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Hardman & Co

Advanced Oncotherapy Proving the accuracy and superiority of minibeams

The goal of Advanced Oncotherapy (LON:AVO) is to deliver an affordable and more effective proton beam therapy (PBT) system, based on state-of-the-art technology developed originally at the world-renowned CERN. In the past 18 months, the project has been de-risked through important technical milestones. AVO is now working on the verification and validation phase, prior to CE marking and LIGHT being used on the first patients. Meanwhile, AVO has entered into a research collaboration with the Cleveland Clinic aimed at proving the accuracy of targeting cancerous tissue, and sparing normal tissue, with proton minibeams in comparison with other methodologies.

  • Strategy: AVO is developing a compact and modular PBT 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.
  • Collaboration: The renowned Cleveland Clinic will undertake a two-year study to evaluate the target conformality of proton minibeams in comparison with stereotactic X-ray radiotherapy currently used for several types of cancer, particularly those located in the brain.
  • Goals: Industry and oncologists are focused on overcoming the key challenge of ensuring that radiotherapy is targeted only at cancerous tissue, and avoiding healthy tissue. LIGHT has been designed for accuracy and improved patient outcomes. It is also being positioned to highlight its commercial advantages.
  • Risks: Since 2018, the more complex technical challenges have been overcome, and progress towards a fully-functional accelerator is under way in readiness for CE marking. Execution risk remains, but management’s ability to raise funding and meet its milestones for the past 30 months has lowered this risk.
  • Investment summary: AVO’s market capitalisation of £93m equates only to the amount invested into LIGHT to date, which does not reflect either the enormous technical challenges that have been overcome or the market potential. A DCF analysis of the LIGHT prospects generates an NPV of at least 224p per share (fully-diluted). The disconnect between fundamental and market valuations offers an interesting investment opportunity, in our opinion.

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