Bionomics Ltd

BNO Details
 
BNC101 and BNC105 represent promising candidates: Recently, Bionomics released new pre-clinical data from ongoing studies of BNC101, its anti-LGR5 cancer stem cell (LGR5 positive cancer stem cells are highly prevalent within metastatic colorectal cancer and lead to a higher tumor recurrence in patients) drug candidate being developed to treat solid cancers. The data presented in Washington, DC demonstrates complementary anti-tumor activity between BNC101 and checkpoint inhibitors (Checkpoint inhibitors are a form of immunotherapy that increase the ability of the immune system to recognize and destroy tumor cells that would otherwise escape immune surveillance). Importantly, preclinical data highlights the ability of BNC101 to induce the recruitment of Natural Killer cells to the LGR5 positive cells through an effect known as Antibody dependent cell-mediated cytotoxicity (ADCC), and strongly supports further clinical evaluation. With regards to update on another key candidate, BNC105, Bionomics will evaluate the candidate in combination trial with blockbuster immune-oncology drug Keytruda. This will be the first clinical assessment of the combination of the PD-1-inhibitor Pembrolizumab (Keytruda) with the vascular disrupting agent BNC105. It will be tested in patients with advanced cases of melanoma, who were unresponsive to standard treatments. Results from the trial are anticipated to include objective response rate of the combination in overcoming therapeutic resistance in melanoma, overall survival, progression-free survival, duration of response to pembrolizumab and BNC105.
 

Half yearly Results (Source: Company Reports)
 
Recommendation: BNO stock has declined 13.5% in the past one month as on May 05, 2017, but rose 6.25% on May 08, 2017 with improving sentiments at the back of the ongoing developments. We maintain a “Speculative Buy” recommendation at the current price of $ 0.34


BNO Daily Chart (Source: Thomson Reuters) 

Mesoblast Ltd

MSB Details
Successful interim result for MPC-150-IM is a key milestone:Recently, MSB announced that the Phase-3 trial of its allogeneic mesenchymal precursor cell (MPC) product candidate MPC-150-IM in patients with moderate to advanced chronic heart failure (CHF) was successful in the first 270 patients. Notably, there were no safety concerns relating to MPC-150-IM after notifying the interim analysis results and the trial is expected to continue as planned. Advanced heart failure is a very serious and life-threatening disease, and there is an urgent need to develop a safe and effective new therapy for these patients that may halt or reverse disease progression and prevent the high associated mortality. This ongoing double-blinded randomized (1:1) trial is currently being conducted across multiple study sites in the United States and Canada, and evaluating in adult patients with moderate to advanced New York Heart Association (NYHA) Class II/III chronic heart failure with left ventricular systolic dysfunction. The United States Food and Drug Administration (FDA) had cleared the commencement of a 24-patient trial combining Mesoblast’s proprietary allogeneic MPCs with corrective heart surgery in children under the age of 5 with hypoplastic left heart syndrome (HLHS).

Recommendation: For Q3FY17, cash flows from operating activities represented an outflow of US$25 million (US$72 million outflow for 9MFY17) and MSB has cash and cash equivalents of US$69 million. The stock has moved up 75.33% over the past three months as on May 05, 2017, led by the optimistic results from ongoing clinical trials. However, the stock slipped about 15.9% in last five days despite any specific news. Given the volatile scenario, we maintain a “Hold” recommendation on the stock at the current price of $ 2.70


MSB Daily Chart (Source: Thomson Reuters) 

Cynata Therapeutics Ltd

CYP Details
Noteworthy progress for key trials: During Q3FY17, Cynata received the conclusive proof of concept study of its Cymerus therapeutic mesenchymal stem cell (MSC) product CYP-001 for acute graft versus host disease (GvHD). The report established the initial study findings which showed a clear therapeutic effect with prolonged survival. Following the September 2016 clinical trial approval from the UK Medicines and Healthcare Products Regulatory Agency (MHRA), it has also received approval from Australian Human Research Ethics Committee (HREC) and the National Health Service (NHS) Health Research Authority (HRA) in the UK. Moreover, the company is already recruiting patients for Phase-1 clinical trial and expects to report results in H12018.The final report of the initial preclinical study with Monash University confirmed Cymerus MSCs have a significant and beneficial impact on all three components of asthma (hyper-responsiveness, inflammation and airway remodeling). Importantly, the findings from the report led to Cynata signing an agreement in March 2017 with the Monash Lung Biology Network to conduct a further preclinical study for the use of Cymerus MSCs in the treatment of asthma with and in comparison, to corticosteroids, which are the most widely used treatment to control asthma exacerbations. Further, Cynata received positive preliminary data from its preclinical heart attack study conducted at the Westmead Institute for Medical Research, Sydney. On Oncology front, Cymerus technology has now been integrated with apceth’s (GmbH & Co.) in-house cell culture and genetic modification system aimed at developing new therapeutics for MSCs in cancer and other diseases. Agreement with a leading global technology and healthcare company FUJIFILM to further develop and commercialize the Cymerus technology, will help Cynata receive an upfront US$3 million fee along with future milestone payments more than AUD$60 million (including royalties on product sales), while future development costs of CYP-001 will be borne by FUJFILM. Earlier this year, Cynata secured $6 million in a placement of 9.23 million shares at $0.65c to sophisticated and institutional investors.

