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

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Clinical breast cancer data indicate pelareorep-induced changes in blood T cell populations may be a predictive biomarker

Advanced collaboration with Roche and AIO by initiating dosing in phase 1/2 GOBLET trial in gastrointestinal cancers

Strong financial position with approximately $48 million and cash runway into 2023

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

SAN DIEGO and CALGARY, AB, Nov. 5, 2021 /PRNewswire/ -- Oncolytics Biotech® Inc. (NASDAQ: ONCY) (TSX: ONC) today announced its financial results and development highlights for the quarter ended September 30, 2021. All dollar amounts are expressed in Canadian currency unless otherwise noted.

Oncolytics Biotech Logo (PRNewsfoto/Oncolytics Biotech, Inc.)
Oncolytics Biotech Logo (PRNewsfoto/Oncolytics Biotech, Inc.)

"Over the past few months, we achieved key milestones that have advanced pelareorep's development programs and further highlighted the advantages of its broadly applicable mechanism of action," said Dr. Matt Coffey, President and Chief Executive Officer of Oncolytics Biotech Inc. "These milestones include the reporting of new clinical biomarker data from our AWARE-1 breast cancer study, which we are pleased to be announcing today. These data further demonstrate pelareorep's immunotherapeutic effects and its ability to synergize with checkpoint inhibition. It also indicates that changes in peripheral blood T cell populations may be predictive of patient response. This exciting finding could improve our chances of success in subsequent studies by allowing for early identification of patients most likely to benefit from pelareorep therapy. We are evaluating this hypothesis as part of our BRACELET-1 breast cancer trial, which is assessing the safety, efficacy, and pharmacodynamic effects of pelareorep with and without checkpoint inhibition to support the advancement of our lead program to a registrational study."

Dr. Coffey continued, "Beyond our lead program, we also advanced our collaboration with Roche and AIO with the initiation of dosing in our phase 1/2 GOBLET trial. This trial addresses a pressing unmet need in gastrointestinal cancer by leveraging pelareorep's immunotherapeutic effects to overcome checkpoint inhibitor resistance and then increase the proportion of patients responding to checkpoint inhibition therapies. Looking forward, we will continue to strategically leverage collaborations and partnerships to drive pelareorep's development as an enabling technology for various immuno-oncology agents across multiple indications with high unmet needs. We believe this will allow us to maximally benefit from pelareorep's value-creating potential while maintaining focus on our lead breast cancer program."

Third Quarter and Subsequent Highlights

Breast Cancer Program

AWARE-1 data indicate that changes in peripheral blood T cell populations may be a predictive biomarker of pelareorep therapy

Additional analyses from AWARE-1's first two cohorts being announced today focus on changes in the peripheral blood and tumors' T cell populations of HR+/HER2- early-stage breast cancer patients following treatment with pelareorep and letrozole without (cohort 1) or with (cohort 2) the PD-L1 inhibitor atezolizumab. These changes were compared to assessments of CelTIL score (a measure of tumor cellularity and inflammation) and tumor-infiltrating CD8+ T cells, two metrics that are associated with favorable clinical outcomes. Highlights from the analyses using Spearman's Rank-Order Correlation not adjusted for multiplicity are shown below:

  • Pooled analysis across cohorts showed:

  • Comparative analysis of cohort 1 vs. cohort 2 showed:

Collectively, these analyses further demonstrate pelareorep's immunotherapeutic mechanism of action and its ability to synergize with checkpoint inhibitors such as atezolizumab. They also suggest that changes in peripheral blood T cell populations are predictive of response to pelareorep therapy and could potentially serve as the basis for a blood-based biomarker to inform the design of subsequent studies.

Oncolytics has completed its planned analyses of AWARE-1's first two cohorts, which enrolled patients with HR+/HER2- breast cancer. Evaluation of these cohorts was the core objective of AWARE-1, as HR+/HER2- is the breast cancer subtype Oncolytics intends to examine in a future registrational study. Following the completion of these cohorts, Oncolytics amended the protocol of the trial so that all remaining cohorts focus exclusively on patients with the HER2+ breast cancer subtype. Together with AWARE-1's first two cohorts and the ongoing IRENE trial in triple-negative breast cancer, these cohorts will facilitate the evaluation of pelareorep in all breast cancer subtypes.

Partner Adlai Nortye dosed first patient in Chinese bridging trial evaluating pelareorep-paclitaxel combination treatment in breast cancer

The bridging clinical trial is evaluating the safety, tolerability, and preliminary efficacy of pelareorep-paclitaxel combination therapy in Chinese patients with advanced or metastatic breast cancer. Results are expected to allow Adlai Nortye to include data from Oncolytics' North American IND-213 and BRACELET-1 trials in a future submission to Chinese regulators. This may accelerate pelareorep's clinical development path in China, which has a rapidly growing pharmaceutical market that is currently the second largest in the world.

