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ONCY: It Has Been a Busy Week or Two

06/06/2018
By John Vandermosten, CFA

NASDAQ:ONCY

TSE:ONC

Over the last week or so, Oncolytics (NASDAQ:ONCY) (TSE:ONC) has experienced a flurry of activity from announcing a research collaboration with the Keck School of Medicine, to raising additional cash in preparation for their Phase III trial. Oncolytics also presented at the ASCO conference discussing a poster highlighting biomarkers that are predictive of response by checkpoint inhibitors.

Since our update on the quarter, Oncolytics forged a collaboration with the Keck School of Medicine at USC to examine the use of their lead candidate pelareorep in combination with Keytruda, Velcade and dexamethasone for multiple myeloma. Previous research has demonstrated that proteasome inhibitors and pelareorep have increased PD-L1 expression on multiple myeloma cells and recruit T-cells to the bone marrow. The addition of a checkpoint inhibitor may take the brakes off in this hot tumor and eliminate the cancer. This is the company’s third combination collaboration after relationships with the Celgene and Myeloma UK and the University of Texas.

Following the shareholder approved consolidation of shares which was announced in January, Oncolytics applied to list on the NASDAQ and reverse split its outstanding shares in a ratio of 9.5:1. On June 1st, the NASDAQ approved the listing and it began trading under the ticker ONCY. In conjunction with the uplisting, the company announced a public offering of common shares which raised a gross US$8.9 million, which should provide sufficient capital to support operations into 2019.

Oncolytics also participated in the American Society of Clinical Oncology (ASCO) 2018 Annual Meeting on June 4th. This annual conference has upwards of 40,000 attendees and over 5,000 exhibitors and is a chance for emerging biotechnology companies to interact with others in the field. Oncolytics presented a poster at the event entitled “Pelareorep to promote the expression of an IFN-gamma-related gene signature that predicts response to checkpoint blockade therapy.” Grey Wilkinson, the lead author on the study, showed that certain genes can predict the likelihood of a strong inflammatory response and the use of pelareorep can stimulate the expression of these genes, particularly in specific HR+ cell lines. This is extremely helpful in identifying those individuals who will most benefit from checkpoint blockade inhibitor therapy. The results suggest that certain tumor types are amenable to immune priming for checkpoint therapy using pelareorep. If this approach continues to work in clinical studies, it may advance the effort of personalized medicine and strengthen the case to payors to have the therapy both covered and reimbursed at a competitive rate.

View Exhibit I – Pelareorep Mechanism of Action


Summary

Oncolytics continues to have a busy schedule on several fronts with additional posters presented and the announcement of more relationships with collaborators. The company has also been successful on the finance side and closed almost $9 million in equity issuance following its uplisting and new ticker symbol on the NASDAQ. We continue to anticipate the launch of the Phase III trial in the second half of 2018 and should also see data come out on other projects that are underway in the following quarters.

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