Operational update

RNS Number : 1609N

Advanced Oncotherapy PLC

18 January 2023

 

18 January 2023

ADVANCED ONCOTHERAPY PLC

("Advanced Oncotherapy", "AVO" or the "Company")

Operational update

Advanced Oncotherapy (AIM: AVO), the developer of next-generation proton therapy systems for cancer treatment, releases the following operational update, including recent accomplishments; a summary of the key deliverables that will facilitate the certification of its LIGHT system; and the Company's financing plans to support this goal.

For definitions of technical terms, please refer to the section, "Notes to Editors".

Key achievements in 2022

· Maximum energy of 230 megaelectron volts ("MeV") achieved on 26 September 2022 à LIGHT accelerator became the first high-frequency linear proton accelerator to generate a beam at 230 MeV, the energy needed to reach the deepest tumours;

· Construction of the patient treatment room and the physical installation of the LIGHT patient positioning system completed   à necessary to treat first patients directly at the Company's assembly site in Daresbury. The clinical patient positioning system calibration and integration work is ongoing;

· Important clinical data released supporting the benefits of LIGHT for tumours not yet optimally treated with proton therapy, most notably for brain, breast, lung, liver and pancreatic tumours à LIGHT system ideally positioned to widen therapeutic access, increasing potential for reimbursement and addressing a large unmet medical need;

· Comparative studies released confirming the breakthrough future potential of LIGHT to deliver FLASH (single dose treatment) à LIGHT system is the only system capable of scanned 3D conformal proton FLASH;

· Initiatives identified and pursued to reduce system cost and lead times à LIGHT system positioned to reduce cost and increase ease of installation for customers; and

· Successful ISO 13485:2016 re-certification surveillance audit à supporting the operational activities and the certification plan.

The Company has released a new video outlining the operational progress on the LIGHT system which can be found here or on the Company's website.

The latest research note published on 17 January 2023 by Hardman on the Company can be found here or on the Company's website.

Together these accomplishments continue to deliver on the mission of AVO and its LIGHT system in democratising access to proton therapy worldwide. Further commentary on these accomplishments can be found further down.

Key deliverables for 2023

Overview	Details
Patient workflow to be validated by UHB for patient treatment	The patient workflow describes the tasks and steps for patient treatment. Patient workflows are relatively uniform in radiation oncology. This milestone involves, University Hospital Birmingham NHS Trust ("UHB"), accepting proton therapy and the LIGHT system within its protocols.
Patient positioning and imaging system calibration by UHB	The LIGHT Patient Positioning System ("PPS") includes a CT scanner. The LIGHT CT scanner is required to be calibrated according to UHB's existing protocols. In addition, the LIGHT PPS must be calibrated for use with proton therapy. Both activities are standard practice and the calibration tools have been purchased and are ready for use at the Company's assembly site in Daresbury.
Interoperability of treatment room subsystems(1): TSM,  OIS, PPS	The LIGHT system integrates a series of sub-systems that interact with each other. It includes the latest generation of medical software and hardware; UHB will verify their interoperability during testing.
Completion of building (for first patients in Daresbury) and approval for patient treatment in accordance with UHB guidance and requirements	For patient use, the Daresbury site is required to comply with cancer treatment facilities, including planning and design. The Company and UHB have designed the building together in compliance with the relevant specifications. The Company requires the acceptance of the patient care space by UHB prior to use.
Usability training with UHB	Usability testing is required for the regulatory submission on the LIGHT product. The UHB staff must be trained on LIGHT before using the system. The Company is currently developing the training program.
UK Health Research Authority ethical approval	Ethical approval is required for patient treatment in Daresbury. The approval is provided by the UK Health Research Authority. The LIGHT system provides proton therapy, a widely used treatment. Therefore, challenges relating to ethical use are not expected.
Patient imaging in collaboration with UHB	The first phase of the Clinical Investigation Plan involves CT scans only of UHB patients (no proton therapy). UHB expects to provide the patients and staff for the imaging study.
End-to-end clinical test acceptance in collaboration with UHB	The end-to-end clinical acceptance test is the final step prior to patient treatment. This provides a "spot-check" of the LIGHT system and its performance.
First patient treatment in collaboration with UHB and regulatory approval	Treatment of the first patient(s) with LIGHT, and indeed the first time to the knowledge of the Board that humans will ever have been treated using a proton linac system, in H2 2023; first product certification is expected in H1 2024
Reduced operational spending by over 30%	Active cost reduction initiatives are now underway.

