OncoSil Medical (ASX:OSL) Presentation, FNN Online Investor Event, May 2020

Company Presentations

OncoSil Medical Limited (ASX:OSL) Managing Director and CEO Daniel Kenny presents on the significance of the company's CE Marking approval for its lead product OncoSil, which helps treat pancreatic, liver and biliary duct cancer, at FNN's Investor Event.

If you've been following the OncoSil story, earlier this year, in March, the USFDA granted breakthrough device designation for our device, which was a major achievement. And in April, the European authorities granted CE marking. So, the company has now moved from a late-stage R&D company to now commercialising a truly breakthrough implantable radiotherapy device for the treatment of pancreatic cancer.

Next slide, please. So just if we summarise quickly the investment thesis. OncoSil Medical is a commercial stage medical device company pursuing targeted radiotherapy with a truly recognised by US and European authorities breakthrough technology for the treatment of pancreatic cancer. We are addressing a $3 billion global market opportunity with no direct competitors, and in terms of other technologies, particularly brachytherapy. We are now ready to commercialise in Europe. And with the CE mark, that CE mark not only allows us to commercialise in 28 markets in Europe, it also allows us to file in multiple ASEAN and APEC countries, which we've already done. So we're expecting approvals in Asia later this year on the back of the CE mark.

We expect, despite COVID-19 pandemic, our launch preparedness for Europe has been impacted, but we still expect first revenues later this year. Unfortunately, pancreatic cancer is a deadly disease, and these patients still have to be treated despite the challenges that come with a pandemic. In exciting news, we've raised $14 million by private placement earlier this month, and we are concluding later today a $5 million fully underwritten rights issue. So we have effectively raised $19 million on the back of our CE mark and USFDA breakthrough designation. So it's an exciting development for the company. We are now fully funded to exploit the commercial opportunities that come with those approvals. Next slide, please.

So let's do a quick recap of pancreatic cancer. Treating pancreatic cancer, as I'm sure you're all aware, is a very challenging and difficult area of oncology. Existing treatments for pancreatic cancer are ineffective. They result in very poor survival outcomes -- arguably, the worst survival outcomes you can have in any cancer. For unresectable locally advanced pancreatic cancer, the overall median survival is only 8.5 months. And the five-year survival is less than 5 per cent. Compare that with breast cancer today, fortunately, it's 95 per cent five-year survival, but unfortunately, for pancreatic cancer, it's less than 5 per cent. And the reason for that is late diagnosis. Most patients don't recognise symptoms until the cancer has potentially metastasised. Existing treatments, whether it's chemotherapy or radiotherapy or the combination of the two, are ineffectual. And only 15 per cent of patients present with tumours that are resectable. And there have been limited advances over the past 20 years in terms of further improvements with chemotherapy.

Next slide, please. The OncoSil device provides a unique and effective solution to this challenge of improving survival and improving outcomes in unresectable locally advanced pancreatic cancer. As I alluded to in the beginning of the presentation, we have now achieved CE mark approval, which allows us to commercialise the device not only in Europe, but also in the UK. We have breakthrough device designation in both the UK, the European Union, and now the US. The device is classified as an active implantable medical device in both the EU and Australia, and as a class III active implantable device under US regulations.

We have a wealth of clinical data, six studies completed to date, all yielding very positive results on tolerability, safety and efficacy. But the PanCO study is the one that we'll talk a little bit more about during this presentation. So what is OncoSil? OncoSil is effectively radioactive microparticles that are implanted directly into tumours, and for pancreatic cancer, we use ultrasound-guided endoscopy to target the tumour and to basically implant or insert or inject the microparticles into the tumour to irradiate the tumour from within. It's a single device to be used once, but we believe that in the future if the patient warrants it, additional dosing could be made available. The device is permanently placed in the tumour unless the tumour is subsequently reduced in size to allow it to be resected or removed surgically.

