Interim Results

RNS Number : 2550B

Advanced Oncotherapy PLC

30 September 2022

 

30 September 2022

ADVANCED ONCOTHERAPY PLC

("Advanced Oncotherapy" or the "Company")

Interim Results

Company's first commercial LIGHT accelerator fully operational; achieving a clinically significant 230 MeV beam, post period

Achievement of a key validating and de-risking corporate milestone

Advanced Oncotherapy (AIM:AVO), the developer of LIGHT, the next-generation proton therapy system for cancer treatment, today announces its unaudited results for the six months ended 30 June 2022.

Key highlights (including post-period):

· Continued to progress the Company's first commercial LIGHT accelerator to be fully operational. Importantly, post-period, as announced on 27 September 2022, a 230 megaelectron volts ("MeV") beam was achieved, a significant milestone and de-risking event for the Company:

o  230 MeV is the energy required to treat deep-seated tumours at a depth of 32cm;

o  Completed the construction of the p atient treatment room and installation of the LIGHT Patient Positioning System ("PPS"), including a state-of-the-art robotic chair, with CT scanner and X-Ray panels;

o  Collected further data on the LIGHT System, including its stability, intensity and spot size and confirming the advantages of LIGHT; data included in technical files for certification purposes;

§ A Q-submission process has been agreed with the US Food and Drug Administration ("FDA") for a potential 510(k) regulatory approval for the LIGHT system, allowing the Company to submit bundled modules of the 510(k) submission for feedback, rather than a single submission at the end of development.

o  The Company and University Hospitals Birmingham NHS Foundation Trust ("UHB") will collaborate to start the commissioning process for the treatment room following a pathway used by all proton therapy machines as part of the certification process.

· Research published in the International Journal of Medical Physics and Practice showcased the potential superiority of the LIGHT system over other existing proton therapy systems in the delivery of FLASH radiotherapy, further differentiating the Company's LIGHT machine from cyclotron-based proton therapy systems.

· During the period and post period, the Company raised £13.4 million through share placings to support ongoing business activities.

Nicolas Serandour, CEO of Advanced Oncotherapy, said:

"Over the period, the Company made significant strides towards the delivery of its first fully operational LIGHT system. Importantly, post-period, in September 2022, we announced that our LIGHT system accelerator had successfully generated a proton beam at 230MeV, the energy required to treat deep-seated tumours at a depth of 32cm. This is the most significant milestone in the Company's history, validating and de-risking our first commercial LIGHT machine. As a result of our efforts, we can now move towards the next stage of this project which will use a pathway followed by all proton therapy systems for the certification process for the treatment of patients. We anticipate that the first patient will be treated at the facility in Daresbury in the second half of 2023. Additionally, we expect the recent validation of the Company's technology will accelerate the signing of further commercial contracts with new customers and the advancement of our existing partnership arrangements.

"We would like to thank both our employees and partners, for their continued hard-work and dedication, and our shareholders for their ongoing support and patience. The generation of a 230 MeV proton beam with our unique technology has been a long process. However, with this key milestone achieved we believe the Company is well positioned to achieve its vision to defeat cancer through democratising proton therapy"

Advanced Oncotherapy plc	www.avoplc.com
Dr. Michael Sinclair, Executive Chairman	Tel: [phone]
Nicolas Serandour, CEO
Allenby Capital Limited (Nomad and Joint Broker)
Nick Athanas / Piers Shimwell (Corporate Finance) Amrit Nahal / Matt Butlin (Sales and Corporate Broking)	Tel: [phone]
SI Capital Ltd (Joint Broker)
Nick Emerson	Tel: [phone]
Jon Levinson	Tel: [phone]
FTI Consulting  (Financial PR & IR)	[e-mail]
Simon Conway / Rob Winder	Tel: [phone]

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 provide an update to shareholders with our report for the six months ended 30 June 2022 and I am delighted to highlight the progress the Company has made in both the period under review and post-period. In particular, as announced by the Company on 27 September 2022, the Company is delighted to have completed its first operational LIGHT system accelerator with a 230MeV beam, the maximum energy required for treating all tumours regardless of their depth in the body - the most significant milestone in the Company's history. We believe that over the longer term, LIGHT generated proton beam therapy could become the preferred modality for external beam radiotherapy and in particular for difficult-to-treat tumours, eclipsing the current use of conventional X-ray photon beam radiotherapy, due to its versatility, precision and cost.

