Today’s announcement marks a crucial breakthrough for Oncimmune with its EarlyCDT Lung blood test set to launch into the NHS on a regional basis. These initial NHS contracts have scope for expansion and the company expects momentum to build with additional regions expected in the coming months. In our view, this begins to address one our key pivotal issues for the Group on the roll-out of the EarlyCDT Lung test. This news alongside growing momentum for the EarlyCDT Lung test in other global geographies, including the US through partner Biodesix, and strong traction in the novel ImmunoINSIGHTS service offering, builds confidence in our revenue forecasts. We make no changes to our base case forecasts or valuation (intrinsic value 184p) at this juncture, and continue to look for £5.9m total revenues in FY’21 in our base case scenario
Companies: Oncimmune Holdings Plc
Oncimmune has achieved significant advances towards clinical adoption of EarlyCDT Lung by NHS and for its incorporation into care pathways for lung cancer detection. Its selection for NICE Diagnostics Assessment Guidance signals recognition of the clinical utility and cost-effectiveness of the technology. Under two new commercial contracts the ability of EarlyCDT Lung to aid early cancer diagnosis will be evaluated by NHS East of England, and separately as part of NHS England’s Lung Health Check Programme to aid community lung cancer detection under its iDx-LUNG programme. In parallel the evaluation of EarlyCDT Lung in these settings provides valuable opportunities to develop further data in real world clinical settings.
Oncimmune has entered a commercial partnership with US West Coast biotech, Augmenta Bioworks, to profile patient plasma samples and characterise antibody therapeutic candidates discovered via Augmenta’s proprietary discovery platforms. There is an option to extend the agreement, expanding the number of samples to be screened, after successful completion of the pilot stage. The expanded phase will utilise Oncimmune’s Infectious Disease NavigAID™ panel being developed under its UK Government funded collaboration the ‘Immunity Profiling of Patients with COVID-19 for Therapy and Triage’ (IMPACTT) programme. Oncimmune’s alliance with Augmenta provides a further opportunity for the company to validate its ImmunoINSIGHTS platform, a versatile proteomics technology with potential applications, not only for oncology and immune-related diseases, but also for infectious disease. It also builds on the existing momentum in its pipeline of contracted revenue for the platform.
We initiate formal coverage of Oncimmune, a leading immuno-diagnostic developer that uses its proprietary autoantibody technology to profile the body’s natural response to cancer. Oncimmune has entered an exciting stage of its development with the lead EarlyCDT Lung test poised for an NHS launch, and growing traction in the new autoantibody profiling ImmunoINSIGHTS platform. We introduce our base case forecasts, showing a clear growth path to profitability and potential for outperformance.
FY 2020 was the first full year of delivery under Oncimmune’s three-year plan of operational, technical and commercial targets for products and services, accomplishing major milestones to support their commercialisation, accelerating post period. Significantly, since year end, there has been a step-change in the performance of Oncimmune’s ImmunoINSIGHTS services business attracting new contracts with world leading biopharma companies and recently a high profile Government funded project to address COVID-19.
Companies: Exact Sciences Corporation (EXAS:NAS)Oncimmune Holdings Plc (ONC:LON)
Two new abstracts of studies evaluating the ‘rule-in’ EarlyCDT Lung test use in determining malignancy risk of indeterminate pulmonary nodules (IPNs) have been announced supporting the US launch by Biodesix and use in this setting. In the IPN setting, test use focuses on the ability to detect cancers earlier and to avoid unnecessary biopsies. Estimates vary but the prevalence of IPNs is thought to be 33% (range 17–53%) and 13% (range 2–24%), in screening (high-risk) and non-screening study populations, respectively. The problem for clinicians is that biopsies that are used to confirm cancer diagnosis are invasive, complication-prone (up to 25% adverse event rate) and expensive (average $15,000/procedure), and ultimately many are unnecessary as the majority of these IPNs are non-cancerous or benign. The two key takeaways from these abstracts are: i) using the test alongside a rule-out test (Nodify XL2) was able to reclassify 32% of IPNs – either diagnosing cancerous nodules earlier or avoiding unnecessary biopsies; and ii) this provides independent validation of the EarlyCDT Lung panel and of the ‘rule-in’ and ‘rule-out’ strategy being used by Biodesix. The US launch is ongoing (temporarily hindered under COVID-19), but we note that Biodesix has filed a prospectus to IPO on the US NASDAQ and capital raised is anticipated to be deployed to support the launch. We expect Oncimmune’s FY’20 annual results (for the period ending 31 May 2020) to be reported 30 October 2020.
