TIDMAVO
RNS Number : 7418Z
Advanced Oncotherapy PLC
22 September 2015
ADVANCED ONCOTHERAPY PLC
("Advanced Oncotherapy" or the "Company")
Half Yearly Report
Advanced Oncotherapy (AIM: AVO), the developer of a next
generation proton therapy system for cancer treatment, announces
unaudited results for the six months ended 30 June 2015.
The Company remains on schedule in its technology development to
have its LIGHT proton therapy system ready for patient treatment in
London's renowned Harley Street in 2017. The LIGHT system
accelerates protons to the energy levels achieved in
first-generation proton therapy machines but in a system that is a
quarter of the size, requires less shielding and is manufactured at
a fraction of the cost. It also delivers proton beams with greater
precision and electronic control than older technologies.
H1 Highlights
-- Continued technical development of first LIGHT system in line with our plans
-- Oversubscribed placing of c.GBP21 million
-- Harley Street lease agreement for the UK's first proton therapy centre using the LIGHT System
-- First commercial sale of the LIGHT system in China to Sinophi Healthcare Limited ("Sinophi")
-- Distribution agreement with Sinophi covering China and Southeast Asia
-- Active conversations continue with other distribution parties and hospital groups
-- Disposal of Southampton non-core property for GBP290k
Post Period End Events & Key Milestones
-- Extension of lease agreement on Harley Street site to provide a larger treatment facility
-- Commencement of initial SCDTL testing and delivery of a further two CCL units
-- Framework agreement between China-Japan Union Hospital of Jilin University and Sinophi
-- Milestone payment from Sinophi received
Sanjeev Pandya, CEO of Advanced Oncotherapy, said: "I am pleased
with the progress that we have made in the first half of the year.
We have established a solid platform from which we can deliver our
first LIGHT machine: our financing is secured, we are on track with
our technical development, and have created a top-class integration
team to work with potential operators to ensure the smooth
installation of the first LIGHT machine on our Harley Street
site."
For further information contact:
Advanced Oncotherapy Plc www.avoplc.com
Sanjeev Pandya, CEO Tel: +44 20 3617 8728
Nicolas Serandour, CFO
Westhouse Securities (Nomad & Tel: +44 20 7601 6100
Joint Broker)
Antonio Bossi / David Coaten
Beaufort Securities (Joint Broker) Tel: +44 20 7382 8300
Jon Levinson / Elliot Hance
Walbrook PR (Financial PR & IR) Tel: +44 20 7933 8780 or avo@walbrookpr.com
Paul McManus / Anna Dunphy Mob: +44 7980 541 893 / Mob: +44
7876 741 001
CEO Report
I am delighted to provide our latest half yearly report and to
update shareholders on our progress in the development and
commercialisation of our game-changing next generation proton
therapy system. We are pleased with our progress to date and
believe that we have an excellent opportunity to create significant
value for our shareholders, and at the same time bring the latest
treatment technologies to cancer patients in the heart of
London.
We are currently focused on developing our proprietary proton
accelerator for the treatment of radio therapy sensitive cancer,
called LIGHT ("Linac for Image Guided Hadron Therapy"). The main
advantage of proton therapy over conventional radiation therapy is
that it can avoid irradiating healthy surrounding tissue and target
the cancerous tumour more directly. However, most current proton
therapy systems cost between GBP150m and GBP200m (excluding
construction costs), they require huge infrastructures to house
them, including extensive concrete and lead shielding, and they can
weigh over 200 tons. These are the major factors that contribute to
the expense of the current technology and the reason why so few
machines exist around the world despite the superior clinical
benefit of proton therapy over conventional radiotherapy. Our LIGHT
system, a complete turn-key system, will be available for a
fraction of the cost, will be lighter, smaller, require
considerably less shielding, and will have the added advantage of a
high precision directional beam, vastly superior to that available
from current technologies.
Our progress in the first half of 2015 falls into four main
areas - all of which are critical to establishing a solid platform
for the initial launch and successful future commercialisation of
our LIGHT system:
-- Completion of significant financing round
-- Progression on the technical development in line with expectations
-- Preparations for the integration of first LIGHT system
-- Pipeline of commercial opportunities being secured
1. Completion of financing
Key to our success was to ensure that the business is well
funded to develop its first LIGHT system treating patients and
delivering revenues to the Company. In May we successfully raised
c.GBP21m via a share issuance. The placing with new and existing
shareholders was oversubscribed and the funds have been earmarked
for the development and installation of the first LIGHT system in
Harley Street and to provide additional working capital.
