With the Australian sharemarket, as measured by the All Ordinaries Index (INDEXASX: XAO)(ASX: XAO), down 1% today, some investors might be asking ‘what on earth has happened to OncoSil Medical Ltd (ASX: OSL)’?
Doing good things
Oncosil is a medical device company focused on localised treatment for patients with pancreatic and liver cancer.
In a presentation in November they gave their investment highlights as being on a clear mission to commercialise a breakthrough radiation treatment for pancreatic cancer, a $2 billion market opportunity for them.
OncoSil also highlighted that current and previous clinical studies demonstrate excellent local disease control, a significant reduction in tumour size and volume, and ease of implementation.
Oncosil say they have conducted 4 clinical studies with encouraging results on tolerability, safety and efficacy and that a CE Mark application to commercially sell Oncosil in the European Union (EU) is under review, with commercial launch subject to approval.
Sounds Good So Far, So What Happened To The OSL Share Price?
OncoSil’s commercial launch just hit a snag.
The company has received advice from the British Standards Institute “BSI” Clinical Oversight Committee that is reviewing the Oncosil CE Mark file, that at this time insufficient clinical benefit has been demonstrated to recommend approval.
The Clinical Oversight Committee will now send this recommendation to BSI’s Medical Device Group for final determination. This isn’t a positive result for Oncosil and presents a serious hurdle to selling their product in Europe. Management have said they will look to clarify the issues with BSI and update the market when a course of action has been formulated.
Buy, Hold or Sell
I don’t like investing in higher risk medical device and biotechnology companies, so this one isn’t for me. I find I have more luck betting at the race track. I find the outcomes are often binary in nature and more often than not, I see share price reactions like today’s (down 68%).
I do however own shares in some medical device companies like Resmed (ASX: RMD) and biotechnology company CSL Limited (ASX: CSL), and I have previously owned Cochlear (ASX: COH).
These companies have proven their technology, strong revenue and continue to invest in R&D to keep them ahead of the game and fit more comfortably in my risk tolerance.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, David owns shares of ResMed and CSL.