Advanced Oncotherapy (AVO-GB): Key talent acquisition reaffirms the promise of LIGHT

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Published to the market and investors on 16^th April 2019 @ 7.03am (BST).

Advanced Oncotherapy Plc
Recommendation: OUTPERFORM
Target Price: £1.55
Current Price: 39.50p (CoB on 15^th April 2019)

KEY TAKEAWAY

Advanced Oncotherapy ("AVO"), the developer of the LIGHT linear proton accelerator for the treatment of cancer patients, today announced the appointment of Moataz Karmalawy as Chief Commercial Officer. Joining from Varian Medical Systems, a major competitor, his appointment once again confirms the promise of AVO's proton therapy proposition; demonstrating that the company has reached an inflection point and is well on its way to commercialisation. Overall, the addition of Mr Karmalawy further strengthens AVO's robust management team which includes veterans of the PT industry from science, engineering, installation, application experience and compliance. We reiterate both our OUTPERFORM recommendation and our target price ("TP") of GBp 155.

Commercialisation now within view

The appointment of Mr Karmalawy as Chief Commercial Officer adds an experienced industry veteran to AVO's management. With senior management experience at industry heavyweights Philips Healthcare and Varian Medical Systems, Mr Karmalawy brings on-board significant business operational experience which will be vital in securing a successful commercialisation roll-out for the LIGHT system. With the successful integration and subsequent testing of the LIGHT system at 52MeV in late 2018, the LIGHT project was significantly de risked with several further developmental milestones expected in 2019E. The company expects to reach therapeutically-relevant energy levels of 250MeV by YE2019. His appointment marks another promising step in AVO's execution plan as the appointment of such a prominent hire indicates a paradigm shift from a focus on developing the platform to marketing and commercialisation.

Proven success in the commercialisation of particle therapy systems

Having joined Varian in 2007, Mr Karmalawy has been an integral part of the Varian particle therapy business for the last 12 years, overseeing the growth of the division. As General Manager, World Wide Particle Therapy Treatment, he has experience across all aspects of the particle therapy business including business development, supply chain management and M&A activities. Mr Karmalawy also brings a history of successful commercialisation exercises in America, which represents a key target market for AVO that has remained largely under penetrated.

Top calibre management to drive commercial success

AVO's management team consists of high calibre industry veterans, from across science, engineering, installation, application experience and compliance. We feel that the successful industrialisation of LIGHT will be grounded in experience of top professionals like Prof. Stephen Myers, Ed Lee, Dr. Jonathan Farr and Dr. Michel Baelen, supported by a team that has the right credentials to implement an attractive funding and execution strategy such as Dr. Mike Sinclair and Nicolas Serandour.

With the development timeline on schedule and first patients due to be treated in H2/2020E, we believe that AVO offers strong upside potential coinciding with successful early stage roll-out of the LIGHT system. We reiterate both our OUTPERFORM recommendation and our TP GBp 155.

Kind regards,

Martin Piehlmeier | Analyst
Kieron Banerjee | Analyst Trainee

goetzpartners Healthcare Research Team | Research Team

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