Oncosil Clarification and Apology

Life is tough as a public company. Commenting on ASX bioscience companies can sometimes also be tough.

This week I received a “shot across the bow” from Oncosil’s (ASX : OSL) lawyers in relation to my posts on the company (communication here, with some names/contact details obfuscated for privacy/courtesy purposes, including my own). I note that I received this communication the day after Martin Rogers’ options vested. Maybe, feeling cashed up, it increased his appetite to be litigious? Hmmmm.

Specifically OSL’s counsel noted:

In response to your Publications, our client has had to respond to numerous negative enquiries from shareholders, stock brokers, investors, scientists and other parties who have doubted the intentions and ability of OncoSil to develop and market the OncoSil Device. 

The impression that the reasonable person would form from reading the Publications would be that OncoSil doesn’t have a good or marketable product in the OncoSil Device nor does it have proper management or a proper regulatory strategy. The imputations and falsehoods you have published are highly damaging to OncoSil and the OncoSil Device

In the context of my apology to OSL (below), I feel compelled to clarify a few matters that I am sure will help to soothe tensions. There are actually four (4) discrete issues raised in the construction of the above assertion:

Assertion #1: Oncosil Doesn’t Have a Good Product

This assertion is correct. I believe that the Oncosil product is fundamentally flawed. Why?

1) Oncosil has not presented meaningful data that demonstrates that P32 biosilicon particles are better than P32 colloids, a relatively ancient technology that has had very limited clinical and commercial impact. This is fact.

2) Oncosil’s product is a type of brachytherapy. In general, brachytherapy is a declining modality of radiation therapy. This is unfortunate because in certain instances, highly localised, high-dose radiation has been shown to be very beneficial to patients in certain oncology settings, such as cervical and prostate cancer. Nonetheless, the industry shows a robust reduction in interest in this technology, including physician practice and training. On a consolidated basis, reimbursement has generally declined in major US and EU markets (ASTRO’s guidance has remained relatively static). Since the 1990s, we have not seen an uptake of P32 colloid/particle use, despite some early promising data. These are facts, facts that have not been sufficiently articulated to retail investors, in my honest personal opinion.

3) We already have a HCC brachytherapy product that is approved, effective and probably a better choice for patients – the Sirtex product. It also doesn’t rely on an accurate intratumoral injection, a non-trivial clinical challenge. Oncosil’s product is, at best, a “me too” product in this space and will need to demonstrate efficacy to displace Sirtex in approximately equivalent patient settings. This represents a clinical and financial undertaking far beyond OSL’s current resources. This is fact.

4) It is my assertion that brachytherapy in pancreatic cancer has not been successful because it is challenging to assess the multi-focal/multi-lesion extent of disease (staging pancreatic cancer patients is notoriously difficult) and because any therapy that is only localised to the tumour and does not provide treatment to lymph nodes (i.e has some degree of systemic effect) is an intrinsically sub-optimal treatment. Indeed, this was the potential of the original P32 colloid work  because an intratumoral injection of dose would also traverse to adjunct lymph nodes. This is fact.

Assertion #2: Oncosil Doesn’t Have a Marketable Product

1) Oncosil doesn’t have a marketable product because it has not yet achieved a marketing authorisation in any jurisdiction. This is a matter of regulatory fact in relevant jurisdictions.

2) Oncosil correctly asserts that a CE Mark is the fundamental and key pre-requisite to a markable product. While a CE Mark or successful IDE/PMA paves the way for commercial success (indeed it is a key hurdle), a marketable product actually stems from demonstrating clinical efficacy. Nothing more, nothing less. Neither Oncosil or Oncosil collaborators/predecessors (over a decade) have demonstrated any statistically meaningful patient outcomes and will be relying on small, weakly-powered studies to convince payors – and patients – that the technology provides cost-benefit. This is a risky strategy and I have noted as such for the benefit of retail investors.

3) Oncosil’s marketing claims are “backed up” by fundamentally insufficient biostatistics. For example, as far back as 2013, OSL was making claims about significant patient outcomes in as few as 17 treated patients in open label studies. This is fact.

