Ladenburg starts Oncolytics Biotech at buy; PT $22

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Ladenburg Thalmann launched coverage of Oncolytics Biotech (NASDAQ:ONCY) with a “buy” rating and $22 price target. The stock closed at $3.86 on Sept. 28.

Oncolytics is developing oncolytic virus (OV) therapy for cancer. Its lead program, Pelareorep, is a RNA reovirus OV that has been safely dosed in more than 1,100 patients across a variety of cancers, and expects to start a Phase 3 trial in HR+/HER2-metastatic breast cancer in 2019, writes analyst Wangzhi Li.

Mr. Li notes that Oncolytics has established collaborations with Merck, Bristol-Myers Squibb, Celgene, and Roche to start Phase 1b/2 trials in the second half of 2018 studying combinations of Pelareorep with Merck’s Keytruda, BMS’ Opdivo, Celgene’s Revlimid/Imnovid and Roche’s Tecentriq.

“Data readout from these trials are expected in 2019, which if positive, could catalyze these Big Biopharma’s business development activities with Oncolytics,” he added.

“We believe Oncolytics is significantly under-recognized and undervalued, and presents an attractive investment opportunity,” according to Mr. Li.

Stephen Kilmer