MIDAS SHARE TIPS: Earn profits from proton beams - and save lives with Advanced Oncotherapy
The sad case of Ashya King, whose parents are sending him to Prague for proton beam therapy, highlights the difficulties faced by many cancer sufferers in the UK – lack of access to certain cutting-edge medical technology.
Proton accelerators cost more than £150million apiece, weigh up to 200 tons, are the size of several double- decker buses and must be surrounded by a huge amount of protective shielding. As a result, there are only 45 such machines in the world.
Now, however, a British company, Advanced Oncotherapy, is building a new generation of these machines, which will be smaller, lighter, cheaper and more accurate than existing models. Its shares are 3.65p and should increase in value substantially as the company develops.
Beaming: Michael Sinclair is developing a smaller and cheaper proton beam machine than current models
Proton beam therapy differs from conventional radiotherapy because it is more precise so cancer cells can be targeted without causing as much damage to healthy surrounding tissue. As such, it is particularly effective for cancers near vital organs such as lung, liver, breast and prostate cancer.
It is also considered beneficial for children because they are less likely to suffer from damaging sideeffects in later life than they might with conventional radiotherapy.
Advanced Oncotherapy’s approach is even more precise than current systems. Adapted from the technology used for the Large Hadron Collider, on the border of France and Switzerland, the company’s designs allow proton beams to be modulated so that they can attack a lung tumour precisely even as the patient breathes in and out.
Founded by Michael Sinclair, a former doctor turned very wealthy entrepreneur, Advanced Oncotherapy used to be known as CareCapital. At that time it specialised in medical property, such as GP surgeries, but in 2012 Sinclair took the view that the business should focus on developments in cancer treatment.
Most of the properties have now been sold, the company’s name was changed and over the past two years the business has been developing so-called light machines, which use Linac Image Guided Hadron Technology.
These machines will cost about £25million, can fit into a hospital corridor and they are easily assembled, so they can be moved around when needed. They also require far less protection than existing systems.
Sinclair chairs the firm and last year brought in Sanjeev Pandya as chief executive. A surgeon by training, Pandya, like Sinclair, opted for a more commercial life. His career has included management consultancy, investment banking and a spell at drugs giant Pfizer.
Since Pandya’s appointment, Advanced Oncotherapy has taken several important steps, particularly securing an order for its first machine from one of America’s foremost medical centres, Upstate University Hospital in Syracuse, part of the State University of New York. The Light machine should be up and running in 2016 and plans are afoot to construct several more.
Pandya has secured letters of intent from two of the largest private medical groups in the UK, BMI Healthcare and Spire Healthcare, to buy six of Advanced Oncotherapy’s machines. Further agreements have been signed in North America, with interest from top hospitals in the US and Canada, as well as Latin America and Asia.
Overall, the company’s order pipeline stands at more than £200million and should increase significantly as the first machine approaches completion.
The NHS already has orders for two old-style machines from another company, but Advanced Oncotherapy is hoping to persuade them that Light machines will be more costeffective and efficient.
The company, based in Mayfair, London, is currently loss-making and earlier this week raised £4.7 million by placing new shares at 3.2p each with large institutional investors. However, Upstate University Hospital is scheduled to start making down payments from next year and the company is also expected to receive medical grants from authorities in Europe and the US.
Analysts believe that the business will be profitable from 2016, with results improving rapidly thereafter. It is also backed by some of the biggest names in oncology, including Dr Nick Plowman of St Bartholomew’s Hospital and Professor Chris Nutting of the Royal Marsden in London.
Midas verdict: Investing in early-stage companies is never without risk, but Advanced Oncotherapy is already building its first machine and other orders are in the pipeline. The company is chaired by a seasoned and successful business operator and has won support from some highly respected medical specialists. It should also help to save lives. Buy.
Traded on: Aim Ticker: AVO Contact: 020 3617 8728 or advancedoncotherapy.com
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