Bionomics Disrupting The Market In RCC

Bionomics has completed enrolment of the 135-patient randomised stage of its DisrupTOR-1 Phase II study of BNC105 in renal cell carcinoma. This puts data read-out on track for January 2014, which is likely to represent a major catalyst for the stock. Our risk-adjusted net present value of Bionomics’ pipeline remains A$275m and adjusting for cash indicates an overall value of A$300m or A$0.72/share.

DisrupTOR-1 study now fully enrolled
Bionomics has completed recruitment of the 135-patient randomised stage of the Phase II study in metastatic renal cell carcinoma (mRCC). The study, named DisrupTOR-1, examines BNC-105 in combination with Afinitor (everolimus, Novartis) in the second-line setting. The primary end point of the study is the PFS rate at six months, thus the read-out is expected in January 2014.

Affinitor confirmed as second-line therapy for RCC
Meanwhile, data presented at ASCO on Afinitor suggest this drug will not displace Sutent (sunitinib) as the first-line standard of care for mRCC and thereby confirms its position as a second-line agent. This is commercially important for Bionomics if it is to establish BNC-105 as the agent for combination with Afinitor. The Novartis-sponsored Evolve-3 Phase II study tested the sequencing of Sutent and Affinitor and failed to show non-inferiority in terms of PFS. This makes any further development of Afinitor as a front-line agent unlikely.

Proof of concept in animal model of melanoma
Separately, Bionomics’ joint venture with the Co-operative Research Centre for Cancer Therapeutics (CTx) reached a proof-of-concept milestone with CTx-0357927, a preclinical compound in an animal model of melanoma for inhibition of vascular growth receptor 3 (VEGFR3).

Valuation: A$0.72 per share
Our risk-adjusted net present value model for Bionomics’ clinical-stage R&D programmes, excluding cash, remains A$275m, which adding cash of $23m, yields an overall valuation of A$300m, equivalent to A$0.72/share. The risk-adjusted NPV can be expected to rise as products advance through development and justify higher probabilities of success. No value is currently attributed to Bionomics’ preclinical programmes, including BNC101 and BNC375, which represents upside to the investment case.

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