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Advanced Oncotherapy #AVO – Hardman & Co Research: Confidence greatly boosted
Confidence greatly boosted: Advanced Oncotherapy (AVO) is focused on delivering a more affordable, novel, proton-based radiotherapy system, based on technology developed originally at the world-renowned CERN. Major technical milestones were achieved in 2017 and the company remains on track with its development plan. Confidence has been enhanced significantly with integration of the first three structures and overcoming the technical challenge of accelerating the proton beam. Meanwhile, construction of the Harley Street site is on schedule for completion in 1H 2018, and new financing and distribution arrangements add further to confidence about the whole project.
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To contact us: Hardman & Co Follow us on Twitter@HardmanandCo |
Contacts: Dr Martin Hall +44 20 7194 7622 |
mh@hardmanandco.com |
About Hardman & Co: For the past 21 years Hardman has been producing specialist research designed to improve investors’ understanding of companies, sectors, industries and investment securities. Our analysts are highly experienced in their sectors, and have often been highly rated by professional investors for their knowledge. Our focus is to raise companies’ profiles across the UK and abroad with outstanding research, investor engagement programmes and advisory services. Some of our notes have been commissioned by the company which is the subject of the note; this is clearly stated in the disclaimer where this is the case.
Hardman Research Ltd, trading as Hardman & Co, is an appointed representative of Capital Markets Strategy Ltd and is authorised and regulated by the Financial Conduct Authority; our FCA registration number is 600843. Hardman Research Ltd is registered at Companies House with number 8256259.
Our research is provided for the use of the professional investment community, market counterparties and sophisticated and high net worth investors as defined in the rules of the regulatory bodies. It is not intended to be made available to unsophisticated retail investors. Anyone who is unsure of their categorisation should consult their professional advisors. This research is neither an offer, nor a solicitation, to buy or sell any security. Please read the note for the full disclaimer.
Advanced Oncotherapy #AVO – Hardman Research: Distribution agreement and capital increase
Advanced Oncotherapy #AVO – Hardman Research: Distribution agreement and capital increase
Distribution agreement and capital increase: AVO is focused on delivering a more affordable, novel, proton-based radiotherapy system, based on technology originally developed at the world-renowned CERN. Major milestones have been achieved in 2017 and the company remains on track with its development plan to deliver and install the first LIGHT system in 2019. Confidence has been enhanced greatly with integration of the first three structures, overcoming technical challenges of accelerating the proton beam. Announcement of a distribution agreement for China, and a sizeable capital increase should resolve the market’s concerns about long-term funding of this important project.
Please click here for the full report:
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To contact us: Hardman & Co 35 New Broad Street London EC2M 1NH |
Analysts: Dr Martin Hall mh@hardmanandco.com Dr Dorothea Hill dmh@hardmanandco.com Dr Gregoire Pave gp@hardmanabdco.com Telephone: +44 20 7194 7622 Follow us on Twitter @HardmanandCo |
www.hardmanandco.com
About Hardman & Co: For the past 20 years Hardman has been producing specialist research designed to improve investors’ understanding of companies, sectors, industries and investment securities. Our analysts are highly experienced in their sectors, and have often been highly rated by professional investors for their knowledge. Our focus is to raise companies’ profiles across the UK and abroad with outstanding research, investor engagement programmes and advisory services. Some of our notes have been commissioned by the company which is the subject of the note; this is clearly stated in the disclaimer where this is the case.
Hardman Research Ltd, trading as Hardman & Co, is an appointed representative of Capital Markets Strategy Ltd and is authorised and regulated by the Financial Conduct Authority; our FCA registration number is 600843. Hardman Research Ltd is registered at Companies House with number 8256259.
Our research is provided for the use of the professional investment community, market counterparties and sophisticated and high net worth investors as defined in the rules of the regulatory bodies. It is not intended to be made available to unsophisticated retail investors. Anyone who is unsure of their categorisation should consult their professional advisors. This research is neither an offer, nor a solicitation, to buy or sell any security. Please read the note for the full disclaimer.
Hardman & Co research – Advanced Oncotherapy (AVO), technology advances & stronger balance sheet
AVO is focused on delivering a more affordable, novel, proton-based radiotherapy system, based on technology originally developed at the world renowned CERN. The company is entering an exciting stage with construction of its Harley Street site well underway and on schedule, with the site expected to be ready for installation by end 1H’19.
While the interim results provide a commercial and financial update, AVO continues its progress in accelerating the proton beam and is on-track in building a machine capable of treating superficial tumours by 3Q’18. The financing has been on a rocky road but confidence is building up as the proton accelerates.
2017 interim results
Successful integration of the different modules of the LIGHT system highlight the reduced technical risk inherent to the development of the LIGHT accelerator. All the different components have been tested individually, and more units are successfully being integrated. To date, three – the proton source, the RFQ and the first SCDTL – of the four main structures have been integrated and the proton beam generated and accelerated up to an energy of 7.5MeV, which is a major achievement. The fourth element – the CCL(s) – has been received at the Geneva testing facility and are less technically challenging to integrate as they have already been validated by the LIBO prototype, which was a high-speed unit that has already been integrated (with another accelerator).