So the PanCO study, which was the pivotal study that secured the breakthrough designation by the USFDA and the European approval for CE marking, shows excellent local disease control. 90.5 per cent of the patients in the PanCO study achieved local control within 16 weeks. In other words, the tumour was no longer growing and spreading. It showed prolonged overall survival, a highly encouraging rate of surgical resection with curative intent, remembering that this group were truly unresectable upon entry, showing high degree of disease control, tumour reduction, and prolonged progression-free survival. All the outcome measures that oncologists are looking for in any treatment of oncology, but particularly so in this very difficult area of unresectable locally advanced pancreatic cancer.

Next slide, please. There is a wealth of data. And I'm not going to bore the audience today with a wealth of clinical data. I'm just going to focus on two outcome measures. The first being overall survival, or improved or prolonged overall survival, and the second will be the surgical downstaging or resection rate. OncoSil Medical has clinically proven to prolong median overall survival in locally advanced pancreatic cancer patients. And as you can see from this graphic, we're effectively doubling the survival benefit by taking OncoSil. The standard median overall survival in unresectable locally advanced pancreatic cancer is eight months. In May last year, we did an analysis of the PanCO data, and it was showing an effective doubling to 16.1 months. We will do a further analysis later this year, and we expect that that survival benefit will be further prolonged as the majority of the patients that were alive May last year remain alive today. So we are showing prolonged overall survival and significant reductions in the risk of death compared to chemotherapy or induction chemotherapy or chemoradiotherapy combinations when you see it in the literature. And so this is a compelling story. Pancreatic cancer patients can live for eight... Generally median survival, eight months, and we're showing a doubling of that survival and we expect that to improve. Next slide, please.

The other important clinical outcome that I want to highlight, which highlights the impact of this technology, is its ability to downstage the tumours. And by downstaging, it basically means OncoSil converts technically inoperable patients, patients whose tumours cannot be removed surgically, to being able to push them into surgery, extending their survival and their quality of life. Why is this important? If you have unresectable locally advanced pancreatic cancer, you will probably live eight to nine months, depending on which paper you cite from the literature. If you can have your tumour removed, certain studies indicated that survival extends out to three years or greater.

So what did we find in the PanCO study? We are effectively showing a tripling of the ability to go into surgery with curative intent. And that 7 per cent typical resection rate from the literature is based on a meta-analysis of the literature. So it is actually an unrealistic target for resection. However, let's take it for what it is. The best, as you can see in the literature, is 7 per cent resection rates for people who are unresectable, versus getting almost 24 per cent on the PanCO study. So a tripling of the ability to have your tumour converted from inoperable to operable. And if you can have your tumour removed, your survival will jump from perhaps months to years.

Next slide, please. So if we take that data and we start looking commercially at the market opportunity, there's a significant market opportunity for the locally advanced unresectable population, which represents 40 per cent of the total pancreatic cancer market. And that represents 50,000 patients in the EU and the UK. So it's a tremendously promising opportunity to become the standard of care. Because standard of care currently, which is chemotherapy combined with radiotherapy, is giving median survival of eight months, where we're showing a doubling of that already. And if patients can be converted from inoperable to operable, they can live for years. Next slide, please.

So we see a highly attractive and scalable operating model at OncoSil to commercialise this unique breakthrough technology. We have no competitors. It's a patented technology and it's a platform technology. This technology can be used in other solid tumours. We've trialled it in primary liver cancer, and we will move shortly into bile duct cancer. A little bit more about that in a moment. We have a low cost base. And we only require a moderate sales force to commercialise this technology because of the nature of the fact that this is a rare cancer and it's treated at tertiary referral centres and there are only a certain amount of those in each geography. In Australia, 15 tertiary referral centres deal with 92 to 94 per cent of all pancreatic cancer cases. So you don't need a large GP sales force to target that. In the UK, for example, there are only 26 centres that treat the vast majority of pancreatic cancer. Once again, you don't need a large sales force. So a moderate sales force is all that is required for us to take this technology to those markets.

