Raymond JamesRaymond James analyst Rahul Sarugaser initiated coverage of two Canadian biotech companies on Thursday, which he thinks are “looking to effect extraordinary change in areas of extraordinary unmet need.”
He gave Calgary-based Oncolytics Biotech Inc. (ONC-T +6.04%increase
) an “outperform” recommendation, touting the “clean safety and strong efficacy results” from recent studies on its pelareorep retrovirus-based drug, which has “been shown to make tumors more susceptible to other important oncology treatments by turning immunologically ‘cold’ tumors ‘hot’.”
“ONC’s most advanced clinical assets include Phase 2 programs in breast and pancreatic cancer; both programs have received FDA Fast Track Designation,” said Mr. Sarugaser. “In this Moonshots-themed report, we focus on ONC’s opportunity in pancreatic cancer, given the dire unmet need for efficacious treatments, alongside pelareorep’s impressive tripling of objective response rates (GOBLET trial) and doubling of 12-mo overall survival rates (REO 017 trial) vs. benchmark data.”
“We see the potential for ONC to submit NDAs for pelareorep in both pancreatic and metastatic breast cancer in 2027/8, yielding a large potential market opportunity (alongside earlier-stage pipeline programs with compelling clinical signals). In the interim, we anticipate a succession of value-creating catalysts, including multiple looks at clinical data, and, with a collection of well-heeled Pharmas already hanging around the hoop (Pfizer, Merck, Roche, Adlai Nortye, Incyte), we assign a non-zero probability to ONC securing material partnerships on data readouts/regulatory guidance in the near- and medium-term, which drives our OP2 rating.”
He set a target of $3 per share. The average is $7.58.