# Advanced Oncotherapy: Progress towards commissioning of first LIGHT

- Link: https://www.directorstalkinterviews.com/advanced-oncotherapy-progress-towards-commissioning-of-first-light/412862915
- Published: 2020-10-08T08:25:32+01:00
- Author: Amilia Stone

**Advanced Oncotherapy plc** (LON:AVO) goal is to deliver an affordable and novel
PT system, called LIGHT, based on state-of-the-art technology developed originally
at the world-renowned CERN. Over the past two years, the project has been significantly
de-risked through important technical milestones. AVO is working on the verification
and validation phase, prior to LIGHT being used on the first patients to support
CE marking. Interim results highlighted the operational and commercial progress 
that has been made, despite the challenges caused by COVID-19. AVO is holding an
investor day on 19 October, where senior management will be available to answer 
questions.

 * **Strategy:** AVO is developing a compact and modular PT system, which is affordable
   for the payor, financially attractive to the operator, and generating superior
   patient outcomes. AVO benefits from technology know-how developed by ADAM (CERN
   spin-off), and relies on a world-class supplier base.
 * **Interims:** AVO reduced operating losses in 1H’20 by 11% compared with 1H’19,
   slightly better than forecast. Drawdown of debt facilities resulted in higher
   finance charges. At the period-end, AVO had gross cash of £5.8m and net debt 
   of -£40.4m, much of which was finance leases.
 * **PT investment:** The attractions of investing in PT companies have been emphasised
   by the proposed acquisition of Varian for $16.4bn (5.0x 2019 sales, 32.2x EBITDA,
   40% premium to previous close) by Siemens Healthineers to gain access to its 
   innovative solutions in radiation oncology.
 * **Risks:** The technology itself is de-risked already, and LIGHT is simply accelerating
   the proton beam in a different way from conventional PT systems. Upcoming challenges
   and how they are being mitigated were highlighted in the annual report, and new
   funding is providing financial flexibility to reach the finishing line.
 * **Investment summary:** Advanced Oncotherapy’s £140m EV equates only to the amount
   invested into LIGHT to date, which reflects neither the enormous technical challenges
   that have been overcome, nor the market potential – our DCF valuation is 229p.
   As assembly of the first LIGHT system reaches its conclusion, the market’s confidence
   in AVO is expected to improve considerably. Commercial deals indicate that buyers
   are comfortable about the timing of LIGHT delivery.

[DOWNLOAD THE FULL REPORT](https://www.hardmanandco.com/wp-content/uploads/2020/10/AVO-%E2%80%93-1H20-results-and-corp-update-7-Oct-Oct-2020.pdf)

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