OncoSec Medical Inc (ONCSQ)

[hschlauch]

Maxim Group Says OncoSec Still a “Buy” (ONCS) by James Garrett Baldwin, dated 10.17.2016.

http://www.investopedia.com/news/maxim-group-says-oncosec-still-buy-oncs/

Excerpts:

"The analyst slashed his price target from $17 to $5 and delayed expectations for the commercialization of a key cancer immune therapy.

McCarthy’s analysis on OncoSec centers on changes to his firm’s model to reflect new assumptions in the pricing and competitiveness of Immunopulse and the timing and commercialization of its immunotherapy products.

In his analysis, McCarthy said he pushed back the timing of commercialization from 2020 to 2022. “While the phase II data in melanoma as a monotherapy is positive, it is clear that a combination study with a checkpoint modulator makes sense and would be consistent with the direction in which we see immune-oncology heading,” McCarthy wrote. “So while a small investigator-sponsored phase II study in combination with Keytruda is ongoing, it is still early in the complex development process of cancer immune therapy.”"
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Here's looking forward to 2022 - cheers! If that's the case, we are looking at significant capital raises to get to that point. Obviously, there are other options besides dilution, but right now we have no reason to believe funding will come from anywhere else but stock offerings/warrants.

If McCarthy is correct, six years is a long runway to reach commercialization. If there is no partnership through the registration trial, and assuming the trial enrollment mirrors the Masterkey 265 phase III trial, then we could be looking at registration trial costs around $39.6 million ($60,000 per patient x 660 patients, assumptions mine only). This is on top of the day-to-day operational, research, etc and filing costs. I estimate it will cost around $250 million to reach commercialization, and this assumes Merck will cover the cost of pembrolizumab throughout the registration trial. Per the conference call from last week, it looks like this will be a classical registration study. I'm obviously not an expert on finance - so take my assumptions with a grain of salt - but it sure looks like we are going to need some substantial cash to make it through to commercialization if McCarthy's estimate is correct. Where is that money coming from?