Financing plans

The Company estimates that the total project costs for 2023 and 2024 amount to £75-85 million. This includes the investment required to complete the building at Daresbury that houses a dedicated proton therapy treatment area designed and built to host cancer patients. To cover this cash requirement until the end of 2024, which also comprises the repayment of a part of the Company's outstanding debt, the Company is working on various financing options, both dilutive and non-dilutive. These financing options involve further possible equity financings, the quantum and timing of which will also depend, inter alia, on the outcome and the timing regarding the non-dilutive financing options. The overall funding requirement is based on a number of assumptions made by the Company which are subject to future change.

The non-dilutive financing options being considered include refinancing certain existing debt facilities that are secured against certain assets of the Company, such as the first LIGHT system and its intellectual property which, over the years of its expansion, has in the Board's view accrued a significant value and represents a key asset of the Company. Since the initiation of this project, the Company has developed a strong portfolio of intellectual property, comprising 10 IP families and over 100 members. A further 10 IP families are targeted to be filed in the next 18 to 24 months.

Similar to the debt facilities that are already in place with Credit Suisse and Nerano Pharma, details of which were announced by the Company on 10 May 2019 and 29 June 2020 respectively, certain assets of the Company such as the first LIGHT system, the intellectual property and other properties will be used as a security for new loan facilities.

The debt facilities proposed to be repaid from the Company's future financings may include the repayment of a short-term loan facility provided to the Company in July 2022 by a French counterparty which, as at the date of this announcement, has an outstanding amount equal to £2.915 million (including interest accrued). This loan was put in place to provide additional working capital facilities to the Company. The loan has a maturity date of 23 January 2023 and the Company is in discussions with the lender regarding various options regarding the loan including full repayment, extension of the loan term or conversion of the loan. As part of the arrangements in respect of this loan facility the Company will issue the lender with a total of 1,250,000 warrants on the maturity date (such warrants representing 0.2% of the Company's current issued share capital).

Furthermore, the Company is working to formalise certain commercial projects which the Board are confident will facilitate some initial down payments, following the recent achievement of the 230 MeV milestone.

In parallel, the Company is undertaking key steps to reduce operational spending by over 30% in the next 90 days.

Prior to these incremental funding plans, the Company has raised around £200 million since it acquired ADAM S.A. from CERN in 2013 (excluding debt). These monies have been used to fund the design and manufacturing of the first fully operational LIGHT accelerator, the Company's assembly site in Daresbury (Cheshire, UK), and the equipment of the treatment room installed therein.

Nicolas Serandour, CEO of Advanced Oncotherapy, commented:

"Despite the wider economic issues and inflationary cost pressures impacting our execution and financing plans, we have made significant progress in 2022 as illustrated with the successful testing of the first ever high-frequency linear proton accelerator generating a proton beam at 230 MeV. Such progress would not have been possible without the resilience and the tremendous effort of our staff. The Company is focused on treating first patients in H2 2023 prior to product certification in H1 2024.

"As these headwinds persist, AVO is strongly focused on three immediate objectives: achieving regulatory certification, increasing the size and maturity of our commercial pipeline, and reducing operational spending by over 30% in the next 90 days. Active cost reduction initiatives are now underway, alongside the system certification and business development initiatives.

"As we enter 2023, we are seeing tremendous growth in our new customer sales pipeline with active discussions taking place with over 20 new centres. We believe this is driven by the delivery on recent milestones such as 230 MeV, the anticipation of upcoming certification, and the extremely promising clinical results that our recent studies are demonstrating, namely the potential for treating moving target tumours and the promise that the LIGHT system holds for developing single dose FLASH therapy in the future."

Further commentary on recent accomplishments

LIGHT SYSTEM, THE FIRST HIGH-FREQUENCY LINEAR PROTON ACCELERATOR TO GENERATE A BEAM AT 230 MEV AND REACH THE DEEPEST TUMOURS

Proton therapy is a radiotherapy technique that exploits the well-known and unique profile of protons to deliver a very localised treatment via radiation whilst sparing healthy surrounding tissues⁽²⁾. To be able to treat all common tumours in the human body, a proton accelerator must deliver a beam with energy of up to 230 MeV, which corresponds to a range in tissue of about 32cm. On 26 September 2022, the LIGHT System accelerated protons to the maximum energy of 230 MeV at its assembly site on the Science Technology Facility Council ("STFC") Campus in Daresbury, Cheshire, UK.

