ONCY

Oncolytics Biotech Inc. (ONCY) - Q1 2026 10-Q Summary

Business Context and Reporting Period

This report covers the quarterly period ended March 31, 2026. Oncolytics Biotech Inc. is a clinical-stage biopharmaceutical company developing pelareorep, an intravenously delivered immunotherapeutic agent targeting gastrointestinal (GI) tumors. During the quarter, the Company completed its domestication from Canada to the State of Nevada and changed its functional currency from the Canadian dollar to the U.S. dollar effective January 1, 2026.

Key Financial Metrics

Note: The Company has no debt other than accounts payable, accrued liabilities, and operating lease liabilities.

Material Changes vs. Prior Period

• Increased Operating Expenses: Total operating expenses rose to $9.28 million from $5.02 million year-over-year.
  • R&D Expenses: Increased by $1.75 million to $4.55 million, driven by higher personnel costs (including stock-based compensation) and start-up costs for the Phase 2 second-line mCRC study.
  • G&A Expenses: Increased by $2.51 million to $4.73 million, primarily due to public company-related expenses (investor relations, professional fees for domestication) and increased personnel costs.
• Stock-Based Compensation: Total stock-based compensation expense surged to $3.03 million from $0.85 million. This includes a significant reclassification of certain stock options from equity to liability due to the change in functional currency.
• Financing Activity: The Company raised $7.61 million in net proceeds from an At-The-Market (ATM) offering, selling 7.45 million shares at an average price of $1.06. The previous ATM agreement was terminated in March 2026.
• Contract Liability: A contract liability of $4.91 million remains on the balance sheet related to a licensing agreement with Adlai Nortye Biopharma Co., Ltd., with no revenue recognized in the quarter.

Guidance, Outlook, and Risks

• Going Concern Warning: Management has raised substantial doubt about the Company's ability to continue as a going concern. Cash resources of $5.49 million are sufficient for near-term milestones but not sufficient to fund planned operations for at least twelve months from the date of issuance. Additional financing is required.
• Clinical Progress:
  • mCRC: Received FDA Fast Track Designation for pelareorep in combination with bevacizumab and FOLFIRI for second-line KRAS-mutant mCRC. Launched a randomized Phase 2 study in March 2026.
  • SCAC: Reported updated data showing a 29% objective response rate in third-line patients. Aligned with FDA on a pivotal study design for second-line or later SCAC.
  • Pancreatic Cancer: Cohort 5 enrollment is sufficient for analysis; preliminary data expected in H2 2026. A Phase 3 registration study design was agreed upon with the FDA, but the Company is seeking a partner to fund it.
• Subsequent Events: On April 6, 2026, the Company entered into a new Open Market Sale Agreement with Jefferies LLC for up to $75 million. Between April 1 and May 12, 2026, it sold 2.58 million shares for net proceeds of $2.29 million.
• Risks: Dependence on successful clinical trial outcomes, regulatory approval, and the ability to secure additional capital. Failure to raise capital may force the Company to reduce or delay R&D activities.

Investor Verification Checklist

• Liquidity Runway: Verify the sufficiency of current cash ($5.49M) against the burn rate (~$7.3M operating cash outflow in Q1) and the timeline for the next financing event.
• Stock-Based Compensation Impact: Review the reclassification of stock options to liabilities and its effect on future volatility in the income statement.
• Contract Liability Recognition: Monitor the $4.91 million contract liability from the Adlai Nortye agreement for future revenue recognition triggers.
• Partnership Status: Confirm progress on securing a partner to fund the proposed Phase 3 pancreatic cancer study, as the Company does not expect to advance this alone.
• ATM Utilization: Track the utilization of the new $75 million ATM agreement with Jefferies LLC to assess dilution and cash extension.