Our cash level also benefitted from the sale of a former GP
surgery property in Southampton generating cash proceeds of
GBP290,000 adding to the funds available for the continued
development of our first system. We continue to progress with the
sale of our property in Folkestone and continue to look at
strategic options for Oncotherapy Resources Ltd, our subsidiary
focused on distributing an innovative brachytherapy device.
2. Technical development progress
Progress in the technical development of our first LIGHT systems
has continued apace. In January, following the signing of a supply
agreement with Pyramid Technical Consultants for the directional
dose delivery system components (or "nozzle"), we had all of the
key pieces in place for our integrated network of suppliers.
Also in January we were able to confirm that the first Coupled
Cavity Linac ("CCL") accelerating module was completed and
delivered to our Geneva facility. Ten CCL modules are required by
the LIGHT system to accelerate the protons to the energies required
to treat all radiosensitive tumours found in a typical clinical
setting. In May, this first unit successfully completed its first
Radio Frequency ("RF") Power testing and the second CCL was
delivered to our testing facility in July, alongside the Modulator
and Klystron power units ready for high power testing which
commenced in August.
Also over the summer, we were able to initiate our first tests
on the Side Coupled Drift Tube Linac ("SCDTL") module. When
combined, the four SCDTL modules will accelerate protons from 5MeV
to 37.5MeV. The SCDTLs sit between the Radio Frequency Quadruple
("RFQ"), which first accelerates the protons to 5MeV, and the CCLs.
We have been pleased with the results achieved so far.
We are proud that to date our technology development has
remained on track with our original timetable and that the test
results support the effectiveness of the technology.
3. Ongoing effort for the integration of the first LIGHT system
At the end of January we signed an agreement with Howard de
Walden Estates Limited to lease an 8,000 sq. ft. property in Harley
Street for the next 50 years. Located in the heart of London, the
site will house our first LIGHT machine, becoming the UK's first
proton therapy centre. We were subsequently offered the option to
extend the original lease to include a larger footprint, offering
potential operators a larger overall facility to manage. Whilst the
additional planning permission and reconfiguration of the original
site plans will mean that construction on the site will take place
early next year, this should not delay our overall development plan
and we remain focused on the successful conclusion of an agreement
with an operator for the site.
We are making good progress on this last point and I hope to be
able to update shareholders shortly on an agreement that will see
the Company partner with a well regarded UK medical facilities
operator who will take responsibility for the management and
operation of the Proton Therapy Centre. We remain committed to
completing the technical development of the first LIGHT system so
that it is ready for patient treatment in 2017.
In anticipation of moving into the integration stage of our
development, we have put a team in place who will take
responsibility for the delivery and construction of the first LIGHT
machine onsite and who will liaise with our operating partner on
the full integration of our technology with front end systems and
infrastructure required for such a centre. We now have a team of
c.40 people working on development and integration. With our key
suppliers in place for the major components within the system, our
integration team is building up a network of ancillary suppliers to
cover cooling systems, shielding and magnet supply as well as front
end systems such as the treatment couch, patient positioning system
and software imaging systems.
We also continue to work with ICT who are developing the
software systems that will manage the patient workflow and
integrate the LIGHT system into the centre's IT systems.
4. Future commercial opportunities secured
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Although we remain focused on delivering our first system we are
also developing the wider commercial opportunity that the LIGHT
system has and the potential for us to roll out our new technology
globally. As well as the existing letters of intent from partners
in the US and UK to purchase our system, we signed our first
commercial sale agreement in March with Sinophi, a UK company
investing in and managing public general and specialty hospitals in
China, for a price of c.US$40m. In addition, Sinophi signed an
exclusive 15-year agreement to become our first tier distributor
for the LIGHT system in China and a number of other countries in
Southeast Asia.
Commercial interest in our LIGHT systems continues to grow and
we have had conversations with a number of parties around the world
who are interested in purchasing their own LIGHT system and we will
update shareholders as these develop.
