Oncolytics Biotech Inc.
| Oncolytics Biotech Inc. |
|---|
| Type Public Listed Company |
| Traded as TSX : ONC |
| Founded in 1998 |
| Founder Matt Coffey (President & CEO) |
| Industry Biotechnology & Biopharmaceutical |
| Area served US and Canada predominantly |
| Product(s) Pelareorep ; Several Clinical Research ongoing |
| Headquarters Calgary, Canada |
| Market Cap (in CAD mm) $251 mm |
| 52 week High/Low 4.49/1.33 |
| Number of Employees 29 (as of 2023) |
| Website https://www.oncolyticsbiotech.com/ |
SummaryEdit
Oncolytics Biotech is a Canadian development-stage biopharmaceutical company that focuses on the discovery and development of pharmaceutical products for cancer treatment, specifically with the aim of weakening tumours. Oncolytics Biotech aims to use immunotherapeutics - a branch of biological therapies that use synthetic substances to activate the immune system for stronger responses. This approach proposes many new treatments that will support the immune system in a more powerful fight against cancer. The company's lead product is Pelareorep, simply put, Pelareorep is an oncolytic virus that causes tumour cells to burst and activates multiple immune system entities.
Oncolytics Biotech has also decided to embark on a co-developmental journey with Merck KGaA and Pfizer to combine Pelareorep with Paclitaxel, a chemotherapy medication, and Avelumab, an anti-cancer antibody medication. This combination is being tested because oncolytic viruses, such as Pelareorep, have the potential to enhance existing cancer treatments like Paclitaxel and Avelumab, leading to the elimination of resistant cancer cells and reducing cancer relapses. Oncolytics Biotech is conducting experiments on breast cancer cells using Pelareorep and Pfizer's drug Bavencio (Avelumab).
On this page, we have included an analysis of Oncolytics Biotech regarding financial valuations, in-depth product analysis, competitor analysis and Risk.
Operations:Edit
Origin of the company / how the idea came about?Edit
At the forefront of the battle against cancer, Oncolytics Biotech Inc. operates on the cutting edge of oncolytic virotherapy research and development. The company's operations revolve around harnessing the power of viruses to selectively target and destroy cancer cells while sparing healthy tissues. Through a meticulous approach, Oncolytics Biotech's team of scientists, physicians, and industry experts works tirelessly to develop innovative oncolytic viruses that exploit the vulnerabilities of cancer cells.
StrategiesEdit
1. Innovative Therapy: Emphasize the company's primary immunotherapeutic agent, pelareorep, and its unique approach to activating the immune system and weakening tumor defenses.
2. Targeted Clinical Development: Highlight the company's strategic focus on conducting clinical trials to evaluate pelareorep in combination with immune checkpoint inhibitors and targeted therapies for various tumor types.
3. Focus on Metastatic Breast Cancer: Mention the specific goal of advancing pelareorep towards a registration study, particularly targeting metastatic breast cancer, a significant area of unmet medical need.
4. Strategic Collaborations: Detail the important partnerships with leading pharmaceutical companies, such as Pfizer, Merck KGaA, and Roche, and how these collaborations aim to explore synergistic effects and expand the potential applications of pelareorep.
5. International Partnerships: Highlight the international partnerships, such as the collaboration with Adlai Nortye in China, which demonstrates the company's efforts to expand its presence in global markets.
6. Exploring Additional Collaborations: Mention the company's openness to exploring further collaborations with other immuno-oncology agents, underscoring its commitment to seeking innovative combinations for enhanced cancer treatments.
7. Financial Stability and Manufacturing: Briefly touch upon the company's financial strength, which is supported by collaborations and investments, and its manufacturing capabilities to ensure commercial-scale production of pelareorep.[1]
2023 Quarterly mission of the company:
- Overall response rate and progression-free survival data from phase 2 BRACELET-1 metastatic breast cancer study: Q2 2023
- Preclinical data from the combination of pelareorep and CAR T cell therapy: Q2 2023
- Updated data in advanced/metastatic pancreatic ductal adenocarcinoma (PDAC) from the GOBLET study: H2 2023
- Update on the metastatic colorectal and anal cancer cohorts from the GOBLET study: H2 2023
- Guidance for the registration paths for HR+/HER2- metastatic breast cancer and advanced/metastatic PDAC: H2 2023[2]
Core principles / values of the companyEdit
Oncolytics Biotech Inc. is driven by a powerful mission: to transform the lives of cancer patients by redefining the way cancer is treated. With a deep commitment to advancing oncolytic virotherapy, the company aims to provide more effective and personalized treatment options that maximize therapeutic outcomes. By leveraging the body's own immune system and developing targeted therapies, Oncolytics Biotech seeks to revolutionize the field of oncology and improve patient outcomes worldwide.