The relevance of this critical milestone is four-fold:

· 230 MeV is the energy that will allow the treatment of a tumour up to a maximum depth of 32cm;

· LIGHT is the first proton therapy medical system in the world using a linear accelerator (i.e. accelerating protons in a straight line as opposed to a spiral and accelerating proton electronically significantly reducing the shielding requirements);

· LIGHT - as a class IIb medical device - is positioned in the proton therapy market, which has a long history of treating patients. The level of evidence required for approval is largely focused on demonstrating that LIGHT is safe and performs as expected. With (i) a LIGHT accelerator now operational; (ii) all the critical parts of treatment room installed; and (iii) the recent ISO 13485 re-certification, the Company is focused and well-placed on the lower-risk aspects of the project and to receive product certification; and

· Commercial momentum is expected to accelerate following the milestone of 230 MeV being reached.

In commenting about this milestone, Paul Vernon, Head of STFC's Daresbury Laboratory, said:

"Accelerating protons at an energy sufficient to treat tumours that are hard to reach is a major achievement for this project. At STFC's Daresbury Laboratory, we have a strong track record in developing world class test facilities to support the development of new cancer therapies. It's fantastic to know that the expertise in particle accelerators and facility construction here, and from our colleagues in CERN, is contributing towards the success of Advanced Oncotherapy's ground-breaking technology. I look forward to continuing to support the business in the next stages in its development of this project, which is expected to bring significant benefits to our society's wellbeing and economy in the future."

BEYOND THE LIGHT ACCELERATOR: A DEEPER LOOK AT THE LIGHT SYSTEM

In 2022, the Company completed the construction of the patient treatment room and installation of the LIGHT patient positioning system and deployed the latest suite of medical software. Key components of the LIGHT system, beyond its breakthrough accelerator, include:

· A robotic patient positioner for aligning patients in the upright position in a treatment chair; this is a high accuracy patient placement system, typically with 1 mm tolerance or less;

· CT scanner mounted on a vertical sliding platform which allows for imaging in the upright position;

· An X-Ray imaging sub-system which acquires orthogonal images of the patient for comparison with images digitally generated from the treatment planning CT image, allowing for position adjustments to be made (if required) prior to treatment delivery; and

· An integrated control medical software suite: this provides medical users with a single interface for performing all clinical steps: appointment scheduling, patient admission, intake appointments, image creation for treatment planning, verification and approval of the treatment plan, proton beam delivery, recording of the patient treatments, etc. This full integration is key to eliminate potential risks and address challenges faced by users of proton therapy systems to date, as well as facilitate a better user experience for clinicians and healthcare workers. It also helps to increase the patient throughput.

First patients are expected to be treated at the facility in Daresbury in the second half of 2023 in collaboration with UHB.

LIGHT SYSTEM IDEALLY POSITIONED TO WIDEN THERAPEUTIC ACCESS, INCREASE POTENTIAL REIMBURSEMENT AND ADDRESS A LARGE UNMET MEDICAL NEED

Studies - conducted by the Company and in collaboration with the Cleveland Clinic⁽³⁾ - showcased the potential superiority of LIGHT in treating a wide range of tumours, including tumours which are particularly sensitive to motion caused by respiratory or heart movements. Key highlights are as follows:

· Brain - LIGHT has been shown to produce superior treatments of multiple brain metastases. Together with the Cleveland Clinic, studying 66 brain lesions from 22 patients, it was found that the average brain dose from LIGHT was 40 cGy in comparison to 190 cGy⁽⁴⁾ for the GammaKnife, a reduction of 79%;

· Breast - Using digital human phantoms of left-sided chest wall breast patients in the lying and in the upright position, treatment planning studies found that LIGHT showed a reduction in heart and lung organs at risk ("OAR") dose of up to 99% in comparison to treatments delivered by cyclotrons, traditional systems for delivering proton beam therapy;

· Pancreas - Using digital human phantoms to simulate pancreatic cancer patients in the lying and upright position, the LIGHT system produced 10-30% less dose to the kidneys and spinal cord than cyclotron-based treatments; and

· Lung and liver - Due to its faster 3D scanning and high precision, the LIGHT system has shown major advantages⁽⁵⁾ for treating moving tumours such as in the lung and liver.

More detailed studies on this topic are currently underway with the Cleveland Clinic.

This set of clinical data is key to providing the foundations for a wider use of proton therapy. At its latest investor day, the Company estimated that the catchment area needed for a proton centre to support its fixed cost base is in the range of 800,000 to 1.6 million people, a range that is set to decrease from 122,000 to 244,000 people if lung, liver and breast tumours become more commonly treated with proton therapy.  

