Dr. Matt Coffey reports

ONCOLYTICS BIOTECH(TM) REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS AND OPERATIONAL HIGHLIGHTS

Oncolytics Biotech Inc. has released recent operational highlights and financial results for the second quarter ended June 30, 2023. All dollar amounts are expressed in Canadian currency unless otherwise noted.

"Our core programs in pancreatic and breast cancer are both progressing rapidly towards registrational studies on the back of the impressive clinical data showing the potential of pelareorep as a backbone immunotherapy," said Dr. Matt Coffey, president and chief executive officer. "Data reported at the American Society of Clinical Oncology (ASCO) annual meeting from our Bracelet-1 randomized phase 2 trial demonstrated robust improvements in objective response rate (ORR) and progression-free survival (PFS) with a hazard ratio of 0.29. This has unlocked the potential for including PFS as a dual end point in our registrational trial, which could considerably reduce the time to a pivotal readout. At the same time, pelareorep was selected for inclusion in the ongoing Precision Promise pancreatic cancer platform trial. Precision Promise, created by the Pancreatic Cancer Action Network, provides us with the opportunity to reduce the time and costs needed for a potential approval, and we are honoured to have been selected for participation in this novel and exclusive trial."

Second quarter and subsequent highlights

Breast cancer program

Bracelet-1 data demonstrated a greater-than-50-per-cent improvement in progression-free survival and a nearly threefold increase in confirmed overall response rate

An oral presentation at the ASCO annual meeting featured results from a randomized trial of pelareorep in HR+/HER2- metastatic breast cancer. As of a March 3, 2023, cut-off date, Bracelet-1 data in the paclitaxel plus pelareorep cohort showed median PFS of 9.5 months, compared with 6.3 months in the paclitaxel monotherapy cohort. This resulted in a hazard ratio of 0.29, indicating the pelareorep-paclitaxel combination reduced the risk of disease progression by 71 per cent. Confirmed ORR in these cohorts was 37.5 per cent for paclitaxel plus pelareorep and 13.3 per cent for paclitaxel. Overall survival data continue to mature as several patients are still on study. With these data, the HR+/HER2- metastatic breast cancer program is now phase 3-ready, and, with two randomized phase 2 trials showing meaningful benefits to patients, the focus is now on progressing to a registrational trial evaluating pelareorep-paclitaxel compared with paclitaxel alone.

Oncolytics hosted a key opinion leader (KOL) webinar on June 5, 2023, where breast cancer experts and the management team discussed recent data from the Bracelet-1 study.

Pancreatic cancer program

Pelareorep selected for inclusion in Precision Promise pivotal phase 3 platform trial

Pelareorep has been selected for inclusion as a new investigational treatment in Precision Promise. Created by the Pancreatic Cancer Action Network (PanCAN), Precision Promise is an innovative adaptive phase 3 clinical trial designed to streamline registration pathways for promising pancreatic cancer therapies. Inclusion is expected to accelerate the registrational pathway and reduce by half the phase 3 costs compared with a traditional trial. The study is designed to evaluate pelareorep in combination with a checkpoint inhibitor and the chemotherapeutic agents gemcitabine and nab-paclitaxel in comparison with gemcitabine and nab-paclitaxel standard-of-care therapy. This clinical study is expected to support the approval of the pelareorep combination therapy as a treatment for first-line metastatic pancreatic ductal adenocarcinoma.

Additional immunotherapeutic opportunity

Preclinical pelareorep-chimeric antigen receptor (CAR) T-cell therapy combination program

A poster presentation at ASCO showed preclinical results of pelareorep synergistically enhancing CAR T-cell therapy efficacy in murine solid tumour models. The results suggest pelareorep could substantially expand the commercial potential of CAR T-cell therapy beyond hematologic malignancies to include solid tumours, which represent the vast majority of cancer cases. Oncolytics is currently advancing preclinical research collaborations evaluating pelareorep-CAR T-cell combination therapies.

Financial highlights:

• As of June 30, 2023, the company reported $24.4-million in cash, cash equivalents and marketable securities, then successfully closed a $15-million (U.S.) public offering on Aug. 8, 2023. On a pro forma basis, including the estimated $13.6-million (U.S.) in net proceeds from the public offering, the company's cash, cash equivalents and marketable securities would have been approximately $42.7-million.
• The net loss for the second quarter of 2023 was $7.4-million, compared with a net loss of $5.1-million for the second quarter of 2022. The basic and diluted loss per share was 12 cents in the second quarter of 2023, compared with a basic and diluted loss per share of nine cents in the second quarter of 2022.
• Net cash used in operating activities for the six months ended June 30, 2023, was $16.3-million, compared with $13.2-million for the six months ended June 30, 2022. The change reflected higher net operating activities and non-cash working capital changes.
• General and administrative expenses for the second quarter of 2023 were $3.5-million, compared with $2.8-million for the second quarter of 2022. The increase was primarily due to higher investor relations activities and annual general meeting of shareholders costs.
• Research and development expenses for the second quarter of 2023 were $3.7-million, compared with $3.2-million for the second quarter of 2022. The increase was primarily due to higher manufacturing expenses associated with an engineering production run along with process and analytical development activities and higher personnel-related expenses. The increase was partly offset by lower Bracelet-1 study costs.

Anticipated milestones and catalysts:

• Updated Goblet study data in advanced/metastatic pancreatic ductal adenocarcinoma (PDAC): H2 2023;
• Update on Goblet study's metastatic colorectal and anal cancer cohorts: H2 2023;
• Guidance on both the HR+/HER2- metastatic breast cancer and advanced/metastatic PDAC registration paths: H2 2023;
• Bracelet-1 phase 2 metastatic breast cancer study overall survival data.

Webcast and conference call

Management will host a conference call for analysts and investors at 8:30 a.m. ET today, Aug. 14, 2023. To access the call, please dial 888-664-6383 (North America) or 416-764-8650 (international) and, if needed, provide confirmation No. 5411-4798. A live webcast of the call will also be available on the investor relations page of Oncolytics' website and will be archived for three months. A dial-in replay will be available for one week and can be accessed by dialling 888-390-0541 (North America) or 416-764-8677 (international) and using replay code: 114-798 followed by the pound key.

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 tumour phenotype -- turning cold tumours hot -- through innate and adaptive immune responses to treat a variety of cancers.

Pelareorep has demonstrated synergies with multiple approved oncology treatments. Oncolytics is currently conducting and planning combination clinical trials with pelareorep in solid and hematological malignancies as it advances toward registrational studies in metastatic breast cancer and pancreatic cancer.

We seek Safe Harbor.