Investment view We maintain a BUY rating noting that our last published price target was $0.38 per share. Our valuation for Oncosil is based on a discounted cash flow (DCF) which is heavily discounted for clinical development and commercialisation risks. We are enthusiastic about the OncoSilTM device and its ability to deliver a decisive dose of radiation therapy to primary tumours with good safety. Primary tumours account for 35% of deaths from pancreatic cancer and remain the principal target in early LAPC treatment. Our market analysis points to potential peak sales in the order of US$300m per annum in this indication. We will review our valuation in a formal way following consultations with the company and other clinical contacts. Note that if we completely “de-risked” our OncoSilTM model (setting all success probabilities to 100%) and priced future cash flows using a WACC of 8.5% (more in line with established medical device companies) – our valuation could push as high as $2.20 per share on a fully diluted basis.
OSL Price at posting:
15.5¢ Sentiment: Buy Disclosure: Held
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