We have comprehensive manufacturing capability in place, which is highly scalable, and the economies of scale will kick in as we move forward. As I indicated earlier, this is a platform technology applicable to other cancer indications with a focus on bile duct cancer and liver cancer.

Next slide, please. I'm going to move quickly today with the story for OncoSil. It's a compelling story, and we can cover this off in 15 minutes. The commercial strategy is currently in full swing. We have four growth pillars. The first one is clearly targeting Europe and the UK on the basis of our CE marking. We are already preparing for that launch and we expect first revenues later this year from that geography. We clearly have already filed, and we've made those announcements on the ASX for filings in ASEAN and APEC markets. So keep an eye out for approvals in Singapore, Hong Kong and New Zealand in the near future. One key area that we've talked about quite often in the past, including with FNN, is strategic partnerships. And I'll talk a little bit more about that in the future, but there are unique geographies which we would like to partner with for both an R&D uplift, but also commercialisation.

And finally, but no means least, is our US market entry strategy, which is well advanced and we have a dual entry pathway, which I'll talk about in a moment, but it focuses on an expedited development and approval process, now that the US has granted us through the FDA a breakthrough device designation.

Next slide, please. So we've talked a $3 billion global market opportunity. As you can see there, the UK market is worth, in the locally advanced unresectable space, a $150 million market opportunity. The rest of Europe represents an almost $900 million USD market opportunity. Singapore, Hong Kong and Australia are smaller, discrete markets that we feel we can capture with our moderate size sales force.

And these markets also can be captured completely as pancreatic cancer is treated in a very centralised way. For example, the Singapore market represents just under $10 million, but all of the pancreatic cancer patients are treated at two sites, the National Cancer Institute and, of course, the Singapore General Hospital. And something similar also in Hong Kong where the predominant site, the leading site there, is the Prince of Wales. We know those markets well, we've done work there in the past, and we see great opportunities to commercialise the technology in Europe and also in Asia and Australia ultimately.

China and Japan, I'd like to talk about briefly. Comes back to that comment I made earlier about strategic partnerships. China and Japan represent a significant, exceeding 1.5 billion US dollar, market opportunities. We believe our technology can be used in those markets. Chinese and Japanese physicians are exceedingly interested in our compelling data, but we know that the best way to target those markets both from a regulatory pathway point of view and ultimately from commercialisation is to seek a strategic partnership. And that's something we will actively exploit moving forward.

And moving forward, the breakthrough device designation received from the USFDA earlier this year allows us to look towards an expedited development and approval for a half a billion dollar market opportunity. Next slide, please.

So Europe, clear path to first revenues, and those first revenues will be achieved with a modest number of sites. So even though we're impacted currently by COVID-19 pandemic, it is clearly impacting our launch preparedness, but we believe we can achieve first revenues later this year with sites coming on board. We're doing training online rather than face-to-face training. We already have five sites established because they were the sites involved in our earlier clinical studies. So the focus is on winning and activating large key hospitals moving forward with a small dedicated sales team. Once activated, we will work with the sites to quickly move all eligible patients onto the device. And we expect through sharing experience between sites to lead to an exponential sales growth over time.

Next slide, please. So much for saying I could finish within 15 minutes, already hit the 15 minute mark, but we're making good progress here. So we see in Europe a repeatable sales model where we target the key sites. As I said, we already have five sites already activated. We are strategically targeting the next 15 most valuable sites in Europe with online training. And once those 20 sites are up and running, we will expect to get revenues later this year. And then we will continue that cycle, basically building evidence, sharing experience, engaging in training with relevant practitioners, and increasing utilisation, both within a hospital that's brought online, but also within the network in which that hospital operates. Next slide, please.

Now let's talk a little bit about the US. As we said, we have a dual entry process that is well established. With the USFDA granting us breakthrough device designation in March, we will now work very closely with the FDA to optimise a pre-market approval with an expedited development and approval process to target a pancreatic cancer market that's worth half a billion dollars. So keep an eye out for ASX announcements in the coming months where we announce what our clinical program and regulatory program will look like on the basis of the USFDA breakthrough designation, which will allow us to come to the market much sooner than would have been if we had not been granted that breakthrough designation.

