Dr. Matt Coffey reports

ONCOLYTICS BIOTECH REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS AND OPERATIONAL HIGHLIGHTS

Oncolytics Biotech Inc. today released recent operational highlights and financial results for the fourth quarter and year ended Dec. 31, 2023. All dollar amounts are expressed in Canadian currency unless otherwise noted.

"Positive 2023 data further derisked pelareorep and redefined Oncolytics as a late-stage cancer company. Data from the randomized Bracelet-1 breast cancer trial in HR+/HER2- metastatic patients, reported in June using a March 3, 2023, cut-off date, nearly tripled response rates in the test arm compared with the control arm. Additionally, median progression-free survival was 50-per-cent higher in the test arm, and the hazard ratio was 0.29. In the coming months, we expect to report overall survival results from the Bracelet-1 study and define a registrational path that will focus on patients with metastatic HR+/HER2- disease and utilize a pelareorep/paclitaxel combination. Productive, ongoing discussions with our clinical collaborators and potential strategic partners have sharpened and enriched our thinking on the design of this study," said Dr. Matt Coffey, president and chief executive officer of Oncolytics.

"Our gastrointestinal-focused Goblet phase 1/2 study showed that pelareorep combinations provided clinically impactful improvements in objective response rates compared with historical controls, especially in the pancreatic and anal cancer cohorts, and with no toxicity concerns. With these results in hand, we have expanded enrollment in the anal cancer cohort, and, in pancreatic cancer, we intend to initiate an adaptive trial in first-line patients this year. This registration-enabled study will be a landmark achievement for Oncolytics and evaluate the Goblet pancreatic cohort treatment regimen that was granted fast-track designation by the FDA. Additionally, the planned PanCAN-supported trial utilizing a modified Folfirinox (mFolfirinox)-pelareorep combination could expand our pancreatic cancer program to include both of the most widely used treatment backbones, which may result in broad adoption of pelareorep as a therapeutic solution in this indication.

"New translational data in breast and pancreatic cancer reported in the fourth quarter continued to highlight pelareorep's role in stimulating tumour-directed immune responses and shaping the tumour microenvironment, affirming its immunotherapeutic mechanism of action (MOA). These studies also point to the potential use of tumour-infiltrating lymphocytes, or TILs, as a clinical biomarker for future studies and patient care based on a positive association with tumour responses. We are optimistic about the potential for pelareorep to provide improved outcomes for cancer patients and look forward to updating investors and our key stakeholders on our registrational readiness and progress as the year unfolds," concluded Dr. Coffey.

Fourth quarter and subsequent highlights

Expansion of enrollment in the Goblet anal carcinoma cohort. Cohort 4 of the Goblet study evaluates pelareorep in combination with atezolizumab (Tecentriq) in patients with second-line or later unresectable squamous cell carcinoma of the anal canal (SCCA). The cohort was expanded based on positive preliminary data from stage 1 of the study, presented at the second International Multidisciplinary Anal Cancer Conference (IMACC), showing that the combination of pelareorep and atezolizumab provided a 37.5-per-cent objective response rate, including one patient with a long-lasting complete response, and good overall tolerability. These data represent a meaningful contrast to recent clinical trial results, which showed that second-line or later anal carcinoma patients treated with checkpoint inhibitor monotherapy experienced response rates of 10 to 14 per cent. With a modest expansion of fewer than 20 patients, there could be a sufficient efficacy signal to move to a registrational study.

Additional positive data from the gastrointestinal cancer phase 1/2 Goblet study. Pancreatic and colorectal cancer data were presented at the European Society for Medical Oncology (ESMO) Congress 2023. Additional data were reported from Pancreatic Ductal Adenocarcinoma (PDAC) patients in cohort 1, including median progression-free survival and interim median overall survival rates that exceed historical control results. Third-line metastatic colorectal cancer patients receiving pelareorep, atezolizumab and trifluridine/tipiracil (cohort 3) recorded a 40-per-cent disease control rate and met the prespecified success criteria according to the Simon two-stage methodology. All three Goblet study cohorts that have completed stage 1 met the prespecified success criteria.

