Imagion Biosystems (ASX: IBX) is the company behind MagSense, a revolutionary imaging agent. The company has just made an IND submission to the US FDA and plans to take MagSense into a Phase 2 clinical trial for HER2+ breast cancer once an answer from the regulator is received and this could be as early as Q1 in 2026.

A $2bn TAM awaits

The market for cancer diagnostics is a US$100bn market. Although it would be unrealistic to expect the company to penetrate the entirety of that market, IBX has a $500m TAM with HER2+ breast cancer alone, a $1bn TAM for prostate cancer and $500m for ovarian cancer. All of these indications have few (if any) imaging agents, and they are generally only approved in invasive surgeries only held when cancer is already confirmed.

How MagSense can stand out from the competition

Imaging agents are an important tool in minimising the use of biopsies, which are invasive procedures where tissue samples are removed from the body and analysed under a microscope. Imaging agents are non-invasive and have grown in popularity. However, many imaging agents are non-specific and/or use radioactivity.  Their availability may be limited due to the radioactivity, in many cases their efficacy is limited due to the lack of specificity, and they can come with safety issues.

MagSense is different from its peers (i.e. other imaging agents) being safer, more highly specific and with the high resolution of MRI is likely to detect cancers of a smaller size and/or at earlier stages – the ‘contrast’ created by the iron particles is differentiated from normal tissue when the MagSense® agent binds to their target. In detecting cancers earlier, better treatment options may be possible.

Valuation range of $0.10-0.12 per share

Our valuation of Imagion is $46.6m in a base case and $56.5m in our optimistic (or bull) case. This was previously $0.12-0.15 per share but is now $0.10-0.12 per share in light of the changes to the company’s structure (through equity dilution to raise capital and the conversion of options since our last note). This assumes MagSense is commercialised against HER2 breast cancer, under a licensing and royalty-based model. Higher upside is possible if MagSense is commercialised against further indications. Please see page 9 of our note for more details on our valuation and page 11 for the key risks