Oncolytics Biotech, a clinical-stage biotech company based in Calgary, Canada, is back in the spotlight with two potential catalysts that could propel its stock forward. The company’s primary asset is a compound called Pelareorep, an immunotherapeutic agent delivered intravenously. Pelareorep works by activating the immune system and weakening tumor defenses, making tumors more susceptible to various oncology treatments.
One recent development involves a Phase 2 trial, known as ‘BRACELET-1,’ evaluating Pelareorep in combination with paclitaxel for the treatment of metastatic breast cancer. Results from the study showed promising outcomes, with the combination therapy reducing the risk of disease progression by 71% compared to paclitaxel alone. Additionally, the combination treatment achieved a 12-month progression-free survival rate of 32.8% compared to 0% for the monotherapy. These positive results pave the way for a pivotal Phase 3 study.
The second noteworthy development is the selection of Pelareorep for a Phase 3 study aimed at evaluating its efficacy in combination with a checkpoint inhibitor and chemotherapeutic agents gemcitabine and nab-paclitaxel for the treatment of pancreatic cancer. Given the dismal five-year survival rate of only 12% for pancreatic cancer, this study, called Precision Promise, offers hope for improved treatment options. The trial is scheduled to begin in early 2024, following positive Phase 1/2 data showing promising median overall survival and one-year survival rates.
The promising results from the Phase 2 trial and the selection of Pelareorep for the Precision Promise study have caught the attention of analysts. Several firms, including Canaccord Genuity and H.C. Wainwright, have reissued Buy/Outperform ratings on Oncolytics Biotech stock, suggesting a positive outlook. Analysts have also set price targets ranging from $5 to $15 per share.
While the prospects for Oncolytics Biotech seem hopeful, there are a few considerations to bear in mind. The company is still a couple of years away from potential commercialization, and additional funding will likely be needed to support late-stage studies, which may result in dilution. Therefore, investing in ONCY is a high-risk proposition, and it may be prudent to approach it with caution.
In conclusion, Oncolytics Biotech is making waves with its promising developments in cancer treatment. The positive Phase 2 trial results and selection for the Precision Promise study have positioned the company for potential success. However, investors should be aware of the risks involved and consider a diversified biotech portfolio.
