(Asx: IBX) | Imagion Biosystems

Sep 26, 2021

Sentiment: Sideways

Type of Trade: Speculative

Industry: Diagnostic & Research

Sector: Health Care

Imagion Biosystems Ltd operates in the field of non-invasive detection of specific solid tumor cancers by use of magnetic nanoparticles. The company only operating segment – Research and Development. Its principal business activities consist of nanotechnology, biotechnology, cancer diagnostics, and superparamagnetic relaxometry. In addition, the company is engaged in the research and development of its clinical phase lead product which is intended for the detection and staging of metastatic.

Imagion Biosystems nanotechnology doesn’t use radioactivity, biosafe magnetic nanoparticles to tag the cancer cells. The whole idea is to use the technology to catch cancer at the early stages which increase the survival rates.

Research shows that cancer global health problem has been rapidly growing as the world life expectancy increases. Imagion Biosystems aims to help preventing and providing patients the opportunity for early treatment by being able to detect cancer at earlier stages.

The MagSense phase 1 study aims to identify Metastatic breast cancer test. The company has chosen this path because it is belief that it is the quickest path to commercialization. You can click here to see the full phase I program and potentially even to participate if you wish.

Key highlights about the MagSense:

✅ Company claims that Imagion Biosystem technology will be able to detect cancer in earlier stages than current technology without using radioactive technology, which is many times avoided by specialists in the first place as it can be harmful to the patient.

✅ Non-invasive – a safe and non-surgical solution to detect cancer.

✅ No radioactive – use bio-safe magnetic nanoparticles to “tag” cancer cells.

✅ Platform technology – can be used for many cancers as well as other diseases. eg. infection and cardiovascular

✅ Proprietary – patent issued in most major global markets

✅ Breakthrough – technical feasibility and safety profile vetted, designated as a “breakthrough device” by FDA, currently being developed.

✅ First Indication – metastatic breast cancer, provides shortest path to commercialisation.

✅ First in human – ready for clinical studies – a catalyst for valuation and partnering.

According to the latest investor presentation the company has received HREC approval for Phase I Study in October 2020. What is HREC approval? Any research involving humans, or requiring access to personal information, requires approval from a Human Research Ethics Committee (HREC) that is registered with the National Health and Medical Research Council (NHMRC).

✅ Compelling Business Model by owning a proprietary equipment with the platform for detection, and the injectable component can readjusted for each type of Cancer with an unique nanoparticle formulation.

✅ How can the company monetize? by licensing the technology with commercial partners. There are more than 40 companies that already making and selling services of imaging equipment.

Revenue Streams

  • Majority of the revenue would come from a high gross margin from consumables stream and;
  • The annual sale of the test platform.

Phase 1 – Human Trials

Trials are set to start in December, multi-site study in Australia, taking 6-9 months depending of the subject availability.

This study shall give the company a fairly good idea whether it will have still some further studies to do or whether they can continue the path to commercial clearance.

According to the CEO Robert Proulx, the constantly changing picture of regional lockdowns has made difficult to predict the impact on timing and duration of the study, hence the firm has focused on increasing the number of sites and build awareness of the study in the catchment areas. (You can see all the points in the September newsletter by clicking here)

The work to expand the MgSense product pipeline has also made progress in the last few months, which the company has received CSIRO funded collaboration with Monash University researches in prostate cancer, followed by added a collaboration with Patrys Limited (Asx: PAB), in which Imagion Biosystems are exploring the use of a Patry’s deoxymab with the nanoparticles for brain tumor imaging and diagnosis. (Patry’s Limited is a publicly-listed company company focused on developing novel antibody technologies for hard-to-treat cancers. Patry’s deoxymab platform is based on an antibody called 3E10 that was originally isolated from a mouse model of a human autoimmune disease called systemic lupus erythematosus (SLE). 3E10 has a number of biological properties that are not normally found in antibodies including: Cancer targeting, Blood-brain barrier, Cell penetrating, Inhibit DNA damage repair)

Agreement to develop nanocrystals for treating breast cancer

Imagion Biosystems has recently entered into agreement with Global Cancer Technology (GCT), to develop GCT’s nanoscintillator technology for the treatment of breast cancer. Under the terms of the Agreement, Imagion will be paid for certain R&D services while gaining an ownership interest in the arising GCT nanoscintillator product. Phase 1 will involve Imagion developing a protocol for synthesizing the yttrium aluminum garnet nanocrystals doped with a praseodymium scintilltor with estimate cost of US$450K to US$500K and duration between 9-12 months. Phase 2 relates to Coating and Linker Chemistries and is expected to have a duration of between 9-12 months with estimate cost of US$450K to US$500K also. In this project, any intelectual property (or product) as a result of Agreement will be considered joyinly owned by Imagion and GCT.

Our View on the Company

We agree that Imagion Biosystems has very compelling technology Magsense and could successfully develop nanocrystals for treating breast cancer as per the latest agreement with Global Cancer Technology, however, the firm is several years away of commercialisation. Magsense is also at the early stages of Phase 1 trial and still has a lot to prove during the trials as results comes along, not to mention another 2 stages to be completed, followed by FDA approval which leads to 3-4 years away to commercialization. Although, the technology is promising, as investment it makes IBX extremely risky company to be classified as investment grade asset. IBX would be more suitable for high risk traders that are willing to compromise capital for short/medium term capital appreciation.

Technical Analysis

If you have “invested” on IBX 12 months ago, you would have seen your money moving quite significantly, however 52 weeks later you would have been sitting in the same amount. If you look at the chart below, you can see a 176% price swing to the upside driven by the hype on the stock last year where we could have seen IBX being spoken in several different forums, and a SP crash of 70% wiping out any capital appreciation, proving our theory of IBX not being an investment grade stock, but a speculative trade stock.

Trading stock like this, requires a great deal of risk tolerance and need to be bought when the stock is at the low levels.

Furthermore, this type of stocks are move by hype and normally, tend to move by announcements, regarding partnering agreements, trials status and results, Government entities approvals or fundings, etc.

At this stage, SP is currently sitting at the SMA9 level as well as trading 67% of the March highs, giving a great entry point around 7.2c which is the current SMA9. Remember that anything above 10% is FOMO and stock likes this tend to swing quite widely.

✅ Bullish intersection level 2;

✅ Potential support level at 6.5 has been the reversal or bottom of this downtrend.

???? Bearish trend with support line around 6.5c which could be tested again. Remember that trend is friend of the trade, hence use caution.

Entry Details

Risk: Extremely high

Trading type: Speculative

Lead time: 1 week to 3 months.

Perfect entry point: 7.2c (at moment anything under 8c is out of FOMO area, which means a technically fair price)

Target: 9.9c | 30% Profit.

Stop loss: under 6c.

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