LIGHT SYSTEM, THE ONLY SYSTEM CAPABLE OF SCANNED 3D CONFORMAL PROTON FLASH

FLASH proton therapy provides the potential to change clinical practice and improve patient outcomes, as it could see patients treated in a single session, as opposed to 20 to 35 visits which is currently the norm. To do so, the FLASH technique - currently in industry clinical trials - necessitates the delivery of a significantly higher dose of radiation (versus the current standards) - up to 200 Gy/s⁽⁴⁾ - in less than half of a second.

For conformal treatment, cyclotrons must use degraders to change the energy of the proton beam, which result in scattering and impact the delivered dose rate. Consequently, FLASH is being investigated with cyclotrons, without degraders, in transmission mode - where the proton beam passes through the patient rather than stopping at the Bragg peak⁽⁶⁾; this ensures a high dose rate is maintained albeit with significantly reduced conformity.

In the context of delivering FLASH, the LIGHT system offers three main advantages over cyclotrons:

· The dose of radiation delivered by the LIGHT system is invariant on energy because it does not use absorbers. Therefore, the LIGHT FLASH effect is not restricted to the transmission mode above, hence offering a 3D conformal treatment;

· The LIGHT system benefits from a fast spot and energy switching time of 5 milli-seconds, allowing for multi-energy FLASH irradiation of targets within half of a second, unlike cyclotrons which deposit radiation once or twice per second; and

· The LIGHT system does not require energy degraders and therefore obviates the large amount of radiation and the increased radiation shielding around these devices. This becomes more important with the larger radiation doses needed for FLASH.

Considering brain metastases, LIGHT FLASH treatment plans were created using a commercial treatment planning system, with beam parameters of LIGHT. The FLASH-optimised plans were compared to X-ray plans and non-FLASH proton plans in terms of the target coverage, dose to OAR, and Dose-Rate average ("DRav"). Each target was treated with a dedicated single field. FLASH dose rates up to 200 Gy/s were achieved. FLASH standard and minibeam plan quality was found to be superior to nominal photon plans, with comparable conformity and lower normal tissue dose. Similar LIGHT FLASH results have been achieved for other tumour sites.

Dr Dejan Trbojevic, Senior Tenured Physicist, and American Physical Society Fellow from Brookhaven Science Associates/Brookhaven National Laboratory (BSA/BNL)⁽⁷⁾,commented:

"FLASH with protons is the future for cancer treatment. The accelerator and beam delivery system must be capable of delivering very high current to meet high dose requirements. Whilst modern isochronous cyclotrons⁽⁸⁾ can deliver large currents; one important limitation is that they require the use of energy degraders to vary the required treatment energies (dose depth) for tumours. Beam losses due to these degraders at low delivered energies around 70 MeV can exceed 99%, which precludes their use for many beam delivery modalities for FLASH. Proton accelerators for FLASH application must therefore control the output energy electronically and obviate the use of the intensity reducing absorbers. The only existing medical proton accelerator technologies which can deliver such high doses at all treatment energies are fast cycling linacs and the yet to be developed fast cycling synchrotrons. Advanced Oncotherapy's LIGHT system is a fast-cycling medical linac which employs electronically controlled energy changes and obviates the use of the intensity reducing absorbers which are required with cyclotrons. The LIGHT output beam current is independent of the output energy."

LIGHT SYSTEM, SET TO DEMOCRATISE ACCESS TO PROTON THERAPY THROUGH NEW OPPORTUNITIES FOR SYSTEM COST AND LEAD TIME REDUCTION

Despite the wider economic issues and inflationary cost pressures which are impacting the Company's execution and financing plans, throughout 2022 and in collaboration with its key partners, the Company made progress in reducing cost and lead times and optimising its production set-up, further leveraging the financial and medical benefits of the LIGHT system. This is key to ensure a smooth execution plan and the delivery of a large commercial pipeline. Key achievements included:

· Successful 3D printing of key parts of the LIGHT system: in co-operation with a new institution, the Company was able to 3D manufacture a buncher cavity at a price of €6,000 versus €20,000 in only two days as opposed to ten days in standard manufacturing terms. Whilst further work is needed to implement a broader 3D printing strategy, current studies bode well for a successful cost and time reduction; and

· Opportunities identified to optimise the design of future LIGHT systems through a reduction of tolerance and specifications.

In parallel, the Company intends to leverage and consolidate its supply chain, with the production of components currently outsourced to over 850 suppliers.

SUCCESSFUL ISO 13485:2016 RE-CERTIFICATION SURVEILLANCE AUDIT

The commercialisation of the LIGHT system requires the business to have a robust quality management system which is third-party audited to ISO 13485:2016 standards. Underpinning this quality management system are processes to ensure that necessary safeguards are in place to ensure the integrity of this system and accordingly the quality of the products under development.