In quick succession after the recent IMPACTT collaboration project to develop a COVID-19 biomarker panel, Oncimmune has signed its first commercial agreement with Cedars-Sinai to provide antibody profiling of its samples. Cedars-Sinai is a leading US hospital organisation, and Oncimmune will be paid on commercial terms to profile the antibodies from samples taken at Cedar-Sinai Hospitals. This first commercial contract is months ahead of our expectations and gives an early look of the strong academic and industry demand for COVID-19 autoantibody profiling. This is one of a number of development-focused collaborations and contracts expected over the coming months, which may be followed by contracts with biopharmaceutical companies once the COVID-19 panel is fully validated.
Today’s announcement of a COVID-19 research project fully funded by a public body (UKRI) is supportive of the broadening investment thesis. The announcement, which has been in development for some months, addresses the evolving current pandemic’s need for stratification, but also represents a new arm of the ImmunoINSIGHTS service offering in Infectious Diseases. This is the first disclosed project in the Infectious Disease therapy area and comes within weeks of a project with Genentech in autoimmune disease, together indicating the broadening utility of the ImmunoINSIGHTS platform beyond immunooncology. This Covid-19 collaboration opens access to over 3,000 Covid-19 samples that can be used to support Oncimmune’s current and future commercial projects, and promises to fuel a pipeline of new potential projects. There is a need for tools to profile and predict an individual’s disease severity, therapeutic response and potential side effects of therapeutics and vaccines. We feel this will have strong importance as we enter the next phase of the pandemic as tools are required to prioritise therapeutics and optimise treatment. There is intense interest in this area, and we note that discussions are already underway with potential academic and biopharmaceutical customers. Development of the Infectious Disease NavigAID panel is with minimal cost burden and expected to take two months, when it will be available for academic customers, and another six months to validate for commercial biopharmaceutical partners. We expect news flow and signing of commercial projects over the coming months as the project progresses that will be at the very least supportive of the platform offering on a longer-term basis.
The award of funding to Oncimmune by the ‘UK Research and Innovation Ideas to Address COVID-19’ project, leverages its proprietary ImmunoINSIGHTS technology to help in predicting disease severity and treatment response, in collaboration with the Government’s research hub, Medicines Discovery Catapult (MDC). This is a strong signal of recognition, enables Oncimmune to participate in critical efforts to mitigate the pandemic, and further showcase its technology on a broad stage. The collaboration paves the way for deeper understanding of the role of immunity in COVID-19, and successful outcomes can result in Oncimmune’s ownership of differentiated proprietary assets with enormous medical value, and with broad commercial applications in COVID-19 drug and vaccine development.
Oncimmune has signed a collaboration with Genentech, a member of the Roche Group, to use its NavigAID panel to profile samples from Genentech’s rheumatology clinical trials, initially focused on Systemic Lupus Erythematosus. If this initial project is successful, it could pave the way for more substantial and lucrative follow-on projects in rheumatology, as was seen in oncology with Roche in May 2020. This is Oncimmune’s first ImmunoINSIGHTS contract in autoimmune disease, and highlights the potential of the ImmunoINSIGHTS platform beyond oncology to better characterise a broad range of diseases, therapy responses and immune-related adverse events. The contract also highlights the depth of the Roche/Genentech relationship and momentum in the platform’s industry perceived valueadd. This latest contract further adds to the Company’s substantial and fast growing pipeline of contracted revenues.
Oncimmune announces that its ImmunoINSIGHTS business has signed a collaboration with Genentech, the US arm of Roche Group known for its ground-breaking contributions to the development of therapies for serious disease, to characterise patient autoantibody profiles from Genentech’s clinical trials for rheumatological diseases, including Systemic Lupus Erythematosus (SLE), an area of high unmet clinical need.
Oncimmune have seen highly encouraging cost-effectiveness study data for its EarlyCDT Lung test in the diagnosis of lung cancer patients that it will be able to leverage in ongoing adoption discussions with healthcare providers. The study shows that at a reimbursed price of £70/test, EarlyCDT Lung test use in combination with Computed Tomography (CT) compared to CT surveillance alone (the current standard of care), produced an incremental cost-effectiveness ratio (ICER) of £2,417/quality adjusted life year (QALY). A lower £/QALY equates to a more cost-effective test, and is attractive for decision makers and is substantially below the £20,000/QALY threshold for acceptance set by NICE. This sets a benchmark for test use with healthcare providers across the UK and internationally further afield. This full data effectively ticks a major box for implementation, and builds on earlier cost-effective study findings and the excellent 3-year data published from the ECLS study in July (36% reduction in late-stage lung cancer diagnoses compared to CT surveillance alone). We anticipate the outcome of ongoing discussions with NICE in FY’21, but potentially as soon as Interims in November 2020. Additionally, we view the recent reshuffle of Public Health England and the formation of a new UK-wide national screening committee as a favourable tailwind for the implementation of future UK screening programmes. As a potential roll-out of the EarlyCDT Lung test looks more likely in a UK-wide screening programme, the service offering continues to gain momentum (see note yesterday), and investors should take comfort in the execution of management’s strategy and the future outlook of the firm.
