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Oncolytics Biotech® Reports 2021 Second Quarter Development Highlights and Financial Results

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- Clinical AWARE-1 trial achieves primary endpoint and confirms that pelareorep is an immunotherapeutic agent which synergizes with checkpoint inhibitors: Validation of clinical development strategy in breast cancer

- Phase 2 BRACELET-1 (breast cancer) trial remains on track for full enrollment in Q4 2021

- Highly encouraging clinical proof-of-concept data in metastatic pancreatic cancer demonstrate pelareorep's broad applicability to a number of different tumor types

- Strong financial foundation with approximately $50.8 million in cash on hand and cash runway into 2023

- Management hosting conference call and webcast today at 8:00 a.m. ET

SAN DIEGO and CALGARY, AB, Aug. 6, 2021 /PRNewswire/ -- Oncolytics Biotech® Inc. (NASDAQ: ONCY) (TSX: ONC) today announced its financial results and development highlights for the quarter ended June 30, 2021. All dollar amounts are expressed in Canadian currency unless otherwise noted.

Oncolytics_Logo
Oncolytics_Logo

"Our second quarter accomplishments have advanced our lead clinical breast cancer program down a clear path towards a registrational study and substantially de-risked our broader clinical pipeline," said Dr. Matt Coffey, President and Chief Executive Officer of Oncolytics Biotech Inc. "Clinical AWARE-1 data show that pelareorep is an immunotherapeutic agent that synergistically combines with checkpoint inhibitors. These findings support the statistically significant overall survival benefit observed in our prior phase 2 breast cancer trial, achieving a key regulatory objective. They also suggest that pelareorep's efficacy can be further enhanced by combining it with checkpoint inhibition. We are currently working to confirm this hypothesis in the BRACELET-1 breast cancer trial, which will support pelareorep's advancement to a registrational study."

Dr. Coffey continued, "Beyond our lead program, we also presented clinical proof-of-concept data in pancreatic cancer that further demonstrate pelareorep's immunologic mechanism of action and potential to address unmet needs across multiple indications. Together with AWARE-1 data, these results support our ongoing trials evaluating pelareorep-checkpoint inhibitor combinations and highlight pelareorep's potential as an enabling technology for multiple classes of immunotherapeutic agents. Looking forward, our strong financial foundation leaves us well-positioned to build on this momentum and advance pelareorep's clinical development. As we work towards this goal, we will remain primarily focused on breast cancer and our stated clinical milestones while pursuing a partnership strategy to further broaden pelareorep's potential impact."

Second Quarter and Subsequent Highlights

Breast Cancer Program

Achieved primary endpoint in AWARE-1 study

Data from the twenty HR+/HER2- early-stage breast cancer patients included in AWARE-1's first two cohorts were presented in an electronic poster at the American Association for Cancer Research (AACR) Annual Meeting 2021 (link to PR; link to poster). Results from these patients, who were treated with pelareorep and letrozole without (cohort 1) or with (cohort 2) the PD-L1 inhibitor atezolizumab (Tecentriq®), showed that that pelareorep and 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 CelTIL score, a measure of tumor cellularity and inflammation that is significantly correlated with event-free and overall survival. These desirable effects were further enhanced in patients receiving atezolizumab, demonstrating that pelareorep and atezolizumab synergistically combine to generate an anti-cancer immune response in the tumor and peripheral blood. Notably, cohort 2 met the pre-specified success criteria for the study's primary endpoint, with six of ten patients achieving at least a 30% increase in CelTIL score following treatment. Together, these data support the results of a prior successful phase 2 trial (IND-213) that showed a statistically significant near doubling of overall survival with pelareorep treatment. This supports the clinical rationale behind the phase 2 BRACELET-1 trial: Evaluating the safety and efficacy of pelareorep and chemotherapy alone, and in combination with a PD-L1 inhibitor, in HR+/HER2- breast cancer patients.

Gastrointestinal Cancers Program

Phase 2 data demonstrating clinical proof-of-concept for pelareorep-checkpoint inhibitor combination therapy in pancreatic cancer