Technology development update

The Company's LIGHT accelerator became fully operational in the evening of 26 September 2022, at its assembly site in Daresbury, Cheshire, UK, generating proton beams at 230 megaelectron volts ("MeV"), the energy required to treat deep-seated tumours at a depth of 32cm. This milestone was reached post-period and reflects the strong progress made by the Company in the first half of the year on the installation, assembly and commissioning of all the high-precision accelerating structures, which included (i) the proton source; (ii) the radio-frequency quadrupole; (iii) the four side-coupled drift tube linacs and; (iv) the fifteen coupled cavity linacs. The Company also successfully optimised its machine during the period, showing that it can deliver a proton beam with a beam size smaller than 1 mm and a beam current of about 50 μA, equivalent to 500 million protons per pulse.

Achieving the 230 MeV beam was a breakthrough for Advanced Oncotherapy and the milestone validates and de-risks the Company's first commercial LIGHT machine. It also represents the significant work undertaken by Advanced Oncotherapy in a variety of complex scientific disciplines (including but not limited to the fields of physics, engineering and medicine) resulting in the development of a novel proton therapy system, which the Board believe is the first commercial type of its kind.

Alongside the technical and scientific work undertaken in the first half and post-period, the Company has made good progress in preparing data that will be submitted to the US Food and Drug Administration ("FDA") on the stability, intensity and spot size of the proton beam produced by its LIGHT system. These new data sets demonstrate that the measurements of the quality of the beam match those from computer simulations and match our internal expectations. We continue to work with the University Hospitals Birmingham NHS Foundation Trust ("UHB") and Clarivate, a global analytics company, to define the clinical protocol for treating the first patients. The first patient is anticipated to be treated in the second half of next year and, as we move closer towards this significant milestone, we expect to be able to provide a further update on developments over the next period. The FDA approval process will continue to be run in parallel with the milestones listed in the outlook section

As well as operational progress, scientific research in proton therapy remains just as important to our strategy and, in May 2022, we announced the publication of two papers showcasing the potential superiority of the LIGHT system over other existing proton therapy systems in the delivery of FLASH. In the first paper, entitled "Ultra-high dose rate radiation production and delivery systems intended for FLASH"¹, Jonathan Farr, our Chief Clinical Officer, and his co-authors, showed that the Company's LIGHT system is ideally positioned to deliver FLASH, as it is a 'pulsed system' sending out up to 500 million protons in each burst, at 200 times per second. The number of particles per pulse has been noted as a critical FLASH parameter for other (electron) systems, and now is becoming available from LIGHT for proton FLASH treatments. In the second paper, entitled "Treatment planning for FLASH radiotherapy: General aspects and applications to proton beams"², Anna Kolano, a Medical Physicist at Advanced Oncotherapy, and her co-authors, highlighted how FLASH could be applied to the LIGHT system for patients requiring the treatment. FLASH proton therapy is currently administered clinically with "Shoot-Through FLASH Beams", analogous to X-rays, because legacy proton systems (cyclotrons) require thick physical beam absorbers to achieve the lower energies required for patient treatment. By contrast, the LIGHT system, which can electronically adjust energy levels in the beam, is designed to deliver FLASH treatments anywhere in the human body. Hence, the LIGHT FLASH plan for "Conformal Scanned FLASH Beams" is conceptually superior to the Shoot-Through method.

Commercial update

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. Over the period, the Company continued to make progress with its commercial pipeline and is exploring additional opportunities for the sale or lease of LIGHT machines to healthcare providers.

As previously announced in June 2021, the Company signed a letter of intent with Saba Partners SA for the proposed purchase of a three-treatment room LIGHT system in Switzerland. The Company is working to obtain the applicable CE marking clearances and is working with Saba Partners to put in place a binding agreement and finalise the legal documentation. This is in addition to the agreement entered into in February 2020 by the Company with the Mediterranean Hospital in Cyprus for the installation of a three-treatment room system in the Mediterranean Hospital.

The Company is also party to two other partnership agreements. A memorandum of understanding with The London Clinic, whereby the London Clinic will operate Advanced Oncotherapy's first commercial LIGHT facility on Harley Street in London, was announced in February 2020. This followed the two-year collaborative research study announced in December 2019 with Cleveland Clinic. The Company continues working closely with these two institutions.

