Company Overview: Bionomics Limited is a clinical-stage biopharmaceutical company engaged in discovery and development of drug candidates focused on the treatment of central nervous system (CNS) disorders and cancer by using its platform technologies. The Company's segments include Drug discovery and development, and Contract services. The Drug discovery and development segment includes the discovery, development and commercialization of compounds to match a target product profile. The Contract services segment includes the provision of scientific services on a fee for service basis to both external and internal customers. Its product candidates include BNC210, BNC375, BNC101 and BNC105. The Company provides treatments for CNS disorders, such as anxiety, depression and Alzheimer's Disease. Its oncology approach targets cancer stem cell therapies in solid tumors. Its technologies include ionX and MultiCore. It operates in three geographical areas, such as Australia, France and the United States.


BNO Details

Bionomics Ltd is focussing on its clinical trials for key product and is aiming to expand its market share by directing research in order to cater to a wide-range of treatments for diseases including cancer and anxiety disorders. The group has strengthened its balance sheet through milestone payment received from its collaboration partner and shareholder, Merck & Co (MSD). It also collaborated for some new ventures and is looking forward to becoming a part of discussions which can drive growth going forward. Its proprietary, novel therapeutic candidate for the treatment of anxiety related disorders and PTSD, BNC210 is tracking well with regards to trial expansion efforts.

Stepping Stones for blockbuster BNC210: Under research and license agreement signed in 2014, Bionomics had received an up-front of US$20 million and was eligible to receive up to US$ 506 million for achieving its research and clinical development milestones. Bionomics was internationally recognised for its expertise in ion channel drug discovery and so it received many opportunities to participate in key, global industry events to showcase its collaboration with Merck & Co, through BNC210 which has been developed for the treatment of anxiety disorders, depressions and Post Traumatic Stress Disorder (PTSD). To enable the expansion of the trial into the US, it was necessary for Bionomics to secure acceptance of an Investigational New Drug (IND) application specially for the use of BNC210 in the treatment of PTSD from the US Food and Drug Administration in addition to the active BNC210 IND for the treatment of anxiety disorders. Bionomics expanded the ongoing Phase 2 trial of BNC210 in patients with PTSD to 192 patients and added US clinical trial sites to those in Australia.
 

BNO Highlights (Source: Company Reports)

Capturing Market Share: Bionomics has emerged from 2017 as a more focused and cost-efficient company as it closed its US operations and indicated for a formal monetisation process for both BNC101 and BNC105. In October, initial data from the Phase 1 clinical trial of BNC101 in patients with metastatic colon cancer became available and the results were quite encouraging. BNO is also making a solid progress in its Phase 2 clinical trial of BNC210 in patients who are suffering from PTSD. With these efforts, the group aims to target a bigger market share in view of potential of its key product and targeted monetisation of BNC101 and BNC105 planned as corporate objectives for 2018. It is noteworthy that US market research conducted by Bluestar BioAdvisors that involved the input of some 30 clinical key opinion leaders and up to seven health insurers has put the US market opportunity for generalised anxiety disorder at US$2.7 billion, PTSD at US$4.7 billion and panic disorder at US$4.4 billion.
 

Market Value Trend (Source: Company Reports)
 
December 2017 Quarterly Results: BNO focussed on the discovery and development of innovative therapeutics for the treatment of diseases of the central nervous system (CNS) and cancer. It is in a decent position to fund its development programs. Cash balance as on 31 December 2017 was $32.021m (30 September 2017: $38.111m) and the net operating cash which was expended during the quarter ending 31 December 2017 was $6.209 m against $3.927m as on 30 September 2017. The cash receipts for the period included receipts from the customers which totalled to $1.683 m for the current quarter against $1.755 m of pervious quarter; and were lower due to the timing of receipts. It also received an R&D Tax incentive refund of $6.788 m in January 2018 which reflected a current cash position of approximately $37.8 m.

Strategic moves of 2017: Bionomics’ US operations were closed in June and this decision resulted in a significant cost saving for the company and had no adverse impact on its clinical and commercial objectives. The result which consolidates all clinical and business operations in Adelaide, provided Bionomics with the ability to be quicker in developing a new drug treatment, in particular BNC210. Securing and maintaining strategic partnerships remained key to Bionomics business model and aimed to facilitate international commercialisation, mitigate risk and generate revenue. A payment of US$10 million from MSD in February 2017 allowed it to progress its drug discoveries without raising additional funds from shareholders. Difficult operational decisions were also made like closure of its operations in San Diego and retirement from the CRC for cancer Therapeutics. This allowed it to consolidate its business and R&D operations in Australia and France and it made a greater use of its exiting synergies.
 

BNC210 Highlights (Source: Company Reports)
 
Financial Performance: Revenues for FY 17 increased by 128% and were recorded at $18.6 million. The reported loss after tax for FY 17 was $6.7 million as compared to FY 16 figure of $16.6 million. Its ROE for 2016 was (43.6%) and for 2017 it was (16.0%). Whereas Return on Invested Capital for 2016 was (24.8%) and for 2017 it was (9.1%). Percentage Debt to Total Capital for 2016 was 28.2% and whereas in 2017 it was 17.0%.

Developments for 2018: BNC210 Phase 2 PTSD clinical trial enrolment is ongoing and has been expected to be completed in quarter 1 of CY 2018. Data from the clinical trial is anticipated in the second half of CY 2018. In addition, it continues to progress its potential partnership discussions and also monetisation of non-core assets. The group recently was a part of “New Approaches to Neuropsychiatry and Pain Management” discussion.  Whilst BNC210, Bionomics’ proprietary ionX drug discovery platform and its relationship with Merck & Co. are the primary focus of the Company; it will continue its recruitment for the BNC101 Phase 1 clinical trial in colon cancer patients. It is pleased with its progress in the formal process to monetise its oncology assets and took the opportunity to meet a number of potential partners during Biotech Showcase in San Francisco held on 8-10 January 2018. The Biotech Showcase was expected to attract over 3,500 attendances which included 400 presenting companies and over 900 investors.

Stock Performance: In the past few years, market capitalization had increased over time and the group is positive with regards to catalysts in 2018 that are expected to entail Phase 2 PTSD trial results and the BNC101 and BNC105 monetisation processes. The group believes in the therapeutic potential and future of BNC105 and BNC101, however, expects the candidates to perform better with a company able to give them the full attention and resources that they richly deserve. Thus, the group now has returned to its ion channel core with renewed focus, and the potential for BNC210 is expected to deliver value finding support from collaboration with MSD. Further, while the heavy market correction is being witnessed, BNO stock has dropped just 2.6% in last five days, as at February 05, 2018. The overall scenario looks encouraging and we give a “Buy” on the stock at the current price of $0.365


BNO Daily Chart (Source: Thomson Reuters)

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