Data from a phase 2 trial evaluating pelareorep in combination with the PD-1 inhibitor pembrolizumab (KEYTRUDA®) in pancreatic adenocarcinoma patients who progressed after first-line treatment were featured in an electronic poster presentation at the 2021 American Society of Clinical Oncology (ASCO) Annual Meeting (link to PR; link to poster). Findings from the trial indicate that pelareorep and pembrolizumab synergize and show anti-cancer activity in these difficult-to-treat patients, with a 42% disease control rate achieved and durations of control ranging from approximately 2.5 months to approximately 7 months despite the absence of chemotherapy in the treatment regimen. Biomarker data showed that patients achieving disease control had increased activation of anti-cancer CD8+ T cells in the peripheral blood, and reduced levels of pro-tumor Treg cells in the peripheral blood and tumor compared to those with progressive disease. These results, which are consistent with what has been seen in clinical trials in other indications, such as breast cancer, highlight the broad applicability of pelareorep's immunotherapeutic mechanism of action. They also bode well for a successful outcome in the phase 1/2 GOBLET trial, which includes a cohort evaluating pelareorep and the PD-L1 inhibitor atezolizumab in combination with chemotherapy as a first-line treatment in metastatic pancreatic cancer patients (link to PR).

Additional Immunotherapeutic Combinations and Opportunities

Preclinical data highlighting pelareorep's ability to synergize with multiple classes of anti-cancer agents

Data presented in two electronic poster presentations at the AACR Annual Meeting 2021 showed that pelareorep enhanced the anti-tumor efficacy of the poly(ADP)-ribose polymerase 1 (PARP-1) inhibitor talazoparib and the cyclin-dependent kinase (CDK) 4/6 inhibitor palbociclib, which are both FDA approved for the treatment of breast cancer. The observed synergistic effects were notably mediated through immunologic mechanisms rather than through the molecular pathways typically associated with PARP-1 and CDK4/6 inhibition (link to PR; link to CDK4/6 poster; link to PARP-1 poster). Together, these results suggest that pelareorep may enhance the therapeutic potential of PARP-1 and CDK4/6 inhibitors by expanding the mechanisms by which they exert anti-tumor effects.

Changes to the Board of Directors

William G. Rice, Ph.D. has stepped down from Oncolytics Biotech's Board of Directors to avoid any potential conflicts that might arise from the development of pelareorep with molecules being developed by Aptose Biosciences Inc., the company for which Dr. Rice serves as Chairman of the Board, President & Chief Executive Officer. "I'm a staunch supporter of Oncolytics and wish to express my sincere gratitude for the time serving the Board and working with a wonderful group of directors and officers," stated Dr. Rice. Oncolytics would like to thank Dr. Rice for his guidance during his tenure as a member of the Board.

Financial Highlights

  • As of June 30, 2021, the Company reported $50.8 million in cash and cash equivalents. The Company raised $8.1 million during the second quarter through issuing of common stock through its ATM facility.

  • Operating expense for the second quarter of 2021 was $3.5 million, compared to $3.0 million in the second quarter of 2020.

  • R&D expense for the second quarter of 2021 was $3.2 million, compared to $2.5 million in the second quarter of 2020.

  • Net cash used in operating activities for the second quarter of 2021 was $6.8 million, compared to $6.3 million for the second quarter of 2020.

  • The net loss for the second quarter of 2021 was $7.2 million, compared to a net loss of $6.8 million in the second quarter of 2020. The basic and diluted loss per share was $0.13 in the second quarter of 2021, compared to a basic and diluted loss per share of $0.17 in the second quarter of 2020.

Anticipated Milestones and Catalysts

  • Dosing of the first patient in phase 1/2 GOBLET study in gastrointestinal cancer: H2 2021

  • Final biomarker data for AWARE-1 breast cancer study in the intended target population for a registrational study: H2 2021

  • Completion of enrollment in phase 2 BRACELET-1 metastatic breast cancer study: Q4 2021

  • Interim safety update from phase 2 IRENE study in triple-negative breast cancer: Q4 2021*

  • Interim safety data from phase 1 WINSHIP 4398-18 multiple myeloma study: Q4 2021*

*Guidance provided by clinical investigators

Oncolytics expects to provide updates on the timing of the following milestones:

  • Interim safety update from BRACELET-1 metastatic breast cancer study

  • Phase 2 BRACELET-1 metastatic breast cancer study: final data

Webcast and Conference Call

Management will host a conference call for analysts and institutional investors at 8:00 a.m. ET today, August 6, 2021. To access the call, please dial (888) 664-6383 (North America) or (416) 764-8650 (International) and, if needed, provide confirmation number 5114-8191. A live webcast of the call will also be available by clicking here or on the Investor Relations page of Oncolytics' website (LINK) and will be archived for three months. A dial-in replay will be available for one week and can be accessed by dialing (888) 390-0541 (North America) or (416) 764-8677 (International) and using reference code: 148-191#.


ONCOLYTICS BIOTECH INC.