Product[3]Edit
Oncolytics’ core product is Pelareorep, a cutting-edge intravenously delivered immunotherapeutic agent aiming to treat solid tumours and hematological malignancies. Oncolytics Biotech. is testing Pelareorep as a potential treatment as the immune system has difficulty recognising and destroying malignant cancerous cells. It can be used alone or for more successful results, in combination with other chemotherapeutic drugs such as Paclitaxel[4], or immunotherapies such as CAR T, targeting a large market audience.
Cancer cells (tumour cells) are unique in comparison to other cells in the body as they can rapidly multiply due to their ability to carry out a cell signalling pathway, namely the RAS-activated pathway[5]. As a proprietary isolate of the naturally occurring, non-pathogenic double-stranded RNA (dsRNA) virus reovirus, Pelareorep can target this pathway. Reoviruses are a group of RNA double stranded viruses possessing the ability to recognise unique glycans on cancerous cells via the σ1R protein to allow immune system enhancement. The RAS-activated pathway required for Pelareorep to function is only present in cancerous cells, this includes some of the most common cancers such as lung and breast cancer.
Its mechanism of action involves the activation of both the innate and adaptive immune systems while weakening tumor defense mechanisms[6]. This effect enhances the immune system's ability to combat cancer, rendering tumors more susceptible to a diverse range of oncology treatments. Pelareorep is injected intravenously, once it interacts with a RAS-activated cancer cells it rapidly multiplies which causes:
- Release of cytokines (innate)
- Activation of Natural Killer cells (innate)
- Dendritic cell activation (innate)
- T cell education and activation[7] (adaptive)
- Tumour cell lysis
- Activation of the interferon-gamma (IFN-γ) signalling pathway
After the cell has burst all of the daughter Pelareorep cells are released to continue the process in surrounding cancer cells with the same glycans, until all cancerous cells have been defeated.
The Oncolytic Virus Therapy market is projected to experience substantial growth, with an estimated value of USD 29 million by 2028, compared to its previous value of USD 6 million in 2021. The market is expected to grow at a compound annual growth rate (CAGR) of 24.9% from 2022 to 2028[8].
Pelareorep has been clinically tested in partnership with Canadian Cancer Trials Group for pancreatic, breast, head, neck, prostate, lung, colorectal, bladder and ovarian cancers. Breast and pancreatic cancer tests have shown statistically significant results and have moved to Phase III clinical trials, on track for licence enabling studies. The clinical tests have also shown low death rates and less adverse side effects in comparison to chemotherapy. Side effects are: chills, fever, headache, cough, myalgia, runny nose, sore throat, fatigue, lymphopenia or neutropenia all for less than 6 hours.
The use of Pelareorep withholds many competitive advantages including:
- Intravenous delivery which quickly targets metastatic cells
- Pelareorep does not require special handling to be used, it follows a simple procedure
- Selectively destroys tumour cells, not normal, healthy cells
- It has a predictive biomarker- peripheral T-cell clonality
Pelareorep is manufactured at a commercial scale under a commercial supply agreement with MilliporeSigma (formerly Sigma-Aldrich)[9]. Currently, Pelareorep is mainly supplied to Canada and the US, however the company is looking to expand to other countries with 17 pending patent applications.
Currently the price of Pelareorep is unknown as it isn't officially a marketed drug, but it is likely to be equivalent to the price of Pfizer's Paclitaxel at $18 for a supply of 5 millilitres.
MarketEdit
Total Addressable Market (TAM):Edit
The total addressable market is used to define the revenue opportunity available for a product or service. TAM helps prioritise business opportunities by serving as a quick metric of a given opportunity's underlying potential.
