Oncolytics Biotech Inc.

Good afternoon and welcome to Oncologics Biotech's fourth quarter 2021 conference call. All participants are now in listen-only mode. There will be a question and answer session at the end of this call. Please be advised that this call is being recorded at the company's request. And I would like to turn the call over to John Tatton, Director of Investor Relations and Communication. Please go ahead, sir.

Thank you, Operator, and good afternoon, everyone. Earlier today, Onclytics issued a press release providing recent operational highlights and financial results for the fourth quarter and full year 2021. A replay of today's call will be available on the events and presentation section of the Onclytics website approximately two hours after its completion. After remarks from company management, we will open the call for Q&A. As a reminder, various remarks made during this call contain certain forward-looking statements relating to our business prospects and the development and commercialization of Pella Rear Rep. including statements regarding our focus, strategy, and objectives, our belief as to the potential and mode of action of Pellery Rep as a cancer therapeutic, design, aims, expectations, and anticipated benefits of our current and pending clinical trials, our plans and expectations regarding a potential registrational study, our plans regarding the expansion of Pellery Rep's market and business development potential, our plans for collaborations with industry leaders, our financial runway, 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 risks, delays, uncertainties, and other factors not under the company's control that 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 OnCodex expresses an expectation or belief as to future results, such expectations or beliefs are expressed in good faith, are believed to have reasonable basis, but there can be no assurance that the statement or expectation or belief will be achieved. These factors include results of current or pending clinical trials, risk associated with intellectual property protection, financial projections, actions by regulatory agencies, and other factors detailed in the company's filings with CDAR and the SEC. Oncologics does not undertake any obligation to update these further looking statements, except as required by applicable laws. Now, I will turn the call over to Dr. Matt Coffey, President and Chief Executive Officer of Oncologics Biotech. Matt?

Thanks, John, and thanks to all who are joining us today to discuss our fourth quarter corporate update. Now, in addition to John, I'm joined by Tom Heinemann, our Chief Medical Officer, Andrew D. Gadadaro, our Global Head of Business Development, and Kirk Luck, our Chief Financial Officer. I'm pleased to say that we had a very strong 2021 and have continued to build on our momentum in the early part of 2022. If you've not had a chance, I would encourage our investors to read the letter to shareholders that we distributed as a press release on January 11th. In it, we walk you through why what we saw in 2021 is significant and why we're excited about 2022 and our upcoming milestones. We are advancing toward potential value inflection points across our pipeline with a strong historical foundational data set that demonstrates Pella's ability to deliver a statistically significant survival benefit, as was shown in our randomized Phase II metastatic breast cancer trial, generate a profound and concerted innate and adaptive anti-cancer immune response, and synergize with multiple oncology treatments. Now, the most significant of our expected 2022 milestones is the top-line data announcement from Bracelet 1. Our randomized Phase II trial evaluating PELA in combination with checkpoint inhibition in HR-positive HER2-negative metastatic breast cancer. Bracelet 1 is being conducted with collaboration with Pfizer and Merck-Sorono and is designed to expand upon our prior positive phase 2 results in this indication by generating critical data requested by the FDA and our global pharma collaborators. Data that confirms the overall survival benefit we saw in IMD 213 would serve to de-risk our lead breast cancer program and broader pipeline And we believe that data represents the last major step on Pella's path to a registrational breast cancer study. As we work towards this data readout, we intend to begin discussing our plans for a registrational study with the FDA and other regulators so that we can advance the programs with efficiency. While Tom will be speaking more about bracelet one and our lead breast cancer program in a bit, I will say now that the trial remains on track for full enrollment in late Q1, early Q2 with top line data in Q4. assuming no or limited impact from COVID-19. Beyond our lead program, Pella's ability to generate an innate and adaptive immune response, thereby weakening tumor defense mechanisms, continues to spark collaborations with industry leaders and academia. These collaborations include those underlying our ongoing trials in triple negative breast and gastrointestinal cancers, both of which recently reported interim updates that further demonstrate the favorable safety profile of Pella checkpoint inhibitor combinations. These positive updates are notable because the lack of toxicity in these large indications provides additional opportunities to expand the potential market of pellet checkpoint inhibitor combinations. The opportunity for expanding beyond checkpoint inhibitors has been evident in data we reported during the 2021 year. Promising combination therapy data readouts involving CAR-T, bispecific antibodies, PARP, and CDK4-6 inhibitors are evidence of Pella's differentiated and broadly applicable mechanism of action. We believe leveraging Pella REAREP in this fashion could address unmet needs across a spectrum of target indications, and we expect to report clinical updates supporting this hypothesis in both multiple myeloma, GI, and glioblastoma at upcoming conferences. Looking ahead, we plan to utilize a partnership strategy to pursue the multitude of market and business development opportunities offered by Pella REAREP and its potential to act as an immunotherapy backbone. This will allow us to operate efficiently as we devote our primary focus and resources towards the advancement of Pella Rear Rep to registration in HR-positive HER2-negative metastatic breast cancer. With that, I'll now hand it off to our Chief Medical Officer, Tom Peidemann, who I should also congratulate on his well-deserved recent promotion to provide a bit more detail on Bracelet 1 and our recent highlights. Tom?

