Shares of Advanced Oncotherapy PLC (LON: AVO) jumped 15.1% after signing a letter of intent to supply Saba Partners with a three-treatment room proton therapy system for cancer treatment valued at up to US$107 million (£75.5 million).
The contract’s value reflected the purchase price of the proton therapy systems and the associated installation and extended long-term maintenance costs. There is also a warranty agreement.
Advanced Oncotherapy is a company that develops next-generation proton therapy systems for cancer treatment knowns as LIGHT systems. On the other hand, Shaba is an investment firm based in Geneva, Switzerland, with decades of experience investing in the healthcare sector.
Shaba is planning to build a medical centre that will host the proton therapy centre in Glion, Switzerland.
Today’s announcement results from Advanced Oncotherapy’s partnership with DiaMedCare AG to offer its European and US clients access to its LIGHT system via flexible financing agreements, eliminating the need for large upfront payments from customers.
Advanced Oncotherapy also announced that it was planning to enter into another exclusive supply agreement with Shaba Partners to supply proton therapy services in the Gulf Cooperation Council (GCC).
The firm intends to leverage Saba Partners' presence in Saudi Arabia’s healthcare sector to make its LIGT systems available to GCC countries, such as Egypt, Oman, Kuwait, Qatar, the UAE, Saudi Arabia, and Bahrain.
Nicolas Serandour, Advanced Oncotherapy’s CEO, said: “Today's announcement represents another key milestone for Advanced Oncotherapy and demonstrates the significant potential market for the LIGHT system where we estimate that 4,000 proton therapy centres are required worldwide; while only 95 facilities currently exist.”
Investors cheered the move, as evidenced by today’s rally despite the letter of intent being unbinding. The two companies have up to 31 March 2021 to sign a binding contract.
Advanced Oncotherapy’s share price.
Advanced Oncotherapy shares jumped 15.07% higher to trade at 38.55p, rising from Wednesday’s closing price of 33.50p.