Advanced Oncotherapy (AVO) announced yesterday that it has signed a joint venture agreement with CircleHealth to operate the Company’s proton beam cancer therapy centre in Harley Street. CircleHealth, owned by AIM-listed Circle Holdings plc (CIRC) which is an employee co-owned company, runs hospitals and healthcare across the UK. It has nearly 2,000 partners, working across four UK sites. Under the terms of the agreement, Advanced Oncotherapy and CircleHealth will jointly own a newly formed company into which funding of £6 million will be provided in equal portions by the parties and will cover, inter alia, pre-opening costs and working capital. The arrangement, together with further definitive agreements to be finalised in the coming months, would combine CircleHealth’s clinician-led operating model with Advanced Oncotherapy’s next-generation proton therapy systems for cancer treatment. Once the centre commences operation the equity in the operating company will be owned as to 50.1% by CircleHealth and the remaining 49.9% by Advanced Oncotherapy.
Beaufort Securities view: Yet another important step, yet another senior incoming partnership agreement. With every announcement, the credibility of AVO’s ground-breaking proposal to develop the next generation of proton therapy systems grows further, as either high-brow academics stake their reputations, hospital/medical institutes place firm orders or letters of intent and service providers carve out long-term working relationships. The Harley Street facility will house the UK’s first high energy proton beam cancer therapy centre. CircleHealth will take responsibility for all operational and clinical matters at the facility as well as the additional procurement, fit-out and facility testing requirements needed for full commissioning and beyond. CircleHealth will also take responsibility for insurance provision for the centre while Advanced Oncotherapy takes responsibility for all technical matters. A number of proposals from international financial institutions concerning the provision of vendor finance for the LIGHT technology in Harley Street are now also being considered. CircleHealth has a reputation for providing innovative healthcare delivery and are an ideal candidate to operate AVO’s flagship Harley Street site. Whilst AVO’s ongoing business model is to focus on the manufacturer of cutting edge proton therapy systems, that it obviously retains a vested interest in the operational success of the facility. This is exactly what has been agreed. Working alongside CircleHealth, AVO expects to transform the UK’s approach to cancer radiotherapy treatment. Beaufort retains its Speculative Buy recommendation on Advanced Oncotherapy.
Beaufort Securities acts as corporate broker to Advanced Oncotherapy plc