured and passed
factory acceptance testing.
In September, we announced a further technical update on the
development of the LIGHT system which has been optimised to reduce
the start-up time for future LIGHT systems. We have continued to
develop the software necessary to operate the LIGHT system and have
now received upgraded versions of the oncology information system
and the treatment session manager. Additionally, the upgraded
version of the treatment planning system ("TPS") software has been
installed and is operational for LIGHT proton therapy treatments
using the PPS.
As a result of the COVID-19 pandemic and subsequent restrictions
put in place, we have focused on and made strong progress to
enhance our documentation workstreams and software development.
Working with P-Cure, the supplier of the PPS, the Company enhanced
key documentation to ensure the efficient installation of future
systems, enabling quicker system start-up and commissioning. In
March, the Company successfully transitioned to remote working and
established contingency plans to support business continuity.
During the UK lockdown earlier in the year, the Daresbury
Laboratory site had to be temporarily closed and our staff at
Daresbury were placed on furlough supported by the UK government
scheme. Since then, our development activities at Daresbury have
resumed and are operational whilst abiding by social-distancing
measures.
The site preparation at Daresbury is now ready to support the
ultra-high vacuum tests and the high-voltage conditioning of the
accelerating structures, to (i) prepare them for use in delivering
the proton beams, and (ii) assemble additional LIGHT systems based
on the production schedules set by the Company. We have
successfully installed the first beam diagnostic test benches at
Daresbury and the powering sources for the RFQ (inductive output
tubes) were successfully tested and delivered to Daresbury during
the period under review. At the Daresbury site, the building
requirements and building interfaces for the patient treatment area
have been finalised and we have optimised our machine installation
process which will reduce the start-up time for future LIGHT
systems. Our work on the safety systems to connect the patient
treatment area with the LIGHT system are ongoing.
Overall, we believe strong progress has been made at our
Daresbury site over the period to support the timely delivery of
all technical files for the certification process of the LIGHT
system.
Partnerships update
Over the period, we were pleased to have signed multiple
commercial partnerships agreements, in line with our continuous
efforts to fast-forward our growth and the roll-out of the LIGHT
system. Our partnership with University Hospital Birmingham NHS
Foundation Trust ("UHB") is aimed at treating patients in Daresbury
in the context of our certification plan. The partnership also
envisages the installation of a machine in Birmingham at Queen
Elizabeth Hospital Birmingham, which is part of UHB. UHB is now
preparing to install LIGHT beam data into its TPSs and we are
cooperating to plan for the initial Daresbury patient
indications.
During the period, we also signed a partnership with The London
Clinic to operate the Harley Street proton therapy facility, with
the Company intending to lease part of The London Clinic's premises
to install a second treatment room. The London Clinic is one of the
UK's largest private charitable hospitals; it has a pioneering
cancer treatment centre in its Duchess of Devonshire wing that is
at the forefront of advancing healthcare through the adoption of
new technologies. As part of its charitable purpose, The London
Clinic, whose recent collaboration with the Cleveland Clinic should
allow more cancer patients to be treated, also offers free of
charge survivorship programmes for cancer patients. Through our
partnership, Advanced Oncotherapy will receive a share of the
profit generated by the centre.
In addition, we announced in February the agreement to purchase
a LIGHT system by The Mediterranean Hospital of Limassol, whereby
the Company will receive EUR50 million and a share of profits from
clinical services. The Mediterranean Hospital of Limassol provides
high-quality medical services to not only citizens of Cyprus but
also to tourists seeking medical treatment. Under the terms of the
agreement, the installation of a three-treatment room system is due
to commence before the end of 2023, subject to customary conditions
and documentation being in place. Discussions with planners are
ongoing.
Following the announcement of our research collaboration with
the Cleveland Clinic in December 2019, the Cleveland Clinic has now
installed the LIGHT TPS software and commenced a two-year study to
evaluate the target conformity of proton mini-beams in comparison
with X-ray stereotactic body radiation therapy and stereotactic
radiosurgery.
Equity fundraise and strategic funding agreements
Despite the challenging market conditions created by COVID-19,
we successfully completed an equity fundraise of c.GBP14.9 million
(before expenses) in May, from new and existing investors at a
price of 25 pence per share. We were delighted to complete this
fundraise with the proceeds being utilised to progress the assembly
of our LIGHT system, and our verification and validation
documentation needed for regulatory approval.