Assertion #3: Oncosil Doesn’t Have Proper Management

I have never asserted this about the company. I do, however, assert that:

1) There is limited executive team experience in developing radiopharmaceuticals/radioactive devices, a challenging field with a unique set of development issues. This is fact.

2) The board lacks independence from a corporate governance perspective. This is fact.

3) The company has an inconsistent policy of communicating the arrival and departure of executive leadership and failed to inform the market that the VP of Regulatory Affairs departed from the company at the time the CE Mark dossier was in a period of critical iterative review with a Notified Body. This is fact.

Assertion #4 : Oncosil Doesn’t Have a Proper Regulatory Strategy

Establishing the safety and efficacy profile of a radioactive device is non-trivial, particularly in challenging oncology settings like pancreatic cancer. Patients have taken diverse “journeys” to the end-of-life setting and demonstrating safety and efficacy requires sophisticated and relatively large-scale outcome studies of the type not yet conducted by OSL. Therefore when OSL makes claims of an impending  CE Mark, without having demonstrated that it has conducted sufficient pre-clinical and clinical development (at least in the public domain) then these claims warrant scrutiny by retail investors. Even paid research has compared Oncosil’s plight to drugs that had to undergo significant clinical development (at significant cost) to demonstrate moderate survival benefit. This is fact.

If a Notified Body has classified the Oncosil product as a device and advised that a CE Mark is the appropriate strategy, then this is, indeed, a “proper” regulatory strategy (by definition). This appears to be the case and I recognise it as such. The company has also recently noted an IDE application. At a 30,000ft  view, this is also very much a “proper” regulatory strategy. However, regulatory strategy is a far more sophisticated issue than just a headline assertion of product development pathway. Since 2013 the company has asserted that a CE Mark was just around the corner (after almost a decade of glacial development by predecessor organisations). More recently, anticipated goals of a November outcome have slipped, without sufficient explanation to retail shareholders. This is fact and a matter of ASX disclosure record.

In summary, at a high-level, I acknowledge that OSL has a “proper” regulatory strategy. However, in terms of the details, I am highly skeptical that OSL has done the necessary development work to deliver either a CE Mark or an IDE application in the near future.

I will be happy (and so will patients) to be proven wrong.


Because of my comments, OSL’s lawyers have asserted that:

Your conduct is therefore considered defamatory within the meaning of section 6 of the Defamation Act 2005 (NSW) (the “Act”). Your conduct may also constitute the tort of injurious falsehood due to the malice you have exhibited with reckless, unqualified and poorly researched statements.

Anyone with a sleep disorder and interested in reading NSW defamation legislation (fortunately now largely harmonised on a national basis) can do so here. With respect and deference to the company’s Notice of Concern, my comments are not intended to be reckless. My comments are – on the whole – researched, informed and substantiated opinions. They are also views shared by many people actively practicing medicine in the areas that OSL intends to impact patient care. I fail to see how an open discussion around scientifically and commercially significant matters like clinical efficacy and reimbursement could be considered to be “malicious”.

As for being unqualified, I have co-founded or lead (in an executive capacity) 7 companies in the nuclear medicine and radiopharmaceutical space and advised a dozen more. Unlike most of OSL’s management team, I have lead the financing and clinical development of multiple clinical radiopharmaceutical products. I don’t consider myself to be an especially gifted product developer, but two decades in the nuclear medicine industry means that I feel fairly comfortable talking about the overall landscape. For the record, I also welcome contrary opinion and fact-correcting when I comment about a company’s technology – even OSL’s.

My Apology

So, to summarise:

Yes, I don’t think the Oncosil product is a good product. I am entitled to my honest opinion (even under Australia’s somewhat draconian defamation laws) and I have provided ample backup to my statements as someone with significant practical commercial experience in the field of nuclear medicine, and with informed review of the available public domain data from OSL and collaborators.

