OSL Details

OncoSil Medical Ltd

H1FY21 Result Performance: OncoSil Medical Ltd (ASX: OSL) is an Australian based medical device company with an emphasis on treating patients with pancreatic and liver cancer. OSL has recorded revenue of around $93k during the H1FY21 and bagged the first commercial sale of its Oncosli device. Thus, it allowed the company to start garnering revenue after years of development. The company has sold 9 doses during the period, which includes both commercial as well as non-commercial doses. The company has recorded an increase in its net loss after income tax to $4.7 million in H1FY21 from $3.4 million in H1FY20. The company had current assets of around $18 million at the end of H1FY21.

H1FY21 Financial Performance (Source: Company Reports)

Outlook: The company is looking at bagging required approvals in order to commence commercial sales in Europe. Meanwhile, it has got the formal approval for 9 sites in UK from HRA as well as REC and it is in the last leg of commercialisation of the same. The company has filed humanitarian device exemption with FDA with respect to distal cholangiocarcinoma (bile duct cancer) in July 2020 and is in the process of finalising the data package as requested by the FDA. Besides, the company is mulling at augmenting acceptance in the New Zealand market and for this, it is working with more sites.

With respect to the application to the Therapeutic Goods Administration (TGA) in Australia, which was submitted in July 2020, the company has already shared additional data on 11 January 2021 as required by the TGA.

Key Risks: The company is exposed to the risks associated with COVID-19 uncertainties. Further, the company is also exposed to regulatory risks, as it requires approvals from health regulatory authorities.

Stock Recommendation: The stock of OSL has delivered a negative return of ~23.20% in the past six months and a negative return of ~24.68% in the past one year. The stock is trading lower than the average 52-weeks price level range of $0.088- $0.180. On a TTM basis, the stock is trading at a price to book value multiple of 4.5x, lower than the industry average of 37.7x. On the technical analysis front, the stock has a support level of ~$0.08 and resistance of ~$0.14. Considering the commencement of revenue in H1FY21, the company’s continued focus on further commercial sales across different geographies, modest outlook, current trading level, valuation on TTM basis, and associated key risks, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.096 per share, up by 2.127% as on 6^th April 2021.

OSL Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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