After the period end and in addition to the sale of a LIGHT
system in Huai'an City, Jiangsu Province, we confirmed that Sinophi
have signed a Framework Agreement with China-Japan Union Hospital
of Jilin University in relation to the development of a proton
therapy centre. Whilst we have yet to receive a purchase order for
a LIGHT machine, our technology is very much at the heart of this
proposed centre and we are encouraged by the growing pipeline of
strong leads that Sinophi have been building in China and in
Southeast Asia.
Financials
Our financial performance continues to reflect the development
stage of our business.
During the 6-month period ended 30 June 2015, the Group produced
revenues of GBP42,050 (H1 2014: GBP50,884) and an operating loss of
GBP4.50m (H1 2014: GBP2.64m loss). We recorded a loss before tax of
GBP4.60m (H1 2014: GBP3.68m), after taking into account GBP498,033
of share based payments.
Total assets at 30 June 2015 were GBP30.58m (H1 2014: GBP14.01m)
with net assets at 30 June 2015 of GBP27.48m (H1 2014: GBP10.30m).
In May we raised c.GBP21m through a share issuance, with proceeds
being used to develop and install our LIGHT system in Harley
Street, and to support the working capital requirements of the
group. GBP2m of the funds raised were used to repay a short term
loan raised in March as previously announced.
At the end of the period the Company held cash and cash
equivalents of GBP15.64m (H1 2014: GBP1.45m).
Outlook
My colleagues and I are most excited about the prospects for
this business: we have a major opportunity to introduce a
game-changing proton therapy system on a worldwide scale. Our clear
focus now is to continue to develop our first machine in the UK to
our original timescale, but to do so now in bigger and better
facilities in Harley Street in what we hope will become the UK's
flagship centre for next-generation proton beam therapy care.
Again, I would like to thank our teams in the UK, Switzerland
and the US for their hard work over the past six months and for
their commitment to deliver this exciting project.
Sanjeev Pandya
Chief Executive Officer
22 September 2015
Consolidated statement of comprehensive income
For the period ended 30 June 2015
(amounts in GBP)
Interim Interim
June-15 2014 June-14 2013
------------ ------------
Re-stated (1)
Revenue 42,050 106,378 50,884 68,916
--------------------------------------------- ------------ ------------ ------------ ------------
Cost of sales (53,689) (202,679) (99,112) (155,952)
--------------------------------------------- ------------ ------------ ------------ ------------
Gross Profit (11,639) (96,301) (48,228) (87,036)
Administrative expenses (3,748,657) (5,553,728) (2,586,944) (2,036,949)
Impairment charge for investment in
subsidiary (537,075) - - -
Impairment charge for investment properties (200,000) (802,907) - (1,049,357)
------------ ------------ ------------ ------------
Operating loss (4,497,371) (6,452,936) (2,635,172) (3,173,342)
Finance income - 499,281 499,281 8
Finance costs (99,780) (377,180) (225,508) (257,812)
--------------------------------------------- ------------ ------------ ------------ ------------
Loss on ordinary activities before
taxation (4,597,151) (6,330,835) (2,361,399) (3,431,146)
Taxation - - - -
--------------------------------------------- ------------ ------------ ------------ ------------
Loss after taxation from continuing
operations (4,597,151) (6,330,835) (2,361,399) (3,431,146)
--------------------------------------------- ------------ ------------ ------------ ------------
Discontinued operations
Loss for the year from discontinued
operations - (1,231,950) (1,317,903) (539,351)
Loss after discontinued operations (4,597,151) (7,562,785) (3,679,302) (3,970,496)
--------------------------------------------- ------------ ------------ ------------ ------------
Loss for the period
Attributable to equity shareholders (4,595,773) (7,463,320) (3,571,242) (3,936,291)
Non-controlling interests - (99,465) (108,060) (34,205)
--------------------------------------------- ------------ ------------ ------------ ------------
