Oncolytics Biotech - Earnings Call - Q4 2024

Transcript

Operator (participant)

Good morning and welcome to Oncolytics Biotech's fourth quarter and full year 2024 conference call. All participants are in a listen only mode. There will be a question and answer session at the end of the call. Please be advised that this call is being recorded at the Company's request. I would now like to turn the call over to Jon Patton, Director of Investor Relations and Communication. Please go ahead.

Jon Patton (Director of Investor Relations)

Thank you operator. Good morning everyone and welcome to Oncolytics' fourth quarter and full year 2024 earnings call. As a reminder, various remarks made during this call contain certain forward looking statements relating to the Company's business prospects and the development and commercialization of pelareorep, including statements regarding the Company's mission, strategy and milestones, the Company's belief as to the potential and mechanism of action of pelareorep as a cancer therapeutic, our search for a new permanent CEO, our potential registrational opportunities for pelareorep and our plans and strategies related thereto, the potential market for pelareorep in breast cancer, our plans to continue enrollment in Goblet Cohort 5, our ongoing business development initiatives and other statements related to anticipated developments in the Company's business.

These statements are based on management's current expectations and beliefs and are subject to a number of factors which involve known and unknown risk. Delays, uncertainties and other factors not under the Company's control may cause actual results, performance or achievements of the Company to be materially different from the results, performance or expectations implied by these forward looking statements. 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 reasonable basis, but there can be no assurance that the statement, expectation or belief will be achieved.

These factors include results of current or pending clinical trials, risks associated with intellectual property protection, financial projections, actions by regulatory agencies and those other factors detailed in the Company's filings with SEDAR and the SEC. Oncolytics does not undertake any obligation to update these forward looking statements except as required by applicable laws. Joining me this morning to discuss our recent accomplishments in addition to what we're looking forward to in 2025, Chairman of Oncolytics' Board of Directors and Interim CEO Wayne Pisano, Chief Medical Officer Dr. Tom Heineman, Chief Financial Officer Kirk Look, and Vice President of Business Development Christophe Degois. To get us started, I'd like to hand it to Wayne who will provide us with an introduction and overview. Wayne.

Wayne Pisano (Chairman and Interim CEO)

Thanks Jon and thanks everyone for joining our 2024 year end conference call. First, I'd like to reiterate my and the entire team's best wishes for Dr. Matt Coffey as he focuses full time on his recovery. Many of you know that Matt is a co-founder of the company and he has a passion for improving the lives of cancer patients, so this is not a decision that was taken lightly. Matt's knowledge and expertise on pelareorep and immuno-oncology is impressive. He will always be a strong advocate of pelareorep and we anticipate that he will support Oncolytics in an advisory role later this year. We are actively searching for a Chief Executive Officer to lead the company's advancement of our novel therapeutic agent pelareorep, or Pella as we refer to it.

We believe the opportunity for Pella is very compelling as we see the potential for an accelerated approval pathway in HR positive HER2 negative metastatic breast cancer and our exciting work in gastrointestinal tumors continues to garner attention from collaborators like GCAR and PanCAN, in addition to key opinion leaders in the field. I'll leave it to Tom to discuss our clinical data in more detail, but I'd like to highlight that in 2024 we generated outstanding final data in the BRACELET-1 breast cancer study that not only met but exceeded our expectations. We also furthered our work in GI cancers with the ongoing GOBLET study. Initial safety and efficacy data in both pancreatic and anal cancers are positive.

After Tom, Christophe will provide us with an overview of our business development progress and Kirk will discuss our financials. I'd like to remind everyone that on our last call, Christophe provided a detailed analysis of the breast cancer market. Even with the introduction of the ADCs, breast cancer remains an unmet medical need for many patients. We estimate that as many as 55,000 breast cancer patients would benefit from pelareorep. The efficacy data generated in both breast and gastrointestinal cancer trials demonstrate the potential of pelareorep in hard to treat and very diverse tumor types. We remain focused on advancing the development of pelareorep for cancer patients and value generation for our shareholders. I'll now turn it over to Tom to discuss our clinical program updates.

Tom,

Tom Heineman (CMO)

thanks Wayne. The recent impactful GI data that Wayne mentioned were presented in late January at the ASCO GI conference from Goblet Cohort 4, which investigates Pella and the checkpoint inhibitor atezolizumab in relapsed anal cancer. We reported a 33% objective response rate from the 12 evaluable patients, including a complete response that lasted more than 15 months. In addition, we reported translational data from this cohort showing the expansion of new and pre-existing tumor infiltrating lymphocyte clones in the blood of patients who responded to treatment with pelareorep combined with atezolizumab. We also saw the upregulation of multiple cytokines in these patients including CXCL9, 10 and 11, as well as PD-L1 and interferon gamma. These results from patients with relapsed anal cancer support Pella's immunologic mechanism of action as previously defined in other cancers.

