In a May 29 research report, analyst Neil Maruoka indicated Canaccord Genuity raised its target price on Oncolytics Biotech Inc. (ONCY:NASDAQ; ONC:TSX) to CA$23 per share (previously CA$2.50), which "represents a 132.6% annualized return and continues to support our Buy recommendation." Canaccord's revised price target follows the completion of Oncolytics' 9.5:1 share consolidation. The biotechnology firm is now trading at around CA$9.30 per share.
Canaccord noted that, "the company has previously announced its intention to list its common shares on the Nasdaq, which we believe will provide better exposure to US investors and a larger pool of sophisticated healthcare-focused capital."
In other news, the FDA outlined the regulatory path forward for Oncolytics' Reolysin, "significantly derisking the stock," Maruoka purported. Reolysin is an immuno-oncolytic virus that targets cancer.
Also, the company recently announced it intends to conduct a pivotal study of Reolysin in metastatic breast cancer, with overall survival as the endpoint.
Further, it plans a second combination study of Reolysin with Merck & Co. Inc.'s (MRK:NYSE) anti-PD1 checkpoint inhibitor Keytruda in collaboration with the University of Southern California. "If successful, we believe that the Reolysin-Keytruda combination studies could lead to a possible expanded partnership with Merck," Maruoka wrote.
Looking forward, the analyst also pointed out that Oncolytics likely will need additional funding to develop and commercialize Reolysin. To this end, it will "re-list its common shares on the NASDAQ, which we believe will provide better exposure to U.S. investors and a larger pool of sophisticated, healthcare-focused capital," added Maruoka.
Another possible funding source, Maruoka noted, is additional partnerships, "including additional regional deals and/or global transactions with big pharma or big biotech." These are expected due to Reolysin's potential to "fit well with other immunotherapies for cancer," and are more likely to happen now that the biotech has received FDA input.
"We would remain buyers of [Oncolytic] stock with potential regulatory and clinical catalysts lined up over the next several months as well as the possibility of additional partnerships," Maruoka concluded.
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Disclosures from Canaccord Genuity, Oncolytics Biotech Inc., Company Update, May 29, 2018
Analyst Certification: Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analystís personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analystís coverage universe and (ii) no part of the authoring analystís compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research.
Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity Inc. and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Required Company-Specific Disclosures (as of date of this publication):
Oncolytics Biotech Inc. currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period, Canaccord Genuity or its affiliated companies provided investment banking services to Oncolytics Biotech Inc..
In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from Oncolytics Biotech Inc.
In the past 12 months, Canaccord Genuity or any of its affiliated companies have been lead manager, co-lead manager or co-manager of a public offering of securities of Oncolytics Biotech Inc. or any publicly disclosed offer of securities of Oncolytics Biotech Inc. or in any related derivatives.
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Oncolytics Biotech Inc. in the next three months.
Disclosures are available here.