One Stock We Think Should Be In Virtually Every Portfolio

August 22, 2024
9:16 pm
Stock Piper Team

Investment portfolios are tailored to meet the specific goals and objectives of each investor, coming in various shapes and sizes. Some investors focus on growth, others on income, and many seek a balanced approach. However, if we had to choose one stock that we believe should be in nearly every portfolio, it would be OncoSil Medical Ltd. (ASX: OSL)

OncoSil Medical possesses several attributes that make it an attractive investment option. The company boasts a proven track record, growing income potential, a history of strong performance, and experienced leadership. These characteristics are exactly what many investors look for when building a robust portfolio.

The Story of OncoSil Medical

OncoSil Medical Ltd. is a publicly traded medical device company headquartered in Sydney, Australia, with a global footprint. The company is renowned for its innovative brachytherapy device, OncoSil, which delivers targeted intratumoral placement of Phosphorous-32 (32P) for the treatment of locally advanced unresectable pancreatic cancer in combination with gemcitabine-based chemotherapy.

Timeline and Milestones

2004: The OncoSil technology was developed as BrachySil by pSivida Corp.
2004-2009: Early clinical development phases for the OncoSil technology.
2012: pSivida Corp granted an exclusive worldwide royalty-bearing licence agreement with Enigma Therapeutics Ltd. for the development of BrachySil.
2013: Enigma Therapeutics Ltd. was acquired by Neurodiscovery Ltd., which then changed its name to OncoSil Medical Ltd., focusing on the development of OncoSil.
2016: OncoSil Medical received investigational device exemption (IDE) approval from the FDA to conduct a clinical study.
2017-2018: First study participants were implanted with the OncoSil™ device as part of the global PanCO and OncoPaC-1 studies.
2020: The OncoSil device received Breakthrough Device Designation from the FDA, European CE marking, and regulatory approvals in New Zealand and Switzerland.
2021-2023: Continued regulatory approvals and the commencement of commercial treatments in multiple countries, including Spain, Italy, and Israel.

Financial Health and Leadership

Financial Data

As of the latest data, OncoSil Medical’s market capitalization is approximately $49 million. The company is in the growth phase, focusing on developing and commercialising its core technology, the OncoSil device. Revenue growth is expected as the product gains regulatory approvals and market acceptance.

As of June 30, 2024, OncoSil Medical had $4.509 million in cash and equivalents, up from $2.930 million on March 31, 2024. In the June 2024 quarter, the company raised $5.415 million in capital, with an additional $0.331 million committed in June and paid in July. A further placement of $2.7 million was announced on July 25, 2024.

Net cash used in operating activities during the quarter was $3.366 million, with over 65% of this amount attributed to staff costs and direct research and development expenditures. Staff costs included an additional part-time customer service resource.

Leadership

Recently, OncoSil Medical has attracted interest from industry veterans like Peter Hall (an Australian-based financier) and Gilman Wong (former CEO of Sirtex Medical), who are known for their contributions to the success of Sirtex Medical Ltd. Both names were present among the top 20 security holders, and Peter Hall is planned to join OncoSil Medical’s team as a non-executive director by the end of August.

The leadership under CEO Nigel Lange, who also played a crucial role in Sirtex's success, demonstrates a clear vision for OncoSil Medical. Lange's experience and strategic direction are key factors in the company's ongoing development and potential for future success.

Competitive Landscape

OncoSil Medical operates in the highly competitive biotech and medical technology sectors. Key competitors include companies developing similar localised radiation therapies and other innovative cancer treatments. OncoSil Medical differentiates itself through its focus on the OncoSil device, which delivers targeted radiation therapy directly to tumours, potentially improving patient outcomes and reducing side effects.

Risks and Considerations

Investing in biotech companies like OncoSil Medical is inherently speculative. The success of such investments often hinges on the outcomes of clinical trials, regulatory approvals, and market adoption.

Potential setbacks include delays in regulatory approvals, competition from other treatments, and challenges in achieving commercial milestones.

Future Potential

The biotech sector has significant potential for growth, particularly with successful clinical trials that can revolutionise treatment methods. OncoSil Medical is on the brink of commercialisation, utilising a groundbreaking technology that can treat pancreatic cancer in a minimally invasive way. The potential impact on the future cancer treatment market is substantial.

Diversification Emphasis

While OncoSil Medical presents an exciting opportunity within the biotech sector, it is crucial to maintain a diversified investment portfolio. Diversification helps mitigate the risks associated with sector-specific challenges and market volatility.

Including OncoSil Medical as part of a well-rounded portfolio can provide exposure to the high-growth potential of the biotech sector while balancing risks with investments in other industries.

In summary, OncoSil Medical Ltd. (ASX: OSL) is a stock that we believe should be considered for virtually every diversified portfolio. The company’s focus on innovative cancer treatment technology, its strategic market expansion, and its potential for future growth make it an attractive investment option. While no investment is without risk, OncoSil’s dedicated approach and promising portfolio position it well for future success.

Wrapping Up

Our recommendation for including OncoSil Medical in your portfolio is based on its impressive attributes and potential for future growth. However, it’s essential to maintain a diversified portfolio, and OncoSil Medical should be one part of a broader investment strategy. Consider consulting with a financial advisor to ensure that your portfolio aligns with your investment goals and risk tolerance.

By including OncoSil Medical in your portfolio, you are investing in a company at the forefront of medical innovation with the potential to deliver strong returns and income generation in the future.