Company Overview: OncoSil Medical Limited is a late-stage medical device company, which is focused on localized treatments for patients with pancreatic and liver cancer. The Company is engaged in the development of its lead product candidate, the OncoSil localized radiation therapy, for the treatment of pancreatic cancer. The Company's lead product, OncoSil, is a brachytherapy device that emits beta radiation and is implanted directly inside the cancerous tumor. OncoSil is a silicon and phosphorus (p32) beta emitter, able to be implanted intra-tumorally via endoscopic ultrasonography in localized solid tumors of patients with pancreatic cancer. The Company focuses on an application for Conformite Europeene (CE) Mark to enable commercial sales of OncoSil in the European Union and an application for an Investigational Device Exemption (IDE) from the United States Food and Drug Administration (FDA) to enable commencement of the United States pivotal clinical study, known as OncoPac-1.


OSL Details

Gearing well on the path to Commercialization: Oncosil Medical Ltd (ASX: OSL), a small cap company with market capitalization of about $119.8 million, focuses on the localised treatments for patients with pancreatic and liver cancer in Australia. The company’s lead product is OncoSil, which is a class III brachytherapy device that includes OncoSil Phosphorous-32 Microparticles and OncoSil Diluent, that implants a pre-determined dose of beta radiation emitting isotope directly into cancerous tissue for the treatment of pancreatic and liver cancer. The company’s focus is on an application for Conformite Europeene (CE) Mark required for the commercial sales of OncoSil in the European Union and an application for an Investigational Device Exemption (IDE) from the United States Food and Drug Administration (FDA) to enable starting or initiation of the United States pivotal clinical study, known as OncoPac-1. Before 2015, some studies showed that the company has the  potential for the treatment of the pancreatic & primary liver (HCC) cancer. From 2016-2018, OSL was granted US FDA IDE approval, then the company started with PanCO & OncoPac-1 clinical studies and received highly positive initial data that demonstrates safety, efficacy and implant delivery, consistent with the results from previously completed studies.

OSL’s focus till now was getting this data and 2018 onwards the company has been focusing on the commercialization. For this, OSL is required to secure strategic partnerships and licensing agreements in all the key geographies, including EU & US. It also plans to get the licensing agreements in unique geographies like China, Japan & India and then it will leverage its potential for broader distribution, capital and market support and exposure. Therefore, the company is focusing on two concurrent trials, in which company is targeting 65 patients to get the desired results. The first trial is of PanCO, which is being done on 45 patients and the trial involves open label study in patients that have unresectable locally advanced pancreatic cancer in which the OSL’s product is being given in combination with SOC chemotherapy. The second trial is of OncoPaC-1, which is given on 10 patients to do open label study in patients that have unresectable locally advanced pancreatic cancer and this is also given in combination with SOC chemotherapy. Overall, OSL’s focus is to explore clinical study options inresectable, borderline resectable and locally advanced pancreatic cancer indications. The company will take final decision on future studies on the back of the data received from ongoing studies and feedback from US FDA. These future trials will lead to the clinical adoption in EU by getting EU regulatory approval (this includes CE Mark certification for pancreatic cancer, which is expected in near-term) and will also help in generating data for US FDA approval (PMA).


Strategic Plan (Source: Company Reports)

Appointed IQVIA as EU Market Access and Reimbursement Advisor: OSL stock had witnessed price rise, after the company’s appointment of IQVIA in Europe as part of commercialisation strategy. IQVIA is appointed to be its Market Access and Reimbursement advisor for the OncoSil device in multiple EU markets including France, UK, Germany and the Nordic countries. IQVIA is a NYSE-listed global provider of advanced analytics, technology solutions, and contract research services to the health care industry. IQVIA will work with OSL to undertake detailed feasibility assessments, pathway specifications, and market penetration activities in the lead up to OncoSil Medical receiving CE Mark Certification and first commercial use of the OncoSil device in patients. After IQVIA’s appointment, the company has already undertaken lot of work and will be  focusing on early and special reimbursement options, private paying alternatives for patients, special funding for treatment of challenging cancers and reimbursement options at local, regional and national or governmental level. Further, both will develop strategic and effective approach for the commercialisation of the OncoSil. IQVIA will bring deep experience commercialising breakthrough technologies as it is a globally recognised leader in the provision of information, technology solutions and contract research services in the healthcare sector. Overall, this is a significant milestone in the company’s commercialisation strategy in expectation of securing CE Mark approval and moving into early commercialisation of the company’s device over the coming months.