Thanks, Matt, and thanks to all those listening on the call today. As a reminder, GRACELET-1 and our early stage breast cancer study, AWARE-1, were designed to achieve three crucial objectives put forward by regulators and our pharma partners after seeing the results of IND213, the randomized phase two study that showed a near doubling of overall survival in metastatic HR-positive HER2-negative breast cancer patients treated with Paclitaxel combined with Pellarearap. These objectives were to, first, Confirm that Pellarearep works through an immunotherapeutic mechanism of action. This would indicate that it stimulates long-lasting anti-cancer effects and explains the survival benefits seen in IND213. Second, determine whether Pellarearep synergizes with immune checkpoint inhibitors. This could lead to an enhancement of the survival benefits seen in IND213 in breast cancer patients and could also potentially provide more effective treatment options for patients with many other types of cancer. And third, determinative changes in peripheral blood T-cell populations could potentially serve as a novel blood-based biomarker to predict patient responses to Pellaria Rep therapy. This could improve our chances of success in future studies by allowing the selection of patients most likely to benefit from therapies that include Pellaria Rep. Now, on past earnings calls, we detailed data from AwareOne's first two cohorts, which exclusively enrolled patients with the HR-positive, HER2-negative breast cancer subtype. These data showed that AWARE-1 met its primary endpoint, with Pellarearip reversing immunosuppressive tumor microenvironments and generating and expanding T-cell clones and upregulating PD-L1 expression. It led to increases in cell TIL score and tumor infiltration of CD8-positive T-cells, two metrics that are known to correlate with improved clinical outcomes. Additionally, we found that several of these positive effects were enhanced when a checkpoint inhibitor was combined with Pellarear Rep and the changes in peripheral blood T cell populations correlated with cell till score and tumor infiltrating CD8 T cells. Taken together, these promising findings indicate that we are well on our way to achieving the three key objectives mentioned earlier. They clearly show that Pellarear Rep has an immunologic mechanism of action and demonstrated synergy with checkpoint blockade. Moreover, they indicate that changes in peripheral blood T-cell populations may serve as a predictive biomarker. With these objectives in mind, we designed Bracelet1, a study that is very similar to IND213 with two notable exceptions. First, Bracelet1 exclusively enrolls HR-positive, HER2-negative metastatic breast cancer patients, the population that demonstrated the most pronounced overall survival benefit in IND213. And second, in addition to having study arms evaluating paclitaxel alone and paclitaxel plus pelariarep. Bracelet 1 also includes a third study arm in which paclitaxel and pelariarep are combined with Pfizer and Merck-Sorano's anti-PD-L1 checkpoint inhibitor, Bivencio. We are pleased with the progress being made in Bracelet 1, and we expect to complete enrollment later this month or early in the second quarter. Approximately 16 weeks after enrollment is concluded, the final patient scans required for assessment of the study's primary endpoint will be completed. Once the results of the scans are available, we will compile and analyze the data, and then discuss these results with the relevant parties as we continue to plan for our next steps on the path to registration. Considering all of this, we anticipate announcing the top-line results of the trial in the fourth quarter of this year. I'd now like to take a minute to set the stage for what to expect from the BRACE1 study. Data from earlier studies give us some insight into what to expect from both the paclitaxel alone and paclitaxel plus pelariarep arms of the study. However, now, based on the AWARE-1 study results, we have a much clearer understanding of the immunologic effects of adding pelariarep, including increasing PD-L1 expression and the infiltration of CD8-positive T cells into tumors. Moreover, the AWARE-1 study provided extensive insights into the potentially beneficial immunologic effects of combining Pellariarep with a checkpoint inhibitor. These include reversing the immunosuppressive nature of the tumor microenvironment and enhancing the development of potentially protective innate and adaptive immune responses. The IND213 study gave us a clear reason to expect that the addition of Pellariarep to chemotherapy may benefit metastatic breast cancer patients. Now, based on the AWARE-1 results, we are hopeful that the synergistic effects of adding a checkpoint inhibitor PELAR-REAREP will further benefit patients in the Bracelet-1 study. In addition to collecting data on overall response rate and survival, we are also collecting progression-free survival, safety, and biomarker data from the Bracelet-1 study. I should note, however, that we do not plan to present the entirety of the Bracelet-1 results during the anticipated fourth quarter announcement, and that we expect to present additional updates at medical meetings in 2023, including updates on PFS and overall survival. Additionally, I should point out that due to the size of the Bracelet One trial, which is expected to enroll a total of 48 patients, it is not powered to detect statistically significant differences in overall response rates between the study groups. Therefore, we will be evaluating numerical differences between Bracelet One study groups to support the statistically significant survival benefits previously observed in IND 2 and 3, and to inform the design of the Phase 3 study. We thus view Bracelet 1 as the last major step on Pella Rear Rep's path to a registration study and believe the anticipated Q4 data announcement represents a major potential inflection point for the company. Now that I've provided you with a refresh of our Wear 1 program and an overview of our Bracelet 1 study, I'll hand it off to Andrew to speak a bit more about our partnership strategy as well as our broader business development efforts. Andrew?

