Advanced Oncotherapy - Operational update

Advanced Oncotherapy

18/01/2023 14:00

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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 (https://youtu.be/FUkV5UXHHIw) or on the
Company's website.

 

The latest research note published on 17 January 2023 by Hardman on the
Company can be found here
(http://www.avoplc.com/Portals/0/adam/Document%20Manager/1m1pEzgJX0Cq0L3SfWDSZg/Doc_Link/AVO%20%20LIGHT%20model%20update%20%E2%80%93%2017%20Jan%202023%20(edited).pdf)
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  For patient use, the Daresbury site is required to comply with cancer
 patient treatment in accordance with UHB guidance and requirements         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 (http://www.avoplc.com)
 Dr. Michael Sinclair, Executive Chairman                    Tel: +44 (0) 20 3617 8728
 Nicolas Serandour, CEO

 Allenby Capital Limited (Nomad and Joint Broker)
 Nick Athanas / Piers Shimwell (Corporate Finance)           Tel: +44 (0) 20 3328 5656

 Amrit Nahal / Matt Butlin (Sales & Corporate Broking)

 SI Capital Ltd (Joint Broker)
 Nick Emerson                                                Tel: +44 (0) 1483 413 500
 Jon Levinson                                                Tel: +44 (0) 20 3871 4066

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 (http://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.

 

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