Initial results from a couple of mid-stage trials have shown incredible promise for Oncolytics Biotech, Inc. (USA) (NASDAQ:ONCY) despite its small subset of patients. In February, reolysin delivered perhaps its best results to date in a mid-stage squamous cell carcinoma lung cancer trial. Of the 20 patients receiving reolysin, 19 exhibited some level of tumor shrinkage. More recently, in May, Oncolytics reported positive results from the first stage of phase 2 trial in treating metastatic melanoma. The primary endpoint of the trial was achieving three partial responses within 18 patients; but it reached its endpoint after the 14th patient. Furthermore, the combination of reolysin, paclitaxel, and carboplatin helped seven of those patients maintain steady disease, for a disease control rate of 71.5%.
This is just half the battle
As we’ve seen in recent years, getting a drug approved by the FDA can be just half the battle. Even if Oncolytics successfully gains approval for reolysin in one of the many types of cancer it’s targeting, it’s going to face a sea of competition.
Take lung cancer, for instance, which currently has 29 compounds approved by the FDA — including Celgene Corporation (NASDAQ:CELG)‘s Abraxane, which was approved as a first-line treatment for non-small-cell lung cancer in October. Abraxane was able to boost the overall response rate by 8% relative to placebo and, along with a handful of other NSCLC treatments, will be tough to unseat even if reolysin works effectively in treating NSCLC.
Even in metastatic melanoma, where Oncolytics Biotech, Inc. (USA) (NASDAQ:ONCY)’s early phase 2 trial showed signs of success, the company will face plenty of competition. GlaxoSmithKline plc (ADR) (NYSE:GSK), for instance, had two metastatic melanoma drugs approved last month, Tafinlar and Mekinist. Both are approved as single-agent treatments and work by targeting various forms of the BRAF mutation. Unseating a juggernaut like GlaxoSmithKline plc (ADR) (NYSE:GSK) for a small-cap biotech will not be easy.
Do this one thing
If you take anything away from this discussion of Oncolytics Biotech, it’s that it deserves to be on your watchlist. While the cards are certainly stacked against the company, its approach to cancer treatment via a naturally occurring virus is incredibly unique and has proven successful in a few mid-stage trials. It still remains to be seen if these response rates and tumor shrinkages will actually translate into an overall survival benefit, but I’d certainly suggest adding it to your watchlist and keeping a close eye on any developments with the company.
The article This High-Risk, High-Reward Biotech Is Worth a Look originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends, Johnson & Johnson. It also recommends Celgene Corporation (NASDAQ:CELG).
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