Specifically, they demonstrate Pella's ability to enhance anti-tumor T cell responses and its complementary effect of making tumors visible to the immune system. In addition, these findings provide evidence of Pella's ability to synergize with checkpoint inhibitors in cancers that have historically resisted immune therapies. We have begun enrollment into stage two of this Simon 2-stage study, which will provide data from an additional 18 patients. We believe the confirmation of the efficacy signal from these patients would provide a strong foundation for a subsequent registrational trial in anal cancer. At ASCO GI this past January, we also presented safety results from Goblet Cohort 5. In this cohort, patients with metastatic pancreatic cancer are being treated with Pella combined with modified FOLFIRINOX, either with or without atezolizumab, in two treatment arms.

No safety signals were observed during the safety run-in period in both an independent data safety monitoring board and the German regulatory authorities have approved the cohort to continue to full enrollment. We are now working towards achieving the next enrollment milestone, completion of enrollment into stage one of the Simon 2-stage cohort, which consists of a total of 30 evaluable patients. We expect to review and report the initial efficacy results from this cohort by the end of the year. Note that this cohort is funded by a $5 million grant from the Pancreatic Cancer Action Network or PanCAN through their Therapeutic Accelerator Award based on compelling prior pancreatic cancer results, including from Cohort 1 of the Goblet study in which patients treated with Pella combination therapy showed an objective response rate more than double.

Historical results While our GI cancer studies have provided results most recently, our top priority is remains breast cancer, specifically metastatic HR positive HER2 negative breast cancer in which Pella has previously demonstrated a marked statistically significant near doubling of median overall survival in the IND-213 study. In light of this exciting result, we conducted the BRACELET-1 study to confirm the robust efficacy signal observed in IND-213 and to extend the evaluation of Pella to patients who had previously received CDK4/6 inhibitors, which are now part of the standard treatment regimen for patients with advanced or metastatic HR positive HER2 negative breast cancer. This past fall the final efficacy results from the BRACELET-1 study became available and they once again pointed to a clinically meaningful benefit for patients treated with Pella based combination therapy to those treated with chemotherapy alone.

In fact, all efficacy measures favored patients in the Pella combination therapy arm compared to those in the chemotherapy alone arm. These included median progression-free survival, median overall survival, two-year survival rate, and confirmed objective response rate. With these results, we have now observed a substantial efficacy signal from two randomized trials that enrolled over 100 patients. We currently are planning to move directly to a large phase 2 study of approximately 180 HR positive HER2 negative advanced or metastatic breast cancer patients that we anticipate will support an accelerated approval file submission. In this study, patients will be randomized to receive either Pella + paclitaxel or control therapy of paclitaxel alone. The primary endpoint is expected to be reached within two years of the start of patient enrollment.

The planning for this study is ongoing and we aim to initiate the study in the second half of this year. In conclusion, the clinical data we have generated continue to exceed our expectations, provide extremely strong support for continued clinical development and provide clear paths towards registration in breast, pancreatic and anal cancers, all difficult to treat cancers with high unmet needs. Now I'll turn the call over to Christophe who will provide an update on our ongoing business development activities and collaborations. Christophe.

Christophe Degois (VP of Business Development)

Thanks Tom. I'm happy to be here with you today to provide the latest update on our ongoing business development conversations. Since our last earning call, we've continued to communicate to potential biopharma partners the substantial clinical benefit Pella has demonstrated across multiple hard to treat indications. However, breast cancer is our highest priority. This is because we have data showing Pella's benefit in two randomized breast cancer studies that exceeds 100 patients. Also, after discussion with regulators and key opinion leaders, we know where Pella should be positioned in the ever evolving breast cancer treatment paradigm. As for the clinical benefit and the final BRACELET-1 data reported this past fall, Pella combined with paclitaxel showed a greater than 12 month estimated advantage over paclitaxel monotherapy. However, as Tom mentioned, we also saw meaningful benefit in objective response rate, PFS and 24 months overall survival.