The Company believes the LIGHT machine will make proton beam therapy more affordable and accessible as it has been designed to minimise the costs of setting up and running a proton therapy centre while maximising patient throughput. The system is relatively smaller than traditional cyclotron-based proton therapy machines, is moveable and can be easily installed directly into clinical facilities. There are only 114 proton beam therapy centres globally, meaning that only an estimated 87,000 cancer patients can be treated a year. The cost to cover patient treatment is unsustainable for healthcare systems and is often out of reach for individual patients. The Company believes that in the next twenty years the industry will need more than 10,000 additional proton therapy treatment rooms to meet demand, representing a 50-fold increase over the current global capacity.

The proton therapy market has seen accelerated growth over the past few years in both the number of centres in development and the number of patients being treated. With the introduction of the Company's first operational LIGHT system to the market, the Board expects the Company's commercial pipeline to accelerate as a result of this significant milestone.

Equity fundraises

During the period, the Company raised £5.38 million, which was complemented by a further £8.04 million raised, post period, between 01 July 2022 and 19 August 2022. Proceeds raised through these fundraisings strengthened the Company's balance sheet ahead of the 230MeV milestone being met and contributed towards progressing the assembly, documentation, verification and validation activities associated with our first operational LIGHT system.

Financials

For the period under review, the Company recorded a loss of £15.9 million in the six months to 30 June 2022 (H1 2021: £12.8 million), with net assets increasing to £60.5 million over the same period (H1 2021: £36.3 million). Cash and cash equivalents at 30 June 2022 were £2.5 million (as at 30 June 2021: £725k).

Outlook

With the Company's LIGHT system accelerator now fully operational, the Company and UHB will collaborate to start the commissioning process for the treatment room, with the aim of treating the first patient in H2 2023. This will use a pathway followed by all proton therapy systems as part of the certification process and the Board believes this milestone has significantly de-risked the Company's LIGHT system. Upcoming development milestones to be achieved in collaboration with UHB prior to the first patient being treated include:

i.  patient positioning and imaging system calibration;

ii.  approval of the patient treatment room in Daresbury in accordance with UHB guidance and requirements;

iii.  UK Health Research Authority ethical approval; and

iv.  end-to-end clinical test acceptance.

We are confident that there will be increased commercial demand for the LIGHT system and, in line with our strategy of democratising proton beam therapy, we will continue to develop our commercial pipeline and progress existing discussions across the globe for the sale or lease of future LIGHT machines. The Company has already signed a lessor financing partnership with Kineo Finance, where it is intended that Kineo will acquire LIGHT systems from the Company and lease them to customers that are commissioning the LIGHT system.

On behalf of the Board and the rest of the staff, I would like to thank all our shareholders for their continued support. I look forward to updating the market on further progress in due course as Advanced Oncotherapy continues on its journey to democratise proton therapy across the globe.

Dr. Michael Sinclair

Executive Chairman

30 September 2022

1- Farr, J, Grilj, V, Malka, V, Sudharsan, S, Schippers, M. Ultra-High dose rate radiation production and delivery systems intended for FLASH. Med Phys 2022; 00 1- 37. https://doi.org/10.1002/mp.15659

2- Schwarz, M, Traneus, E, Safai, S, Kolano, A, van de Water, S. Treatment planning for FLASH radiotherapy: General aspects and applications to proton beams. Med Phys. 2022; 49: 2861- 2874. https://doi.org/10.1002/mp.15579

Consolidated statement of profit or loss and other comprehensive income Financials in £	Unaudited	Unaudited	Audited
	6 months to	6 months to	year to
	30-Jun-22	30-Jun-21	31-Dec-21
Revenue	-	-	-
Cost of sales	-	-	-
Gross profit	-	-	-
Administrative expenses	(13,535,664)	(11,049,439)	(23,736,754)
Operating loss	(13,535,664)	(11,049,439)	(23,736,754)
Finance income	-	-	-
Finance costs	(2,417,188)	(1,714,047)	(5,755,981)
Loss on ordinary activities before taxation	(15,952,852)	(12,763,486)	(29,492,735)
Taxation	77,370	-	-
Loss after taxation	(15,875,482)	(12,763,486)	(29,492,735)
Loss for the period
Equity of shareholders of the parent company	(15,875,482)	(12,763,486)	(29,492,735)
Other comprehensive income
Items that will or may be subsequently reclassified to profit or loss:
Exchange differences on translation of foreign operations	2,766,348	(2,294,818)	(772,061)
Total comprehensive loss for the period net of tax	(13,109,134)	(15,058,304)	(30,264,796)
Total comprehensive loss attributable to:
Equity of shareholders of the parent company	(13,109,134)	(15,058,304)	(30,264,796)
Non-controlling interests	-	-	-
	(13,109,134)	(15,058,304)	(30,264,796)

