Oncimmune (ONC ) said it has witnessed ‘a marked increase’ in commercial activity during the six months ended 30 November 2020 resulting in ‘substantial’ growth in revenues.
Operational Highlights
ONC has seen a marked increase in commercial activity, despite all the distractions in acute and chronic care caused by the outbreak of CIOVID-19.
Specifically, the group saw improving traction, as well as ‘increasing scientific and commercial validation’ for its two proprietary biomarker discovery platform tools, SeroTagTM and NavigAIDTM,which offer insight into its customers' therapeutic and other assets.
The group signed its first commercial contracts in H20 to supply its EarlyCDT® Lung blood test to the NHS. It highlighted that patient samples are already ‘analysed and increasing engagement’ with NHS England's Cancer Alliances and Clinical Commissioning Groups.
Oncimmune is now holding final negotiations for an additional NHS trust contract to screen over 2,000 patients, which is expected to commence in the first calendar half of 2021.
Sales volumes and forecasts in the US with Biodesix, Inc. for EarlyCDT Lung have ‘materially improved through 2Q2 and Q3. It expects confirmed purchase orders to expand from 32 to 76 by 2022, pointing to ‘an expected increase in commercial activity in 2021 and beyond.’
‘Despite the COVID-19 constraints on customer interactions by our distributors, marketing activity across our global distributor network continues to progress as countries recognise the importance and value of identifying lung cancer early. As national hospital systems open up, we expect product sales to at least return to pre-pandemic forecasts,’ the group noted.
Commenting on the 1H20 results Dr Adam M Hill, CEO of Oncimmune said: “We have experienced a sixfold increase in revenue against the same period last year as we continue to establish partnerships with leading pharmaceutical and biotech companies in the key areas of oncology and autoimmune diseases and, most recently, infectious diseases.”
"The ImmunoINSIGHTS business is underpinned by world leading technologies and expertise which, despite the impact of COVID-19, has delivered significant commercial opportunities. Our progress is a testament to the hard work of our team under the challenging circumstances the pandemic has presented. The key now is to optimise this value creation with growth becoming more evident as we approach the end of FY21 and enter FY22."
Financial Highlights
The global immunodiagnostics group said revenue for the period came in at £1.83m (1H19: £0.31m) after it ImmunoINSIGHTS service business secured seven contracts in 1H20, including with large pharmaceutical firms such as Roche Pharmaceuticals and Genentech.
Oncimmune said it has delivered ‘significant and profitable revenues’ in line with its strategy, with gross profit at £1.41m compared to a previous gross loss of £0.05m in 1H19.
Total administrative expenses as well as Research & Development costs both came in ‘substantially lower’ than the previous years at £2.88m (1H19: £4.88m) and £0.62m (1H19: £1.01m), respectively.
Loss after tax for the period was therefore less than half that for 1H19 at £2.60m, which the group said reflects ‘not only the increased revenues but also lower overall costs.’
The Company reported a gross cash balance at the period end of £3.28m (FY20: £4.24m) and gross debt at the period end of £9.59m (FY20: £7.29m) with a further €3m available under the IPF Management SA credit facility subject to the attainment of certain milestones.
Outlook
The group said there is evidence of ‘sustainable growth’ with its commercial pipeline of over 100 opportunities (up 50% since October 2020) of which 19 are potential contracts worth £10.8m in aggregate from follow-on contracts with existing customers or proposals for new customers.
The group said it expects to announce the signing of a number of these before the end of FY21. It has also invested in further equipment and staff to increase capacity and ‘remove potential operational bottlenecks and to capitalise on all available growth opportunities.’
‘The climate for our biomarker discovery platform technology tools remains strong and we are experiencing an unprecedented level of enquiries from the world's leading biopharmaceutical and biotech companies, resulting in an increasing pipeline of potential projects,' it said.
Oncimmune said its ‘key focus’ is driving the commercial adoption within the NHS. Final negotiations are currently in progress for a further NHS trust contract for the screening of over 2,000 patients, which is expected to commence in the first half of calendar 2021.
Meanwhile, the group noted that the US market is ‘key’ for EarlyCDT Lung and ‘whilst the effects of the COVID-19 pandemic interrupted the launch of the product earlier in 2020, we are now seeing an uplift in product orders by our US partner, Biodesix, Inc. (Biodesix).’
The Group said it is becoming ‘more confident’ that Biodesix will be able to achieve the market forecasts for EarlyCDT Lung as originally set out in our commercialisation agreement and that as the COVID-19 pandemic is contained, full commercial activity will re-commence.
Oncimmune expects to be able to announce further progress over the coming months as it ‘continues to drive the growth trajectory through the second half of 2021 and beyond.’
Few investors fully appreciate the vast potential of immunodiagnostics. Whilst the pandemic has taught us the importance of antibodies in protecting against #Covid19, what is less well understood is that antibodies can also be used as an early warning system to alert doctors about illnesses that a patient might have, but be totally unaware of. This is exactly the expertise that Oncimmune provides Biopharma firms (Roche & Genentech) with its breakthrough ImmunoINSIGHTS technology.
Today #ONC said that it had signed 7 such contracts in H1, & had a pipeline of >100 opportunities, of which 19 had an aggregate value £10.8m. Thus demonstrating the medical significance of its proprietary biomarker discovery platform.
Elsewhere substantial progress has been made in further commercialising its leading earlyCDT lung cancer test in both the UK (NHS) & US (Biodesix, Inc.), alongside helping the world better understand Covid & similar bugs.
With regard to valuation, Exact Sciences & Illumina acquired Thrive ($2bn) & Grail ($8bn) trade on LY multiples of 4-5x total R&D investment. Which if applied to ONC, would deliver a shareprice of >400p vs 172p today. Shares in Oncimmune have only begun to re-rate, increasing nearly 8% in value over the past two weeks in the lead up to the publication of its 1H20 results.
Reasons to Follow ONC
Oncimmune Holdings’ focus is to harness the immune system’s sophisticated response to disease to detect cancer earlier and to support the development of better therapies.
Leading Proprietary Technology Portfolio
The company believes the key to improving cancer survival is early detection and optimal selection for therapy. Oncimmune's immuno-diagnostic test, EarlyCDT, can detect and help identify cancer on average four years earlier than standard clinical diagnosis.
Oncimmune’s core technology also powers its ImmunoINSIGHTS service; a proprietary platform that enables life-science organisations to optimise drug development and delivery, leading to more effective, targeted as well as safer treatments for patients.
The group’s EarlyCDT Lung blood test was previously featured on an ITV news broadcast last weekend titled ‘New Blood Test Provides Breakthrough in Lung Cancer Detection Rates’.
The feature highlighted that, in the UK, more than 35,000 people die of lung cancer each year and most have their lung cancer diagnosed late thereby lowering their chances of survival. 80% of lung cancer cases are diagnosed in the latest stages of the disease.
The EarlyCDT test works to identify the immune system's response to the presence of lung cancer. The test detects antibodies present in the body, enabling clinicians to focus their diagnosis on identifying the disease and treating it earlier than current clinical practice.
It has previously been shown that Oncimmune’s EarlyCDT Lung blood test can detect lung cancer on average four years before standard of care and has shown in a large National Health Service (NHS) trial that it can reduce late stage lung cancer presentation by 36%.
Inflection Point to Commercialisation
The Company now believes it has made the point of inflection as it matures from an R&D business into a commercial entity evidenced through its deepening commercial relationships with Industry Partners such as Roche
Fully Funded
The Company has recently announced it is now fully funded to develop all its commercial activities and drive revenues.