Biotech stocks are known to have long lead times, underperforming in the early years and then gaining once they have established themselves in the market. Over the years, these stocks, considered risky at first, have tended to perform well after their products are adopted and used in the marketplace. Although stocks like Oncosil (ASX: OSL) are appreciating gradually, they will likely outperform over the long run. 

Over the last year, Oncosil (ASX: OSL) has gained approval in 30+ countries, it is increasingly adopted by insurers, and more hospitals across Europe, Israel, and Australia are increasingly using the device for treatments. All this is happening while they are working to get further approvals from regulators and test the safety of their products. As such, the share price is not yet reflecting these positive developments, but that could change in the future. 

For example, Vertex Pharmaceuticals (NASDAQ: VRTX), a drugmaker that has a monopoly in the cystic fibrosis (CF) market, and since its launch 12 years ago, has not stopped innovating and improving its lineup. The biotech company recently earned approval for Casgevy, a gene-editing therapy developed with CRISPR Therapeutics and it has begun rolling submissions in the U.S. for - suzetrigine - designed to treat acute pain. Its share price has risen from $40 in 2012 to $430 in 2024. 

Meanwhile, Biomarin Pharmaceutical Inc (NASDAQ: BMRN) muscular dystrophy won the Food and Drug Administration’s approval in 2015 and its share price has been experiencing an upturn ever since the drug gained wide-scale approval. After trading between $12 - $22 between 2000 - 2010, the share price now trades in the $60 - $80 range. 

Although there was early skepticism about the drug's ability to deliver, it has risen by over 200% in the last decade alone, illustrating that biotech stocks, which have proven their innovation, tend to perform well over the medium term. 

Oncosil (ASX: OSL), meanwhile, has made important gains in the development and commercialisation of its product, but like these biotech stocks, it is at the early stage of its trading. As such, there is significant potential for the stock to outperform over the medium to long run as it continues to gain approval and expand across several countries in Europe, Asia, and the Middle East. 

Is Oncosil Medical (ASX: OSL) a Good Buy Opportunity?

At present, it presents an attractive opportunity for long-term investors willing to capitalize on favorable technical setups combined with promising fundamental prospects. Despite the stock's recent downtrend, a closer examination reveals several compelling reasons to consider establishing a bullish position. From a technical standpoint, OSL's price action has formed a falling wedge pattern over the past several months. This pattern is characterized by contracting trading ranges, with the stock finding support along the lower trendline. 

Technical Indicators suggest bullish Trend

Reinforcing the bullish case, OSL's monthly Relative Strength Index (RSI) is currently hovering in oversold territory, reaching multi-year lows. This extreme reading suggests that the selling pressure may be exhausted, increasing the likelihood of a trend reversal shortly. It is important to note that looking at short-term volume dynamics will paint an incomplete story. Instead, there is reason to believe that approval from regulators and commercialisation of its products will cause the share price to rise on a more sustained basis over the medium term. 

Oncosil (ASX: OSL) share price could rise by more than 1000% once its products gain broad-based approval from regulators and it becomes increasingly used across the world. While past performance is no guarantee of future results, Oncosil's current technical setup and positive fundamental developments warrant consideration from investors with a long-term investment horizon. By exercising patience and adhering to disciplined risk management strategies, the potential rewards on offer could make OSL an attractive addition to a well-diversified portfolio.