OncoSil Medical Ltd

OSL Details

OncoSil Medical Ltd (ASX: OSL) is an Australian biotechnology company focused on interventional oncology  and treating patients with pancreatic and liver cancer.

H1FY21 Result Performance (For the Period Ended 31 December 2020)

Reported Revenue of Around $93k: OSL has recorded revenue of around $93k during the period and the company bagged first commercial sale of its Oncosli device in New Zealand. This makes it a revenue-generating company after years of development.

Increase in Net Loss to $4.7 million: The impact of restrictions and lockdown amid Covid-19 resulted in the postponement of the company’s launch. 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 due to higher expenses. The company has a decent liquidity position of around $18 million at the end of H1FY21.

H1FY21 Financial Performance (Source: Company Reports)

Quarterly Activities Report (For the Quarter Ended 30 June 2021)

• The company is witnessing sustained progress through the final stages of onboarding and training of the remaining hospitals in the UK that have got ethics approval from the Health Research Authority (HRA) and the Research Ethics Committee (REC), along with the receipt of the appropriate radiation licenses.
• In Germany, the sales team is concentrating initially on prospects through hospitals where “single patient approvals” can be received for reimbursement by statutory German health funds (Krankenkassen), on a case-by-case basis.
• The company continues to have talks with various distributors in EMEA serving countries that recognises the CE Marking approval for local registration. It is also targeting smaller European countries including  Switzerland, Austria, Portugal, Greece, Israel, Turkey and Egypt.
• In the USA, the updating of the data package to the FDA is in process, with COVID hampering the closing out of the Panco clinical study.

Recent Update

Appointment to the Board: As per the press release dated 20 July 2021, the board of the company has appointed Mr Otto Buttula to the OncoSil board as a Non-Executive Director effective 20 July 2021. Mr Buttula is a prominent biotech investor and has a rich experience of over 30 years in investment research, funds management and information technology.

Bagged Regulatory Approval: The company, on 4 May 2021, informed that it has bagged the regulatory clearance to market and sell the OncoSil^TM device in Hong Kong. This device will be used for the treatment of locally advanced pancreatic cancer (LAPC).

Outlook

The recent regulatory approval from Hong Kong has aided the company in achieving a key milestone in its commercialisation strategy in Asia, following the bagging of approvals in Singapore and Malaysia in 2020. Further, its discussions with APAC hospitals are in advanced stage to attain Osprey registry approval.

Besides, it has commenced commercial sales in New Zealand and has also filed its application with the Therapeutic Goods Administration (TGA) in Australia.

To fastrack the registration approvals and increase the number of sites for the treatment of the OncoSil device, the company will continue to have discussions with other distributors  of countries in both EMEA and APAC.

Key Risks:

The company’s operations are exposed to the risks associated with Covid-19 uncertainties. Further, it is prone to regulatory risks due to its requirements of approval from health regulatory authorities.

Technical Overview:

Chart:

Source: REFINITIV

Note: Purple Color Line Reflects RSI (14-Period)

Stock Recommendation

The company holds a decent cash position and its cash and cash equivalent stood at around $12.2 million at the end of 30 June 2021. The stock price of the company declined by ~52.7% in 1 year. It has made a 52-week low and high of $0.046 and $0.180, respectively.

Considering the commencement of revenue generation, along with focus on further commercial sales across different geographies, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.051 per share (Australia Time: 12:08 PM (GMT+10)) on 6^th August 2021.

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 on 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 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 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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