Oncolytics Biotech, Inc. (USA) (NASDAQ:ONCY)

CAPS Rating: 1 out of 5

A development stage company focuses on the discovery and development of oncolytic viruses for the treatment of cancers.

Recs

7
Player Avatar zzlangerhans (99.75) Submitted: 8/9/2010 12:22:19 PM : Underperform Start Price: $3.17 ONCY Score: +7.92

If you pay attention to my picks you know not to follow me on a red thumb on a murky cancer biotech with upward momentum. I'm usually right in the long term, but you might have to tolerate a temporary 200 point deficit as the share price continues to rise inexplicably. That being said, Oncolytics is the murkiest of murky little cancer biotechs. I'd recommend they change their name to Oncomurkics. Yahoo Finance can't even figure out their market cap.Two facts are sufficient to make Oncomurkics an avoid stock. One is that their entire pipeline is Reolysin, which is actually a virus that seems to preferentially infect and kill cancer cells with an activated Ras signalling pathway. It looks great in the lab, promising in early stage trials, but we know how that usually goes. Surprise and disappointment in phase III. The second fact is that this company is perennially short of cash, and is dependent on dilutive financings. They finished Q2 2010 with about 25 million.Despite the cash shortage, they've decided to proceed to a phase III trial without a partnership. It appears they couldn't sell Reolysin to big pharma. The share price is up now that the trial has kicked off, but this little Canadian company is planning on enrolling at least 280 patients with head and neck cancer. It's going to take years. And even if their burn rate only kicks up a little once the trial is initiated, they're still looking at a year of cash flow max without more dilutive financings. And more. And more. Do you see where I'm going with this?

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Member Avatar JackCaps (25.05) Submitted: 9/25/2010 9:33:56 AM
Recs: 0

Given your first two sentences, do you think that using limit orders on such picks might help your CAPS score?

Member Avatar seawayguy (< 20) Submitted: 9/27/2010 8:44:09 PM
Recs: 0

61 million shares is not that many compared to some other companies. The Phase III results will have partners coming looking for a partnership. If nothing else I almost expect a takeover/bidding war to start in the new year.....nice report as well....
http://www.paradigmcapinc.com/research/?alpha=O

Member Avatar zzlangerhans (99.75) Submitted: 9/29/2010 2:10:20 PM
Recs: 2

Thank you, you may have explained the paradoxical movement in share price. Share price rises modestly ahead of analyst/hedge fund report as they buy ahead of their self-created catalyst, rockets upward on low volume after positive report, soon to decline to prior steady state or lower after aforementioned hedge fund sells shares at hefty profit. Now if only I could get a hold of some puts ...

Using limit orders on red thumbs would reduce my pick numbers as some would drop back down before reaching the limits. The age-old question of whether it is better to have a higher number of lower-quality picks or a lower number of high-quality picks remains unanswered. Ultimately, the main reason I'm here isn't to try and become a top ten player (never gonna happen) but to establish reference points for my future investment decisions.

Member Avatar bridger48 (< 20) Submitted: 10/4/2010 8:49:28 PM
Recs: 0

zz

Something like 64% of drugs that reach this level are eventually approved. Looking at the size of the ongoing PIII that is expected to be only 280 patients is interesting. The smallness is a real in your face we can show the FDA statically significance in just 280 patients. However ONCY management is saying they really expect statically significance numbers at just 80 patients and only need the other 200 for a more complete safety package even when the normal side effects are simple flu like, lookout chemo.

Future financing looks to be put off till sometime next year per recent comments by the company CEO. With only about year + of cash on hand and delaying financing it appears the company believes upcoming PII results will make the waiting beneficial. Still I can not completely discount some sort of small bridge financing or forced warrant conversion should the PPS reach $6.50 US prior to ASCO 2011.

Dang zz, you get your financial cap data from a website called YAHOO, and I am writing to you on a site with FOOL in the name. All in good fun, but ONCY is something to be watched closely in the coming months.

bridger

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