Bionomics Ltd

BNO Details

BNC210 data demonstrates it as a novel treatment: Recently, Bionomics Limited (ASX: BNO) presented its BNC210 data at the Society of Biological Psychiatry Annual Convention in May 2017 in San Diego, CA. The data highlights a successful Phase 2 double-blinded, placebo controlled clinical trial in Generalized Anxiety Disorder (GAD) patients evaluating the effects of BNC210 on task-related brain activity and behavior associated with anxiety. This study used the anxiety provoked emotional faces task during functional magnetic resonance imaging (fMRI) scanning and evaluated defensive behavior using the Joystick Operated Runway Task (JORT). Amygdala hyperactivity has been associated with GAD and other anxiety related disorders. It is also associated with stress and trauma related conditions such as Post Traumatic Stress Disorder (PTSD). Anxiolytic drugs including the benzodiazepines, have been shown to diminish this hyperreactivity, suggesting that normalization of amygdala activity is critical to successful treatment of symptoms. Importantly, the data demonstrate that BNC210 treatment reduced bi-lateral amygdala reactivity to fearful faces relative to placebo. Additional analysis of the data also showed that connectivity between the amygdala and the anterior cingulate cortex was reduced in patients treated with BNC210. The results of this clinical trial indicate that BNC210 reduces activation of anxiety-related neural circuits and reduces anxiety-related behaviors. Notably, this highlights the potential of BNC210 as a novel treatment for patients who are suffering with GAD and other anxiety related disorders and suggests a role for BNC210 in the treatment of stress and trauma related disorders.

Recommendation: BNO stock has declined 13.5% in the past one month as on May 05, 2017, but rose 6.25% on May 08, 2017 with improving sentiments at the back of the ongoing developments. We maintain a “Buy” recommendation at the current price of $ 0.405

Mesoblast limited

MSB Details

Partnering with global pharma players: During 9MFY17, Mesoblast Limited (ASX: MSB) executed its planned operational streamlining and reprioritization of projects to successfully absorb the incremental costs of the MPC-150-IM Phase 3 program in advanced chronic heart failure (CHF). Due to these measures, cash outflows for R&D product support costs, manufacturing, and management & administration were reduced for the nine months of FY2017 by US$16.4 million (24%), compared with the nine months of FY2016. For the third quarter of FY2017, cash outflows for the same operational activities were reduced by US$5.1 million (23%) compared with the third quarter of FY2016. After absorbing the incremental R&D costs associated with the CHF Phase 3 trial, together with increased spend on advancing the other Tier 1 product candidates in Phase 3 trials, total operating cash outflows were reduced by US$0.8 million as compared to the first nine months of FY2016. As of March 31, 2017, the Company had cash reserves of US$69.1 million following a capital raising of approximately US$40 million. Mesoblast has established an equity facility for up to A$120 million/US$90 million, to be used at its discretion over the next two years to provide additional funds as required. Further, the company intends to partner one or more of its four Tier 1 product candidates to increase cash reserves and further reduce cash burn. As part of its strategy, the company is in exclusive negotiations with Mallinckrodt Pharmaceuticals about a potential commercial and development partnership for two of its lead product candidates.

Recommendation: The stock has moved up 67.2% over the past six months as on June 08, 2017, led by the optimistic results from ongoing clinical trials. Although, the stock has moved up significantly over the past few months, given the ongoing progress on clinical trial programs, we give a “Buy” recommendation on the stock at the current market price of $ 2.16

CSL Limited

CSL Details

Robust performance in H1FY17: For H1FY17, CSL Ltd (ASX: CSL) reported for a net profit after tax (NPAT) of $806 million, growth of $87 million or 12% on a reported basis against the prior comparable period (PCP). The underlying NPAT grew 36% and earnings per share (EPS) increased 39% on a constant currency (CC) basis (excluding the one-off items related to the Novartis influenza vaccines business acquisition). Based on the first half fiscal 2017 profit and expected performance for the second half of fiscal 2017, CSL has outlined NPAT growth for FY17 in the range of about 18% to 20% at constant currency over the FY16 result. The group along with an international team of scientists came up with a successfully prevention methodology for the progression of Diabetic Kidney Disease (DKD) in laboratory studies of type 2 diabetes. The stock has moved up 36.2% in last six months (as at June 08, 2017) and is trading near its 52-week elevated levels. We give an “Expensive” recommendation at the current price of $ 135.32

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