Oncimmune Holdings (ONC ) said it intends to raise gross proceeds of £9m in order to ramp up the operating capacity at its ImmunoINSIGHTS pharma services business in Dortmund.
The global immunodiagnostics group raised the proceeds via a placing of 5,000,000 new ordinary shares at 1p by way of an accelerated book building process. The Placing Price represents a premium of c.5% to its mid-market closing price of 171.5p on Wednesday.
The Company acquired its Dortmund operation back in March 2019 with the view that this would drive further service contracts with pharmaceutical and biotechnology companies. It has since been integrated and transformed into the ImmunoINSIGHTS services business.
To date, it has entered into over seven contracts, including contracts with pharmaceutical giant Roche, Genentech, another leading global biopharmaceutical company with extensive experience in developing novel immune checkpoint inhibitors, and certain other biotechs.
The company believes that the ImmunoINSIGHTS business, which has a current pipeline of over 100 separate opportunities, is now in a solid position to deliver ‘sustainable growth.’
Within this pipeline, ONC is currently in advanced discussions on over 19 potential contracts with a value of £10.8m, including £3.8m from follow-on contracts with existing customers.
The company said it is seeking funding in order to enable the group to further invest in ImmunoINSIGHTS and take advantage of its growing pipeline of commercial prospects.
Specifically, ONC intends to use the net proceeds of the placing to increase the operating capacity of ImmunoINSIGHTS in Dortmund, ‘in order to accommodate the near term contracts and the growing pipeline.’ It said the current optimal operational capacity is around 10,000 samples per annum, of which the group currently reports utilisation of 60%.
The investment in Dortmund is anticipated to increase its annual capacity to around 20,000 samples per year by December 2021 and to c.40,000 samples per annum, by June 2022.
In conjunction with these efforts, ONC said it anticipates an increase in the demand on its sales team for commercial engagement with US pharmaceutical and biotech companies and, as a result, a portion of the proceeds are intended to be invested in establishing the Company's sales and business development presence in the US for ImmunoINSIGHTS.
The Company will also seek to rationalise certain of its partnerships to enable both strategic optionality and support a path to the US capital markets, including by way of a dual listing.
In addition, the company said it intends to invest into the commercial discovery technology space by expanding into cell surface screening as a service to pharmaceutical companies and biotechs. The Group believes that investing in this space will enable it to partner with an increased number of pharmaceutical companies and biotechs in future drug development.
Separately, the company said it has made further progress towards the finalisation of commercial contracts since the release of its half-year results back in February 2021.
It said there are several contracts which it expects to sign before the end of this financial year in regard to the ImmunoINSIGHTS services business while it added that a number of proposals and commercial discussions for new and existing contracts are ongoing.
ONC noted that an existing contract for its EarlyCDT® Lung product business is ‘proceeding well’ with a significant number of blood tests performed and participants with a positive result for the presence of lung cancer being referred for further clinical examination.
Oncimmune said that following ongoing final negotiations, it expects to sign a contract with the NHS for the use of the EarlyCDT Lung blood test before the end of this financial year.
In the US, ONC’s partner, Biodesix, Inc. continues to ramp up new sales representatives dedicated to the sale of the EarlyCDT Lung test to US pulmonologists. It said Biodesix is forecasting an acceleration in quarter-on-quarter sales growth through calendar year 2021.
Last month, ONC said it had witnessed ‘a marked increase’ in commercial activity during the six months ended 30 November 2020 resulting in ‘substantial’ growth in revenues.
To date, ImmunoINSIGHTS has signed over seven significant contracts and holds a pipeline of more than 100 opportunities, of which 19 has an aggregate value of £10.8m. ONC believes this demonstrates the medical significance of its proprietary biomarker discovery platform.
Shares in Oncimmune Holdings have increased by over 11% since the beginning of the year. The stock was trading 7.58% higher this morning at 184.5p following the announcement.
Reasons to ONC
Oncimmune Holdings’ focus is to harness the immune system’s sophisticated response to disease to detect cancer earlier and to support the development of better therapies.
Leading Proprietary Technology Portfolio
The company believes the key to improving cancer survival is early detection and optimal selection for therapy. Oncimmune's immuno-diagnostic test, EarlyCDT, can detect and help identify cancer on average four years earlier than standard clinical diagnosis.
Oncimmune’s core technology also powers its ImmunoINSIGHTS service; a proprietary platform that enables life-science organisations to optimise drug development and delivery, leading to more effective, targeted as well as safer treatments for patients.
The group’s EarlyCDT Lung blood test was previously featured on an ITV news broadcast last weekend titled ‘New Blood Test Provides Breakthrough in Lung Cancer Detection Rates’.
The feature highlighted that, in the UK, more than 35,000 people die of lung cancer each year and most have their lung cancer diagnosed late thereby lowering their chances of survival. 80% of lung cancer cases are diagnosed in the latest stages of the disease.
The EarlyCDT test works to identify the immune system's response to the presence of lung cancer. The test detects antibodies present in the body, enabling clinicians to focus their diagnosis on identifying the disease and treating it earlier than current clinical practice.
It has previously been shown that Oncimmune’s EarlyCDT Lung blood test can detect lung cancer on average four years before standard of care and has shown in a large National Health Service (NHS) trial that it can reduce late stage lung cancer presentation by 36%.
Inflection Point to Commercialisation
The Company now believes it has made the point of inflection as it matures from an R&D business into a commercial entity evidenced through its deepening commercial relationships with Industry Partners such as Roche
Fully Funded
The Company is now fully funded to develop all its commercial activities and drive revenues.
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