Oncolytics Biotech (OTCQX:ONCYF) is an early-stage, small-cap biotech that has hitched its wagon to the train of oncolytic viruses, most notably its Ras-directed Reolysin platform, which integrates itself into the genomes of tumor cells expressing activated Ras.
As I wrote around the time of last year's ASCO Annual Meeting, Oncolytics suffered a dispiriting setback when reolysin was shown to actually lower progression-free survival and patient quality of life when adding Reolysin to chemotherapy. In my opinion, this sunk most hope for this drug ever getting anywhere in the oncology space, and it has further supported my personal view that oncolytic viruses are something of a nonstarter in oncology.
But now there is a glimmer of hope, and I'll be happy to admit if I was wrong, though not about colorectal cancer. In this case, ONCYF has gotten some traction in breast cancer. They have announced that they will present encouraging phase II results at this years Annual Meeting of the American Association for Cancer Research.
The study name in question is IND 213, which enrolled 74 patients to receive paclitaxel, with or without Reolysin, in advanced or metastatic breast cancer. The primary endpoint, progression-free survival, was not improved in this population. However, this is consistent with studies into the checkpoint inhibitors.
The real crux for immunotherapies appears, in many cases, to be the overall survival. And in the IND 213 study, that survival improved with the addition of Reolysin. Median overall survival was 10.4 months vs 17.4 months, representing a 35% improvement with P=0.1. In normal parlance, this P value is not significant (many researchers default to 95% power), but in this case the study was designed to meet a 90% power, giving this P value significance.
This really goes to show you how important it is to appropriately build your studies!
Now, ONCYF is planning to pursue a registrational trial of Reolysin in breast cancer. But the hour is growing late for this small company. According to their 2016 annual results, ONCYF maintains $14.4 million in current assets, including $12 million cash on hand. Operational expenditures were $15.1 million over the same time.
So ONCYF has a year of cash on hand if we're being generous, which is certainly not enough time to initiate and complete a registrational trial and the actual FDA review.
It is also unclear at this time how they're going to raise funds moving forward. Given the current market cap of $51 million, ONCYF does not carry much leverage for funding on the backs of shareholders through dilution.
However, these promising phase II data could potentially be the launch pad of a lucrative partnership that places some much-needed cash in the coffers and helps to offset future developmental costs.
One potential partner could be Celgene, as it recently announced an early stage collaboration with ONCYF in myeloma. At last year's ASH meeting, ONCYF presented some early-stage findings, showing good tolerability and some activity.
Certainly, Oncolytics has quite the hill to climb. They are certainly not dead in the water, and biotech is capable of delivering on some insane turnarounds based on the fortunes of just one drug.
For my sake, I wouldn't mortgage the house for this one, but ONCYF is definitely a company to keep an eye on as we move through 2017.
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