Yes, I don’t think the Oncosil product is a marketable product. Oncosil, as a product, fundamentally flies in the face of a significant downward industry trend, and seems to basically ignore that there are some major clinical challenges in the deployment of the Oncosil technology. In my opinion, the company has failed to articulate how it fits into current clinical best practice in diseases such as pancreatic cancer.

Yes, I am concerned that the company has an insufficient data package to achieve a CE Mark or an IDE, particularly within the timelines articulated to shareholders. This is a perfectly reasonable observation based on the slippage and repeatedly deferred guidance by the company, and the lack of visibility of scientifically meaningful data in the public domain.

No, I do not think the company has “[im]proper management”. It’s hard enough to be on the receiving end of scientific and commercial criticism from an industry commentator (i.e. me), without this unfortunate and frankly unkind implication. I don’t personally believe it is an implication I have directly or indirectly made (indeed, I spoke very positively of my experience interacting with Mr. Kenny, CEO) but I can also accept that critical scientific and commercial commentary could be misconstrued by an organisation unused to informed and objective analysis. As such, I offer a public apology to readers of the site and to OSL directly for writing and publishing articles about OSL and the OncoSil device that may have conveyed the position that I view the management team as incompetent, misleading, or irreverent of retail shareholder capital. This is not the case and I wish OSL’s management every success with their venture.


Despite my attempt to provide a reasonable response to the original notice of concern, this evening I received a follow-up communication asserting the need for apology, retraction of four (4) posts I made in relation to Oncosil, and a commitment not to further comment on the company.

As such, I undertake to do the following :

1) Apologise. Please note above.

2) Commit to no longer cover, comment or make reference to OSL in any fashion on this site.

3) By 5pm AEDT, 18th of January, the following four posts will be permanently removed from this blog site, per “instruction” from OSL’s lawyers:


Concluding Remarks

For my readers, I would like to briefly make a final personal comment. I am obviously deeply disappointed by this action on behalf of OSL. Having endured this type of approach several times over the past 12 months, at great personal cost, I wish to inform that I will no longer accommodate these kinds of legal interventions.

As such, any and future formal and informal legal threats will simply be published directly to this site, unredacted for 3rd party privacy/courtesy (including identification of representative counsel), without comment.

30 thoughts on “Oncosil Clarification and Apology

  1. It is very disappointing that you have agreed to never make further comment about the company. I dont understand why you have agreed to this. The threat of defamation seems to have shut you down. Your readers are all the poorer for it. It is so rare to find impartial, informed, critical comment about listed ASX bio companies.

    Like

  2. It always amazes me that companies work with lightening speed to take advantage of the benefits of being public, but then get upset when the public’s gaze turns to them. When you are a public company you must expect the public to comment on you, positive or negative.

    It also amazes me that they fail to understand that, in almost every case, the best response is no response to negative public comment and that the bigger their response is the more likely it is that the negative comment is accurate. When they pull out the lawyers, an investor will know the negative commentary is 100% accurate. Why else would they try and simply shut debate down, rather than proving the negative commentary is in inaccurate?

    I also find it ironic that investors in these sorts of companies often believe legal action to stifle negative opinions is a good thing for their company to be doing. While it may influence the share price one way or the other, ultimately the share price will head to the value of a company’s technology. This means if the negative comment is wrong, it will eventually be shown to be through the company’s share price. If it is right, investors shouldn’t be urging the company to take legal action, they should be selling their shares in the company.

    Like

      • Sorry, I was being a bit whimsical.

        I admire what you’re doing. And, it must be frustrating receiving so much pushback.

        I’m no lawyer but in the past our defamation laws provided draconian protection to politicians and other public figures but only during their lifetime. Hence, the controversial media dump on NSW Premier Sir Robert Askin (in relation to financial dealings) on the day after his death.

        Keep up the good work.

        Like

  3. ” The imputations and falsehoods you have published are highly damaging to OncoSil and the OncoSil Device”

    I couldn’t laugh harder.