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Advanced Oncotherapy (AVO) – Hardman Research: Delivery of LIGHT
Delivery of LIGHT: AVO is focused on delivering a more affordable, novel, proton-based radiotherapy system, based on technology originally developed at the world renowned CERN. The company is entering an exciting stage with construction work on its Harley Street site expected to commence this month following preliminary assessment work. Meanwhile, individual modules for the LIGHT system are being integrated and tested in Geneva. At the March 2017 investor presentations, AVO provided a revised timeline for completion of the London Proton Therapy Centre, first patient treatments, and an update on its commercial and financial strategies.
Please click here for the full report:
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To contact us: Hardman & Co 11/12 Tokenhouse Yard London EC2R 7AS |
Contacts: Dr Martin Hall Dr Dorothea Hill dmh@hardmanandco.com Dr Gregoire Pave Telephone: +44 20 7929 3399 Follow us on Twitter @HardmanandCo |
www.hardmanandco.com
About Hardman & Co: For the past 20 years Hardman has been producing specialist research designed to improve investors’ understanding of companies, sectors, industries and investment securities. Our analysts are highly experienced in their sectors, and have often been highly rated by professional investors for their knowledge. Our focus is to raise companies’ profiles across the UK and abroad with outstanding research, investor engagement programmes and advisory services. Some of our notes have been commissioned by the company which is the subject of the note; this is clearly stated in the disclaimer where this is the case.
Hardman Research Ltd, trading as Hardman & Co, is an appointed representative of Capital Markets Strategy Ltd and is authorised and regulated by the Financial Conduct Authority; our FCA registration number is 600843. Hardman Research Ltd is registered at Companies House with number 8256259.
Our research is provided for the use of the professional investment community, market counterparties and sophisticated and high net worth investors as defined in the rules of the regulatory bodies. It is not intended to be made available to unsophisticated retail investors. Anyone who is unsure of their categorisation should consult their professional advisors. This research is neither an offer, nor a solicitation, to buy or sell any security. Please read the note for the full disclaimer.
Hardman & Co – Advanced Oncotherapy (AVO) – China- an emerging opportunity
Advanced Oncotherapy (AVO) – Focused on delivering a more affordable, novel proton-based radiotherapy system, based on a technology originally developed and tested at the world renowned CERN facility in Switzerland. Commercial momentum is building, having recently secured a second purchase order in China, formed a JV with Circle to operate potentially the first proton therapy facility in the UK (Harley Street, London) and further expanded its order book which amounts potentially to $480m. AVO’s system has many attributes (affordability, modularity, versatility) that should appeal to the growing healthcare demands of China, amongst others.
- China: AVO announced that it had received a purchase order for its LIGHT system from the China-Japan Union Hospital of Jilin University in October 2015, valued at $75-80m. This represented the second purchase order in China. Additionally, the Company has four further framework agreements in place.
- Addressable market: China represents a significant opportunity with the capacity for at least 100 proton therapy centres. With only two currently operational and a further eight in the pipeline, AVO appears well placed within this significant emerging market, having already secured a 20% share of pipeline.
- Competition: AVO (market cap £103m) is a pure play on proton therapy. The nearest direct competitor in terms of proton therapy is Ion Beam Applications or IBA (market cap £643m), in which proton therapy represented ca.57% of 1H 2015 revenues and 62% of EBITDA. Varian Medical Systems (market cap £4.9bn) and Elekta (market cap £1.89bn) are the leading providers of radiotherapy systems whilst Accuray (market cap £283m) sells the only robotic radiosurgery system, CyberKnife. Of these, Varian also has a presence in proton therapy. Comparative valuations for radiotherapy companies * Valuation ratios adjusted for calendar year end Prices at close of business on 1st February 2016 Source: Hardman & Co Life Sciences Research.
- Valuation: With two system sales, a potential order book of 12 systems ($480m+) and the capacity to produce up to 30 systems p.a., operational momentum is building. We have not altered our forecasts. Timing of revenues from this purchase order is not yet clear.
- Risks: Delays to completing LIGHT installation in Harley Street in 2017 and first patient treatment in 4Q 2017 – both mitigated by partnership supplier network, and the small size relative to its principal competitors which impacts potentially on vendor financing capability as well as external perceptions.
Investment summary: Advanced Oncotherapy Plc is entering a market on the cusp of a steepening adoption curve, not least in China, with a PT solution that is unique with respect to its competitors and addresses the needs of all key stakeholders. The Company has sufficient cash to achieve its near term goal of first patient treatment in 2017 beyond which additional capital may be required.
Download full report Hardman_AVO-01.02.16
Advanced Oncotherapy (AVO) – Discussed by Mark Brewer – Hardman & Co Analyst
Mark Brewer – Hardman & Co Life Sciences Analyst discusses with DirectorsTalk Advanced Oncotherapy Plc, it’s unique technology, the market size, growth drivers, key risks and an outlook for the company.