- Appointment of Bob Rose to establish Global Manufacturing and Supply Chain function
- Expanding the Medical Advisory Board with Dr Jay Loeffler, Dr Nick Plowman and Dr Hanne Kooy
- Appointment of NED, Dr Enrico Vanni
- Successful completion of the purchase of ADAM
- Raised a total of £2.4 million in cash in four equity placings
Post Period End Highlights:
- Successful equity placing to raise £6m completed
- Appointment of Sanjeev Pandya as CEO to drive the Company forward into commercialisation
- Strengthening of the Board with the appointment of Euan Thomson, NED
- Establishing the Senior Management team with key appointment of Eric Ferret as Director of Project Planning
Sanjeev Pandya, CEO of Advanced Oncotherapy commented: "In the latter half of 2013, we refined our strategy and operating model. We plan to deliver and install the first LIGHT accelerator at the beginning of 2016. This, together with the continued support of our investors and our growing internal expertise, puts us in a strong position to become a major player and contributor in the proton radiation treatment arena.
Chairman and CEO Report
We are pleased to report that during 2013 Advanced Oncotherapy (AVO) made significant progress in its strategic aim of providing wider access to radiation treatment with protons with significant commercial advantages over the current competitor machines. We anticipate that LIGHT, the AVO ground breaking radiotherapy system, will offer clinical advantages at more than half the capital outlay currently required. AVO has now established itself in a competitive position to supply the next generation of proton radiotherapy systems for cancer treatment.
These results reflect the development nature of the Company.
During the 12-month period ended 31 December 2013 the Group had revenues of £68,916 (31 December 2012: £100,000).
The loss on ordinary activities before taxation was £3.43 million (31 December 2012: £1.88 million).
The comprehensive loss for the period was £3.97 million (31 December 2012: £2.74 million).
Total assets at 31 December 2013 were £10.75 million (31 December 2012: £5.64 million).
Net assets at 31 December 2013 were £5.37 million (31 December 2012: (£0.14) million).During 2013 AVO raised a total of £2.4 million in cash in four equity placings. The market response to AVO's LIGHT system has resulted in the Board reassessing its overall financing plans. A number of new and attractive financing options have been presented, including the provision of scientific grants, and it is hoped that these will be finalised and reported to shareholders during 2014. As a result of this review and in light of market receptiveness, the Company undertook a financing in April 2014 that raised £6.0 million before expenses from a number of new and existing investors including UK institutional investors. As part of its plans, the Company intends to use the net proceeds of the fundraising to continue the development of its LIGHT machine, which the board expects will be delivered and installed by the beginning of 2016 and will contribute to building the first facility in conjunction with SUNY Upstate Medical University in Syracuse, New York.
At the heart of AVO is the technology that was acquired during 2013 from ADAM SA, the particle physics CERN spin-off company on the CERN campus in Geneva. Not only does this provide an exciting new technology platform for AVO, it also allows us to use the experts and facilities at CERN to raise awareness of the technology and medical potential in terms of bringing proton beam treatment to more patients.
To help accelerate completion of the acquisition, BRAHMA AG, the original owner of ADAM, waived the financing condition in the purchase contract. BRAHMA was issued shares in Advanced Oncotherapy plc that gave it a 29.9% holding in the Company on completion of the acquisition, and a shareholding of 25.1% upon completion of the original planned financing.
The patented ADAM technology produces the proton beam that is at the core of the AVO LIGHT system. It has taken over 10 years and an investment of €17 million, largely made by the previous owners of ADAM SA, to develop and is now being commercialised by AVO. We are firmly convinced that the LIGHT system will replace existing cyclotrons and synchrotrons by creating three-room treatment centres at a quarter of the current cost with a footprint that will allow them to be integrated with existing medical facilities. The board of AVO believes that it has the necessary technological and financial resources to complete the development of the products.
Strengthening the Management Team
As already mentioned, there have been a number of key appointments, both executive and non-executive, during 2013. To give AVO access to specialists in each of the fields of particle physics, engineering and medical radiology, we have had to build up the Board of Directors and, importantly, our Medical Advisory Board. It is rare for a company of our size and age to access worldwide expertise in multiple fields, so to the outsider there may appear to be an unusually high number of appointments. We feel this aggregated knowledge of industry and treatment will enable us to surpass customer expectations, addressing both clinical and financial needs as we create and produce the next generation of proton therapy equipment.
