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Bionomics (BNO) is an Australian biopharmaceutical company specialising in ion channel drug discovery for central nervous system (CNS) disorders such as anxiety and post-traumatic stress disorder (PTSD). BNO also offers contract and partnered drug discovery based on its proprietary technology platforms: MultiCore and ionX. The group sales model includes fees-for-service, licensing income and royalties from successful partnered products. Its strategic focus is on development of its lead candidate, BNC210, to completion of Phase II in PTSD. BNO is seeking to divest or out-license its off-strategy oncology programmes, which is the focus of this report.

  • Strategy: BNO’s recently refined strategy is to focus on development of its ion channel drug candidates, particularly allosteric modulators. It intends to partner its priority CNS candidate for late-stage development and commercialisation, and to monetise its clinical-stage, non-ion channel, oncology programmes.
  • Off-strategy assets: Management has reiterated that it is in formal discussions for an oncology deal, a position originally announced at least eight months ago. The deal could take the form of a strategic partnership for clinical development of BNC101 from Phase Ia and/or of BNC105, currently in two Phase I trials.
  • New data: New clinical information on BNC101 was presented at the AACR meeting in April 2018, which included data consistent with a pharmacodynamic effect of BNC101 in colorectal cancer patients. In vitro BNC105 data were also presented. BNO reiterated that this could assist partnering discussions.
  • Risks: BNC101 is compelling as a first-in-class drug targeting the stem cell marker LGR5. However, there are significant risks in development of any drug, and there are no licensed cancer stem cell-targeting drugs. BNC105 has been through three trials in solid cancers but has failed primary end-points previously.
  • Investment summary: BNO has a clear strategy to invest in developing its drug candidates to a stage that both interests big pharma and generates good potential returns for shareholders. Hardman & Co estimates the post-tax NPV of the two oncology assets to be around A$21m/$16m, and A$651m for the whole pipeline. The next inflection point is likely to be the BNC101 data in CY 1H’18.
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