Update: Oncolytics Biotech Earnings

Aug.15.14 | About: ONCOLYTICS BIOTECH (ONCYF)

Summary

Oncolytics reported a net loss of $0.05 per share in the second quarter of 2014, beating the analysts’ consensus estimate of a loss per share of $0.07 by $0.02.

The company reported the completion of enrollment in a Phase II study using REOLYSIN in combination with carboplatin and paclitaxel in pancreatic cancer patients.

In my original article I said that REOLYSIN is expected to work on some of the most prevalent forms of cancer including lung, colorectal, prostate, ovarian, breast and pancreatic cancers.

I’m still bullish on the stock, but my investment thesis will take time to play out until the company actually has revenues and sales.

Oncolytics Biotech (ONCY) recently reported financial results and operational highlights for the second quarter of 2014. The company reported a net loss of $0.05 per share for the quarter, beating the analysts' consensus estimate of a loss per share of $0.07 by $0.02. The company's balance sheet consists of $18.9 million in cash, cash equivalents and short-term investments, as of June 30, 2014. Cash burn during the quarter was $5.8 million, down 13% year-over-year. Oncolytics being a development stage biopharmaceutical company doesn't generate any sales.

Oncolytics focuses on the discovery and development of cancer drugs for the treatment of a wide array of human and companion pet cancers based on the oncolytic capability of the reovirus. The company's lead product REOLYSIN is a proprietary formulation of the human reovirus. Dr. Brad Thompson, President and CEO of Oncolytics, said, "Our randomized clinical program continued to advance during the quarter as we recently reported the completion of enrollment in a Phase II study using REOLYSIN in combination with carboplatin and paclitaxel in pancreatic cancer patients."

In my original article I said that the strongest argument in favor of Oncolytics' investment thesis is that REOLYSIN is expected to work on some of the most prevalent forms of cancer including lung, colorectal, prostate, ovarian, breast and pancreatic cancers. However, the investment thesis will take time to play out until the company actually has revenues and sales. REOLYSIN, which is currently available exclusively in a clinical trial setting, has been proved to be well-tolerated. Since I'm optimistic about the company's long-term prospects, I'd recommend accumulating the stock on dips.

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