More upside in oncology assets?

Yesterday I read with interest the very well written and very detailed report published on Bionomics by Edison Research.

I recommend it to all those interested in Bionomics.

There are a number of interesting observations in the report that I think have not been noticed by the market:

1. Edison values BNC 101 at A$75.6 million - but does not attribute any value for BNC 105.

2. Edison gives BNC 210 a 30% chance of success for PST alone and values it at A$329.7 million.

3. Edison places no value on the upside of BNC 210 being used in other large indications such as General Anxiety, Panic, Agitation, etc

4. Edison only values the Merck Anxiety collaboration at a meagre A$16.2 million using a conservative 10% probability of success.

5. Edison values Bionomics fully dilutes shares at 84c but acknowledges that in the event of good clinical results fro PTSD, then the valuation would need to be increased.

With other valuations in the market from 97c to $2.00, the Edison report seems very, very conservative.

There seems to be an expectation that the oncology assets will be sold by 30 June, but I am not sure whether that has been verified.

On the strength of the report, one can only say that at 60c the stock is still cheap and the upside may well be comfortably above $1.00 if the sale price for oncology assets exceeds expectations or the PTSD trial delivers clear positive data on the Primary endpoint.

Technicals still look good and the current mini pullback seems like a good opportunity to accumulate before there are any further announcements likely to trigger additional buying interest.

There does not appear to be a lot of loose stock available, so good news should translate to strong price moves.

Next pop could be 70-80c but it depends on the catalyst........

Enjoy the next few months because I think it is just starting to get interesting for longer term holders.

GLTA