Total comprehensive loss for the period
net of tax (4,597,151) (7,562,785) (3,679,302) (3,970,496)
--------------------------------------------- ------------ ------------ ------------ ------------
(1) Restated in line with 2014 accounts
Consolidated statement of financial position
As at 30 June 2015 (amounts
in GBP)
Interim Interim
June-15 2014 June-14 2013
------------- -------------
Re-stated (1)
------------------------- ------------- ------------- ----------------------------
Non-current assets
Investment properties 997,093 1,197,094 2,000,000 2,000,000
Investments - - 6,020 6,020
Intangible assets 10,298,085 9,217,854 9,245,697 8,233,314
Plant and equipment 329,837 882,128 673,602 672,864
11,625,015 11,297,076 11,925,319 10,912,198
Current Assets
Trade and other
receivables 665,926 591,686 600,299 1,196,514
Cash and cash
equivalents 15,639,563 1,465,149 1,450,819 148,804
Inventories 2,651,130 1,112,050 29,250 37,199
18,956,619 3,168,885 2,080,368 1,382,517
-------------------------
Total assets 30,581,634 14,465,961 14,005,687 12,294,715
-------------------------- ------------- ------------- ------------- -------------
Current liabilities
Trade and other
payables (2,103,366) (2,346,263) (2,590,988) (2,196,141)
Borrowings (996,952) (987,832) (1,111,752) (3,190,315)
(3,100,318) (3,334,095) (3,702,740) (5,386,456)
------------------------- ------------- ------------- ------------- -------------
Non-current liabilities
Borrowings - - - -
Deferred tax - - - -
- - - -
-------------------------
Total liabilities (3,100,318) (3,334,095) (3,702,740) (5,386,456)
-------------------------- ------------- ------------- ------------- -------------
Net assets 27,481,316 11,131,866 10,302,947 6,908,260
-------------------------- ------------- ------------- ------------- -------------
Equity
Share capital 13,479,227 10,284,439 8,651,486 6,044,415
Share premium
reserve 32,535,214 14,658,924 11,171,379 6,874,185
Share option reserve 2,318,717 2,020,681 1,654,502 1,478,091
Reverse acquisition
reserve 11,038,204 11,038,204 11,038,204 11,038,204
Acquisition reserve - 662,782 1,462,782 1,462,782
Exchange movements
reserve (129,023) (369,291) (395,021) (388,330)
Accumulated losses (31,761,023) (27,163,872) (23,280,385) (19,601,087)
--------------------------
Equity attributable
to shareholders
of the Parent
Company 27,481,316 11,131,866 10,302,947 6,908,260
Non-controlling
interests - - - -
--------------------------
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Total equity funds 27,481,316 11,131,866 10,302,947 6,908,260
-------------------------- ------------- ------------- ------------- -------------
(1) Re-stated in line with 2014 accounts
Consolidated statement of cash flows
For the period ended 30 June 2015 (amounts
in GBP)
Continuing Discontinued Total Continuing Discontinued Total
Jun-15 Jun-15 Jun-15 2014 2014 2014
---------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Cash flow from operating
activities
Loss after taxation (4,597,151) - (4,597,151) (6,330,835) (1,231,950) (7,562,785)
Adjustments:
Taxation - - - - - -
Finance costs 99,780 - 99,780 377,180 - 377,180
Finance income - - - - - -
Net portfolio losses
/ (gains) - - - - - -
Depreciation 61,732 - 61,732 117,616 - 117,616
Impairment charge for
investment properties 200,000 - 200,000 802,907 - 802,907
Impairment charge for
investment in subsidiary 537,075 - 537,075 - - -
Waiver of mortgage
debt - - - (499,273) - (499,273)
Share based payments 498,033 - 498,033 542,590 - 542,590
Cash flows from operations
before
changes in working
capital (3,200,531) - (3,200,531) (4,989,815) (1,231,950) (6,221,765)
Changes in inventories (1,539,080) - (1,539,080) (1,074,851) - (1,074,851)
Change in trade and
other receivables (74,240) - (74,240) 28,951 575,877 604,828
Change in trade and
other payables 184,322 (321,396) (137,074) 234,066 77,659 311,725
---------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Cash (used) / generated
from operations (4,629,529) (321,396) (4,950,925) (5,801,649) (578,414) (6,380,063)
Interest paid (101,059) - (101,059) (178,278) - (178,278)