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited)
(in Canadian dollars, except share amounts)



As at

June 30,
2021
$

December 31,
2020
$

Assets



Current assets



Cash and cash equivalents

50,799,432


31,219,574


Other receivables

135,857


89,661


Prepaid expenses

4,503,776


2,427,200


Total current assets

55,439,065


33,736,435


Non-current assets



Property and equipment

146,216


236,664


Right-of-use assets

724,164


372,468


Total non-current assets

870,380


609,132





Total assets

56,309,445


34,345,567


Liabilities And Shareholders' Equity



Current Liabilities



Accounts payable and accrued liabilities

2,193,979


1,805,015


Other liabilities


123,985


Lease liabilities

234,139


248,885


Warrant derivative

153,968


531,228


Total current liabilities

2,582,086


2,709,113


Non-current liabilities



Contract liability

6,730,287


6,730,287


Lease liabilities

510,369


153,174


Total non-current liabilities

7,240,656


6,883,461





Total liabilities

9,822,742


9,592,574


Commitments and contingencies



Shareholders' equity



Share capital

Authorized: unlimited

Issued: June 30, 2021 – 54,959,672

December 31, 2020 – 46,166,980

391,124,995


356,824,172


Warrants

3,617,570


3,617,570


Contributed surplus

32,224,806


31,022,356


Accumulated other comprehensive income

311,543


400,225


Accumulated deficit

(380,792,211)


(367,111,330)


Total shareholders' equity

46,486,703


24,752,993


Total liabilities and shareholder's equity

56,309,445


34,345,567



ONCOLYTICS BIOTECH INC.

INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(unaudited)

(in Canadian dollars, except share amounts)



Three Months
Ended June
30, 2021

$

Three Months
Ended June
30, 2020

$

Six Months
Ended June
30, 2021

$

Six Months
Ended June
30, 2020

$






Expenses





Research and development

3,203,181


2,499,128


5,962,195


5,028,774


Operating

3,520,986


3,048,572


6,662,876


6,041,960


Loss before the following

(6,724,167)


(5,547,700)


(12,625,071)


(11,070,734)


Change in fair value of warrant derivative

80,159


(507,150)


(84,621)


3,644,832


Foreign exchange (loss) gain

(631,352)


(805,098)


(1,021,906)


899,707


Interest income, net

29,224


32,533


50,717


98,442


Loss before income taxes

(7,246,136)


(6,827,415)


(13,680,881)


(6,427,753)


Income tax expense





Net loss

(7,246,136)


(6,827,415)


(13,680,881)


(6,427,753)


Other comprehensive (loss) income items
that may be reclassified to net loss





Translation adjustment

(48,370)


(146,443)


(88,682)


148,769


Net comprehensive loss

(7,294,506)


(6,973,858)


(13,769,563)


(6,278,984)


Basic and diluted loss per common share

(0.13)


(0.17)


(0.26)


(0.17)


Weighted average number of shares (basic
and diluted)

54,325,212


39,603,671


52,008,768


37,734,689


ONCOLYTICS BIOTECH INC.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited)

(in Canadian dollars)



Share Capital

$

Warrants

$

Contributed Surplus

$

Accumulated
Other Comprehensive Income

$

Accumulated Deficit

$

Total

$

As at December 31, 2019

311,077,859


3,617,570


29,338,849


464,101


(344,606,273)


(107,894)


Net loss and other comprehensive loss




148,769


(6,427,753)


(6,278,984)


Issued pursuant to stock option plan

162,812



(60,024)




102,788


Issued pursuant to incentive share award plan

289,686



(289,686)





Issued pursuant to "At the Market" Agreement

24,359,150






24,359,150


Issued pursuant to warrant derivative exercised

6,332,778






6,332,778


Share-based compensation



653,445




653,445


Share issue costs

(1,072,119)






(1,072,119)


As at June 30, 2020

341,150,166


3,617,570


29,642,584


612,870


(351,034,026)


23,989,164









As at December 31, 2020

356,824,172


3,617,570


31,022,356


400,225


(367,111,330)


24,752,993


Net loss and other comprehensive income




(88,682)


(13,680,881)


(13,769,563)


Issued pursuant to stock option plan

313,867



(117,751)




196,116


Issued pursuant to incentive share award plan

370,117



(370,117)





Issued pursuant to "At the Market" Agreement

34,168,071






34,168,071


Issued pursuant to warrant derivative exercised

686,616






686,616


Share-based compensation



1,690,318




1,690,318


Share issue costs

(1,237,848)






(1,237,848)


As at June 30, 2021

391,124,995


3,617,570


32,224,806


311,543


(380,792,211)


