Oncimmune new ImmunoINSIGHTS contract further validates offering and supports expected sales growth

Oncimmune Holdings plc (LON:ONC) announced a new contract with the Dana-Farber Cancer Institute (Harvard Medical School affiliate based in Boston, US) whereby the latter will utilise Oncimmune’s proprietary SeroTagTM ‘biomarker discover engine’ to identify predictive patient responses to novel checkpoint inhibitor (CPI) based cancer therapies. As in the case of yesterday’s announcement (see our note Cutting edge COVID-19 research validates ImmunoINSIGHTS as a valuable research tool) this new deal further validates the commercial value of Oncimmune’s ImmunoINSIGHTS offering, although in this case the news is also indicative of additional revenue from a new deal. The news further supports our expectations of continuing revenue and earnings growth for the company.  Our valuation and current forecasts are currently under review pending an update by a new analyst. 

Dana-Farber is a world-leading centre of excellence in cancer research

The institute is an acclaimed global leader in pioneering cancer research, from preclinical investigations through to clinical trials. Employing nearly 5,000 staff it is ranked the number 3 cancer hospital in the world, oversees in  excess of 1,100 clinical trials and enjoys extensive support in terms of Federal funding.

Checkpoint inhibitors are at the cutting edge of cancer therapy

Therapies to be investigated include Merck’s Keytruda (pembrolizumab), Pfizer’s Opdivo (nivolumab), Roche/Genentech’s Tecentriq (atezolizumab) and Astrazeneca’s Imfinzi (durvalumab), which together generated combined 2021 sales of $26.6bn. The future commercial success of CPI sales will benefit greatly from better understanding of patient responses, and we hope that this work with Dana-Farber will facilitate further immune-oncology contracts with CPI companies, including those listed above. We note that Oncimmune already has a contract with an undisclosed US-based global pharmaceutical company working in this area.

Today’s news is evidence that new ImmunoINSIGHTS contracts are being won

Oncimmune’s March 2021 £9m (gross) fundraise facilitated the expansion of the ImmunoINSIGHTS franchise, and is supporting an increase in analytical capacity, from c10,000 to c40,000 samples by Q1 FY2023. Laboratory and commercial operations are being expanded in Dortmund and the US respectively. On a broader basis, the company also reported that going forward ImmunoINSIGHTS sales would benefit from new contracts with Roche, its subsidiary Genentech, Cedars-Sinai Medical Center and an undisclosed leading US-based global pharmaceutical company. Oncimmune expects that new ImmunoINSIGHTS contracts over FY2021 and Q1 FY2022 will likely constitute 50% of FY2022 revenue. Sales growth is evidenced by today’s news. With over 90% of ImmunoINSIGHTS revenue likely to be US-based, the company is considering building a duplicate US laboratory and hiring a US business development team to support its efforts in this geography.

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