In June, we entered into an unsecured debt facility agreement
with existing supplier VDL ETG Precision BV, a subsidiary of VDL
Groep BV, for EUR20.0 million, and also entered into an
interest-bearing secured convertible facility with Nerano Pharma, a
financing vehicle wholly owned by Seamus Mulligan, an existing
shareholder in the Company, for up to $30 million. Details on the
key terms of the facilities are contained within the announcement
released on 29 June 2020. Post period, the Company announced in
August that it had drawn down an initial $10 million from the
interest-bearing secured convertible facility with Nerano
Pharma.
The mix of equity and debt financing arrangements secured during
the period provides the Company with greater financial flexibility
and allows us to further the development of our LIGHT system and
advance our pipeline of construction opportunities.
Financials
The Company recorded a loss of GBP11.1 million in the six months
to 30 June 2020 (H1 2019: GBP11.2 million), with net assets
increasing to GBP49.6 million over the same period (H1 2019:
GBP37.4 million).
Cash and cash equivalents at 30 June 2020 were GBP5.7 million
(as at 30 June 2019: GBP3.6 million). The cash position does not
take into account the optionality and flexibility the Company has
gained through the additional facilities announced during the
period nor does the cash position at 30 June 2020 reflect the $10
million draw down made under the Nerano Pharma facility post period
end.
Board changes
As announced in June, we have streamlined the size of the Board
for corporate governance purposes and to ensure we have a more
agile and balanced Board to reflect the Company's strategy. As a
result, this led to the departure of Mr Gabriel Urwitz, Mr Peter
Sjöstrand, Mr Chunlin "Allen" Han, and Dr Yuelong Huang (all
Non-Executive Directors of the Company) at the Company's Annual
General Meeting in July 2020.
In addition, in the context of our vision to build a more
balanced and international business, we are delighted to today
welcome, Lori Cross, who will join the Board as a Non-Executive
Director with immediate effect. Lori is a successful business
executive with over 35 years of experience in transforming leading
global Medical Technology and Life Sciences organisations and
commercialising disruptive healthcare business models.
Following these changes, the Board has decreased from 12 members
to nine members and will comprise of three Executive Directors and
six Non-Executive Directors.
Innovating and Sustainability
As a Company, we are at the forefront of innovation and we
recognise that we have a social responsibility. While all
businesses need to generate value for their shareholders, a
responsible business should also have a clear social purpose. At
Advanced Oncotherapy, our business model is focused on patients'
needs and it seeks to ensure that proton therapy is accessible by
the many and not the few. For instance, our LIGHT systems will look
to be built in the heart of cities to ensure patient accessibility.
Facilities where our customers are treating patients have a lower
environmental footprint and a reduced use of transportation of
large equipment in comparison to what is necessary with traditional
proton therapy systems during construction.
Outlook
We have made notable progress at our Daresbury site over the
first half of the year and have made all the necessary steps to
prepare the hardware required for the PPS. The ongoing work at the
site to optimise our machine installation process will reduce the
start-up time for future LIGHT systems and support the assembly of
future machines through our commercial contracts. Our equity
fundraise and strategic financing agreements announced during the
period will be key to continuing the development of the LIGHT
system and advancing our pipeline of construction opportunities. In
line with our business model, we have signed a number of commercial
partnerships over the period and will continue to seek further
opportunities for partnerships and future purchase orders of the
LIGHT system in due course.
The performance and progress made over the period despite the
disruption and challenges created by COVID-19, is a testament to
the hard work and dedication of all our employees and partners. We
are confident that our colleagues have the skills and commitment
required to adapt to whatever the remainder of 2020 has in store
and to continue to deliver for our customers, stakeholders and
shareholders.
Looking ahead, 2021 is set to be an important year for us with
our goal of having the first fully operational LIGHT system
generating a full energy beam and the commencement of treating
patients with our clinical partner. We are confident about future
orders of the LIGHT system and expect further acceleration of our
commercial pipeline when our machine is fully operational, taking
advantage of the unique exemption in proton therapy which provides
the opportunity for manufacturers to sell machines prior to
certification.
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 with progress in due course.
