Bionomics Limited

BNO Details

Recent Business Update: Bionomics Limited (ASX: BNO) is engaged in the development of innovative treatments for cancer and diseases of the central nervous system.

• 06 January 2022:BNO announced the issuance of 243,300 American Depositary Shares (ADS), which represents 180 ordinary shares of BNO, relevant to the exercise of complete underwriters’ options. The ADSs were sold at the offering price of US$12.35/ADS.
• 04 January 2022: BNO announced the commencement of its Phase 2 clinical trial under the PREVAIL Study for the evaluation of BNC210 to treat Social Anxiety Disorder, with top-line inflow expected by the end of 2022.

Q1FY22 Quarterly Activity Update

• Appointment of Mr. Miles Davies: BNO appointed Mr. Miles Davies as a Non-executive director on the board of BNO, replacing Dr. Srinivas Rao.
• Initiation of Phase 2b Trial: BNO announced the commencement of Phase 2b trial for the evaluation of the tablet formulation of BNC210 in patients suffering from Post-Traumatic Stress Disorder.
• Capital Distribution: BNO announced to engage in capital distribution, in line with the US offering, representing an economic interest in royalty payments received by BNO under its exclusive Research Collaboration and License Agreement.
• Cash Position: The cash balance as of 30 September 2021 stands at $22.17 million, down from $28.50 million registered in the previous quarter.

Q1FY22 Liquidity Position, Analysis by Kalkine Group

Key Risks and Challenges

• Risk of Obstructions in Clinical Trials: BNO’s financial and operational metrics are highly sensitive to potential status for clinical trials.
• High Regulatory and Approval Risks: Considering the industry requirements, BNO is expected to walk through a stretched timeline of regulatory approvals with a potential risk of refusal.

Outlook: BNO’s ATTUNE Study is under evaluation for the oral tablet formulation of BNC210 relative to placebo in circa 200 PTSD patients in the US. Notably, US IPO offerings shall deliver substantial cash support for R&D expenditure and improve sustainability in stretched timelines of the regulatory process.

Stock Recommendation: The stock of BNO gave a negative return of ~30.736% in the past year. The stock has touched its 52-weeks low of $0.096. BNO’s 52-weeks band stands at $0.096 - $0.448. The stock is trading at a P/BV multiple of 2.8x compared to the industry median (Healthcare) of 3.8x on a TTM basis. Thus, it can be said that the stock is undervalued at the current trading levels. Given the completion of US IPO, decent cash position to sustain R&D expenditure, low debt to equity levels, current trading levels, valuation ON TTM basis, and key risks associated with the business, we give a “Speculative Buy” recommendation on the stock at the closing market price of $0.096, down by ~2.041%, as of 11 January 2022.

BNO Daily Technical Chart, Data Source: REFINITIV

Note: The purple line reflects the RSI (14-day period)

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 Valuation has been achieved and is subject to the factors discussed above.

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 unfavorable movement in the stock prices.

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