46,486,703


ONCOLYTICS BIOTECH INC.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in Canadian dollars)



Three Months
Ended June
30, 2021

$

Three Months
Ended June
30, 2020

$

Six Months
Ended June
30, 2021

$

Six Months
Ended June
30, 2020

$






Operating Activities





Net loss for the period

(7,246,136)


(6,827,415)


(13,680,881)


(6,427,753)


Depreciation - property and equipment

75,340


22,584


95,890


45,629


Depreciation - right-of-use-assets

88,493


92,133


174,677


183,156


Share-based compensation

1,032,242


260,640


1,690,318


653,445


Interest expense on lease liabilities

24,450


14,885


38,259


33,094


Unrealized foreign exchange loss (gain)

713,763


699,079


1,233,131


(728,677)


Change in fair value of warrant derivative

(80,159)


507,150


84,621


(3,644,832)


Net change in non-cash working capital

(1,404,875)


(1,027,687)


(2,001,354)


(327,950)


Cash used in operating activities

(6,796,882)


(6,258,631)


(12,365,339)


(10,213,888)


Investing Activities





Acquisition of property and equipment

(6,598)


(3,034)


(6,598)


(13,749)


Cash used in investing activities

(6,598)


(3,034)


(6,598)


(13,749)


Financing Activities





Proceeds from exercise of stock options

6,766


17,638


196,116


102,788


Proceeds from exercise of warrant derivative


263,318


230,946


1,696,460


Proceeds from "At the Market" equity distribution agreement

8,072,561


6,449,218


32,930,223


23,287,031


Payment of lease liabilities

(98,555)


(119,634)


(210,228)


(233,108)


Cash provided by financing activities

7,980,772


6,610,540


33,147,057


24,853,171


Increase in cash

1,177,292


348,875


20,775,120


14,625,534


Cash and cash equivalents, beginning of period

50,362,162


30,567,480


31,219,574


14,148,021


Impact of foreign exchange on cash and cash equivalents

(740,022)


(1,005,004)


(1,195,262)


1,137,796


Cash and cash equivalents, end of period

50,799,432


29,911,351


50,799,432


29,911,351


About AWARE-1

AWARE-1 is an open label window-of-opportunity study in early-stage breast cancer enrolling 38 patients into five cohorts:

  • Cohort 1 (n=10), HR+ / HER2- (pelareorep + letrozole)

  • Cohort 2 (n=10), HR+ / HER2- (pelareorep + letrozole + atezolizumab)

  • Cohort 3 (n=6), TNBC (pelareorep + atezolizumab)

  • Cohort 4 (n=6), HR+ / HER2+ (pelareorep + trastuzumab + atezolizumab)

  • Cohort 5 (n=6), HR- / HER2+ (pelareorep + trastuzumab + atezolizumab)

The study combines pelareorep, without or with atezolizumab, and the standard of care therapy according to breast cancer subtype. Tumor tissue is collected from patients as part of their initial breast cancer diagnosis, again on day three following initial treatment, and finally at three weeks following treatment, on the day of their mastectomy. Data generated from this study are intended to confirm that pelareorep is acting as a novel immunotherapy, to evaluate potential synergy between pelareorep and checkpoint blockade, and to provide comprehensive biomarker data by breast cancer subtype. The primary endpoint of the study is overall CelTIL score (a measurement of cellularity and tumor-infiltrating lymphocytes). Secondary endpoints for the study include CelTIL by breast cancer subtype, safety, and tumor and blood-based biomarkers.

For more information about the AWARE-1 study, refer to https://clinicaltrials.gov/ct2/show/NCT04102618.

Tecentriq® (atezolizumab) is a registered trademark of Genentech, a member of the Roche Group.

About BRACELET-1

The BRACELET-1(BReast cAnCEr with the Oncolytic Reovirus PeLareorEp in CombinaTion with anti- PD-L1 and Paclitaxel) study is an open-label, phase 2, randomized study in patients with HR+/HER2-, endocrine-refractory metastatic breast cancer being conducted under a co-development agreement with Merck KGaA, Darmstadt, Germany and Pfizer. PrECOG LLC, a leading cancer research network, is managing the study. The study will take place at 20 trial sites and is expected to enroll 45 patients randomized into three cohorts. A three-patient safety run-in was conducted with patients receiving pelareorep, paclitaxel, and avelumab prior to randomization. The three cohorts being treated are as follows:

  • Cohort 1 (n=15): paclitaxel

  • Cohort 2 (n=15): paclitaxel + pelareorep

  • Cohort 3 (n=18): paclitaxel + pelareorep + avelumab (Bavencio®)

Patients in cohort 1 will receive paclitaxel on days 1, 8, and 15 of a 28-day cycle. Patients in cohort 2 will receive the same paclitaxel regimen as cohort 1, plus pelareorep on days 1, 2, 8, 9, 15 and 16 of the 28-day cycle. Patients in cohort 3 will receive the same combination and dosing regimen as cohort 2, plus avelumab on days 3 and 17 of the 28-day cycle. The primary endpoint of the study is overall response rate. Exploratory endpoints include peripheral and tumor T cell clonality, inflammatory markers, and safety and tolerability assessments.