Dr. Michael Sinclair
Executive Chairman
29 September 2020
Consolidated statement of profit or loss
and other comprehensive income Unaudited Unaudited Audited
6 months to 6 months to year to
30-Jun-20 30-Jun-19 31-Dec-19
Revenue - - -
Cost of sales - - -
Gross loss - - -
Administrative expenses (9,785,032) (11,030,123) (20,659,460)
Operating loss (9,785,032) (11,030,123) (20,659,460)
Finance income 3,350 2,921 15,572
Finance costs (2,403,223) (588,638) (1,233,545)
Loss on ordinary activities before taxation (12,184,905) (11,615,840) (21,877,433)
Taxation - 375,728 1,082,827
Loss after taxation (12,184,905) (11,240,112) (20,794,606)
Loss for the period
Equity of shareholders of the parent company (12,184,905) (11,240,112) (20,794,606)
Non-controlling interests - - -
(12,184,905) (11,240,112) (20,794,606)
Other comprehensive income
Items that will or may be subsequently reclassified to profit or loss:
Exchange differences on translation of foreign operations 3,205,831 821,035 (462,413)
Total comprehensive loss for the period net of tax (8,979,074) (10,419,078) (21,257,019)
Total comprehensive loss attributable to:
Equity of shareholders of the parent company (8,979,074) (10,419,078) (21,257,019)
Non-controlling interests - - -
(8,979,074) (10,419,078) (21,257,019)
Consolidated statement of financial position Unaudited Unaudited Audited
6 months
to 6 months to Year to
30-Jun-20 30-Jun-19 31-Dec-19
Non-current assets
Intangible assets 54,615,037 45,061,007 49,183,428
Property, plant and equipment 5,989,439 5,457,764 6,002,500
Right of use assets 31,993,087 10,155,869 32,528,667
Trade and other receivables 944,395 699,941 914,938
93,541,958 61,374,582 88,629,533
Current assets
Inventories 18,799,153 11,681,528 15,048,228
Trade and other receivables 1,010,608 2,414,698 2,140,657
Corporation tax R&D refund - 685,764 1,768,591
Cash and cash equivalents 5,747,913 3,592,879 3,235,167
25,557,674 18,374,869 22,192,643
Total assets 119,099,632 79,749,451 110,822,176
Current liabilities
Trade and other payables (6,860,301) (4,961,920) (6,196,795)
Lease liabilities (630,616) (1,329,998) (279,106)
Borrowings (9,914,247) (2,230,000) -
(17,405,164) (8,521,918) (6,475,901)
Non-current liabilities
Licence Fee Received (16,500,000) (16,500,000) (16,500,000)
Lease liabilities (31,617,958) (7,944,167) (31,046,827)
Borrowings (4,000,000) (9,348,904) (13,864,384)
(52,117,958) (33,793,071) (61,411,211)
Total liabilities (69,523,122) (42,314,989) (67,887,112)
Net assets 49,576,510 37,434,462 42,935,064
Equity
Share capital 76,592,811 50,107,148 61,105,852
Share premium reserve 60,560,535 55,087,750 60,452,065
Share option reserve 6,341,155 8,011,287 7,853,803
Reverse acquisition reserve 11,038,204 11,038,204 11,038,204
Exchange movements reserve 4,195,357 2,272,975 989,526
Accumulated losses (109,151,552) (89,082,902) (98,504,386)
Equity attributable to shareholders of
the Parent Company 49,576,510 37,434,462 42,935,064
Total equity funds 49,576,510 37,434,462 42,935,064
Consolidated statement of changes in equity
Six months to 30 June 2020
Reverse Loan note
Share premium Share option acquisition conversion
Share capital reserve reserve reserve reserve
Balance at 01 January 2019 42,391,523 50,724,177 7,198,580 11,038,204 -
Loss for the year - - - - -
other comprehensive income
exchange movement - - - - -
Total comprehensive Income - - - - -
Shares Issued in the period 18,714,329 10,975,557 - - -
Expenses deducted from
share premium - (1,247,669) 81,414 - -
Lapsed options - - (1,014,117) - -
Lapsed warrants - - (85,028) - -
Share based payments
- Share option charge - - 872,539 - -
- Share warrants charge - - 800,415 - -
Balance at 31 December 2019 61,105,852 60,452,065 7,853,803 11,038,204 -
================================ ============= ============= ============ ============ ===========
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 15,486,959 596,353 - - -
Expenses deducted from
share premium - (487,883) - - -
Lapsed options - - (510,950) - -
Lapsed warrants - - (1,026,788) - -
Share based payments
- Share option charge - - 25,090 - -
- Share warrants charge - - - - -
Group provision for minority - - - - -
interest
Balance at 30 June 2020 76,592,811 60,560,535 6,341,155 11,038,204 -
================================ ============= ============= ============ ============ ===========
Consolidated statement of changes in equity (continued)
Six months to 30 June 2020
Exchange Equity share
movement Accumulated holders Non-Controlling
