# Advanced Oncotherapy Analyst Q&A discussing the LIGHT collaboration (LON:AVO)

- Link: https://www.directorstalkinterviews.com/advanced-oncotherapy-analyst-qa-with-dr-martin-hall-lonavo-2/412806561
- Published: 2020-02-26T10:00:29+00:00
- Author: Amilia Stone

**Advanced Oncotherapy PLC **(LON:AVO) is the topic of conversation when **Hardman
and Co**’s Analyst Dr Martin Hall caught up with DirectorsTalk for an exclusive 
interview.

**Q1: You recently released a report on Advanced Oncotherapy highlighting some interesting
developments for the company. Can you tell us what has been going on?**

**A1: **Until now, the focus of the company’s activities has been on the technical
aspects and potential advantages of its new proton therapy system, called LIGHT.
All the recent announcements have been about commercial arrangements, which indicates
that potential purchasers are comfortable that LIGHT will be completed and validated
in the foreseeable future.

The confidence in a successful outcome with LIGHT and the momentum behind the commercial
deals were highlighted in our report.

**Q2: Can you flesh out a little more detail about these commercial deals?**

**A2: **First, there is a new arrangement with respect to the company’s prestigious
Harley Street site. Investors that have been following AVO for some time will recall
that the company originally did a deal with Circle Health for the day-to-day management
of that site. However, there has been a natural evolution at both companies such
that a new deal was needed. They have now signed a 10-year agreement with the also
prestigious group, The London Clinic, for the daily operational activities at Harley
Street, and will be increasing it to a two-room facility.

Secondly, the company announced that a LIGHT system will be installed at The Mediterranean
Hospital, Cyprus. This is due to be completed by the end of 2023 and the LIGHT system
will cost €50m, about £42m at today’s exchange rate.

Thirdly, and this was announced subsequent to our report, the company announced 
a collaboration with University Hospitals Birmingham NHS Foundation Trust for the
construction and installation of a LIGHT system in Birmingham. This deal was announced
subsequent to our research report.

**Q3: Is there anything of note in these deals?**

**A3: **Financial terms were not disclosed. However, in each case they will be working
with its partners such that it will have a profit sharing arrangement with the operators
So the significance of these deals is that are structured to increase the log-term
cashflows for the company.

**Q4: Can you just bring us up to date with respect to the LIGHT system?**

**A4: **Yes, at its AGM in July, the company set out a schedule of module deliveries
at its UK assembly and testing facility in Daresbury, Cheshire. Progress with this
schedule was updated along with its interim results at the end of September, and
we provided a further update in the research report.

All of the modular components, together with the patient positioning system, have
been manufactured and either delivered or placed in storage at its UK assembly and
testing facility in Daresbury, Cheshire. Currently the modules are being integrated
and tested as part of the overall validation process in readiness for the application
for CE marking later this year.

**Q5: What was overall conclusion and investment view for Advanced Oncotherapy?**

**A5: **After several years focusing on the technological and manufacturing challenges
of LIGHT, the focus has rapidly changed to commercial execution. These three partnerships
represent a step-change for the company and provide an insight into how the company
is building its business model.

As for investment, today’s market capitalisation barely equates to the gross investment
by AVO to get LIGHT where it is today. There is a big disconnect between fundamental
and market valuation which we expect to change as the market realises that more 
potential purchasers have the confidence that LIGHT will become a reality in the
near future.

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