Our expected positioning of Pella in the treatment paradigm is for it to follow hormonal treatment like endocrine therapy, CDK4/6 inhibitors and targeted therapy and antibody-drug conjugate like Enhertu. However, some patients may not be eligible for or cannot tolerate ADCs, so once a patient is eligible for chemotherapy, Pella would be a natural fit as our data with paclitaxel shows a robust benefit over paclitaxel monotherapy. As I discussed in great detail on our previous call, this is where we anticipate there will be 55,000 addressable breast cancer patients in the U.S. by 2027 and the potential for $2.4 billion in annual sales across the U.S. and major European markets by 2033. Another important aspect of our BD conversation centers around where we will take Pella next on the regulatory pathway.

After multiple discussions with key opinion leaders and statisticians, we have designed a registration enabling breast cancer study that could generate a PFS endpoint within two years of the start of patient enrollment and be eligible for an accelerated approval file submission. We believe this is reasonable because the PFS benefit we would aim to achieve is 4.3 months, but the BRACELET benefit was 5.7 months. In our meetings, this is an aspect of our strategy that seems to be well understood and one that has already been used by other companies, including the approval of Ibrance for Pfizer and Enhertu for Daiichi Sankyo. In future meetings we will also layer in the most recent development that we presented at ASCO GI from our promising gastrointestinal opportunity. As this conversation progresses, we'll be sure to keep you updated.

We're in the fortunate position to have compelling data in three indications: breast, pancreatic, and anal cancers. These three indications demonstrate the broad potential for pelareorep to help a large number of patients and provide a commercial opportunity that is appealing to potential biopharma partners in the GI space. GCAR and PanCAN remain our valued collaborators. We're excited that Goblet Cohort 5, funded by PanCAN, is continuing to progress as planned and is now ready for full enrollment given the DSMB and PEI sign-offs. As a reminder, PanCAN provided Oncolytics with a $5 million grant to fully fund Cohort 5 after an extensive vetting process and meeting with multiple pancreatic key opinion leaders. As a highly regarded organization solely focused on pancreatic cancer, their vote of confidence in pelareorep's potential gives us confidence in a strategy to continue evaluation.

In this indication, PanCAN's continued interest in Pella is helping us to provide a more complete picture of Pella's potential in this extremely difficult to treat type of cancer. This is due to the fact that the treatment regimen in its cohort is evaluating treatment with a different chemotherapy than we have used in the past, modified FOLFIRINOX. This is one of the two most commonly administered to metastatic pancreatic cancer patients, the other being gemcitabine and nab-paclitaxel. The combination of Pella+ gemcitabine, nab-paclitaxel and atezolizumab showed a 62% objective response rate, well above the usual 20-25% response rate that would be expected in a similar patient population. In turn, that data led to the relationship with PanCAN as well as a fast track designation from the FDA and the opportunity to collaborate with GCAR.

We continue to engage with the Global Coalition for Adaptive Research to finalize a master protocol for initiating a registration enabling study that could eventually lead to regulatory approval for the pelareorep and paclitaxel, nab-paclitaxel, and atezolizumab combination. We look forward to sharing additional enrollment plan updates with you later this year. Next, I'll now turn the presentation over to Kirk for a review of our financials. Kirk.

Kirk Look (CFO)

Thanks Christophe and good morning everyone. I'll now discuss our financial results for the fourth quarter and full year 2024 which will be provided in CAD unless otherwise noted. A full summary of our financial results can be found on the Investors section of our website under Filings and Reports or in the press release issued earlier this morning. Now, throughout 2024, we remained cautious with our cash resources. As of December 31, 2024, the company reported CAD 15.9 million in cash and cash equivalents. Net cash used in operating activities for 2024 totaled $27 million compared to CAD 28.4 million for 2023, reflecting non cash working capital changes partially offset by higher net operating activities in 2024. General and administrative expenses for the fourth quarter of 2024 were CAD 3.9 million compared with CAD 4.2 million for the fourth quarter of 2023.

The decrease was mainly attributed to lower personnel related expenses incurred in 2024 along with lower cash annual short term incentive awards. The decrease is partially offset by higher share based compensation expense. Research and development expenses for the fourth quarter of 2024 were $4.6 million compared to $4.7 million for the fourth quarter of 2023. The decrease was due to lower personnel related expenses related to lower cash annual short term incentive awards mainly offset by higher clinical trial expenses and share based payment compensation expense. Net loss for the fourth quarter of 2024 was $8 million compared to a net loss of $3.9 million for the fourth quarter of 2023. The basic and diluted loss per share was $0.10 in the fourth quarter of 2024 compared to a basic and diluted loss per share of $0.05 in the fourth quarter of 2023.