Cash flows from operating
activities (4,730,588) (321,396) (5,051,984) (5,979,927) (578,414) (6,558,341)
---------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Cash flows from investing
activities: - - - - - -
Disposal of subsidiary
undertaking - - - 6,020 - 6,020
Cash acquired with
subsidiary - - - - - -
Capital expenditure
on intangible assets (853,700) - (853,700) (984,540) - (984,540)
Purchase of plant and
equipment (46,516) - (46,516) (326,880) - (326,880)
Interest received - - - - - -
Cash flows from investment
activities (900,216) - (900,216) (1,305,400) - (1,305,400)
---------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Cash flows from financing
activities:
Equity share capital
raised 20,126,614 - 20,126,614 10,158,129 - 10,158,129
Other short term loans - - - (978,042) - (978,042)
Intra Group Cash Transfers (321,396) 321,396 - (578,414) 578,414 -
Cash flows from financing
activities 19,805,218 321,396 20,126,614 8,601,673 578,414 9,180,087
---------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Decrease in cash and
cash equivalents 14,174,414 - 14,174,414 1,316,346 - 1,316,346
Cash and cash equivalents
at 01 January 1,465,149 - 1,465,149 148,803 - 148,803
Cash and cash equivalents
at end of period 15,639,563 - 15,639,563 1,465,149 - 1,465,149
---------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Consolidated statement of cash flows (continued)
For the period ended 30 June 2015 (amounts
in GBP)
Continuing Discontinued Total Continuing Discontinued Total
Jun-14 Jun-14 Jun-14 2013 2013 2013
------------ ------------- ------------ ------------ ------------- ------------
Re-stated (1)
---------------------- ------------------------------------------------------------------------------------
Cash flow from
operating
activities
Loss after taxation (2,361,399) (1,317,903) (3,679,302) (3,431,146) (539,351) (3,970,497)
Adjustments:
Taxation - - - - - -
Finance costs 102,626 - 102,626 257,812 18,393 276,205
Finance income - - - (8) - (8)
Net portfolio losses
/ (gains) (6,691) - (6,691) 4,310 (3,103) 1,207
Depreciation 55,566 - 55,566 82,481 - 82,481
Impairment charge for
investment
properties - - - 1,049,357 - 1,049,357
Loss on disposal of
subsidiary - - - - - -
Waiver of mortgage
debt (499,273) - (499,273) - - -
Share based payments 256,562 - 256,562 30,422 - 30,422
Cash flows from
operations
before
changes in working
capital (2,452,609) (1,317,903) (3,770,512) (2,006,773) (524,061) (2,530,834)
Changes in
inventories 7,949 - 7,949 (37,199) - (37,199)
Change in trade and
other receivables 486,087 - 486,087 (95,672) 12,867 (82,805)
Change in trade and
other payables (1,084,126) 1,317,903 233,777 (184,466) 227,936 43,470
---------------------- ------------ ------------- ------------ ------------ ------------- ------------
Cash (used) /
generated
from operations (3,042,699) - (3,042,699) (2,324,110) (283,258) (2,607,368)
Interest paid (113,191) - (113,191) (330,937) - (330,937)
Cash flows from
operating
activities (3,155,890) - (3,155,890) (2,655,047) (283,258) (2,938,305)
---------------------- ------------ ------------- ------------ ------------ ------------- ------------
Cash flows from
investing
activities: - - - - - -
Disposal of
subsidiary
undertaking - - - - 1,245,000 1,245,000
Cash acquired with
subsidiary - - - 27,574 - 27,574
Capital expenditure
on intangible assets (292,534) - (292,534) (188,349) - (188,349)
Purchase of plant and
equipment (56,304) - (56,304) (543,765) - (543,765)
Interest received - - - 8 - 8
Cash flows from
investment
activities (348,838) - (348,838) (704,532) 1,245,000 540,468
---------------------- ------------ ------------- ------------ ------------ ------------- ------------
Cash flows from
financing
activities:
Equity share capital
raised 5,469,558 - 5,469,558 2,437,000 - 2,437,000
Other short term
loans (662,814) - (662,814) 52,008 - 52,008
Intra Group Cash
Transfers - - - 961,742 (961,742) -
Cash flows from
financing
activities 4,806,744 - 4,806,744 3,450,750 (961,742) 2,489,008
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