For Oncolytics Biotechnology , we define the TAM as the global biotechnology market. Currently, the size of this market, based on revenue figures is USD 378 billion . [10]
Serviceable Available Market (SAM):Edit
Here, the serviceable available market is defined as the global oncolytics cancer virus therapy market. Taking several factors into consideration, the SAM for Oncolytics Biotech is currently estimated to be USD 22.86 million in 2023. [11]
Executive Team and Board of Directors:Edit
Founders of Oncolytics Biotech.:Edit
Matt Coffey is the founder of Oncolytics and completed his PhD at the University of Calgary in oncology, specifically focusing on reoviruses. Matt Coffey published many successful research papers before he cofounded Oncolytics Biotech. Within the company, Coffey excelled in various roles including Chief executive officer, Chief operating officer, Chief scientific officer and Vice President of Product development and Chief financial officer.
Management Team at Oncolytics Biotech.:Edit
Matt Coffey, PhD, MBA is the Chief Executive Officer and President of Oncolytics and completed his PhD at the University of Calgary in oncology, specifically focusing on reoviruses. Matt Coffey published many successful research papers before he cofounded Oncolytics Biotech. Within the company, Coffey excelled in various roles including Chief executive officer, Chief operating officer, Chief scientific officer and Vice President of Product development and Chief financial officer.
Kirk Look is the Chief Financial Officer of Oncolytics and is a highly experienced chartered accountant. Before joining the company in 2003 Look was the manager of Audit and Assurance services in the prestigious accounting firm Ernst & Young in Canada.
Allison Hagerman is the Vice President of Product Development at Oncolytics. Ms. Hagerman is a biotechnology professional engineer and has been Director of Manufacturing and Engineering and Project Manager in Oncolytics. During this time she led the team to for the performance qualification of Pelareorep drug substance.
Andrew de Guttadauro is the President and Global Head of Business Development at Oncolytics Biotech. Mr. Guttadauro has held executive and senior-level positions at leading pharmaceutical and biotechnology companies.
Thomas C. Heineman, MD, PhD is the Chief Medical Officer of Oncolytics. He completed his PhD at the University of Chigaco in Virology. Prior to his position in Oncolytics Dr Heineman worked in various roles which were Head of clinical development at Denovo, Vice President, Head of Clinical Development at both Genocea Biosciences and Halozyme Therapeutics, Senior Director of Global Clinical Research and Development at GlaxoSmithKline and as an Associate Professor at the Saint Louis University School of Medicine.
Board of Directors at Oncolytics Biotech.:Edit
Matt Coffey, PhD, MBA is a Director in Oncolytics and completed his PhD at the University of Calgary in oncology, specifically focusing on reoviruses. Matt Coffey published many successful research papers before he cofounded Oncoltyics Biotech. Within the company, Coffey excelled in various roles including Chief executive officer, Chief operating officer, Chief scientific officer and Vice President of Product development and Chief financial officer.
Wayne Pisano is a Director at Oncolytics and has had a very successful career and been recognized in 2010 as Pharma Executive of the Year by the World Vaccine Congress. He has served a plethora of roles including: President and CEO of VaxInnate (a privately held biotech company), member of Immunovaccine's Board in October 2011 and lastly he was the former President and CEO of Sanofi Pasteur (one of the largest vaccine companies in the world).
Jonathan Rigby is a Director at Oncolytics. He is currently the Group Chief Executive Officer of Revolo Biotherapeutics, where he is focused on the development of therapies for autoimmune and allergic diseases. Other than this he has lots of experience in the biotech industry including CEO of SteadyMed Ltd, Co-founding Zogenix, Inc. (a CNS-focused specialty pharmaceutical company), being a member of the Revolo Biotherapeutics and ImmunoMolecular Therapeutics Boards of Directors and lastly the Chairman of BIOS (a Nasdaq-listed biotech acquisition company).
Deborah M. Brown, MBA is a Director at Oncolytics. Ms. Brown has many achievements including being a current Managing Partner at Accelera (a specialty consultancy firm that assists emerging biopharma ventures in the United States and Europe) Canada. She has previously been Executive Vice President of Neuroimmunology and President and Managing Director of the company's Canadian operations at EMD Serono. Ms. Brown has also been Chair of the National Pharmaceutical Organization (now Innovative Medicines Canada), Life Sciences Ontario, the Strategic Executive Advisory Council for Canadian Cancer Trials Group, and her local SPCA.