Thanks, Tom, and thanks to all who have joined us on today's call. I'd first like to touch on some of the recent progress in our Irene and Goblet trials, which are examples of how we're collaborating with industry leaders to develop PilarioRef in combination with checkpoint inhibitors and expand its potential therapeutic impact. As you may recall, IRENE is a Phase II trial evaluating Pellorirap in combination with Insight's PD-1 checkpoint inhibitor, retifanilamab, in metastatic triple negative breast cancer. At the most recent San Antonio Breast Cancer Symposium in December, we were pleased to report that the combination was well tolerated in each of the five patients enrolled at that point in the trial. The trial remains ongoing, and we look forward to its continued progress. We also recently provided positive safety update from our Phase I-II GOBLA trial, which is a value pedal rear rep in combination with Roche's PD-L1 inhibitor, atizolizumab, in patients with advanced or metastatic pancreatic, colorectal, and anal cancers. We were pleased to report in February that an independent review of the trial's pancreatic cancer safety run-in noted no toxicity concerns and that the Data Safety Monitoring Board recommended the trial proceed as planned. The trial also includes a safety run-in for its third-line metastatic colorectal cancer cohort which remains ongoing with an update expected in the first half of the new year. Now, one point I'd like to emphasize is how Irene and Goblet take a similar approach to try and address suppressing unmet needs. While checkpoint inhibitors have been commercially successful, less than one in five patients respond to these therapies due to several different resistance mechanisms that can be addressed by Pelorirap's clinically demonstrated immunotherapeutic effects. As Tom mentioned earlier, Pelorirap has shown the ability to remodel the tumor microenvironment causing PD-L1 upregulation in addition to increase in CD8-positive cells and memory T-cells. Outcomes like these are appealing to industry leaders because PaloRioRef has demonstrated it can increase the proportion of patients eligible for therapies like checkpoint inhibitors and increase the benefit derived from combination therapies. The ultimate goal is to secure a global clinical and commercialization partnership, and past deals have typically been preceded by research collaborations similar to the trials Tom and I have discussed on this call. Next, I'd now like to provide another update on the additional progress made since our Q3 call with Adelaide Norti. Our partner is working to develop and commercialize Pilaria rep in China, Hong Kong, Macau, Singapore, South Korea, and Taiwan. In October, Adelaide boasts the first patient in their bridging safety trial, evaluating the safety, tolerability, and preliminary efficacy of Pilaria rep paclitaxel combination therapy in Chinese patients with advanced or metastatic breast cancers. This trial follows a design that is similar to the Pellorio Repactitaxel cohort in IND213. Now, in January, Adelaide announced that they had advanced the second dose escalation cohort of the trial. This is significant because the second dose cohort is equivalent to what was administered to patients in IND213, which showed a near doubling of survival in metastatic HR-positive HER2-negative breast cancer patients. The initiation of this cohort is an important step that reflects the positive safety findings from the trial's first dose escalation cohort, where no toxicity concerns were noted. The ultimate goal of the bridging trial is to satisfy Chinese safety requirements and thereby accelerate Pella ReRef's development in Adelaide's principled jurisdiction. Subsequent studies will include data from IND213 and Bracelet 1 in future regulatory submissions and trial design decisions. Data from these studies and regulatory requirements from the Chinese authorities will dictate what a Phase III study will entail, as a Phase III design has not yet been determined. Results from Bracelet 1 will factor heavily when considering whether a checkpoint inhibitor will be included in a Phase III study in China. Colorado's advancement in these jurisdictions is significant, as China alone has the world's second-largest pharmaceutical market, with rapid growth expected over the coming years. By leveraging our partnership with Adelaide, we have positioned ourselves to capitalize on this significant market opportunity with minimal risk and clinical costs. Finally, before I hand the call over to Kirk, I'd like to reiterate a point Matt made earlier regarding our efforts to develop Pelorereq as an enabling technology for therapeutic agents beyond checkpoint inhibitors. To efficiently pursue this goal, we're seeking high-quality partners to lead this development pathway and assume its associated costs. We are supported in these efforts by merging preclinical data and our clinical results, demonstrating Pelorereq's ability to reverse immunosuppressive tumor microenvironments and recruit cancer-fighting T-cells into tumors. These have led to collaborations by technology companies and key opinion leaders of premier academic institutions. Since I've discussed positive safety readouts for TNBC and gastrointestinal cancer, plus a Pella ReRap dose escalation in breast cancer today, I'd like to take a moment to remind our investors that Pella's favorable safety profile is an important factor when we have discussions with new and existing biopharma partners. Being able to provide clinical safety data across multiple indications and tumor targets, in addition to combinations of multiple oncology therapies, broadens the overall addressable market opportunity for Pellarear Rep. As such, it shows the pharma world that Pellarear Rep really does have the potential to be an immunotherapy backbone since it is so versatile. While we are eager to see data from these collaborative efforts generate, we remain steadfastly committed to preserving the company's primary focus on our lead breast cancer program, the execution of our stated clinical objectives. Our relationships with distinguished collaborators such as Roche, Pfizer, Merck-Sorano, BMS, Insight, and Adelaide-Norti help to maintain this focus and should serve us well as we work to execute on our goals. We look forward to the continued maturation of these relationships which together with our talented team and robust data set leave us well positioned for sustained success. With that, I'll turn the call over to Kirk Look, our CFO, to discuss our financial results for the fourth quarter. Kirk?