Gastrointestinal Cancers Program

Dosed first patient in the phase 1/2 GOBLET trial in collaboration with Roche and AIO

GOBLET is a phase 1/2 multi-center trial designed to evaluate the use of pelareorep in combination with Roche's anti-PD-L1 checkpoint inhibitor atezolizumab in patients with metastatic pancreatic, metastatic colorectal, and advanced anal cancers. The trial is being managed by AIO, a leading academic cooperative medical oncology group based in Germany. In addition to evaluating the safety and efficacy of pelareorep-atezolizumab treatment, the trial also seeks to validate CEACAM6 and T cell clonality as predictive biomarkers, which may improve the patient selection process in future registration studies and increase their likelihood of success. The trial builds off previously reported phase 2 data demonstrating clinical proof-of-concept for pelareorep-checkpoint inhibitor combination therapy in pancreatic cancer (link to PR, link to poster), as well as prior early clinical data showing that pelareorep-based combinations stimulated an adaptive immune response and led to a greater than 90% clinical benefit rate in KRAS mutated colorectal cancer patients (link to PR, link to study), and a greater than 80% increase in progression-free survival in pancreatic cancer patients with low levels of CEACAM6 expression (link to PR, link to poster).

Additional Immunotherapeutic Combinations and Opportunities

Announced preclinical data demonstrating the synergistic immunotherapeutic effects of pelareorep combined with radiotherapy

Preclinical data presented in a poster at The International Conference on Immunotherapy Radiotherapy Combinations showed that combination treatment with pelareorep and radiotherapy promoted the tumor infiltration of anti-cancer T cells and prolonged survival in a murine cancer model. Increased infiltration of anti-cancer T cells was observed both in tumors exposed to local treatment with radiation and pelareorep, and in tumors located away from the treatment site. Collectively, these data are indicative of the synergistic immunotherapeutic effects of the pelareorep-radiotherapy combination (link to PR, link to poster).

Financial Highlights

  • As of September 30, 2021, the Company reported $48.1 million in cash and cash equivalents.

  • Operating expense for the third quarter of 2021 was $2.9 million, compared to $2.5 million in the third quarter of 2020.

  • R&D expense for the third quarter of 2021 was $3.3 million, compared to $3.9 million in the third quarter of 2020.

  • Net cash used in operating activities for the third quarter of 2021 was $3.7 million, compared to $6.1 million for the third quarter of 2020.

  • The net loss for the third quarter of 2021 was $4.9 million, compared to a net loss of $6.7 million in the third quarter of 2020. The basic and diluted loss per share was $0.09 in the third quarter of 2021, compared to a basic and diluted loss per share of $0.16 in the third quarter of 2020.

Anticipated Milestones and Catalysts

  • Completion of enrollment in phase 2 BRACELET-1 metastatic breast cancer study: Q4 2021/Q1 2022

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

  • Multiple myeloma study data: Q4 2021

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, November 5, 2021. To access the call, please dial (888) 664-6383 (North America) or (416) 764-8650 (International) and, if needed, provide confirmation number 7285-9440. 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 replay code: 859-440#.

ONCOLYTICS BIOTECH INC.

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited)

(in Canadian dollars, except share amounts)


As at

September 30,
2021


December 31,
2020

Assets




Current assets




Cash and cash equivalents

$

48,087,369



$

31,219,574


Other receivables

251,319



89,661


Prepaid expenses

3,254,568



2,427,200


Total current assets

51,593,256



33,736,435


Non-current assets




Property and equipment

340,726



236,664


Right-of-use assets

659,354



372,468


Total non-current assets

1,000,080



609,132






Total assets

$

52,593,336



$

34,345,567


Liabilities And Shareholders' Equity




Current Liabilities




Accounts payable and accrued liabilities

$

2,334,251



$

1,805,015


Other liabilities



123,985


Lease liabilities

268,762



248,885


Warrant derivative

106,063



531,228


Total current liabilities

2,709,076



2,709,113


Non-current liabilities




Contract liability

6,730,287



6,730,287


Lease liabilities

441,981



153,174


Total non-current liabilities

7,172,268



6,883,461






Total liabilities

9,881,344



9,592,574


Commitments and contingencies




Shareholders' equity




Share capital

Authorized: unlimited

Issued: September 30, 2021 – 54,976,453

December 31, 2020 – 46,166,980

391,166,760



356,824,172


Warrants

3,617,570



3,617,570


Contributed surplus

33,185,565



31,022,356


Accumulated other comprehensive income

406,450



400,225


Accumulated deficit

(385,664,353)



(367,111,330)


Total shareholders' equity

42,711,992



24,752,993


Total liabilities and shareholder's equity

$

52,593,336



$

34,345,567


ONCOLYTICS BIOTECH INC.

INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(unaudited)

(in Canadian dollars, except share amounts)



Three Months Ended
September 30,


Nine Months Ended
September 30,


2021


2020


2021


2020

Expenses








Research and development

$

3,278,705



$

3,854,272



$

9,240,900



$

8,883,046


Operating

2,876,312



2,461,642



9,539,188



8,503,602


Loss before the following

(6,155,017)



(6,315,914)



(18,780,088)



(17,386,648)


Change in fair value of warrant derivative

52,216



60,264



(32,405)



3,705,096


Foreign exchange gain (loss)

1,212,070



(506,349)



190,164



393,358


Interest income, net

25,740



13,367



76,457



111,809


Loss before income taxes

(4,864,991)



(6,748,632)



(18,545,872)



(13,176,385)


Income tax expense

(7,151)





(7,151)




Net loss

(4,872,142)



(6,748,632)



(18,553,023)



(13,176,385)


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








Translation adjustment

94,907



(68,212)



6,225



80,557


Net comprehensive loss

$

(4,777,235)



$

(6,816,844)



$

(18,546,798)



$

(13,095,828)










Basic and diluted loss per common share

$

(0.09)



$

(0.16)



$

(0.35)



$

(0.34)


Weighted average number of shares (basic and diluted)

54,960,650



41,720,230



53,003,541



39,072,900


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







80,557



(13,176,385)



(13,095,828)


Issued pursuant to stock option plan

162,812





(60,024)







102,788


Issued pursuant to incentive share award plan

358,690





(358,690)








Issued pursuant to "At the Market" Agreement

28,147,501











28,147,501


Issued pursuant to warrant derivative exercised

6,332,778











6,332,778


Share-based compensation





854,521







854,521


Share issue costs

(1,263,170)











(1,263,170)


As at September 30, 2020

$

344,816,470



$

3,617,570



$

29,774,656



$

544,658



$

(357,782,658)



$

20,970,696














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







6,225



(18,553,023)



(18,546,798)


Issued pursuant to stock option plan

321,697





(120,747)







200,950


Issued pursuant to incentive share award plan

413,282





(413,282)








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





2,697,238







2,697,238


Share issue costs

(1,247,078)











(1,247,078)


As at September 30, 2021

$

391,166,760



$

3,617,570



$

33,185,565



$

406,450



$

(385,664,353)



$

42,711,992


ONCOLYTICS BIOTECH INC.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in Canadian dollars)



Three Months Ended
September 30,


Nine Months Ended
September 30,


2021


2020


2021


2020

Operating Activities








Net loss for the period

$

(4,872,142)



$

(6,748,632)



$

(18,553,023)



$

(13,176,385)


Depreciation - property and equipment

11,089



21,891



106,979



67,520


Depreciation - right-of-use-assets

73,434



87,878



248,111



271,034


Share-based compensation

1,006,920



201,076



2,697,238



854,521


Interest expense on lease liabilities

27,589



17,970



65,848



51,064


Unrealized foreign exchange (gain) loss

(1,153,206)



360,258



79,925



(368,419)


Change in fair value of warrant derivative

(52,216)



(60,264)



32,405



(3,705,096)


Net change in non-cash working capital

1,225,536



(3,293)



(775,818)



(331,243)


Cash used in operating activities

(3,732,996)



(6,123,116)



(16,098,335)



(16,337,004)


Investing Activities








Acquisition of property and equipment

(204,638)



(15,556)



(211,236)



(29,305)


Cash used in investing activities

(204,638)



(15,556)



(211,236)



(29,305)


Financing Activities








Proceeds from exercise of stock options

4,834





200,950



102,788


Proceeds from exercise of warrant derivative





230,946



1,696,460


Proceeds from "At the Market" equity distribution agreement

(9,230)



3,597,300



32,920,993



26,884,331


Payment of lease liabilities

(75,274)



(114,838)



(285,502)



(347,946)


Cash (used) provided by financing activities

(79,670)



3,482,462



33,067,387



28,335,633


(Decrease) increase in cash

(4,017,304)



(2,656,210)



16,757,816



11,969,324


Cash and cash equivalents, beginning of period

50,799,432



29,911,351



31,219,574



14,148,021


Impact of foreign exchange on cash and cash equivalents

1,305,241



(544,339)



109,979



593,457


Cash and cash equivalents, end of period

$

48,087,369



$

26,710,802



$

48,087,369



$

26,710,802


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 plans and expectations regarding a potential registrational study; our expectations regarding the Adlai Nortye bridging clinical study and the potential benefits therefrom; our plans to further develop pelareorep through collaborations and partnering opportunities; our upcoming milestones and catalysts and the anticipated timing of release of updates in respect thereof; 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.