Bernd R. Seizinger, MD, PhD is a Director at Oncolytics. Dr. Bernd., currently serves as board member in numerous public and private biotech companies including: Vaccibody, Oxford BioTherapeutics, Aprea, CryptoMedix, and BioInvent. In previous roles he was simultaneously President & CEO of GPC Biotech (VP Oncology Drug Discovery) while also serving as VP Corporate and Academic Alliances at Bristol-Myers Squibb, and as Executive VP and CSO of Genome Therapeutics. Prior to his corporate appointments, he held Senior Faculty positions at Harvard Medical School, Massachusetts General Hospital and Princeton University.
James T. Parsons is a Director at Oncolytics. His executive experience includes, currently, being Chief Financial Officer of Trillium Therapeutics Inc. Previosuly he has been president of Empar Management, Vice President of Finance at DiaMedica Therapeutics Inc, CFO of ProMIS Neurosciences (formerly Amorfix Life Sciences Ltd.), and CFO and Vice President of Finance and Administration at Aptose Biosciences Inc. (formerly Lorus Therapeutics). Mr. Parsons has also been a Director and the Chair of the Audit Committees of Sernova Corp. and DiaMedica Therapeutics Inc.
Angela Holtham, MBA, is a Director at Oncolytics. She is currently the Senior Vice President and Chief Financial Officer of Canadian subsidiary of Nabisco Inc. She has also been the Vice President, Finance and Chief Financial Officer in the Ontario-based Hospital for Sick Children.
Historical FinancialsEdit
This section of the report covers the financials of Oncolytics Biotech from the last 5 years.
Major Stakeholders in Oncolytics Biotech:- [12]Edit
| Holder | Common Stock Equivalent held | Country | Market Value (CAD in mm)2 |
|---|---|---|---|
| Seizinger MD , PhD , Bernd Robert | 314,863 | New York , USA | 1.2 |
| FSC Securities Corporation, Asset Management Arm | 227,425 | USA | 0.9 |
| International Assets Investment Management | 194,963 | Florida, USA | 0.7 |
| Pisano , MBA , Wayne F | 189,941 | New Jersey, USA | 0.7 |
| Renaissance Technologies LLC | 129,856 | New York, USA | 0.5 |
Risks[13]Edit
As with any investment, investing in Oncolytics Biotech carries a level of risk. Overall, based on the key risks highlighted below, the degree of risk associated with an investment in Oncolytics Biotech is very high.
Risks Related to the Companies OperationsEdit
- As a clinical stage pharmaceutical company, the prospects of Oncolytics Biotech is regarded as speculative, it is impossible to predict whether new therapeutics will ultimately prove to be safe and effective in humans or whether necessary and sufficient data can be developed through the clinical trial process to support a successful product application and approval
- Their current product in development, Pelareorep, is in it's R&D stage for human application, the riskiest stage for a company in the biotechnology industry
- If they are unable to establish that Pelareorep is a safe, effective treatment for cancer, they may be required to abandon further development of the product and develop a new business strategy
Edit
- If a product is approved for sale, product manufacturing at a commercial scale, and significant sales to end users at a commercially reasonable price may not be successful
- There can be no assurance that adequate funds will be generated to continue development or will ever achieve significant revenues or profitable operations
Edit
- Human clinical trials must demonstrate that the product is safe for human use and that the product shows efficacy in order to obtain regulatory approvals for products being developed for human use, and to achieve commercial success
- In developing a pharmaceutical product, there is a reliance on employees, contractors, consultants and collaborators, and other third-party relationships, including the ability to obtain appropriate product liability insurance. There can be no assurance that this reliance and these relationships will continue as required
Edit
- Market prices for securities of biotechnology companies generally are volatile, and may or may not move in a manner consistent with the progress made
Discounted Cash FlowEdit
A discounted cash flow was undertaken to provide a valuation for Oncolytics Biotech by forecasting future cash flows over a specific period and estimating a terminal value, which represents the business's value beyond that period. The projected cash flows are then discounted back to their present value using the company's weighted average cost of capital (WACC). The sum of the present values of the future cash flows and terminal value provides an estimate of the company's intrinsic value.
