Bionomics Limited

BNO Details

Q3FY22 Financial and Operational Summary: Bionomics Limited (ASX: BNO) is engaged in the development of innovative treatments for cancer and diseases of the central nervous system.

Q3FY22 Summary (Source: Analysis by Kalkine Group)

Key Risks: BNO’s operational and financial health could be impacted by any failure in the clinical trial. The company is exposed to risks arising from regulatory uncertainties, liquidity risk, etc.

Outlook: The company is optimistic about the diversified model with multiple value-driving clinical milestones in the next 4 – 6 quarters. In addition, BNO believes that the diverse early-stage pipeline of partnering prospects is targeting Kv and Nav ion channels for the treatment of schizophrenia and pain, respectively.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Source: Analysis by Kalkine Group 

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation: The stock of BNO is trading at par to its 52-week low level of $0.058, offering a decent opportunity for accumulation. The stock has been corrected by ~4.83% in the past month. The stock has been valued using an EV/Sales multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers, considering the macroeconomic uncertainties, negative ROE, etc. For valuation, peers such as Pacific Edge Ltd (ASX: PEB), Mesoblast Ltd (ASX: MSB), and Paradigm Biopharmaceuticals Ltd (ASX: PAR) have been considered. Considering the expected upside in valuation, decent progress in Q3FY22, decent liquidity position, optimistic outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing market price of $0.058, down by ~3.333% as of 09 June 2022.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

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 subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

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

Resistance: A level where-in stock prices tend to find resistance when they are rising, and an 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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