Advanced Oncotherapy Plc (LSE:AVO) recently announced a prospective recapitalisation and funding plan to raise up to £110m1. Amidst the financial challenges the company is facing, this prospective recapitalisation plan is a crucial step. This not only is vital to sustaining investor confidence. But could also ensure stable and strong foundations for operational progress.
While this funding plan has been a breath of fresh air for investors, let’s explore the future prospects of the Advanced Oncotherapy share price.
Key Points
- The company recently announced a prospective recapitalisation and funding plan to raise up to £110m.
- Advanced Oncotherapy shares are currently suspended since the announcement of the non-availability of £8m funding.
- Analysts are very optimistic about the future of the company’s stock.
What does Advanced Oncotherapy do?
Advanced Oncotherapy is a London-based provider of proton therapy for cancer treatment. This treatment is designed to target specific cancers with a more precise, less intrusive, and higher dose of radiation. This technology is currently used in major cancer centres worldwide and has been demonstrated to achieve superior results compared to other forms of radiation treatments.
Despite the financial challenges, the company remains optimistic and plans to treat its first patients with its light proton beam cancer therapy in the second half of 2023.
The bull case for the Advanced Oncotherapy share price
The Advanced Oncotherapy share enjoyed a bullish period from April 2022 to the start of 2021, when the stock hit 47.5p. During this six-month-long bullish period, the stock appreciated by 102%.
However, Since the announcement of the non-availability of £8m funding, Advanced Oncotherapy shares are currently suspended.
Despite that, the company is strongly focused on three immediate objectives: achieving regulatory certification, increasing the size and maturity of its commercial pipeline, and reducing operational spending. Moreover, the cancer treatment company has received tremendous growth in its new customer sales pipeline in fiscal year 2023. This is majorly due to the anticipation of upcoming certification and the extremely promising clinical results demonstrated by our recent studies.
The bear case for the Advanced Oncotherapy share price
Advanced Oncotherapy shares have been on a prolonged bearish run since the start of 2021. From a price of 47.5p, the Advanced Oncotherapy share price has dropped to 1.92p. This is a whopping 95% value depreciation!
One of the major challenges that have been worrying the management and the investors is the financial crunch the company is facing. This situation was further aggravated after the £8m funding was cancelled, putting the company in a highly constrained financial position. To further add fuel to investor worry, the annual report and accounts for the year ended 31 December 2022 have not been published at the current time.
Now, with the suspension of Advanced Oncotherapy shares, the future of the company seems pretty uncertain.
Advanced Oncotherapy share price prediction
There is no denying the fact that a cancer treatment company is under a lot of financial stress. Despite that, analysts are very optimistic about the future of the company’s stock. The 12-month price prediction for Advanced Oncotherapy Share price is to rise up to 166p.
This certainly sounds like the Advanced Onocotherapy shares are getting ready to explode. However, in my opinion, this is a trap. The share price prediction was issued before the financial woes were plaguing the company. And even if its medical technology proves to be superior, it ultimately won’t matter if management cannot secure funding.
Therefore, I’m ignoring these analyst forecasts.
Should I buy Advanced Oncotherapy shares today?
Investors like me are under a lot of confusion about the future of Advanced Oncotherapy share price. On one hand, the analysts have positive projections about the company’s stock. While on the other hand, the company’s financial position tells a different story.
At this stage, there is too much uncertainty surrounding this business to warrant any investment, in my opinion. There may be tremendous growth potential if the shares are resuspended. Or investors may currently be at the end of the line. Time will tell.
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Article sources
- London South East. Advanced Oncotherapy plans to raise up to GBP110 million
Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services.