For the full year 2024, net loss totaled $31.7 million compared to $27.8 million in 2023, or $0.41 per share on a basic and fully diluted basis. As we look forward to 2025, we are confident in the vast potential that Pella holds for improving patient outcomes. We are making progress as shown by the recent data on pancreatic and anal cancers announced at ASCO GI, and we are dedicated to advancing Pella as effectively and efficiently as possible. Now, before we wrap up today's call, I'd like to thank everyone who continues to support our efforts from patients, providers and caregivers to our dedicated employees, and most importantly, our steadfast shareholders. On behalf of the entire management team at Oncolytics, thank you again for taking the time to join us today. Now I would like to open the call up for Q&A operator.

Operator (participant)

Thank you and ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press a star followed by the number one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, you may press a star followed by the number two. Once again, please press a star one to join the queue. One moment please for your first question. Your first question comes from the line of Michael Freeman with Raymond James. Please go ahead.

Michael Freeman (Equity Research Analyst)

Good morning, Kirk, Wayne, Tom, Christophe, Jon. Congratulations on closing out a strong year 2024 and looking like an action packed 2025. Getting excited for this I guess. One question I have is as you get closer to launching the registration enabling study in metastatic breast, I'm wondering how you're thinking about the total cost of that trial. I know you did provide some sort of detail around timing, but if you could provide as much color on launch timing and initial readout timing as you can, that'd be terrific.

Kirk Look (CFO)

Sure, I can take that. Currently we are working at getting the study registration, pardon me, enrollment ready and so you know what that means is we more or less finalize the protocol, will be approaching the regulator just as a normal course activity. In the meantime we're working with identified sites through feasibility and working with their process to get them on board. Once we have that site identified and ready to be put on board, we'll look to bring them online and then we'll start to. Then we'll be in a position to enroll. We're targeting to be in that position. You know, as things progress, it'll probably be later, half of the year. Once enrollment starts, it's expected to be an 18 month enrollment period with a 6 month data maturity to get to PFS readout.

In the interim, we're looking at.

Putting.

In place a futility analysis and we have to finalize that assessment. Our expectations right now is a futility analysis will take about 14 months from the first patient enrolled to get to that point. Then we can have the futility readout.

Michael Freeman (Equity Research Analyst)

Okay, great. Any sharper estimations on total costs?

Kirk Look (CFO)

We're working through that, Michael. I think it's premature to speak to that in any great detail, but as we understand our sites and enrollment, their enrollment rates, et cetera, we'll be able to have more color on that.

Michael Freeman (Equity Research Analyst)

Gotcha. Okay, thank you. One more question. You know, I've been noticing more news from oncolytic virus developers in the landscape, and I wonder if you're seeing increasing evidence that there's a bit of an oncolytic virus renaissance going on and are you seeing increased interest from pharma as a result? Like I point specifically to CG Oncology. They were able to raise about $200 million at the end of last year on good data, and that's a live virus. Curious how you're seeing things. Curious for your perspective on all this.

Kirk Look (CFO)

Christophe, do you want to speak to that as to what you've heard on your end? I can follow up and if others want to jump in, they can.

Christophe Degois (VP of Business Development)

No, happy to answer that. Yes, you're exactly right. I mean, you're talking about CG Oncology. We also, I don't know, you may have seen also Kura, you know, who's talking on a raise, you know, at the end of last year. We definitely see more activities in that field. I think that that's very beneficial for us because let's remember that we have, you know, significant advantage, you know, being injected, you know, instead of, I mean, IV injection and not an intratumoral. You know, the intratumoral has been sometimes, you know, a little complicated for big pharma companies that are not really interested in that. As I mentioned, you know, during the call, I think we continue to have a conversation with potential partners.

We have seen that, you know, the fact how we position, you know, pella in breast cancer, the multiple, you know, signal breast cancer obviously having very strong data, but also the strong signal we have seen in other indication pancreatic and analysis resonate, you know, very well with, with potential companies. Kirk, do you want to add anything to that?

Kirk Look (CFO)

Yeah, and what we're noticing on, you know, kind of discussions and presentations with investors is again, more interest in the, in the OV space. We're seeing, we're seeing more dedicated, you know, clinicians, science experts from, from those investors sitting down and talking to us and, you know, walking through our data and our plan. There's been some comments on, from their standpoint, just seeing some white space opportunities to generate return for them. Their focus is on that. They see some of them are seeing this as a real opportunity. That in combination with what's going on in the industry, you know, pretty, you know, I think big and important data readouts coming from our competitors that'll be important to help those investors continue looking at the space.