Thanks, Andrew, and good afternoon, everyone. It's my pleasure to report that Oncolytics remains well capitalized as we advance our lead breast cancer program towards a registrational study and execute on additional clinical and corporate objectives. We ended 2021 with cash and cash equivalents of $41.3 million compared to $31.2 million at the end of 2020. Based on our current projections, we expect our current cash resources to provide a financial runway into 2023, taking us through Bracelet 1's top-line data announcement and additional clinical readouts. Now, our operating expenses for the fourth quarter of 2021 were $3.8 million, remaining relatively consistent with the fourth quarter of 2020 operating expenses of $4 million. For the full year 2021, our operating expenses were $13.3 million compared to $12.5 million for the prior year. This change largely related to a rise in public company costs, including an increase in our directors' and officers' insurance premiums and an increase in our investor relations activities. Research and development expenses for the fourth quarter of 2021 were $3.7 million compared to $4.1 million for the same period last year. This change was largely due to a decline in our Aware 1-related expenses as a large majority of patient enrollment occurred back in 2020. As well, our manufacturing related expenses were lower given we completed a product fill back in the fourth quarter of 2020. This was partly offset by higher R&D compensation related expenses as we continue to invest in and support our expanding clinical development program. Research development expenses were $12.9 million for the full year 2021 and 2020. Now for 2021, in addition to our continued investment in our clinical program and our R&D team, we also increased our translational science activities this year, focusing on CAR T therapy and bispecific antibody opportunities. This was offset by lower manufacturing activities as we had sufficient product supply from the production run and product fields completed in 2020, lower intellectual property costs due to the lapsing of patents in certain jurisdictions, and foreign exchange fluctuations. The net loss for the fourth quarter of 2021 was $7.8 million compared to 9.3 for the fourth quarter of 2020, equating to a net loss of 14 cents per share for the 2021 period compared to 21 cents per share for the prior period. The net loss for the full year of 2021 was 26.3 million compared to 22.5 million for 2020, equating to a net loss of 49 cents per share for 2021 and a net loss of 56 cents per share for 2020. Now, with that, I'll hand it back to Matt. Matt? Thank you, Kirk. The Oncology family has continued to work hard to drive our programs forward.