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Robust FY21 performance forecast, despite pandemic
Companies: SDI Group plc
Ongoing strong demand for EKF’s products, both in the core business and the Primestore MTM Covid-19 sample collection device, means the FY20 outturn will be “comfortably ahead” of already upgraded expectations. This pattern is expected to persist throughout Q1’21 and beyond and management is confident that the performance in Q1 will be materially ahead of expectations. Having previously left FY21 estimates untouched, we are today putting through the first in what we expect to be a series of material upgrades. Given the dynamic situation around Covid-19, we expect regular updates throughout the course of the year and will adjust our forecasts accordingly as visibility over ordering patterns increases.
Companies: EKF Diagnostics Holdings plc
Although 2020 will probably go down in history as one of the most challenging years experienced during our lifetime, it will also likely be chronicled as one of the best years for the recognition and appreciation of science. As we entered 2020, the COVID-19 pandemic was in its infancy. However, it rapidly evolved through the exponential rise in infections and mortality globally. Much has been achieved during the past 12 months in the fight against COVID-19, but, as we enter 2021, there are considerable concerns about the emergence of a mutant version of the virus and the second wave that we are now facing.
Companies: AVO ARBB ARIX BBGI CLIG DNL FLTA ICGT OCI PCA PIN PHP RECI STX SCE TRX SHED VTA YEW
For many reasons, 2020 was a transformational year for Circassia as the new management team set to work streamlining the business, addressing legacy issues and positioning the group to benefit from the strong market position of NIOX, a gold standard diagnostic device for asthma. Whilst the pandemic has had an impact, recovery is underway, with Q4 revenues back to 86% of Q1 levels. The EBITDA breakeven point of the business has been reduced further to £32.0m and there was £7.4m of net cash on the balance sheet at the year end. Whilst the pace of recovery remains difficult to predict, the business looks well set for the medium term.
Companies: Circassia Group PLC
Q4 trading has led sales to guidance being raised 8%. This has been driven by better than expected UK sales, incl. success with new customers like Wilko/Tesco. Some of the benefit is offset by a non-cash FX debit, but it still leads to an upgrade and higher net cash. As a result of successful trials in Tesco Express, W7 is also being rolled out to 469 more stores. This, and previously announced distribution gains, bodes well for incremental sales/PBT in 2021, and underlines the appeal of its value-for-money brands. On 11x 2019 cash-adjusted EV/EBITDA, valuation is undemanding, particularly with the added attraction of dividends/income.
Companies: Warpaint London PLC
After an eventful 2020, ReNeuron released updated 12-month Phase ll data in January on its lead human retinal progenitor cell (hRPC) project. This continues to show a consistent and robust, sustained average gain in visual acuity in retinitis pigmentosa (RP). A continuation study in nine patients using two million cells is underway with three- and six-month data due over H2 CY21 and the first three patients treated. This will facilitate partnering negotiations. A pivotal hRPC study may start in 2022. Deals are possible in CY21 on the exosome genetic drug delivery platform, which could be very valuable. The valuation remains at £190m with strong cash.
Companies: ReNeuron Group plc
Allergy Therapeutics’ European commercial business remains resilient despite COVID-19 impacts. The H121 trading statement indicates sales growth of 7% (+5% CER), while steady pipeline progress is also being made. Recruitment and treatment in the G309 Grass MATA MPL Phase III study is on track, with post period key events including initiation of the P001 ex vivo peanut allergy biomarker study and publication of positive challenge chamber results for ImmunoBON in a peer reviewed journal. This bodes well for news flow delivery over the rest of calendar 2021. G309 results in the autumn are expected to inform design of the G306 pivotal grass trial; P001 data in the spring will support IND submission; and ImmunoBON is set to launch in Germany later this month. A record cash balance of £48m (at end-December 2020) covers nearterm requirements taking the company through to material value-inflection points. Ahead of H121 results on March 3, we maintain our £325m (51p/share) valuation.
Companies: Allergy Therapeutics plc
Diaceutics has rebased itself for growth. While the pathway to normalised expenditure patterns in the pharma industry will not be helped by new lockdowns, we believe the second half of 2021 onwards will see continuous budget improvements. Customer engagement with the new platform is positive and this is the key to securing the incremental financial benefits offered by taking the business fully online.
