Dr. Matt Coffey reports

ONCOLYTICS BIOTECH REPORTS THIRD QUARTER 2023 FINANCIAL RESULTS AND OPERATIONAL HIGHLIGHTS

Oncolytics Biotech Inc. has released recent operational highlights and financial results for the third quarter ended Sept. 30, 2023.

"We continue to build our case for pelareorep to be an important immunotherapy in multiple large and in-need cancer indications," said Dr. Matt Coffey, president and chief executive officer. "The ESMO presentations show the first batch of survival data from first-line metastatic pancreatic cancer patients exceeds the historical averages recorded in control trials, aligning with the positive response data we first reported at SITC last year. They also reveal that pelareorep can generate an immune response in heavily pretreated metastatic colorectal cancer patients. I'm pleased to note that Goblet has now reported consecutive indications where pelareorep-based therapy has met the success criteria for efficacy, validating our decision to explore pelareorep in gastrointestinal indications in combination with the checkpoint inhibitor atezolizumab. The compelling Goblet results were instrumental in obtaining a $5-million (U.S.) grant from PanCAN to explore pelareorep in combination with modified Folfirinox (mFolfirinox) with and without atezolizumab in pancreatic cancer patients."

Dr. Coffey continued: "Having already observed efficacy signals in pancreatic cancer from the combination of pelareorep and atezolizumab plus the standard-of-care regimen gemcitabine and nab-paclitaxel, we believe that with encouraging efficacy signals from a pelareorep and mFolfirinox combination, we have the potential to become the go-to treatment option for a substantial number of pancreatic cancer patients."

Third quarter and subsequent highlights

Pancreatic cancer program

Updated data reported at ESMO shows robust survival and translational data

A poster with data from the pancreatic cancer cohort of the phase 1/2 Goblet study was presented at the European Society for Medical Oncology (EMSO) Congress 2023. This study cohort was designed to evaluate pelareorep in combination with atezolizumab and the chemotherapeutic agents gemcitabine and nab-paclitaxel in patients with advanced or metastatic pancreatic cancer. The efficacy results presented exceeded those from earlier studies, including a 62-per-cent objective response rate, a median progression-free survival of 7.2 months, an interim median overall survival of 10.6 months and a 46-per-cent interim 12-month survival rate. These data also demonstrated the ability of pelareorep-based combination therapy to induce the expansion of both pre-existing and new T-cell clones from the tumour. This combination therapy has already been selected for inclusion in the Precision PromiseSM pivotal phase 3 platform trial.

Pancreatic Cancer Action Network (PanCAN) award and grant

Oncolytics was awarded the Therapeutic Accelerator Award, which includes a $5-million (U.S.) grant from PanCAN to initiate a phase 1/2 randomized clinical trial of pelareorep combined with modified Folfirinox, with or without the checkpoint inhibitor atezolizumab. The company anticipates that the combination therapy that performs best will be further evaluated in a licensure-enabling study, such as the Precision PromiseSM pivotal phase 3 platform trial. The combination of pelareorep, gemcitabine, nab-paclitaxel and atezolizumab has already been selected for inclusion in Precision Promise, with the trial expected to open in the first half of 2024.

Colorectal cancer data

ESMO presentation shows the third-line colorectal cancer cohort met its success criteria for efficacy

A poster presentation at ESMO announced interim results from the third-line metastatic colorectal cancer cohort of the phase 1/2 Goblet study. In a patient population that failed two prior lines of treatment, six of 15 patients recorded stable disease as their best response and four had stable disease at week 16 or later, thereby meeting the prespecified success criteria for stage 1 of the study. The disease control rate was 40 per cent, the median progression-free survival was 2.8 months, the median overall survival was 8.0 months, and the 12-month survival rate was 33 per cent.

Breast cancer program

Aware-1 abstract data reported at SITC reinforces pelareorep's ability to remodel the tumour microenvironment, poster to be available later today

Additional data from the Aware-1 breast cancer study was reported in an abstract at the Society for Immunotherapy of Cancer (SITC) 38th annual meeting. Aware-1 evaluated early-stage breast cancer patients in two cohorts who received pelareorep and letrozole with and without atezolizumab. The study met its primary end point of CelTIL score (a measurement of cellularity and tumor-infiltrating lymphocytes), with the arm that included atezolizumab showing enhanced outcomes. Further analysis of the tumor microenvironment of patient tissue samples was performed using imaging mass cytometry (IMC). The data show increased PD-L1 positive cells and an increase in cytotoxic T cells, amongst other benefits, which make the tumor microenvironment more amenable to treatment. The SITC poster embargo lifts at 9 a.m. Pacific Time today, November 3, 2023, and the poster will be available on the Oncolytics website shortly after that.

Financial Highlights

As of September 30, 2023, the Company reported $40.0 million in cash and cash equivalents, with a projected cash runway for at least 12 months.

Net cash used in operating activities for the nine months ended September 30, 2023 was $22.3 million, compared to $17.4 million for the nine months ended September 30, 2022. The change reflected higher net operating activities.

General and administrative expenses for the third quarter of 2023 were $5.2 million, compared to $2.4 million for the third quarter of 2022. The increase was primarily due to higher investor relations activities and the portion of the public offering transaction costs allocated to general and administrative expenses.

Research and development expenses for the third quarter of 2023 were $5.8 million, compared to $3.7 million for the third quarter of 2022. The increase was primarily due to higher manufacturing expenses as we completed a scaled-up engineering production run and the associated batch testing. The increase was partly offset by lower clinical trial expenses related to clinical and safety data management.

The net loss for the third quarter of 2023 was $9.9 million, compared to a net loss of $4.4 million for the third quarter of 2022. The basic and diluted loss per share was $0.14 in the third quarter of 2023, compared to a basic and diluted loss per share of $0.08 in the third quarter of 2022.

Anticipated Milestones and Catalysts

Interim data from the GOBLET study's anal cancer cohort: Q4 2023

Initiation of the Precision PromiseSM Pivotal Phase 3 Platform Trial in first-line metastatic pancreatic ductal adenocarcinoma (PDAC) patients: H1 2024

Initiation of the PanCAN supported Phase 1/2 combination study of pelareorep and modified FOLFIRINOX in newly diagnosed metastatic PDAC patients: H1 2024

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, November 3, 2023. To access the call, please dial (888) 664-6383 (North America) or (416) 764-8650 (International) and, if needed, provide Conference ID: 6026-0546. To join the conference call without operator assistance, please click here. A live webcast of the call will also be available by clicking here or on the Investor Relations page of Oncolytics' website (LINK) and will be archived for three months. A dial-in replay will be available for one week and can be accessed by dialing (888) 390-0541 (North America) or (416) 764-8677 (International) and using replay code: 260-546#.

About Oncolytics Biotech Inc.

Oncolytics is a clinical-stage biotechnology company developing pelareorep, an intravenously delivered immunotherapeutic agent. Pelareorep has demonstrated promising results in Phase 2 studies in breast and pancreatic cancers. It acts by inducing anti-cancer immune responses and promotes an inflamed tumor phenotype -- turning "cold" tumors "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 towards registrational studies in metastatic breast cancer and pancreatic cancer. For further information, please visit: www.oncolyticsbiotech.com.

We seek Safe Harbor.