Our pharma partners have continued to provide world-class input and guidance, and our investigators and collaborators continue to share our vision for the opportunity presented by Pella RayRef's mechanism of action, for which we are extremely grateful. We would also like to thank and acknowledge our clinical trial patients and their families for their participation in our studies and in their fight against this terrible disease. Lastly, I'd like to thank our investors who provide us with the ability to pursue these inspiring aims. Oncolytics could not have advanced to where it is without all of these stakeholders' contributions. Looking towards the future, we have a truly unique immunotherapeutic agent that has provided us with exciting clinical data and continues attracting interest from significant global collaborators. Its immunotherapeutic effects can be seen across multiple indications and in combination with an array of oncology treatments. We believe these effects could have a profound positive impact on the quality of life of cancer patients worldwide, and in turn, provide a broad commercial opportunity of which we have only begun to scratch the surface. We will continue to further Pella ReRef's clinical development as there are significant opportunities worthy of pursuit. but we will still preserve our primary focus in breast cancer while selectively engaging partners and collaborators to progress our efforts in other areas. Advancing our lead breast cancer program towards a registrational study is important to our team as it provides a meaningful foundation which we can build upon to unlock additional value and other indications. The clinical data from AwareOne alone has brought us substantial insights about how Pellary Rep can be leveraged in many clinical settings by effectively harnessing the patient's own immune response against their disease. These learnings are crucial in advancing Pella as a world-class immunotherapy. Continuing to add to that data goes a long way to expanding the potential value of this company. We have several critical milestones ahead of us in the coming weeks and throughout the year. These upcoming catalysts are highlighted by Bracelets 1, Anticipated Topline Data Readout, and Q4, which represents the last major clinical step on Pella's path to a registrational breast cancer study. We also expect to report a multiple myeloma study update, early results from our GI program, and additional clinical data in glioblastoma at upcoming conferences. As we move towards these catalysts, we are doing so with a strong team that has consistently executed amid an ever-evolving pandemic. I believe their experience and expertise, together with the strong clinical and preclinical data sets supporting our pipeline, leave us well-positioned to generate shareholder value while working towards our ultimate goal of improving the lives of cancer patients. With that, I'd like to open the lines to take some questions. Operator?

Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touch-tone phone. You will then hear a three-tone prompt acknowledging your request. And if you would like to withdraw your question, simply press star followed by two. And if you're using a speakerphone, please lift the handset before pressing any keys. Please go ahead and press star one now if you do have a question. And your first question will be from Patrick Trucchio at HC Wainwright. Please go ahead.