reserve losses interest interest Total
Balance at 01 January 2019 1,451,939 (78,808,925) 33,995,499 - 33,995,499
Loss for the year - (20,794,606) (20,794,606) - (20,794,606)
other comprehensive income
exchange movement (462,413) - (462,413) - (462,413)
Total comprehensive Income (462,413) (20,794,606) (21,257,019) - (21,257,019)
Shares Issued in the period - - 29,689,885 - 29,689,885
Expenses deducted from
share premium - - (1,166,255) - (1,166,255)
Lapsed options - 1,014,117 - - -
Lapsed warrants - 85,028 - - -
Share based payments
- Share option charge - - 872,539 - 872,539
- Share warrants charge - - 800,415 - 800,415
Balance at 31 December 2019 989,526 (98,504,386) 42,935,064 - 42,935,064
================================ ========= ============= ============ =============== ============
Balance at 01 January 2020 989,526 (98,504,386) 42,935,064 - 42,935,064
Loss for the year - (12,184,905) (12,184,905) - (12,184,905)
other comprehensive income
exchange movement 3,205,831 - 3,205,831 - 3,205,831
================================ ========= ============= ------------ =============== ------------
Total comprehensive Income 3,205,831 (12,184,905) (8,979,074) - (8,979,074)
Shares Issued in the period - - 16,083,313 - 16,083,313
Expenses deducted from
share premium - - (487,882) - (487,882)
Lapsed options - 510,950 - - -
Lapsed warrants - 1,026,788 - - -
Share based payments -
- Share option charge - - 25,090 - 25,090
- Share warrants charge - - - - -
Group provision for minority
interest - - - - -
Balance at 30 June 2020 4,195,357 (109,151,552) 49,576,510 - 49,576,510
================================ ========= ============= ============ =============== ============
Consolidated statement of cash
flows Unaudited Unaudited Audited
6 months to 6 months to year to
30-Jun-20 30-Jun-19 31-Dec-19
Group Group Group
Cash flow from operating activities
Loss after taxation (12,184,905) (11,240,112) (20,794,606)
Adjustments to cash flows from non-cash items
Depreciation of property, plant and equipment 467,618 850,408 730,544
Amortisation of right of use assets 679,205 1,294,951
Finance income (3,350) (2,921) (15,572)
Finance costs 1,262,101 336,734 1,233,545
Taxation 1,768,593 - (1,082,827)
Share based payments 859,060 1,835,882 2,005,987
Foreign exchange 578,526 154,491 (62,188)
Cash flows from operations before
changes in working capital (6,573,152) (8,065,518) (16,690,166)
Changes in inventories (3,750,925) (1,667,442) (5,034,142)
Change in trade and other receivables 1,100,592 (450,003) (151,080)
Change in trade and other payables 1,183,539 (325,737) (1,517,532)
Cash (used) / generated from operations (8,039,945) (10,508,700) (23,392,919)
Interest paid (148,822) (653) (160,677)
Corporation Tax Receipt - - -
=================================================
Cash flows from operating activities (8,188,768) (10,509,353) (23,553,596)
Cash flows from investing activities:
Interest received 3,350 2,921 15,572
Purchase of buildings plant and equipment (722,431) (1,911,442) (2,658,105)
Capital expenditure on intangible assets (2,569,850) (4,895,934) (9,344,556)
Proceeds from disposal of investment property - - 310,000
Cash flows from investment activities (3,288,931) (6,804,455) (11,677,088)
================================================= ============ ============ ============
Cash flows from financing activities:
Proceeds from issue of ordinary shares 10,319,521 11,514,958 25,692,058
Costs of share issue (287,683) (262,800) (665,125)
Long term loan receipts 4,729,620 9,300,000 13,800,000
Lease payments (801,800) (660,441) (1,369,231)
Short term loan payments - -
Cash flows from financing activities 13,959,658 19,891,717 37,457,702
================================================= ============ ============ ============
Increase/(decrease) in cash and cash equivalents 2,481,959 2,577,909 2,227,017
Exchange gain on cash and cash
equivalents 30,786 1,920 (4,903)
Cash and cash equivalents at the
beginning of the period 3,235,167 1,013,051 1,013,053
Cash and cash equivalents at the
end of the period 5,747,913 3,592,879 3,235,167
================================================= ============ ============ ============
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 2020, and will be adopted in the
2020 annual financial statements. There have been no new standards
or interpretations issued which are expected to have a material
impact on the financial statements.
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