Consolidated statement of financial position- Financials in £		Unaudited	Unaudited	Audited
		6 months to	6 months to	Year to
		30-Jun-22	30-Jun-21	31-Dec-21
Non-current assets
Intangible assets		75,480,905	58,612,197	68,577,370
Property, plant and equipment		7,990,168	7,435,137	7,871,939
Right of use assets		35,970,599	32,790,930	33,183,516
Trade and other receivables		950,898	917,804	927,414
		120,392,570	99,756,068	110,560,239
Current Assets
Inventories		29,425,527	24,125,861	25,826,665
Trade and other receivables		847,711	1,550,735	643,319
Cash and cash equivalents		2,507,046	724,696	4,260,490
		32,780,284	26,401,292	30,730,474
Total assets		153,172,854	126,157,360	141,290,713
Current liabilities
Trade and other payables		(11,532,608)	(10,530,997)	(5,347,169)
Lease liabilities		(2,717,403)	(1,366,801)	(745,315)
Borrowings		(11,704,233)	(16,996,691)	(10,025,497)
		(25,954,244)	(28,894,489)	(16,117,981)
Non-current liabilities
Licence Fee Received		(16,500,000)	(16,500,000)	(16,500,000)
Lease liabilities		(33,040,406)	(31,271,501)	(32,201,824)
Borrowings		(12,280,896)	(9,172,782)	(10,382,520)
Embedded derivative		(4,875,269)	(4,000,080)	(4,718,960)
		(66,696,571)	(60,944,363)	(63,803,304)
Total liabilities		(92,650,815)	(89,838,852)	(79,921,284)
Net assets		60,522,039	36,318,508	61,369,428
Equity
Share capital		118,338,053	87,458,683	112,903,053
Share premium reserve		67,498,509	63,414,218	71,087,838
Advanced share receipts		5,207,500	-	-
Share option reserve		20,773,150	8,819,914	15,959,337
Reverse acquisition reserve		11,038,204	11,038,204	11,038,204
Exchange movements reserve		4,886,473	597,368	2,120,125
Accumulated losses		(167,219,850)	(135,009,879)	(151,739,129)
Equity attributable to shareholders of the Parent Company		60,522,039	36,318,508	61,369,428
Total equity funds		60,522,039	36,318,508	61,369,428