Recommendation: With considerable progress during Q3FY17, Cynata is well positioned in the regenerative medicine space and is focused on several key target disease areas to generate data to support clinical utility. The stock declined by about 31% over the past three months as on May 05, 2017, but roared up 17% on May 08, 2017 with improvement in sentiments considering the ongoing progress on clinical trials. A latest research note from Shaws and Partners have added to the buoyed sentiment. We give a “Speculative Buy” recommendation on the stock at the current price of $ 0.51


CYP Daily Chart (Source: Thomson Reuters) 

Sirtex Medical Ltd

SRX Details
SARAH clinical trials against Bayer Healthcare’s Nexavar: Recently, Sirtex has announced the results of the 459 patient SARAH clinical study comparing the current standard-of-care systemic therapy sorafenib (Nexavar, Bayer Healthcare Pharmaceuticals) in patients with non-resectable advanced hepatocellular carcinoma (HCC). While the study did not meet the primary endpoint of OS superiority versus sorafenib, it showed both treatments resulted in a similar OS in patients with beneficial safety, toxicity and Quality of Life (QoL). The SARAH study is the first ever large randomized controlled trial with Level I clinical evidence to demonstrate that a liver-directed therapy and offers patients a similar overall survival benefit to the current standard of care chemotherapy agent sorafenib with significantly less side-effects and improvements in the quality of the patient’s life. Further analyses from the study will include the cost-effectiveness of SIR-Spheres, dose-related efficacy in the SIR-Spheres group and prognostic factors. Althouth it did not meet primary endpoints, Sirtex planned to commence sales and marketing activities on the SARAH study results across EMEA, APAC, Latin America and Canada, given other positive attributes.
 
Recommendation: With the not-so-appealing results of SARAH on survival rates, the stock declined 14.99% over past one month. The stock on the other hand surged 4% on May 08, 2017 partly owing to sector-driven gains. We give “Hold” recommendation on the stock at the current price of $ 15.84


SRX Daily Chart (Source: Thomson Reuters) 

Somnomed Ltd

SOM Details
Subdued outlook:SOM lately announced that its subsidiary Renew Sleep Solutions (RSS) in the U.S. had opened its fourth treatment centre in St. Louis, Missouri and is moving well ahead of plan and will exceed target of having 5 operating outlets by end of financial year. On the other hand, SOM revenues for Q3FY17 grew by 2% year on year (yoy) to $11.25 million impacted by stronger Australian dollar exchange rate movements while subdued sales in North America negatively impacted the overall number. 

Global Unit Sales and Revenue Growth (Source: Company Reports)
 
However, Europe continues to perform well by growing 26% yoy and enabled it to surpass North American sales for the first time in the company’s history in the third quarter. While the company has witnessed signs at the end of Q3 that US business was stabilizing and US sales are expected to grow at a greater rate during Q4, the reaction to the launch and opening of RSS of some of customers had affected US sales in Q3. Hence, it is expected that the volume of selling devices for the financial year 2016/17 is to come down to 67,000 (revised from 71,000), and revenues expected to be $50 -$53 million at constant exchange rates and EBITDA expected to be a loss of $1.5 million (against earlier break-even guidance). Cash outflow for the quarter stood at $1.88 million, while the cash balance was at $13.9 million. The stock has fallen about 23% in last six months (as at May 05, 2017). Given the revised guidance downwards and gloomy outlook going forward, we give a “Hold” recommendation at the current price of $ 2.97


SOM Daily Chart (Source: Thomson Reuters)

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