Oncosil Device’s Implantation (Source: Company Reports)

Global Commercial opportunity in excess of $2bn: It is found that more than 70,000 relevant patients are in EU and US alone; and with the company exploring clinical research options in resectable & borderline resectable patients, the opportunity looks great. The company for Pancreatic cancer, first go for advanced locally (35-40%), in which the company is providing suitable treatment for controlling the growth of the primary tumour and to provide meaningful reductions in pain. Then, the company goes for surgical re-section (15%) to cure Pancreatic cancer, however, OSL will be using its product to downstage tumours before the surgery to improve outcomes from surgery. Lastly, for Pancreatic cancer, OncoSil may be used to control tumour growth, which comprise of increasing the pain and to improve quality of life. Further, OncoSil’s potential pricing of US$25,000 per patient, which is in-line with other on-market devices, shows that there is more than $2bn global market opportunity.

Received highly encouraging clinical results from interim analysis conducted on OncoSil’s PanCO study:  OSL has received highly encouraging clinical results from the Interim Analysis conducted on OSL’s PanCO study, and has recorded strong clinical performance across the multiple metrics. The PanCO study is currently running over at various sites in Australia, the UK and Belgium, and in July 2018. The company had closed recruitment globally after the successful enrolment of 50 patients per study protocol. OSL is progressing with its OncoPaC-1 study in the US that is open for recruitment across all activated trial sites. From an Interim Analysis conducted on OSL’s PanCO study, 42 patients were implanted with the device. Local Disease Control Rate (LDCR) is of 88% at Week 16 in the implanted population (N=42, P<0.0001). There is a strong evidence of target tumour regression, with statistically significant and in some cases substantial volumetric reduction (29.7% mean tumour volume reduction by Week 16; maximum reduction 90%; P<0.0001). Till now, nine patients have undergone surgical resection (tumour removal) with curative intent (21.4% resection rate) and 8 out of the 9 resections have reported specific surgical margins. The company had submitted Interim Analysis to BSI as additional evidence of the clinical performance and safety profile of the OncoSil device. The resection data reflects the potential to “convert” selected patients from an initially inoperable status to a surgically resectable and potentially curative state when OSL is used in combination with chemotherapy. This finding has provided the support for future studies of the OSL device as part of a neoadjuvant treatment strategy in resectable and/or borderline pancreatic cancer. Moreover, the Interim Analysis involved comparison of results by using two patient populations for the analysis, that comprised Intention-to-Treat population (ITT Population), including all 50 patients enrolled regardless of whether they were implanted with the OncoSil device or not. The Per Protocol population comprised of all 42 patients enrolled and implanted with the OncoSil device (Per Protocol Population).

Applied to get CE Mark: OSL has applied to get CE Marking, and the British Standards Institute (BSI), the Notified body currently looking on the Company’s CE Marking application, is undertaking the detailed review necessary for granting the CE Marking as is required by the relevant EU laws and regulations. Further, OSL has submitted the full PanCo Interim Analysis data, which is an additional evidence of the clinical performance and safety profile of the OSL device.

Funds Raised in FY 18: In FY 18, OSL successfully completed the oversubscribed institutional placement and raised approximately $12.7m and has completed an oversubscribed Share Purchase Plan (SPP), by raising approximately $4.0m.

Eligible for the research and development tax incentive scheme: OSL’s ongoing research and development activities that comprise of components of the global pancreatic clinical study programme (PanCo & OncoPaC-1 studies), are eligible for the research and development tax incentive scheme. As a result, OSL has received a cash refund from the Australian Taxation Office of $4.3m after the lodgement of the FY 18 tax return. This cash rebate is related to the expenditure on eligible Australian and international R&D activities conducted during the FY 18. After the receipt of these funds, the company has approximately $16.0m in cash and cash equivalents.


M&A Trends in the sector (Source: Company Reports)

Stock Recommendation: Meanwhile, OSL stock has fallen 9.52% in three months as on December 06, 2018. The stock is trading at the level of A$0.205, and has resistance at $0.25 and support at $0.165. OSL for CY 18 had planned to get CE Mark Certification, and is targeting EU first sales, which is yet to happen. The company is progressing with OncoPaC-1 trial, in which only 8 patients have enrolled & implanted. The company is tracking well to securing strategic partnerships and licensing agreements in key geographies, and to get additional licensing partners in unique geographies like Japan, China & India. The M&A trend in the sector can also give a head-ups in terms of opportunities for OSL that may take shape going forward. Therefore, given the scenario while the group is yet to improve on the financial performance, we give a “Speculative Buy” recommendation on the stock at the current price of $ 0.205, up 7.9% on December 07, 2018.

 

OSL Daily Chart (Source: Thomson Reuters)
 
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