The table below represents the Unlevered Free Cash Flow (FCF) data for Oncolytics Biotech from 2018 to 2027. The company experienced negative FCF in the early years (2018-2021) but improved in 2022 with a lower negative value. The projected FCF for the years 2023 to 2027 shows a shift to positive values, indicating expected growth and profitability in the future.
| Fiscal Year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023E | 2024E | 2025E | 2026E | 2027E |
|---|---|---|---|---|---|---|---|---|---|---|
| Unlevered Free Cash Flow | -14,851 | -21,330 | -19,107 | -20,303 | -5,839 | -16,160 | -18,505 | -23,404 | 13,507 | 126,192 |
| Projection Year | 1 | 2 | 3 | 4 | 5 | |||||
| Present Value of FCF | -14,966 | -15,872 | -18,591 | 9,937 | 85,976 |
Oncolytics Biotech has an enterprise value of 1,807,057 units and an equity value of 1,792,207 units with a WACC of 7.98%. The implied share price is 31 units, showing a significant increase compared to the current share price of 2.83 units, with a remarkable 991.32% change.
| WACC | 7.98% |
|---|---|
| Sum of PV of FCF | 46,483 |
| Growth rate | 4.50% |
| Terminal Value | 2,584,090 |
| Present Value of Terminal Value | 1,760,574 |
| Enterpise Value | 1,807,057 |
| (+) cash | 8,620 |
| (-) Debt | 23,470 |
| Equity Value | 1,792,207 |
| Diluted Shares Outstanding | 58,030 |
| Implied share price | 31 |
| Current share price | 2.83 |
| % change in share price | 991.32% |
Relative ValuationEdit
A comparable company analysis is undertaken using key metrics of Price-to-Book Ratio and EV/R&D Ratio, involving other companies operating in the biopharmaceutical sector, particularly those focusing on the development of oncology treatments.
Note that Oncolytics anticipates profitability only upon commercial viability of Pelareorep, which renders usual comparing metrics like P/E ratio unavailable.
| Market Data ($K) | Financial Data ($K) | Valuation (x) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Company | Ticker | Price | Shares Out | Market Cap | TEV | Revenue | EBITDA | EBIT | Net Income | Assets | Liabilities | Book Value | R&D Exp. | P/B | EV/R&D |
| Oncolytics Biotech Inc. | TSX:ONC | $2.78 | 65701 | 178090 | 156580 | 0 | -20628 | -20699 | -19093 | 27585 | 8003 | 19582 | 11864 | 9.09x | 13.20x |
| TME Pharma | PAR:ALTME | $1.6 | 5300 | 8662 | 8074 | 0 | 12551 | 12028 | 15910 | 5620 | 6327 | -707 | 8148 | -12,25x | 0.99x |
| Faron Pharmaceuticals | LON:FARN | $3.51 | 66161 | 231110 | 237840 | 0 | -28748 | -28892 | -30267 | 12046 | 24310 | -12265 | 21822 | -18.84 | 10.90x |
| Mustang Bio | NAS:MBIO | $5.00 | 7281 | 40400 | 13780 | 0 | -73436 | -76159 | -77525 | 92422 | 46149 | 46273 | 63949 | 0.87x | 0.22x |
| Celyad Oncology | BRU:CYAD | $0.60 | 22594 | 14660 | 1590 | 0 | -20597 | -21346 | -43125 | 21071 | 16457 | 4614 | 19923 | 3.18x | 0.08x |
| ESSA Pharma INC | (NasdaqCM:EPIX) | $2.85 | 44.092 | 125700 | 31235 | 0 | 25875 | 25996 | 22473 | 158500 | 2166 | 8933 | 5121 | 14.07x | 6.09x |
| Helix BioPharma Corp. | (TSX:HBP) | $0.21 | 200.019 | 41004 | 39674 | 0 | 4001 | 4010 | 3982 | 1162 | 493 | 913 | 4259 | 44,91x | 9.31x |
Below presents brief introduction to Oncolytic's peers; note by nature of the drug discovery industry, each company's focus and addressable market can vary.