Hi, good afternoon. This is Jason Shea on for Patrick. And my first question is for the bracelet study. Can you tell us what oncologists would like to see within their Phase II data readout for IV-Q, and how will this proceed to your Phase III pivotal study? Thank you.

I'll start. It's Matt. How are you doing? How are you doing? We very much think that bracelets should fall in line with the learnings of OIR-1. What we know from bracelet 213 is we saw a survival advantage. And at that point, it was presumably due to the immunotherapy aspects of the product, where one really did speak to the virus itself causing a pro-inflammatory event with remodeling of the tumor microenvironment and the checkpoint inhibitor leading to enhanced inflammation and enhancing the quality, which led to better cell tilt scores, which should in turn lead to better outcomes in terms of PFS and OS. We would very much hope to see something similar in a bracelet with Outcomes being improved from paclitaxel-only to paclitaxel plus virus. And again, we would like to see an improvement by the addition of the checkpoint blockade. Now those are wishes. Certainly aware one exceeded our expectations. Bracelets not given a formal readout yet, but we'll do so in Q4. With that, I'll let the more knowledgeable Tom Heinemann join in to see what his thoughts are on this.

Yeah, thank you, Matt. No, I mean, to be honest, I don't have any real new insights. I think that Matt expressed that perfectly, and that is we do have some sense from the previous IND213 study what to expect with the paclitaxel alone arm and the paclitaxel plus pelarear rep arm, and we expect and hope, based on the AWARE-1 data, to see an additional immunologic effect leading to clinical benefit from the addition of a checkpoint inhibitor And as the data come in, you know, we look forward to being able to share those data towards the end of this year.

And kind of just a follow-up question is, are there plans in terms of progressing with Pfizer or any of your collaborators for Palo Verde Rep and for the Phase 3 pivotal study? Or will Oncolytics kind of proceed alone?

Again, that's a great question. We think there is you know, multiple opportunities beyond breast cancer. I mean, obviously, we're very excited about the Goblet program. We're excited by what we're doing in hemoglobin and other things like GBM. With the collaborations and co-development agreements we have right now, we have brought some of the world's best and brightest pharmaceutical companies together to collaborate with us. So what we would like to see is some competitive tension between the parties as the Gallup data becomes available, as the AWARE and bracelet data becomes available, we would like to obviously bring in one of these world-class leaders who contributed already to contributing in the phase three for breast cancer, but we would look to hopefully expand that into other indications so that we're not looking at a binary event in the phase three environment. We would like to have multiple phase three programs at play, and again, we would like to see that done in potential with a partner so that it'd be less dilutive to existing shareholders, but also so that we can move sprightly through the regulatory approvals. And I think Mr. DeGadadaro would like to join in here for a sec as well. Andrew, would you wanna join?

Yeah, I just wanna remind everybody, as you probably know from prior calls, from the time we provide the report to Pfizer and Merck-Sorano, the collaborators on bracelet, they have 90 days to evaluate the data on their own. They may or may not need 90 days or they may need more than 90 days, but come day 91, we do have a number of other top 20 oncology companies that have expressed an interest in the brace up data. So we would want to get that data to those companies as well. And then of course, as Matt mentioned, we've got the goblet data that should be maturing in parallel. to some degree. And so we want to make sure we leverage both what's available from Goblet as well as Bracelet and the prior final data sets from 213 and AWARE to have really a critical mass with which to try and bring more than one company to the table.

Okay, great. Thank you. And kind of if I could just squeeze in one last question. And this is more just in terms of the current events. Has Omcolex felt any disruption in their clinical trials since the beginning of the war in Ukraine? Has that really impacted anything with your clinical trials out in China or in Asia area?

No, not at all. You know, fortunately, we're not running anything in Eastern Europe. We may not be able to be as resounding in it. But, no, our breast cancer programs are all in the U.S. What we're doing in, you know, Godwit is all in Germany. So we've been unaffected, thanks.

All right, great. Thank you so much.

As a reminder, ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touch-tone phone. And at this time, we have no further questions. I would like to turn the call back over to Dr. Coffey.

Well, thanks again, everyone, for joining us on the call. We look forward to our continued progress, and we'll keep everyone updated along the way. Thanks, everyone.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.