Consolidated statement of changes in equity
Six months to 30 June 2022 Financials in £
	Share capital	Share premium reserve	Share option reserve	Advanced share receipts
Balance at 01 January 2021	83,359,894	61,442,782	7,675,332	-
Loss for the year	-	-	-	-
other comprehensive income exchange movement	-	-	-	-
Total comprehensive Income	-	-	-	-
Shares Issued in the period	29,543,159	16,514,884	-	-
Expenses deducted from share premium	-	(1,194,556)	-	-
Share based payments	-	(5,675,272)	5,675,272	-
Lapsed options	-	-	-	-
Lapsed warrants	-	-	(257,045)	-
Share based payments				-
- Share option charge	-	-	2,421,599	-
- Share warrants charge	-	-	206,859	-
Balance at 31 December 2021	112,903,053	71,087,838	15,722,018	-
	Reverse acquisition reserve	Exchange movement reserve	Accumulated losses	Total equity share holders interest
Balance at 01 January 2021	11,038,204	2,892,186	(122,266,120)	44,142,278
Loss for the year	-	-	(29,492,735)	(29,492,735)
other comprehensive income exchange movement	-	(772,061)	-	(772,061)
Total comprehensive Income	-	(772,061)	(29,492,735)	(30,264,796)
Shares Issued in the period	-	-	-	46,058,043
Expenses deducted from share premium	-	-	-	(1,194,556)
Lapsed options	-	-	-	-
Lapsed warrants	-	-	257,045	-
Share based payments
- Share option charge	-	-	-	2,421,599
- Share warrants charge	-	-	-	206,859
Balance at 31 December 2021	11,038,204	2,120,125	(151,501,810)	61,369,429
	Share capital	Share premium reserve	Share option reserve	Advanced share receipts
Balance at 01 January 2022	112,903,053	71,087,838	15,722,018	-
Loss for the year	-	-	-	-
other comprehensive income exchange movement	-	-	-	-
Total comprehensive Income	-	-	-	-
Shares Issued in the period	5,435,000	-	-	-
Expenses deducted from share premium	-	(3,589,329)	3,536,229	-
Receipt of funds	-	-	-	5,207,500
Lapsed options	-	-	-	-
Lapsed warrants	-	-	(157,442)	-
Share based payments				-
- Share option charge	-	-	731,769
- Share warrants charge	-	-	940,577
Group provision for minority interest	-	-	-	-
Balance at 30 June 2022	118,338,053	67,498,509	20,773,150	5,207,500
	Reverse acquisition reserve	Exchange movement reserve	Accumulated losses	Equity share holders interest
Balance at 01 January 2022	11,038,204	2,120,125	(151,501,810)	61,369,428
Loss for the year	-	-	(15,875,482)	(15,875,482)
other comprehensive income exchange movement	-	2,766,348	-	2,766,348
Total comprehensive Income	-	2,766,348	(15,875,482)	(13,109,135)
Shares Issued in the period	-	-	-	5,435,000
Expenses deducted from share premium	-	-	-	(53,100)
Receipt of funds	-	-		5,207,500
Lapsed options	-	-		-
Lapsed warrants	-	-	157,442	-
Share based payments				-
- Share option charge	-	-	-	731,769
- Share warrants charge	-	-	-	940,577
Group provision for minority interest	-	-		-
Balance at 30 June 2022	11,038,204	4,886,473	(167,219,850)	60,522,039

Consolidated statement of cash flows- Financials in £	Unaudited	Unaudited	Audited
	6 months to	6 months to	year to
	30-Jun-22	30-Jun-21	31-Dec-21
	Group	Group	Group
Cash flow from operating activities
Loss after taxation	(15,875,482)	(12,763,486)	(29,492,735)
Adjustments to cash flows from non-cash items
Depreciation of property, plant and equipment	602,632	472,561	1,044,530
Amortisation of right of use assets	672,073	641,707	1,294,725
Finance income	-	-	-
Finance costs	2,109,978	1,293,385	3,603,480
Taxation	-	-	-
Share based payments	1,672,346	1,164,308	2,628,458
Foreign exchange	921,246	(2,472,666)	3,272,736
Cash flows from operations before changes in working capital	(9,897,208)	(11,664,191)	(17,648,807)
Changes in inventories	(3,598,862)	(1,987,538)	(9,188,342)
Change in trade and other receivables	(305,246)	351,519	1,249,325
Change in trade and other payables	6,391,081	3,047,397	(3,982,181)
Cash (used) / generated from operations	(7,410,235)	(10,252,813)	(29,570,005)
Corporation Tax Receipt	77,370	-	-
Cash flows from operating activities	(7,332,865)	(10,252,813)	(29,570,005)
Cash flows from investing activities:
Other income	-	-	-
Purchase of buildings plant and equipment	(760,521)	(1,196,921)	(2,222,647)
Capital expenditure on intangible assets	(4,389,748)	(1,742,782)	(7,072,083)
Cash flows from investment activities	(5,150,269)	(2,939,703)	(9,294,730)
Cash flows from financing activities:
Proceeds from issue of ordinary shares	5,435,000	6,385,012	43,564,416
Costs of share issue	(53,100)	(314,787)	1,299,072
Advance share receipts	5,207,500	-	-
Interest paid	(110,722)	(45,750)	(294,494)
Long term loan receipts	-	-	-
Lease payments	(1,286,805)	(1,363,460)	(3,781,009)
Short term loan receipts	1,500,000	6,957,375	7,850,000
Short term loan repayments	-		(7,850,000)
Cash flows from financing activities	10,691,874	11,618,390	40,787,985
Increase/(decrease) in cash and cash equivalents	(1,791,260)	(1,574,127)	1,923,249
Exchange gain on cash and cash equivalents	37,816	(18,628)	19,789
Cash and cash equivalents at the beginning of the period	4,260,490	2,317,451	2,317,451
Cash and cash equivalents at the end of the period	2,507,046	724,696	4,260,490

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 2022, and will be adopted in the 2022 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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