Advanced Oncotherapy : 2019 Annual Report

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TABLE OF

CONTENTS

STRATEGIC REPORT

Introduction to Advanced Oncotherapy Group04

Need for a Targeted Radiotherapy Technology12

Making Proton Therapy More Widely Available22

LIGHT, Breakthrough Proprietary Linac28

Business Model Designed for Success36

GOVERNANCE REPORT

Advanced Oncotherapy Team48

Corporate Governance Report54

Statement of Directors' Responsibilities58

Audit Committee Report60

Remuneration Committee Report62

Group Directors' Report64

Independent Auditor's Report66

FINANCIAL REPORT

Consolidated Statement of Profit or Loss and Other

Comprehensive Income72

Consolidated Statement of Financial Position73

Consolidated Statement of Changes in Equity74

Consolidated Statement of Cash Flows75

Notes Forming Part of the Financial Statements76

Notes to the Accounts - Group78

Company Statement of Financial Position

102

Company Statement of Changes in Equity

103

Notes to the Accounts - Company

104

GOVERNANCE REPORT

FINANCIAL REPORT

STRATEGIC REPORT

Introduction to Advanced Oncotherapy Group

Advanced Oncotherapy and ADAM at a GlanceStrong Social Impact and True Sense of PurposeOur Vision, Mission and Values

Statement from the Executive Chairman and CEO

04 05 06 08

Need for a Targeted Radiotherapy Technology

Cancer in a Broader ContextRadiation Therapy, a Powerful Weapon Against CancerProton Therapy, a More Targeted Approach of RadiationThe Advantages of Proton TherapyWhere Proton Therapy can add most Value

12

14

16

18

20

Making Proton Therapy More Widely Available

Offer and DemandPricing Environment

22 26

LIGHT, Breakthrough Proprietary Linac

LIGHT: Compact and Modular SystemLIGHT: Myriad of BenefitsFLASH: Golden Opportunity

28 30 34

Business Model Designed for Success

Implementing a Value-Enhancing Commercial ModelThe Size of the OpportunityCommercial Traction is Gathering MomentumPrincipal Risks and Risk Management

36 38 40 42

• •Advanced Oncotherapy's purpose is to democratise proton therapy, a fast-growing subset of radiation oncology, by designing, assembling, selling and maintaining proton therapy systems called LIGHT

  • •Growing market with strong needs massively unmet due to costs

  • •Revolutionary CERN technology applied addressing the current shortcomings in radiation therapy

• •ADAM, a spin-off from CERN, the world's most advanced lab for nuclear science, was acquired in 2014

  • •Significant commercial traction with three commercial collaborations announced in early 2020

• •LIGHT has been designed to accelerate protons in a linear fashion, which has several advantages over circular systems, including a smaller footprint, modular design, ease of installation, fast electronic control of the proton beam and energy, significant cost savings throughout every step of the project

  • •First commercial system to be installed and operated in London

  • •Process for scaling-up production well advanced; assembly lines in partnership with STFC (UK governmental organisation)

  • •Four streams of prospective revenues: sale of LIGHT systems, maintenance, software licence fees, project management fees, which brings a diversified and sustainable source of cash-flows

• •The production of LIGHT and components is outsourced to established OEMs (such as VDL, Toshiba, Philips)

  • •Clear achievements with significant catalysts ahead

• •Staff: 129 in offices in London, Geneva, Daresbury, the US and the Netherlands

• •A highly recognised and experienced management team with a successful track-record of value creation

Advanced Oncotherapy and ADAM at a Glance

&

Company Overview

Investment HighlightsMarket Overview

• •Second cause of death globally, cancer accounts for 13% of all deaths worldwide

• •More than 10 million cases are expected to be diagnosed every year by 2030

• •Approximately 14,000 X-rays machines are used in the treatment of up to 60% of cancer cases

• •Proton therapy: similar efficacy to X-rays; up to 60% less damage to healthy surrounding tissues

• •Installed base growing at 14% CAGR p.a.

• •Growing scientific evidence of proton therapy; more than 1,200 papers published every year

• •Only 90 proton centres globally

• •Price of proton therapy treatment in the UK comprised between £60,000 and £90,000

• •Lower costs for setting up proton therapy centres are needed to decrease the cost of treatment

Strong Social Impact and True Sense of Purpose

Proton therapy for many, not just a few:Democratise proton therapy by reducing the treatment cost

Helping customers:Business model focused on providing a turnkey solution, including project management, training, maintenance and financing

Children:Company committed to support the treatment of children free of charge

Training:Company committed to train physicians and engineers

Access to proton centres (shorter journeys for patients requiring proton therapy):The uptake of radiotherapy treatment by patients is known to diminish with distance travelled by patients, which should ideally be limited to 45 minutes travel time. LIGHT can be installed in the heart of big cities, allowing patients to be treated at proximity to their family

No need to transport large equipment:LIGHT is designed to be transported in standard container and trucks (i.e. no road access blocked, use of cranes, etc.)

Treating patients in a green environment:LIGHT is designed to limit induced radiation with building and shielding requirements being significantly less than current machines

STRATEGIC REPORT	GOVERNANCE REPORT	FINANCIAL REPORT
Introduction	The Need	The Availability	The Breakthrough	The Business Model

Introduction

Our Vision, Mission and Values

Our vision:

To develop a more affordable proton-based radiotherapy system, using an innovative and clinically more effective technology, and saving many more lives from cancer

Our mission:

To facilitate the wider use of radiation with protons for treating all forms of cancers by commercialising a novel technology, and building on the success and scientific know-how of CERN (Centre Européen pour la Recherche Nucléaire)

GOVERNANCE REPORT	FINANCIAL REPORT
The Need	The Availability	The Breakthrough	The Business Model

Our Values:

We choose the right path, not the easy path. We do the right thing to ensure patient safety, the safety of our users and the safety of our staff. We are rigorous in our research, our development and our testing, never accepting short-cuts.

We collaborate across our professional disciplines, and with our suppliers and investors, to create outcomes that go beyond the sum of the parts. Putting the well-being of patients and staff at the heart of our mission, we change people's lives for good.

We focus on patient outcomes, on reliability and consistency. Our professionalism, commitment and precision deliver world-class results, meeting the most stringent medical requirements.

We push the boundaries of what can be achieved between physics and engineering, creating something that has never been done before. Our agility and entrepreneurial spirit are changing cancer treatment for ever.