You know, we've seen a real shift in that. We are excited to hopefully be part of that.

Michael Freeman (Equity Research Analyst)

Yeah, good rising tide situation I hope, and if I could shoehorn one last one. I wonder, on the pancreatic front and your alignment with GCAR, I understand that you're working together to get that master protocol together first. Will this be the first trial launched on the GCAR platform? I recognize that it takes some time for this organization to unload and get together a master protocol, but I wonder if there's any way that this trial can be accelerated to launch.

Kirk Look (CFO)

Tom, can you speak to this?

Tom Heineman (CMO)

Yeah, I can speak to that. You know, we have been working, as Kirk mentioned, very actively with GCAR to finalize a licensure enabling study protocol. The next step would be, this would be typical in these sort of situations, to go to the regulators and get the FDA's thoughts and move on from there. It is really maybe a little early for us to say anything very specific about the timing until we talk to the FDA. I can say with regard to accelerating it that, you know, we are working very actively with GCAR and we are moving things forward with them at, you know, the greatest possible pace.

Michael Freeman (Equity Research Analyst)

Okay.

All right, thank you very much. I look forward to seeing all your activity this year.

I'll pass it on.

Operator (participant)

All right, thank you. Once again, if you would like to ask a question, press the star one on your telephone keypad. Your next question comes from the line of Patrick Trucchio with HC Wainwright. Please go ahead.

Good morning, everyone. Thank you for taking your questions. Luis here, in for Patrick, congratulations on the latest presentations. We are curious to know what your thoughts are around the positioning, the commercial positioning of pelareorep, given that ADCs seem to have shown and continue to show positive.

Results.

In the same patient population. You are probably going to focus on the patients that did not respond or are not eligible, as you said, for this kind of therapy. Is there any other population that you could target regarding the ADCs? Do you think that there is a potential also for combination, not just as a sequential treatment approach, but a combination with Enhertu and other ADCs? Thank you.

Tom Heineman (CMO)

Okay, Tom here. I can start there. If Christophe or others want to jump in, they can. You're right, we do want to target patients who are ineligible for or who cannot tolerate ADCs.

In actuality, the largest population we.

Expect to target will be patients who receive ADC therapy and then progress on ADC therapy. Okay. Which is going to be a very large population. The ADCs have been extremely successful drugs and have benefited a lot of patients, but they are not cures. Right. Once a patient takes an ADC at the appropriate time in their treatment path, they will eventually progress on that therapy and will at that point need the best possible treatment options. We think that we would be, may very well provide an alternative there that would be very attractive.

Right.

I'm sorry, what was the second part of your question, please?

We were wondering if there's any potential for combination with any of these therapies.

Yeah, yeah, sorry. Pelareorep in general has proven itself to be an agent that can potentiate the activity of other therapies, including chemotherapy and immunotherapies. I think it's a very logical thing to consider in the future. It's not our immediate path for a variety of reasons now, but I think at the appropriate time in the future, combination therapy with ADCs and other agents would certainly be something worth considering.

Great, thank you.

Christophe Degois (VP of Business Development)

Yes, Christophe, I can add a.

Little color more on the numbers of patients for you. As you may recall, we discussed a total addressable patient population of 55,000 patients just in the U.S. and when you look at that, it's mostly, you know, for patients who would have been on Enhertu and would have initially responded and then, you know, would relapse, which is, you know, as you, as you look at Enhertu, I mean your average PFS is 10-11 months. We know that this patient at some point in time will need another, better treatment. Another treatment. When we build our forecast of that total to more than $2 billion, that considers 55,000 patients annually in the U.S. and then, you know, we take, you know, a very conservative approach with 15%-20%, you know, market share, you know, in this population.

That's where we believe, you know, there's a significant market opportunity.

Okay.

Operator (participant)

Any follow up question?

Thank you, that was very helpful.

Christophe Degois (VP of Business Development)

Great.

Operator (participant)

Thank you. I'm showing no further questions at this time. I would like to turn it back to Kirk Look for closing remarks.

Kirk Look (CFO)

Thanks to everybody who took the time to join our earnings call this morning. This is going to be an exciting year for pelareorep and Oncolytics with additional data readouts expected and the planning of registration enabling studies that can move pelareorep closer to regulatory approval. Thanks again for your support and we will have more updates as soon as we can. Wishing everyone a wonderful day. Thanks very much.

Operator (participant)

Thank you presenters and ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.