This Canadian biotech stock is tackling pancreatic Cancer

Leede Financial analyst Douglas Loe says recent feedback from the U.S. Food and Drug Administration gives Oncolytics Biotech (Oncolytics Biotech Stock Quote, Chart, News, Analysts, Financials TSX:ONC) a clear path into a pivotal trial for its oncolytic virus pelareorep in metastatic pancreatic cancer, but investors should still view it as a long-dated, high-risk story.

In a Nov. 21 note, he maintained a “Speculative Buy” rating and C$5.25 (US$4.00) target.

Calgary-based Oncolytics received FDA feedback that essentially confirms the Phase III plan it has been signalling for pelareorep: a first-line metastatic pancreatic cancer trial testing gemcitabine/nab-paclitaxel alone, the regimen plus pelareorep, and a third arm adding a checkpoint inhibitor. Loe called the inclusion of an immunotherapy arm a “modest positive” because it could attract interest from major PD-1/PD-L1 drug makers.

He said the design holds “no major surprises,” with overall survival as the primary endpoint and PFS and response rate as key secondary measures. He expects Phase III to start in the first half of 2026.

Loe added that the FDA’s stance reflects a solid foundation of early data: pelareorep combinations have produced stronger one-year survival and response rates than historical gemcitabine benchmarks. He said this evidence supports prioritizing pancreatic cancer as the company’s lead indication, while still ascribing value to its breast cancer program

Loe’s valuation remains based on a discounted cash flow of future pelareorep royalties, assuming Oncolytics ultimately partners with a larger oncology company and keeps an effective 23-per-cent royalty on drug sales.

He stresses the long runway: the model does not assume any pelareorep royalty revenue until 2030, when he forecasts about C$57.3-million in revenue and C$22.9-million of EBITDA, ramping to C$190.1-million in royalty revenue and C$158.1-million of EBITDA by 2031.

In the near term, he expects continued losses while the company funds Phase III work. Loe models an Adjusted EBITDA loss of C$27.2-million in 2025 and a loss of C$34.0-million in 2026, with no pelareorep royalty revenue in either year.

On that basis, he said that if the pivotal pancreatic data are positive, the current share price leaves room for substantial upside relative to his C$5.25 target.

-30-