In December 2022, the Company successfully passed its annual ISO 13485:2016 re-certification surveillance audit with TÜV-SÜD, an independent compliance specialist. During this audit, no findings were recorded and the auditors considered the Company's technical file and quality management system to be very robust and well prepared.

ISO 13485:2016 is an internationally recognised quality standard to ensure consistent, design, development, production, installation, and sale of medical devices are safe for their intended purposes. This outcome and the certification reflect the Company's commitment to safety and the high quality of our product performance. ISO 13485:2016 is a critical pre-requisite for product certification. This means that, once all verification and validation work of the LIGHT system is completed in Daresbury, the Company will be ready to make its submission for the CE marking and the FDA 510(k) submission.

- ENDS -

Advanced Oncotherapy plc	www.avoplc.com
Dr. Michael Sinclair, Executive Chairman	Tel: [phone]
Nicolas Serandour, CEO
Allenby Capital Limited (Nomad and Joint Broker)
Nick Athanas / Piers Shimwell (Corporate Finance) Amrit Nahal / Matt Butlin (Sales & Corporate Broking)	Tel: [phone]
SI Capital Ltd (Joint Broker)
Nick Emerson	Tel: [phone]
Jon Levinson	Tel: [phone]

Notes to Editors

(1)  TSM (Treatment Session Manager): software developed by Raysearch, allowing the management of the daily proton treatment for patient delivery; TPS (Treatment Planning System) software: software, well established and familiar to oncologists, providing superior functionality for treatment planning, encompassing patient positioning through to treatment solutions; OIS (Oncology Information System): software, developed in partnership with Raysearch, offering managed workflows and enabling patient treatment to be modified daily.

(2)  The depth at which the desired radiation dose is given, corresponding to the location of the tumour, is directly correlated to the energy of protons gathered during their acceleration. The higher the energy is, the larger the penetration depth is. In human tissues, the penetration depth is about 3 cm for 65 MeV protons, and about 32 cm at 230 MeV.

(3)  Cleveland Clinic is a non-profit American academic medical centre based in Cleveland. It runs a 170-acre campus as well as 11 affiliated hospitals, 19 family health centres in Northeast Ohio and hospitals in Florida and Nevada. International operations include - amongst others - Cleveland Clinic London which opened in 2021. Cleveland Clinic is consistently ranked as one of the best hospitals in the US.

(4)  Gray (Gy) is the unit of ionising radiation dose.

(5)  This is due to: (i) the highly precise proton therapy is more susceptible to target motion than in photon treatment; (ii) LIGHT's three-dimensional fast pulsing capability, making the system uniquely capability to treat moving targets faster than the targets can move; (iii) the LIGHT system providing sub-motion-cycle individual proton irradiations restoring the quality of proton therapy for moving targets; (iv) the capability of LIGHT to rescan individual sub-irradiation, not reasonably possible with a cyclotron; specifically, in the time required for a cyclotron to deliver the needed dose to the subplans, with no rescanning, LIGHT can rescan to improve the treatment quality remarkably.

(6)  The Bragg peak is the peak of the energy loss of ionising radiation which occurs immediately before the protons stop.

(7)  Brookhaven National Laboratory is an organisation funded by the US Department of Energy, which was born of the dreams of scientists returning from Los Alamos after WW2. Since then, it has become home to some of the world's most powerful accelerators.

(8)  In an isochronous cyclotron the magnetic field increases in the outward direction whilst in a "classical" cyclotron, the magnetic field is constant from the centre outwards. This allows higher energies to be reached in an isochronous cyclotron.

About Advanced Oncotherapy Plc www.avoplc.com

Advanced Oncotherapy, a UK headquartered company with offices in London, Geneva, The Netherlands and in the USA, is a provider of particle therapy with protons that harnesses the best in modern technology. Advanced Oncotherapy's team "ADAM," based in Geneva, focuses on the development of a proprietary proton accelerator called, Linac Image Guided Hadron Technology (LIGHT). LIGHT's compact configuration delivers proton beams in a way that facilitates greater precision and electronic control.

Advanced Oncotherapy will offer healthcare providers affordable systems that will enable them to treat cancer with innovative technology as well as expected lower treatment-related side effects.

Advanced Oncotherapy continually monitors the market for any emerging improvements in delivering proton therapy and actively seeks working relationships with providers of these innovative technologies. Through these relationships, the Company will remain the prime provider of an innovative and cost-effective system for particle therapy with protons.

 

END

 

 

UPDGPUWAGUPWGWR