Oncolytics Biotech Inc T.ONC

Solid Data, Competitive Tension, Timing

[Proboscises]

It’s actually pretty simple. If you want a good price for something it’s important to satisfy the following requirements:

 

1. Solid data that demonstrates that what you are offering has value. A story based on hype and fluff won’t cut it with a savvy purchaser. ONC/Y has collaborated with major pharmas to elucidate the kind of data they need to de-risk a potential billion $+ purchase. De-risking is key and it has been mentioned in a number of press releases, including in the recent Adlai Nortye press release.  De-risking means providing the kind of evidence that provides sufficient justification for consummating a major deal.  The data from IND-213, AWARE-1, GOBLET, and Adlai Nortye has been unequivocally positive. The strong hope is that the BRACELET-1 data will be the final piece that seals the deal.  Pfizer already has this data up to the current moment, but the expectation is that as the data matures later into 1H 2023 it will become ever more compelling as the durability of therapy with Pela becomes ever more apparent.  Roche and Pfizer need to decide whether to make a deal and, if so, whether to make it sooner rather than later.  An earlier partnership or purchase offer means fewer competitors with full information with which to de-risk a purchase.  If Roche and Pfizer wait and the capstone data is released, say at ASCO June 2-6, then there will likely be more competitors to deal with who now have the info needed with which to de-risk their own offers.
2. Competitive tension is the other ingredient without which a good deal cannot happen.  Good data to justify and de-risk a deal are key, but without multiple interested potential purchasers there is no hope of a good deal for the seller.  If there is only one interested party they can successfully offer a lowball price.  I think ONC/Y by good fortune (I.e. good data) and good strategy (collaborating with many large pharmas, focusing on the immunotheraputic potential of Pela, and going specifically after data to de-risk Pela) has put themselves in an excellent position to generate the needed competitive tension.  At this point I believe ONC/Y’s focus is not so much on retail investors, but on potential pharma purchasers.  I read all press releases and webcasts from ONC/Y as not being directed primarily to retail shareholders, but to potential pharma purchasers.  Likewise I expect ONC/Y to do everything possible to continue inciting competitive tension, including purchasing compelling factual articles/infomercials.  ONC/Y needs to continue to put out the good news re. Pela to incite the appetite of pharma and to heighten the fear of missing out.  The danger to pharma of a significant new therapy is that if someone else acquires it may reduce the demand for their own therapies.  In this case “de-risking” can also mean purchasing a potential groundbreaking therapy so that a competitor does not get it.
3. Timing is a third item of importance for a good price.  Pharma is flush with cash, there are impending patent cliffs, and there continue to be serious and increasing unmet needs in oncology.  I’d say the timing is right.