OncoSil last traded at $0.16 per share. The following is an extract from the report.
Path towards Commercialisation - valuation 80 cents per share
Based on our NPV valuation, we believe that OncoSil Medical is substantially undervalued at the current share price of AUD 0.16.
Considering the upcoming CE Mark, OncoSil™'s much higher potential commercial success compared to Sirtex' SIR-Spheres (with total annual sales of more than AUD 176 million) and the high unmet medical need in pancreatic and primary liver cancer, induces us to increase our valuation.
The previous estimate was AUD 170-210 million and to calculate a more justified valuation of OncoSil™ of AUD 275-325 million or AUD 0.65-0.80 per share.
This represents a substantial upside from the current share price.
- OncoSil Medical (ASX:OSL) is an Australia based Life Sciences company that provides an innovative technology for safer and more effective radiation therapies for difficult to treat cancers like pancreatic cancer and hepatocellular carcinoma (NYSE:HCC).
Its lead product is OncoSil™ for pancreatic cancer.
A second indication is HCC. For both indications the company filed for a CE Mark in the EU, which is expected to be granted early 2016.
- In July 2015 the company filed the CE Mark Design Dossier for both pancreatic and HCC liver cancer to the Notified Body.
In September 2015 it was announced that the Notified Body has scheduled a Fast Track review for OncoSil™, which took place on October 6th over a period four days.
We expect that the CE Mark will be awarded end of 2016Q1. A CE Mark will facilitate commercialization and sales in large markets other than the EU including Australia, Canada and Singapore.
The company also filed for an IDE with the FDA, for which we expect approval towards the end of 2016Q1 as well.
- Both the market for pancreatic cancer and HCC liver cancer are estimated to be USD 1-1.5 billion.
The lack of effective treatments that offers significantly improved survival rates provides ample opportunity to be a game changer for the treatment of these cancers.
We feel that OncoSil™ therefore has the potential to be a blockbuster (sales > 1 billion) within a few years since the therapy would be useful in other cancers as well.
- Beginning of 2016 the company successfully raised AUD 10 million in an Institutional Placement to finance the commercialization of its lead product candidate OncoSil™.
We feel that the company may raise additional capital at a higher price in early 2017 following regulatory success with the CE Mark and FDA IDE filings in Q1 2016.
The current cash position after this raise is AUD 15 million.
- There are a number of key milestones to focus on in the next 6-12 months which include: approval of the CE Mark in the EU, start of sales in both the EU and other regions as well (Australia, Canada, Singapore), and the approval of the IDE by the FDA.
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