Companies: Diaceutics Plc
A year in which we expect the company to make significant advancements in the development and commercialisaon of LIGHT, AVO kicked off 2021 with a new financing partnership with specialist asset financing company DiamedCare and technical updates. With its differenated technical and commercialsoluon supported by growing clinical evidence base for proton therapy ("PT"), AVO remains well posioned to disrupt the radiotherapy market. We expect further progress in 2021 to connue to de-risk the AVO story, with much of the risk now lying on commercial execuon, in our view. Part of AVO's turnkey PT soluon, the new lessor financing agreement with DiamedCare covering Europe and the US should facilitate faster adopon in smaller radiotherapy centers which currently represent an underserved and largely untapped market. We maintain and reiterate both our OUTPERFORM recommendaon and 135 GBp target price.
Companies: Advanced Oncotherapy Plc
STX is a commercial-stage company delivering specialty products that address patients’ unmet medical needs, with an initial focus on treating iron deficiency (ID). Feraccru®/Accrufer® has been approved by the regulators in both Europe and the US. For various reasons, STX has been unable to secure a commercial partner for Accrufer in the US. Consequently, the board is now considering an STX-led launch option, thereby retaining all the US profits. Financial modelling shows the logic of this option, but it would necessitate financing the working capital requirements covering the next two years in the region of £25m-£30m.
Companies: Shield Therapeutics Plc
ReNeuron’s Dec’20 £17.5m raise now means the Group is sufficiently funded through key upcoming milestones for its lead hRPC candidate and the exosome platform – mitigating a previous pivotal issue. 2021 could promise to be the critical year for the Group, with the potential to unlock value from its programmes well beyond its current modest market value. We refresh our forecasts post yesterday’s analyst briefing, and reiterate our positive stance.
The six-month trading update to 31 December demonstrates solid underlying growth, with revenues rising 7% to £54.0m, or c.5% at constant exchange rates (CER), despite ongoing COVID-19 restrictions. Period-end cash was £48.3m, which implied a c.30% increase (+£11.3m) in underlying cashflows in the period. With relevant and potentially significant commercial and regulatory newsflow through 2021, we expect the shares to perform well. We leave our forecasts unchanged for FY 2021 at this point and reiterate our 45p target price, pointing out the substantial and unwarranted discount to its nearest peer (ALK-abello - 6.1x EV/Sales). This target also excludes the value for US market entry for Grass MATA MPL or its early-stage pipeline, including VLP Peanut allergy vaccine.
Alcon, a dominant force in the $25bn ophthalmology space, is set to outgrow the industry in the mid-term – driven by the pick-up in demand for recently-launched products, PanOptix and Precision1. Moreover, with robust margin expansion potential – led by an improving product mix and targeted cost-savings – earnings should grow healthily. A sturdy balance sheet increases its appeal further. Interestingly, Alcon is recovering faster than rivals from the COVID-19-hiccups and its sales and profitability profile should inflect once the situation normalises. Add.
Companies: Alcon, Inc.
It has been a year the likes of which we have never seen before, and hope never to see again. The description of the impact of the CV19 pandemic as K-shaped certainly feels accurate, with some sectors being well placed to benefit from the creative disruption that has engulfed the world, accelerating structural changes, while others through no fault of their own have been severely impacted. This has been the case for the Dowgate portfolio of corporate clients, with our quoted clients falling into three groups. The first, comprising Cambridge Cognition, GRC, The Panoply, S4 Capital and Water Intelligence have on average seen their share prices double this year as structural changes accelerated by CV19 have been accompanied by strong execution. The second, comprising Franchise Brands, OTAQ and SEEEN, have experienced share price declines averaging a third as their businesses have either been directly impacted by CV19 or their growth aspirations curtailed. The final group comprises those companies which have been bid for this year, namely Be Heard, Hunters Property, Huntsworth and Reach4Entertainment. Looking into 2021, we expect continued strong performance from the first group and a rebound in the second as the world returns to normal. Finally, having completed Series A/B rounds for a range of private companies this year, we hope to bring these entrepreneur-led, growth companies to market in 2021.
Companies: COG FRAN GRC OTAQ TPX SFOR SEEN WATR
Upon Admission to AIM, Nightcap will acquire The London Cocktail Club Limited (the "London Cocktail Club"), which is an award winning independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol. Offer TBC. HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange.
Companies: PMI RMM SUN BOIL ITM TRMR MLVN 88E IME ANP