Sanjeev Pandya trained as an orthopaedic surgeon before following a career in the City. He joined AVO as Chief Operating Officer responsible for the commercialisation of our LIGHT system. He was appointed Chief Executive Officer in June 2014.
Prof Christopher Nutting is a Consultant Clinical Oncologist and Chair in Radiation Oncology at the Royal Marsden Hospital and The Institute of Cancer Research in London. He has been appointed as anNED and member of the AVO Medical Advisory Board.
Dr Enrico Vanni is an independent consultant with more than 25 years' experience in the pharmaceutical industry and currently Vice Chairman of the Novartis Board of Directors, has been appointed as an NED of AVO.
Euan Thomson, PhD is internationally recognised as an expert in the field of radiation therapy. He has nearly 20 years of experience in research, clinical practice, consulting and corporate management. He was previously CEO of Accuray, Inc. from March 2002 to October 2012.
Medical Advisory Board
Dr Nick Plowman is head of Clinical Oncology at St Bartholomew's Hospital, Senior Clinical Oncologist at St Bartholomew's Hospital and Great Ormond Street Hospital, and Director of the CyberKnife Centre in London. He has joined as Chairman of the AVO Medical Advisory Board.
Dr Jay Loeffler has also joined the Medical Advisory Board. A world authority on the use of proton therapy for benign, vascular and malignant brain tumours. He is currently the Herman and Joan Suit Professor of Radiation Oncology at the Harvard Medical School and Chair of the Department of Radiation Oncology at the Massachusetts General Hospital in Boston.
Dr Hanne Kooy, Associate Professor at Harvard Medical School, joined as Chairman of the Product Development Committee. Dr. Kooy's interests lie in the effective deployment of the appropriate, advanced and integrated technologies to support proton radiation therapy. His expertise will be invaluable in the development of a new fully integrated patient software management programme that incorporates the best in established software architecture to ensure improved patient outcomes, safe and efficient patient treatment management which will maximise the unique characteristics of our linac accelerator based technology.
Another extremely important appointment was Bob Rose as the Global Director of Manufacturing and Supply Chain Management. A precision engineer by profession and an expert in global sourcing and procurement, he will be responsible for sourcing the units required to build and then install the LIGHT systems worldwide.
AVO is now potentially established as the most cost- effective provider of treatment centres in a growing market for proton beam therapy that is expected to treble by 2018. Global belief in the ability of AVO to bring the LIGHT system to market has led to significant advance orders. During 2013 agreements were signed to provide eight LIGHT systems to locations in both the UK and the USA; the order pipeline now stands at over £200 million. Delivery and installation of the first machine is currently scheduled for the beginning of 2016. Milestone-related stage payments are anticipated from purchasers of the technology, which will make significant contributions to Group cash flow ahead of 2016.
Additional revenues will be generated through service contracts to maintain the LIGHT units over the 30-year life cycle of the systems. The margin on each unit will increase as global orders grow and we move towards a semi-automatic production line
Oncotherapy Resources Ltd (ORL)
While there has been a delay in establishing a sales pipeline for ORL, it is gratifying to report that single dose treatment (SD-IORT) for breast cancer has now commenced in a number of leading hospitals throughout the UK, including key relationships with BMI Healthcare and Spire Healthcare hospital groups. These relationships facilitate the adoption and use of the SD-IORT within the relevant hospitals and clinical settings around the UK. With the appointment of an additional radiographer to help promote the service, there is now a strong flow of patients being booked in for this single-dose radiation treatment for early-stage breast cancer.
Over the past few years, our people have been the foundation of our growth. We share a mission to advance patients' clinical treatments and improve their everyday lives by harnessing innovative science and focusing it to develop the most effective and affordable cancer treatments. It is our skilled, engaged and empowered employees who deliver value to our investors, contribute to our business and lay the groundwork for 2014 and beyond. We would like to thank all our staff and advisors for their hard work and dedication to the Company.
As has been announced subsequent to year end, Lord David Evans became Deputy Chairman of the Company and Michael Sinclair has replaced him as Executive Chairman. As a result of these changes, it has also been announced that Sanjeev Pandya was appointed Chief Executive Officer.
On behalf of everyone at AVO we thank you, our investors, for your support in 2013, and we look forward to an exciting and productive 2014. Together we will make a difference.