Filed amendment to initiate phase 1/2 pancreatic cancer study with support from PanCAN. Cohort 5 of the Goblet study will evaluate pelareorep in combination with mFolfirinox with and without atezolizumab in newly diagnosed PDAC (Prospectors & Developers Association of Canada) patients. Having filed the amendment to the Goblet study, the Paul Ehrlich Institute (Germany's regulatory body) must approve this change before patient enrollment in this cohort can begin. The study is being supported by a $5-million (U.S.) therapeutic accelerator award grant from the Pancreatic Cancer Action Network (PanCAN), an innovative program established to accelerate the development of new treatments for pancreatic cancer.

Positive translational data from further analysis of the Aware-1 breast cancer and Goblet studies. Aware-1 data presented at the Society for Immunotherapy of Cancer (SITC) 38th Annual Meeting and the San Antonio Breast Cancer Symposium (SABCS) 2023 underscored pelareorep's MOA as an immunotherapeutic agent. These data showed the expansion of T cell populations in both the tumour and blood in patients treated with pelareorep. Importantly, translational data from pancreatic cancer patients reported at ESMO showed a correlation between tumour response and the expansion of TIL clones in the blood. This expansion of tumour resident T cells demonstrates that pelareorep treatment can increase the population of presumed tumour-reactive inflammatory cells and could become an informative biomarker of clinical outcomes to be used in future clinical studies and guide patient care.

Addition of new director, Pat Andrews. Ms. Andrews joined the Oncolytics board of directors and brings experience navigating registrational trials in oncology and completing significant business development agreements. Her addition expands the strategic expertise of the board, helping to accelerate the company's registrational plans and transformational mindset as a late-stage oncology company.

Financial highlights

• As of Dec. 31, 2023, the company reported $34.9-million in cash and cash equivalents, with a projected cash runway for at least 12 months.
• Net cash used in operating activities for the 12 months ended Dec. 31, 2023, was $28.4-million, compared with $23.4-million for the 12 months ended Dec. 31, 2022. The change reflected higher net operating activities.
• General and administrative expenses for the fourth quarter of 2023 were $4.2-million, compared with $3.7-million for the fourth quarter of 2022. The increase was primarily due to higher investor relations activities and changes in personnel costs.
• Research and development expenses for the fourth quarter of 2023 were $4.7-million, compared with $4.8-million for the fourth quarter of 2022. The decrease was primarily due to lower Goblet and Bracelet-1 study costs, as well as reduced clinical and safety data management. The decrease was partly offset by higher manufacturing expenses related to the preparation and start of a production run.
• The net loss for the fourth quarter of 2023 was $3.9-million, compared with a net loss of $8.6-million for the fourth quarter of 2022. The basic and diluted loss per share was five cents in the fourth quarter of 2023, compared with a basic and diluted loss per share of 14 cents in the fourth quarter of 2022. The net loss for the fourth quarter of 2023 included a $4.8-million gain mainly related to the change in fair value of the warrants issued as part of the company's 2023 public offering.

Anticipated milestones

• H1 2024: Guidance on the registration path for HR+/HER2- mBC (metastatic breast cancer);
• H1 2024: Initiation of the phase 1/2 PDAC trial incorporating pelareorep/mFolfirinox +/- atezolizumab and supported by PanCAN;
• 2024: Initiation of the adaptive registration-enabling trial for pelareorep in first-line metastatic PDAC;
• H2 2024: Overall survival results from the Bracelet-1 trial.

Webcast and conference call

Management will host a conference call for analysts and investors at 4:30 p.m. ET today, March 7, 2024. To access the call, please dial 888-664-6383 (North America) or 416-764-8650 (international), and if needed, provide conference ID: 6244-5815. A live webcast of the call will also be available by visiting the investor relations page of Oncolytics's 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: 445-815 followed by the pound key.

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 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, both of which have received fast-track designation from the Food and Drug Administration.

We seek Safe Harbor.