Advanced Oncotherapy plc (LON:AVO), Executive Chairman, Mike Sinclair provides an insight into his background in healthcare, his vision for AVO and the opportunity the Company has to transform the global radiotherapy market.
Q1: Mike, thank you for speaking with us. Can you tell us a little about your work in the healthcare sector before the creation of AVO?
A1: Sure; I’m a physician by training and began my career in the healthcare industry in 1971. Over the next forty-odd years, I founded and built, or had senior roles in, companies in the UK and the US, often working with institutional investors and/or with colleagues from prior ventures. Some of these companies had global markets, others were domestically focused; most became market leaders.
For example, Allied Medical (“AM”), where I was Chief Executive and which I founded, was acquired, grew to be the largest hospital management and healthcare personnel firm in Europe. I was subsequently recruited by Hospital Affiliates International (“HAI”), the losing bidder for AM, to create their international hospital division as President of HAI. HAI’s parent company then merged and had to divest its hospitals division, so I returned to the UK and founded Hospital Capital Corporation, which built and managed hospitals and nursing homes around the UK, many of which were subsequently sold to US-based firms. When Lifetime Corporation, a US home healthcare business I set up in the mid 1980’s and which was listed on the NYSE, was acquired in 1993 it had revenues in excess of $1 billion and was US market leader. Atlantic Medical was a US-domiciled healthcare venture fund, with portfolio companies focusing on IT and telecoms services for healthcare providers; one such company, Quovadx, went on list on NASDAQ at a highly profitable level for our investors. Finally, Care Capital, the forerunner to Advanced Oncotherapy, was originally set up in 1994 to develop, own and lease medical office buildings (“MOBs”) to healthcare operators and listed on AIM in 2006, ahead of its realignment to oncology in 2012.
Q2: You must have gained a lot of industry knowledge from those experiences, no?
A2: What I’ve learned, aside from how to nurture and run a successful, multinational healthcare business, is an intimate understanding of the nature of hospitals and the healthcare sector as a whole: how hospitals operate, how they are financed, how they provide their services, etc., in both the public and private sectors. That experience is particularly broad here in the UK, in the US, Middle East and in Asia. They are all significant for AVO: the UK is our home market and site of our flagship project in Harley Street, the US is an early adopter of proton therapy, the Middle East is playing catch up with Europe and the US, creating local centres of medical excellence, while Asia is a key growth market.
Q3: And in that context, what read through is there for AVO from your background?
A3: Value-based care is an imperative for many healthcare providers. This may be obvious in the private sector, where costs are relatively transparent, and might be expected to be critical or to at least feature in the decision making process in the public sector; NHS England produced a discussion paper on this very subject in February of this year.
Lifetime treatment costs would be expected to be lower for proton therapy than X-ray based radiotherapy, due to less chance of developing serious side effects (which need medical care, and represent an additional cost), fewer treatment sessions (hypo-fractionation: less time needed in hospital so lower cost) and a reduced probability of secondary cancers from radiotherapy treatment later in life (particularly relevant in paediatric cases).
AVO’s goal is to reduce the immediate cost of treating each cancer patient, as well as cutting the lifetime cost. The modularity of LIGHT, our unique linear proton accelerator and integrated patient treatment systems, should allow for mass production, physical installation to smaller existing radiotherapy departments/buildings, reduced shielding requirements, more efficient commissioning and high patient throughput, all of which will help lower the immediate cost of treatment to any hospital or clinic. Lifetime costs should be cut further through LIGHT’s designed ability to vary the direction, the dose and the energy of the beam (performing active spot-scanning) hundreds of times per second, thereby targeting tumours accurately in a way that is not currently possible with cyclotron/synchrotron proton therapy systems.
Q4: What about the risks facing AVO; how would you describe those?
A4: The progress we’ve made recently has greatly reduced any technical risk and those aren’t my words but come from our scientific colleagues. Market risk is minimal as there’s a clear unmet medical need for proton therapy systems and recent advances in immunotherapy are likely to be complementary to proton therapy, as most cancers are treated with a combination of radiotherapy, surgery and/or chemotherapy. Furthermore, precisely targeted ultra high doses of ionising radiation i.e. what LIGHT is designed to be able to deliver, can be used to trigger what’s called the abscopal effect, whereby the body’s own immune response attacks outlying secondary tumours. We’re also doing everything we can to minimise regulatory risk. The main risk relates to AVO’s ability to stick to its plan; this is two-fold with management having to ensure the company remains focused on its priority, installing the first LIGHT system in Harley Street, and that we have sufficient funding to realise that goal.
I am continually humbled by our ability to attract the very best people in their fields to work at Advanced Oncotherapy. This gives me great confidence that we will achieve our targets. In addition, the Board is continually looking at ways to optimise our capital structure and ensure we are fully funded through to first patient.
Q5: And what of the opportunity for Advanced Oncotherapy plc?
A5: It is notable that some industry experts, such as Professor Jay Loeffler of Harvard Medical School, and who sits on our medical advisory board, expects proton therapy to completely replace X-ray based radiotherapy, if and when costs become similar for both treatments. Others believe the two approaches will be used to treat different types of cancers. Whatever the eventuality, there is a growing body of evidence on proton therapy’s clinical superiority.
I’ve had a long career in healthcare; AVO is, without a doubt, the most exciting project I’ve had the opportunity to be involved with.
AVO has the capacity to disrupt and gain significant market share in not just the proton therapy global market, which is set to break the $1 billion mark in the next few years, but the whole radiotherapy market. Bearing in mind that only around 1% of the world’s population in need of radiotherapy will receive proton therapy, the opportunity for AVO cannot be overstated.
