Oncimmune Holdings plc (LON: ONC), a leading global immunodiagnostics group, today provided the following business update for the year ended 31 May 2019.
On 4 June 2019, the Company announced the top line results of the Early Cancer Detection Test – Lung Cancer Scotland study conducted by NHS Scotland. The ECLS study, is believed to be the largest randomised controlled study for the early detection of lung cancer using blood-derived biomarkers, recruiting 12,210 patients each of whom were followed up for a minimum of two years. It was announced that the study met its primary end-point showing that the use of EarlyCDT Lung with subsequent X-ray and computerised tomography (CT) scan reduced the incidence of patients with late-stage lung cancer or unclassified presentation at diagnosis, compared to standard clinical practice.
The Directors believe that the positive top line data generated by the ECLS study is a significant milestone for Oncimmune which demonstrates the commercial potential of EarlyCDT Lung in screening. The Company was also pleased to report that preparations are underway in Scotland for the conduct of a phased population-based evaluation to assess the implications of diagnosis with EarlyCDT Lung on survival and mortality in a real-world setting. The initial phase is expected to recruit up to 200,000 patients, each to be tested with EarlyCDT Lung to be supplied by the Company on negotiated commercial terms. Assuming we are successful in concluding it, this contract is expected to contribute materially to revenues and profits over the life of the evaluation which is expected to commence later this year and to last approximately 24 months.
Over the past 12 months, the Company has continued to build its portfolio of distribution agreements for EarlyCDT products and currently there are contracts in force across 19 countries, with combined minimum sales commitments of £34.6 million over the next 5 years. These agreements typically require the distributor to obtain local regulatory approvals before the EarlyCDT test can be marketed and sold in the designated territory. Distributor sales are expected to commence some time after entry into each of these agreements and are expected to build during the balance of the term of these agreements.
These various regulatory approval processes are progressing and recently it was announced that registrations have been granted in Colombia, Singapore and in Israel; where the first order of EarlyCDT Lung kits has already been shipped.
In April 2019, it was announced that the Company’s Spanish distributor, Sabartech S.L., had signed an agreement to sell EarlyCDT Lung as a screening test for the early detection of lung cancer through the hospitals and clinics of the Quirónsalud group, the operator of the largest private hospital network in Spain. Screening is a significant commercial opportunity for the Company as it means potentially a larger group of at-risk individuals being offered EarlyCDT than might otherwise be the case when individual medical practitioners order the test for their patients on an ad hoc basis.
In the announcement of the Group’s half year results on 13 February 2019, it was announced that discussions had commenced with large-scale potential strategic partners who would help drive US market access for EarlyCDT Lung. These discussions are progressing well and the Company expects to make a further announcement in the coming months.
This activity along with the expected uplift in distributor sales as regulatory approvals are obtained in different countries supports the Directors’ belief of the commercial potential of EarlyCDT and validates Oncimmune’s proposed route to market through its partners.
As the timeframe from signing each distribution agreement to obtaining local regulatory approvals and commencing sales is difficult to predict and varies by country, it remains challenging to forecast revenues accurately at this early stage in the product lifecycle. Whilst there has been a shortfall against the modest revenue expectation for the year ended 2019, the Directors are pleased to report that due to significantly lower operating costs both loss before tax and net cash of c.£5 million are materially ahead of expectations.
On 10 May 2019, it was announced that the Company’s Chinese partner, Gene Tech (Shanghai) Co. Ltd, has commenced a multi-centre case control study on early lung cancer detection (for screening and nodules) in the People’s Republic of China. This study uses an extended panel of tumour-associated antigens to accommodate variations in the biomarkers expressed on cancer cells in Asian populations. Led by Professor Bai, Professor and Chair of the Department of Pulmonary Medicine at Zhongshan Hospital, Fudan University, Shanghai approximately 1,000 early lung cancers will be studied at five leading academic health centres across China. The results are expected in the fourth quarter of 2019 and will be used to support Oncimmune’s application for approval of EarlyCDT Lung with the National Medical Products Administration (formerly the China Food and Drug Administration).
Gene Tech is also in negotiations for the sale of EarlyCDT Lung into Hainan, a southern province of China. Hainan holds Special Economic Zone status within China, enabling products such as EarlyCDT Lung to be sold in Hainan ahead of NMPA approval.
In March 2019, the Company announced the acquisition of Protagen Diagnostics AG, an established revenue-generating German company leveraging its existing partnerships with leading pharmaceutical multinationals to support clinical trial patient management, disease stratification and response prediction.
The integration of Protagen is progressing well with work already underway, following the signing of the first commercial contract after the closing of the acquisition.
Partnership Strategy Activities
An important element of the Company’s forward strategy is to fund its ongoing growth by unlocking the latent potential in its autoantibody-based platform through strategic partnerships. The Company is in active discussions with a number of parties focused on combining Oncimmune’s autoantibody panels with other diagnostic modalities.
During the year, the Company continued to strengthen its senior leadership team with the appointment of Adam Hill as CEO in September 2018 and in December 2018 with appointments of Matthew Hall as Group Chief Financial Officer and Andrew Stewart as General Counsel and Company Secretary.
Oncimmune Holdings plc Outlook
The positive ECLS study top line data, the potential for the forthcoming commercial cancer evaluation in Scotland, the depth of the Company’s distributor pipeline and the current ongoing discussions across the breadth of it business, give the Directors confidence in the strength of Oncimmune’s platform, the number of addressable opportunities, and the Company’s potential to generate material profitable revenues.