For more information about the BRACELET-1 study, refer to https://clinicaltrials.gov/ct2/show/NCT04215146.

About GOBLET

The GOBLET (Gastrointestinal tumOrs exploring the treatment comBinations with the oncolytic reovirus peLarEorep and anTi-PD-L1) study is a phase 1/2 multiple indication biomarker, safety, and efficacy study in advanced or metastatic gastrointestinal tumors. The study will be conducted at 15 centers in Germany. The primary endpoint of the study is safety, with overall response rate and biomarker evaluation (T cell clonality and CEACAM6) as exploratory endpoints. Approximately 55 patients are planned to be enrolled in four independent cohorts:

  1. Pelareorep in combination with atezolizumab, gemcitabine, and nab-paclitaxel in 1st line metastatic pancreatic cancer patients (n=12);

  2. Pelareorep in combination with atezolizumab in 1st line MSI (microsatellite instability)-high metastatic colorectal cancer patients(n=19);

  3. Pelareorep in combination with atezolizumab and TAS-102 in 3rd line metastatic colorectal cancer patients (n=14); and

  4. Pelareorep in combination with atezolizumab in 2nd line advanced and unresectable anal cancer patients (n=10).

About Oncolytics Biotech Inc.

Oncolytics is a biotechnology company developing pelareorep, an intravenously delivered immunotherapeutic agent. This compound induces anti-cancer immune responses and promotes an inflamed tumor phenotype -- turning "cold" tumors "hot" -- through innate and adaptive immune responses to treat a variety of cancers.

Pelareorep has demonstrated synergies with immune checkpoint inhibitors and may also be synergistic with other approved oncology treatments. Oncolytics is currently conducting and planning clinical trials evaluating pelareorep in combination with checkpoint inhibitors and targeted therapies in solid and hematological malignancies as it advances towards a registration study in metastatic breast cancer. For further information, please visit: www.oncolyticsbiotech.com.

This press release contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended and forward-looking information under applicable Canadian securities laws (such forward-looking statements and forward-looking information are collectively referred to herein as "forward-looking statements"). Forward-looking statements contained in this press release include statements regarding Oncolytics' belief as to the potential and benefits of pelareorep as a cancer therapeutic; Oncolytics' expectations as to the purpose, design, outcomes and benefits of its current or pending clinical trials involving pelareorep; our goals, objectives and strategies; our plans to further develop pelareorep through collaborations; our financial foundation; our anticipated catalysts and milestones; and other statements related to anticipated developments in Oncolytics' business and technologies. In any forward-looking statement in which Oncolytics expresses an expectation or belief as to future results, such expectations or beliefs are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will be achieved. Such forward-looking statements involve known and unknown risks and uncertainties, which could cause Oncolytics' actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, the availability of funds and resources to pursue research and development projects, the efficacy of pelareorep as a cancer treatment, the success and timely completion of clinical studies and trials, Oncolytics' ability to successfully commercialize pelareorep, uncertainties related to the research and development of pharmaceuticals, uncertainties related to the regulatory process and general changes to the economic environment. In particular, we may be impacted by business interruptions resulting from COVID-19 coronavirus, including operating, manufacturing supply chain, clinical trial and project development delays and disruptions, labour shortages, travel and shipping disruption, and shutdowns (including as a result of government regulation and prevention measures). It is unknown whether and how Oncolytics may be affected if the COVID-19 pandemic persists for an extended period of time. We may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business, operating results and financial condition. Investors should consult Oncolytics' quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Investors are cautioned against placing undue reliance on forward-looking statements. The Company does not undertake any obligation to update these forward-looking statements, except as required by applicable laws.

Company Contact

Jon Patton

Director of IR & Communication

+1-858-886-7813

jpatton@oncolytics.ca

Investor Relations for Oncolytics

Timothy McCarthy

LifeSci Advisors

+1-917-679-9282

tim@lifesciadvisors.com

Cision
Cision

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SOURCE Oncolytics Biotech® Inc.