Bionomics Limited

BNO Details

Change of Substantial Holding: Bionomics Limited (ASX: BNO) is mainly involved in the development of novel, allosteric ion channel modulators that transforms the lives of patients suffering from serious Central Nervous System (CNS) disorders. On 20 December 2021, one of the company’s substantial shareholders, William Blair & Company, L.L.C, reduced its holding in the company from 28.3% to 21.99%. William Blair & Company, L.L.C now holds around 287,960,738 ordinary shares of the company.

Highlights of H.C. Wainwright BIOCONNECT Virtual Conference: On 10 January 2022, BNO participated in H.C. Wainwright BIOCONNECT virtual conference, wherein, the management highlighted, its drug, BNC210, is in Phase 2b ATTUNE trial with Fast Track designation from FDA for PTSD (Post-Traumatic Stress Disorder).

• The company has developed a strategic partnership with Merck & Co. for the treatment of cognitive impairment in Alzheimer’s disease with two compounds in clinical development.
• BNO has a pipeline of partnering candidates targeting potassium (Kv) and sodium (Nav) ion channels.
• As of 30 September 2021, the company had cash balance of US$40.4 million (unaudited) and zero debt in its balance sheet.

Net Loss Trend (Source: Analysis by Kalkine Group)

Key Risks:

• Regulatory Risks: Any delay in the receival of approval from regulatory authorities could impact the company’s operations.
• COVID-19 Uncertainties: The restrictions associated with COVID-19 pandemic could cause a delay in the company’s clinical trials.

Outlook: Looking ahead, the company is focused on undertaking drug and clinical development and will seek to commercialise the outcomes. The Phase 2 trial of BNC210 is currently undergoing and the topline data from the trial is expected by end of 2022.

Stock Recommendation: Over the last three months, the stock has been corrected by 19.99% and is trading lower than the average 52-week price level band of $0.089 -$0.448. On a TTM basis, the stock is trading at a price to book multiple of 2.8x, lower than the industry (Healthcare) median of 3.6x, thus seems undervalued. Considering the company’s robust balance sheet, ongoing trial of BNC210, modest outlook, current trading level, valuation on TTM basis, and key risks associated with the business, we give a “Speculative Buy” rating on the stock at the current market price of $0.098 as on 24 January 2022, 3:30 PM (GMT+10), Sydney, Eastern Australia.

BNO Daily Technical Chart, Data Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and is subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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