OncoSil Medical Ltd (ASX: OSL) aims to make a difference in cancer treatment by selectively targeting tumors while sparing healthy tissue. Their flagship product, OncoSilTM, delivers targeted radiation for pancreatic cancer and has major growth potential by following the blueprint of Sirtex Medical's success.
OncoSil specializes in an innovative brachytherapy device, OncoSilTM, that is implanted directly into pancreatic tumors under ultrasound guidance. This enables a high radiation dose to be delivered precisely to the tumor site unlike traditional external beam radiation.
Who are the people behind OncoSil?
The company is led by Nigel Lange, a seasoned CEO with a proven track record in driving substantial European expansion for Sirtex's liver cancer treatment, SIR-Spheres. By establishing over 300 European medical centers using the technology during 2003-2018, Lange possesses vital expertise in securing local reimbursement and regulatory approvals.
Overcoming all obstacles
Sirtex overcame major obstacles on its journey, despite initially having limited clinical data on SIR-Spheres' survival benefits when launching in Europe in 2004. Challenging times with financial hardships ensued due to setbacks in vital US FDA clearances and lack of market reach expansion. For instance, a clinical trial of SIR-Spheres failed to extend patient survival. However, Mr. Lange displayed remarkable leadership qualities in response. Despite the disappointing trial results, his positive attitude and proactive communication highlighted resilience and forward-thinking. Mr. Lange emphasized the significance of quality of life improvements for patients receiving SIR-Spheres. He also outlined strategic marketing initiatives to capitalize on these findings, showcasing adaptability and effective navigation through obstacles.
Through his determined leadership, Mr. Lange emerged as a commendable captain, guiding Sirtex with optimism during this turbulent time. This anecdote underscores Mr. Lange's proven leadership abilities in the face of challenges. His strategic response to the SIR-Spheres trial results further showcases the experience and problem-solving skills he brings to lead OncoSil effectively. However, Sirtex displayed resilience and recalibrated its strategy to focus on geographic growth and regulatory milestones. This pragmatic approach led to a turnaround with strong double-digit earnings growth.
OncoSil can replicate this success under the leadership of CEO Nigel Lange by employing some of Sirtex's proven strategies. Securing insurance coverage will be critical for adoption, and Lange's team's reimbursement expertise from SIR-Spheres should streamline the process in Europe.
What lies ahead for OncoSil?
While OncoSil has achieved CE Marking in Europe, gaining US FDA approval through additional clinical trials will enable entry into the major American market. Partnerships, similar to Sirtex's collaborations, could also assist with funding and infrastructure needs for Asian market approvals.
In contrast to SIR-Spheres' limited early survival data, OncoSil already boasts robust meta-analysis evidencing doubled survival time versus the current standard of care for pancreatic cancer. Moreover, OncoSil has the prospect of becoming a first-line therapy, unlike SIR-Spheres which was initially relegated to salvage use.
Despite being predominantly for salvage cases initially, SIR-Spheres still generated estimated European revenues of $38 million annually by 2018 with approximately 2700 units sold. This suggests even higher potential use for OncoSil as a frontline treatment.
OncoSil entered the market armed with published efficacy data that SIR-Spheres lacked at launch. And the addition of former Sirtex personnel in key executive roles could rapidly accelerate OncoSil's revenue trajectory. In particular, Dr. Henk Tissing, OncoSil’s Global Head of Clinical Affairs, formerly held the equivalent role at Sirtex. This underscores a seamless transfer of expertise poised to catalyze OncoSil’s adoption and expansion worldwide.
Pancreatic cancer on the rise
The market opportunity is substantial, with over 458,000 new pancreatic cancer cases globally in 2018. This is projected to reach 355,000 new cases annually by 2040. The extremely low 5-year survival remains at only 9%. OncoSil is strategically positioned with breakthrough technology and experienced leadership to capture a significant portion of an estimated $2 billion market for pancreatic cancer treatment.
Recent milestones demonstrate OncoSil’s commercialization progress, including first patient enrollment in European expansion studies and securing ethics approval for trials that could broaden prescribing clinician pools.
Major investors will likely take note of Mr. Lange’s proven success guiding Sirtex’s rise. For instance, Hunter Hall made immense profits of $238 million from their Sirtex investments, including realized and unrealized gains. Allan Gray emerged as a significant shareholder in Sirtex Medical, holding a 6.2% stake in the company. Furthermore, Consonance Capital held a substantial 7.3% ownership in Sirtex in 2017. Their familiarity with Sirtex’s rollercoaster journey under Mr. Lange's leadership enhances the probability of their investment in the similar and undervalued OncoSil, given the tremendous returns seen with Sirtex.
Mr. Lange is clearly up for the challenge, stating: “I truly believe that the Company is set for an exciting future, with an impressive product that addresses such an important unmet medical need." His confidence mirrors that during turbulent Sirtex days when he proactively addressed concerns and outlined a strategic path forward.
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Biotech making moves in Australia
The thriving biotech landscape in Australia positions OncoSil for exciting merger and acquisition prospects. Recent years have seen surging acquisition activity involving Australian biotech companies, like Sirtex's $1.4 billion acquisition by Chinese investors.
Other major deals include Fibrotech's $75 million acquisition by Shire, Novartis acquiring Spinifex for an upfront sum of $200 million, Merck acquiring Viralytics for $500 million, and Allergan's $95 million acquisition of Elastagen. These deals demonstrate the growing global interest in Australian biotechnology innovations and companies. With its groundbreaking brachytherapy technology and experienced talent from Sirtex, OncoSil represents an attractive opportunity, especially given its current low valuation with a market cap of only $12.44 million AUD. As evidenced by recent multi-million dollar acquisitions in the Australian biotech space, larger players are keenly scouting the market for promising technologies to acquire. OncoSil's potential to follow in Sirtex's footsteps makes it a prime target amidst the mature and competitive biotechnology industry in Australia.
OncoSil is ready to make a global impact
It looks like OncoSil Medical is primed for rapid growth by capitalizing on a huge unmet need, leveraging impressive efficacy data and a strategic blueprint laid out by Sirtex Medical's rise. With experienced leadership, OncoSil is positioned to emulate and even exceed the success of its predecessor in pioneering new cancer treatment options. The future is bright for OncoSil to make a meaningful global impact.
