In an Aug. 16 research note, H.C. Wainwright & Co. analyst Patrick Trucchio provided a clinical and financial update on Oncolytics Biotech Inc. (ONCY:NASDAQ; ONC:TSX).
The financial institution has a $15 per share target price on the Buy-rated biotech, implying significant potential return as Oncolytics' current share price is about $2.09.
Trucchio discussed the status of several clinical trials of pelareorep, an immunotherapeutic oncolytic viral drug, in a couple of cancer indications.
As for pelareorep in breast cancer, enrollment of 48 patients for the BRACELET-1 study is in progress and expected to be finished in Q4/21. Enrollees will be divided into three cohorts: one to receive paclitaxel alone, one to receive paclitaxel plus pelareorep, and one to receive paclitaxel plus pelareorep and avelumab.
"If compelling," Trucchio wrote, "we believe BRACELET-1 efficacy data, which we expect by H2/22, could further derisk the pelareorep program, paving the way for a pivotal program in HR positive/HER2 negative metastatic breast cancer."
The AWARE-1 breast cancer trial has so far shown positive results and, thus, could "have a positive readthrough to the key breast cancer program BRACELET-1," Trucchio indicated. In AWARE-1, 20 HR positive/HER2 negative, early-stage breast cancer patients were treated with pelareorep plus letrozole. Additionally, one group, cohort one, also received the PD-1 inhibitor Tecentriq (atezolizumab), the other, cohort two, did not.
The data showed that pelareorep plus letrozole treatment upregulated tumor PD-L1 expression, induced the generation and expansion of T-cell clones, promoted tumor infiltration of CD8+ T-cells and increased patients' CelTIL score. Six out of 10 cohort two patients achieved the primary endpoint, by showing a post-treatment, 30%-plus increase in their CelTIL score, a measure of tumor cellularity and inflammation.
"The data appear to suggest that systemic treatment with pelareorep has the potential to restore the immunological activity of immune tumor infiltrates, thus turning a so-called cold tumor with a microenvironment devoid of immunological activity into a hot tumor that could be more amenable to treatment with checkpoint inhibition," Trucchio explained.
Final biomarker data from AWARE-1 are anticipated in H2/21.
As for the IRENE study, evaluating the use of pelareorep in combination with the anti-PD-1 checkpoint inhibitor retifanlimab in patients with metastatic triple-negative breast cancer, interim safety data are expected in Q4/21.
"We continue to view the unmet medical need in triple-negative breast cancer as being high and the potential for pela to demonstrate an ability to expand the proportion of triple-negative breast cancer patients who could benefit from checkpoint inhibitor treatment as being underappreciated by investors," Trucchio commented.
Other clinical data show that pelareorep works well with additional anti-cancer agents, which opens the door for Oncolytics Biotech to possibly further collaborate with pharmaceutical companies, Trucchio noted. For instance, pelareorep was shown to enhance the anti-tumor activity of talazoparib, a PARP-1 inhibitor, as well as palbociclib, a CDK 4/6 inhibitor. These two inhibitors are U.S. Food and Drug Administration approved as breast cancer treatments.
Shifting to pancreas cancer, Trucchio reported that the Phase 2 NU 18I01 trial generated encouraging results, which Oncolytics Biotech presented in the poster session at the recent American Society of Clinical Oncology annual meeting. This study evaluated the use of pelareorep plus the PD-1 inhibitor Keytruda (pembrolizumab) in patients with pancreatic adenocarcinoma who progressed after first-line treatment, a difficult to treat population. The result was a 42% disease control rate lasting anywhere from two and a half to seven months.
"The data highlight the apparent broad applicability of pelareorep's immunotherapeutic mechanism of action and could provide a positive readthrough to the outcome of the Phase 1/2 trial (GOBLET)," wrote Trucchio. In GOBLET, one cohort of patients with metastatic pancreatic cancer will receive first-line treatment of pelareorep plus atezolizumab plus chemotherapy. Dosing of the first patient is expected in H2/21.
Regarding Oncolytics Biotech's pelareorep overall clinical program, Trucchio described it as being "on track with key safety readouts expected in Q4/21 and efficacy data in 2022 that could further derisk [it]."
In terms of finances, the biotech ended Q2/21 with $50.8 million in cash and investments, more than H.C. Wainwright's forecasted $45.1 million.
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Disclosures from H.C. Wainwright & Co., Oncolytics Biotech, Inc., August 16, 2021
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Patrick R. Trucchio, CFA, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of Oncolytics Biotech Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of July 31, 2021 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Oncolytics Biotech Inc.
Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The firm or its affiliates received compensation from Oncolytics Biotech Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from Oncolytics Biotech Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in Oncolytics Biotech Inc. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.