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.
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:
- How Transparent is OncoSil?
- The Fallacy of the CE Mark
- ASX Biopharma: Stop Informal Shareholder Letters
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.