But in a more near-term opportunity, we actually see an entry into bile duct cancer. Bile duct cancer, or sometimes referred to as cholangiocarcinoma, is an area of huge unmet need where exceedingly poor prognoses, even worse than unresectable locally advanced pancreatic cancer. This has been a journey that we started back in 2018. And it culminated initially with the USFDA granting the company a humanitarian use designation, or HUD, for intrahepatic and distal cholangiocarcinoma. We had a successful pre-submission meeting middle of last year, and we plan to file next month the humanitarian device exemption for distal bile duct cancer. And that's a very near-term opportunity. And if we are successful, we would be able to commercialise the bile duct cancer in the United States in 2021. So we are already living up to the promise of a patent technology with more than one indication. We clearly have a European approval in pancreatic cancer, and we believe we can move quickly to securing US approval in bile duct cancer. Next slide, please.

For a small Australian company, we arguably have one of the finest and most highly credentialled boards for a medical device company with a small market cap of less than a 100 million, led by Dr Chris Roberts, who is our chairman, and under his leadership we've moved forward with, I think, a very successful and aggressive program of subsequent commercialisation based on those two major breakthroughs that we had earlier this year with the USFDA and with the CE marking from the European authorities. Chris Roberts needs no introduction really, but I will just in passing mention that he was the former chairman of Sirtex in its formative days. And, of course, we all recall Sirtex becoming an icon to the Australian market. And, of course, Chris served as the CEO of Cochlear (ASX:COH) for many years. So under his leadership, I think we have a good stewardship of the company from the board.

Next slide, please. In terms of executive management, I'm very proud to lead a very experienced and highly capable team. Couple of highlights here. Karl Pechmann has recently joined us. Another very seasoned company secretary and CFO to lead us into commercialisation. David James is the head of global manufacturing and operations. And David has brought a wealth of experience from his time at Sirtex, where he inhoused the Sirtex manufacturing process. Nicole Wilson has led the company's regulatory pathway and has led to the success of filings in Asia and APEC on the back of our CE marking, but also has been pivotal in our activities with the USFDA.

Two other highlights to talk about. Charles Rowland heads up our US operation, and with potential approval later this year, Charles is busy preparing for a possible commercial launch in bile duct cancer. And most recently, we announced the appointment of Nigel Lange as European president for OncoSil Medical. And Nigel also would be well known to many investors familiar with the Sirtex story. Nigel has a depth of experience in brachytherapy and in cancer, but was most notable for his time as the head of European operations for Sirtex. And his success there we hope to translate into success with OncoSil, and Nigel will lead our commercialisation efforts in Europe later this year.

Next slide, please. Coming to the end, we see an exciting path forward in both the nea-and midterm. The announcement of Nigel Lange has been completed. And that excited the market because we now have a very exciting management team to lead commercialisation. We talked about the humanitarian device exemption for bile duct cancer -- that will be filed next month. We are looking forward to regulatory approvals in Hong Kong and Singapore. We are looking to share with the market and with the medical community through publications and presentations the maturing long-term survival data. We are expecting first sales later this year, despite COVID, in both the UK and in the EU. We do expect and we are quietly confident of getting approval on the HDE filing that's going in next month and having that regulatory clearance from the FDA for US entry into bile duct cancer anticipated in Q4 this year. Regulatory clearance in Australia can be expected on the back of the regulatory success we've had with CE marking, and that's anticipated for 2021.

And then, obviously, if we are successful with the bile duct cancer submission to the USFDA, we can expect first sales and procedures in distal cholangiocarcinoma or distal bile duct cancer in early 2021. So I will stop there. It's a compelling story. We've had some significant breakthroughs this year. And despite the pandemic, we're looking forward to first revenues later this year in the UK and in Europe, and looking forward to other approvals in Asia, as well as regulatory filings for bile duct cancer with the USFDA. Thank you very much for your interest in OncoSil.


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