    Isn’t this the same company that paid for a report to say that there was a 80% chance of CE marking approval from the early October CE review meeting?

    The facts are that the CE marking process is dead and the IDE application in December was refused!

    There is no marketable product, just a bunch a spruikers pumping stock (also a FACT).

    Can they please take legal action against me! Let’s see how strong the allegiance of their paid spruikers are to Oncosil 😀

    Like

  4. I believe they call this the Streisand effect – Oncosil makes a big deal about something they don’t want the world to know about, therefore the world (or in this case, the world as it relates to ASX-listed biotech), pays more (unwanted) attention.
    So Chris, does this mean you’ll also have to delete this apology? I notice it wasn’t in your list.

    Like

    • Exactly Emma. Oncosil’s “lawyering” just comes across as tetchy and overly-sensitive. To the point of paranoia. Drawing much more attention to their operations and management, and closer scrutiny.
      Chris’ apology is well considered, factually stated and based, and effectively refutes any Oncosil claims of defamation.
      “The Oncosil lady doth protest too much, methinks”

      Sorry Chris has had to deal with such silliness.

      Like

  5. Chris, I admire your balls to have stood up for honesty and accountability in public Biotech companies for so long.
    It takes a very strong conviction to make a honest analysis when you know you are stepping on the big toes of your peers.
    I can only imagine the intense heat and poignant atmosphere there would be ,if you ever be in the same room at a function.
    I have found my posts on a stock forum, the target of legal threats from Anteo Diagnostics, simply because, I made logical assumptions from their own asx announcements.Heaven help robust debate and differing opinions about public matters
    That these companies cannot defend themselves by debate or a simple explanation of facts but throw money and suits to fight their battle says plenty to me.

    Cheers and good Luck,

    Like

    • Swami2,

      from a share investor’s perspective, that would be an interesting list to keep:

      publicly listed biotech companies and other companies linked to the industry financially
      that issue legal threats against those who make reasonable criticism against them.

      So far, we’ve got:

      Oncosil (Martin Rogers)
      Anteo
      Forrest Capital (Kim Hogan)

      Any other biotech examples where Legal threats have been used to try to shut down intelligent criticism?

      I don’t want to invest in those companies where management or the board does that.

      Like

      • Yes, I know a few that could be added – and a few where I have had informal “threats” from CEOs/boardmembers.

        I could also say there were a few CEOs that that reached out, expressed their appreciation for the constructive criticism and have done a fantastic job of improving their articulation. Their stock price usually reflects this.

        Like

  6. Chris, it’s a shame to lose the post on the fallacy of the CE Mark — there’s some useful wisdom there. Perhaps you could re-post that article in a form that doesn’t directly mention OSL.

    Liked by 1 person

  7. I am seeing quite a few available defence pleadings under the DEFAMATION ACT 2005.

    24. Scope of defences under general law and other law not limited
    25. Defence of justification
    26. Defence of contextual truth

    29. Defences of fair report of proceedings of public concern

    31. Defences of honest opinion
    32. Defence of innocent dissemination

    Be happy to donate to a fighting fund should you wish to say f@##! em!

    Like

    • Don’t worry Jim – I have plenty of lawyers. More than a few mates from law school who have offered freebies too…but super-nice of you to offer!

      …and watch this space. Your comment contains more than just a hint of the future of this site 😉

      Like

  8. You could add PNO to that list Anne but it is in administration and not likely to ever trade again. Which I suppose is a little hint right there that the criticisms made (on HC) had a some substance to them. And from material released in a couple of court cases it appears the allegations that were being made on HC only scratched surface.

    I would be interested Chris in how you see the situation in the US with Seeking Alpha. I have read a number of very damming attacks on biotech companies on that site. And in several articles allegations are made that Directors and management are engaged in very shady, if not illegal behavior. As well as the criticism that the products / drugs / technologies of those companies are complete duds.

    How have SA been able to get away with this without facing the same problems you are encountering (not that I am alleging illegal behavior on the part of any company you might or might not have ever thought or written about!).

    Like

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