| Company | Description |
|---|---|
| TME Pharma | TME Pharma N.V. is a German biopharmaceutical company focused on developing proprietary cancer therapeutics, including their lead drug candidate, NOX-A12, for various cancer indications(such as metastatic pancreatic, colorectal, glioblastoma, and myeloma). They also have a collaboration with Merck Sharp & Dohme Corp. for studying NOX-A12 in combination therapy for metastatic pancreatic cancer. |
| Faron Pharmaceuticals | Faron Pharmaceuticals Oy is a clinical-stage biopharmaceutical company that has a pipeline based on the receptors involved in the regulation of immune response in oncology and organ damage. Clevegen (bexmarilimab), being the comapny's lead asset, its investigative precision immunotherapy in phase I/II development, is a novel anti-Clever-1 antibody with the ability to switch immune suppression to immune activation. |
| Mustang Bio | Mustang Bio, Inc. is a clinical-stage biopharmaceutical company focused on translating today’s medical breakthroughs in cell and gene therapies into potential cures for hematologic cancers, solid tumors and rare genetic diseases. Mustang has partnered with top medical institutions to advance the development of CAR T therapies across multiple cancers, as well as a lentiviral gene therapy for XSCID. |
| Celyad Oncology | Celyad Oncology is a biotechnology company focused on the discovery and development of innovative technologies for chimeric antigen receptor (CAR) T-cell therapies. The Company is focusing on opportunities to support the development of next-generation CAR T-cell candidates in solid tumors and hematological malignancies. |
| ESSA Pharma INC | ESSA Pharma Inc. is a clinical stage pharmaceutical company and focuses on developing therapies for the treatment of prostate cancer. The company develops an oral drug candidate that is in a Phase I clinical study for the treatment of patients with metastatic castration-resistant prostate cancer. It has collaboration agreements with Caris Life Sciences, Inc.; Bayer Consumer Care AG; Janssen Research & Development, LLC; and Astellas Pharma Inc. |
| Helix BioPharma Corp. | Helix BioPharma Corp., an immune-oncology company in Canada, is developing L-DOS47 and V-DOS47 for non-small cell lung cancer treatment. They have collaboration agreements with Moffitt Cancer Center to investigate pharmacodynamics, benefits of combination therapy, and with and University Hospital Tuebingen to assess therapeutic response in cancer models expressing CEACAM6. |
| Oncolytics Biotech Inc plc Valuation | Value |
|---|---|
| Implied Enterprise Value | 156,580 |
| Implied Market Value | 156,580 |
| Shares Outstanding | 65,701 |
| Implied Value Per Share | 2.38 |
| Average | 2.51 |
| Current share price | 2.78 |
| Difference | 10.76% |
ReferencesEdit
- ↑ https://www.oncolyticsbiotech.com/about
- ↑ https://www.prnewswire.com/news-releases/oncolytics-biotech-reports-first-quarter-2023-financial-results-and-operational-highlights-301816734.html
- ↑ https://pubmed.ncbi.nlm.nih.gov/25693885/
- ↑ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4923331/
- ↑ https://doi.org/10.1016/B978-0-12-394295-1.00013-5
- ↑ https://www.oncolyticsbiotech.com/technology/posters-publications
- ↑ https://d1io3yog0oux5.cloudfront.net/_8c13c7b0608db4d5d85624e790b574c9/oncolyticsbiotech/db/343/2603/pdf/2022+AWARE-1+SITC+Final.pdf
- ↑ https://www.marketwatch.com/press-release/oncolytic-virus-therapy-market-demand-share-report-2023-2030-2023-05-22
- ↑ https://www.oncolyticsbiotech.com/technology/manufacturing
- ↑ 10.0 10.1 https://www.statista.com/statistics/309457/world-pharmaceutical-revenue-distribution-by-technology/
- ↑ https://www.futuremarketinsights.com/reports/oncolytic-virus-cancer-therapy-market
- ↑ https://www.capitaliq.com/CIQDotNet/Ownership/CompanySummary.aspx?CompanyId=1340759
- ↑ https://ir.oncolyticsbiotech.com/all-sec-filings/content/0001129928-23-000008/oncyf-20221231.htm