Funded to completion

AVO’s goal is to deliver an affordable and novel PT system, called LIGHT, based on state-of-the-art technology developed originally at the world-renowned CERN. Over the past two years, important technical milestones have significantly de-risked the project. Now AVO has undertaken its largest fund raise to date, which should be sufficient to see completion of the first LIGHT system and largely remove the financial risk for the project. Barring any unforeseeable events associated with such a complex project, AVO also confirmed that it remains on schedule to have the first system, generating a 230MeV beam, completed by the end of 2021.

• Strategy: AVO is developing a compact and modular PT 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.
• Capital increase: AVO has announced a Subscription and Placing of 93.5m new Ordinary shares at 40p per share to raise £37.4m of new capital for the company. In addition, further shares are being issued to a supplier, advisors, selected employees and directors in lieu of cash fees/settlements (ca.£2.6m).
• Strong support: The issue has been well supported by a number of existing investors, notably Philippe Glatz and DNCA investments, and has attracted some new investors, such as Ahlström Invest BV and Cosylab (supplier). The majority of new shares have warrants attached, which could raise a further £50m.
• Risks: Most of the technical hurdles associated with the LIGHT project have been overcome and it is now a matter of completing the assembly of a complex project involving ca.15,000 components. Concern about the need for more capital to complete the project should be allayed by this capital increase.
• Investment summary: AVO is nearing the finishing line with its first LIGHT PT system. However, the corporate goal is to have a pipeline of installations to satisfy the pent-up demand and bring down the cost of PT, thereby making this form of treatment available to many patients. Strong support for this capital increase, together with the potential exercise of warrants at a 50% premium, suggests that there is scope for considerable upside.