Oncimmune Holdings plc (LON:ONC), a leading early cancer detection company developing and commercialising its proprietary EarlyCDT® liquid biopsy platform technology, today provides an update on the business ahead of the announcement of interim results expected on 13 February 2017.
Geoffrey Hamilton-Fairley, CEO of Oncimmune, commented: “The recent period has seen us continue our strong progress in delivering on our strategy to generate revenues across multiple products, regions and with different partners. We have entered into a distribution and product development agreement in China which includes a contracted £10m equity investment and £15.7 million in minimum royalties. Today we also announce a new distribution agreement for Turkey which brings our total number of agreements in Europe and the Asia Pacific region to 12 with total minimum sales commitments of £25.6m. We continue to be very confident of delivering value in the medium and long term.”
Since the publication of our full year results in October 2017, the Company has continued to make good progress against its commercialisation plans.
In the US, we have commenced a marketing programme to support our distributors. However, as stated in our results we continue to be cautious in terms of near term revenue growth from this channel as positioning the test is key to long-term success. We anticipate that sales will start to build post the end of this financial year as distributors prime their local-market place.
In November, we launched a simplified blood sample collection procedure – using a “finger stick” – which increases the speed and simplicity with which the EarlyCDT®-Lung test can be ordered and completed with no loss of performance. The introduction of this alternative to full blood draw has been timely as a new interpretation of the regulations has resulted in an increasing number of distributors requiring Oncimmune to enter individual direct contracts with each institution where blood is taken. These contracts are taking in the region of two to three months to execute. Over time we expect “finger stick” collection to make the test more accessible but currently a significant proportion of the market still relies on blood draw. This requirement for individual contracts has had an impact on the speed with which we are able to build sales and show traction from our sales and marketing strategy.
Pilot Pulmonology Distribution Project
Our preliminary distribution partnership with a major US pulmonology sales force is progressing well. While the changes to regulations around blood draw described above have impacted timelines, we expect the project to complete in the next two months and if successful should lead to a distribution agreement covering a significant proportion of the pulmonologists in the US. Results so far have been encouraging. The Company is also continuing to explore further pulmonology distribution channels in the US with other parties and, since the announcement of the pilot study, has seen further interest from potential partners active in the pulmonology space.
China and Additional Distribution Agreements
In January, we announced we had signed a framework agreement for an exclusive licence with Genostics Company Limited (“Genostics”), a Hong Kong registered company part of the Gene Group Holdings Limited group. The agreement is for the distribution, manufacturing and future development of all products related to Oncimmune’s EarlyCDT® platform for the People’s Republic of China. Under the terms of the licence, Oncimmune will receive a royalty of 8% to 12.5% on the gross revenue subject to aggregate minimum royalty payments over the first six years post market entry of £15.7 million and £5 million (index linked) per year thereafter. Genostics will start to sell EarlyCDT®-Lung within 36 months of the date of the agreement, subject to China FDA approval, although both parties expect this to be sooner.
We are today announcing a new distribution agreement for Turkey. The exclusive distribution agreement with Biruni Laboratuvari in Istanbul is for three years in the first instance, with minimum sales commitments of £630,000. Turkey is a major market for Oncimmune, with nearly 19 million smokers. The country also performs approximately 14 million CT scans a year and therefore a large number of lung nodules are detected annually. This creates a significant unmet medical need in risk assessment of intermediate pulmonary nodules that our EarlyCDT®-Lung test can address.
Having also signed an agreement for Iran in November, we now have a total of six agreements in place for the Asia-Pacific region (not including the China deal) with minimum committed revenues of £8.0m over the next 5 years. In Europe, the total is £2.1m over the same period.
Additional indications and licensing opportunities
Our R&D programme continues to progress. We have completed validation of the commercial panel for the EarlyCDT®-Liver test, and remain on track to begin commercial sales in H1 2018.
We also continue to progress our work in companion diagnostics with studies in progress alongside drug development programs and in fingerprinting. The first published set of results from our Scancell collaboration have been received positively and we plan to continue to pursue both areas over the next year.
In conclusion, we continue to deliver on our plan to create value from our core autoantibody platform and the board is increasingly confident that the Company is well placed to execute that plan and deliver value in the medium and long term.
Oncimmune Holdings plc will report interim results for the half year ended 30 November 2017 on 13 February 2018.