Oncolytics Biotech, Inc. (USA) (ONCY): Huge Upside Potential Despite Recent Rallies

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Shares of Oncolytics Biotech, Inc. (USA) (NASDAQ:ONCY) have risen by more than 35% since last Thursday. This phenomenal rally started just after the company announced successful Phase III trial results for its primary drug candidate Reolysin. The company’s stock has almost doubled in the last couple of months.

This success of Reolysin shows that the company’s stock has the ability to go even higher. Due to its cheap valuations and huge potential it is also an attractive acquisition target. Pfizer Inc. (NYSE:PFE) and Amgen, Inc. (NASDAQ:AMGN) are the two most likely companies, amongst others, to be interested in acquiring this promising biopharmaceutical.

Pfizer Inc. (NYSE:PFE)Oncolytics

Oncolytics is a biopharmaceutical company focused on the development of innovative methods to fight cancer, and its primary drug candidate is Reolysin. Reolysin has been tested in 32 different clinical trials for various forms of cancer. Out of these 32 trials nearly 16 have been completed, and the remaining trials are still ongoing.

The drug is a formulation of the reovirus which is, most of the time, already present in adult humans but doesn’t show any adverse symptoms. The virus has the ability to replicate in cells that have RAS pathways and kill such cells. The infection keeps on spreading until all tumor cells are destroyed. According to studies approximately 67% of all cancers (and approximately all metastatic) in humans are Ras activated. Therein lays the mammoth potential of Reolysin, in its ability to effectively fight cancer through a virus-based mechanism.

Clinical Results

Oncolytics is testing its primary candidate Reolysin in a number of different clinical trials for various types of cancer. The company has released trial data for the effect of Reolysin on the Neck & Head Cancers and Carcinoma of the Lungs.

The company has released topline data for the Phase III clinical study of Reolysin on patients with head and neck cancer. The subjects were given the drug in combination with two chemotherapies, i.e. paclitaxel and carboplatin. The trials showed that patients with Reolysin regimen had a higher likelihood of having stable or smaller tumors as compared to patients only on paclitaxel and carboplatin. The trial involved 105 patients, out of which 86% being treated with Reolysin combination showed more stable/smaller tumors. On the other hand, only 67% patients on the conventional chemotherapy showed similar responses, making Reolysin approximately 19% more effective.

Last week the company also released data on Reolysin mid-stage Phase II trial for the treatment of squamous cell carcinoma of the lung (SCCLC). The trial tested the effects on Reolysin on SCCLC in combination of carboplatin and paclitaxel (REO 021). According to the released data, 95% of the patients experienced reduced tumor size. The announcement resulted in the second humongous rally in the stock price of Oncolytics in the last two months.

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