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Wall Street 'Reolysin' Value; Oncolytics Soars on Phase III

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By Randy Osborne
Staff Writer

Stock buyers hardly cared that Oncolytics Biotech Inc.'s early Phase III results with Reolysin, its reovirus variant for head and neck cancer, lacked survival data and slipped on part of its endpoint – the rest was just too good.

Reolysin met statistical significance (p = 0.025) in patients with metastatic tumors, proving that, when combined with carboplatin and paclitaxel against platinum-refractory, taxane-naïve tumors, the drug did better at stabilizing or shrinking tumors: a secondary endpoint in the trial known as REO 018.

"The vast majority of patients [showed] shrinkage," said Oncolytics' president and CEO, Brad Thompson, during a conference call.

Outcomes were less convincing in those with loco-regional tumors, but at six weeks, the company said, a numeric trend favored "differing activity" in the group getting Reolysin.

The numbers, wrote analyst Douglas Miehm, of RBC Dominion Securities, in a research report, "support a higher probability of success for final primary data points."

Wall Street agreed in a big way, sending shares of Calgary, Alberta-based Oncolytics (NASDAQ:ONCY) up 40 percent, or 86 cents, to close Thursday at $3.03, after trading as high as $3.85.

The endpoint checked tumor changes between the pre-treatment and first post-treatment scans, typically at six weeks, and stabilization was described – more stringently than in other accepted criteria – as zero percent growth.

"It's not good enough to have some growth," Thompson said. "The surgeons involved want shrinkage, period."

Of the 105 total patients with evaluable metastatic tumors, 86 percent (n = 50) of those in the test arm of the study exhibited tumor stabilization or shrinkage, compared with 67 percent of patients (n = 55) in the control arm.

"To be candid, I think all of us here were modestly surprised that we saw the degree of differentiation, the amount of shrinkage that we did at six weeks," Thompson said. "Reolysin is a pretty gentle agent when it comes to tumor shrinkage."

Getting an accurate measure of shrinkage is difficult, he said. Scans may show that neutralized tumors retain their external dimensions, because of supporting strata. "If you don't kill it, too, then the tumors don't shrink very much," Thompson said, even though they contain only "necrotic goo."

Tumor profiles also may show what looks like enlargement, but is not. "In early studies, we actually lost patients, because doctors thought they progressed when they were having an inflammatory response around the edge of the tumor," which appeared as a ring on scans.

So, coming up with strong numbers in the endpoint was particularly unlikely, and the benefits are expected to continue beyond six weeks, Thompson said.

"It's just how Reolysin seems to work," he said. "I mean, we've seen partial responses develop six, seven, eight, nine months on continuous therapy before. It does sometimes take time" for the full effects of the drug to manifest.

In September, Oncolytics conducted an internal analysis of the blind, combined data for all 80 patients enrolled in the first stage of the Phase III study, with data showing a greater-than-expected median evolving progression-free survival (PFS) of the 80 patients, which comprised the combined control and test groups.

That's when a closer look found that patients for whom only metastatic disease was being measured were responding differently to treatment than patients who had local regional disease, with a statistically significantly greater median evolving PFS in the metastatic disease group.

Because of the difference in response, Oncolytics concluded that those two patient groups ought to be considered differently, and consulted with the FDA before deciding to expand enrollment in the first stage of the trial to include 160 patients, segregating between patients with local recurrent disease, with or without metastases.

That meant that the expanded first stage of the study became a separate supportive study to a planned registration study that took the place of the original second stage, resulting in a need for more time to analyze PFS from the expanded first stage.

And so the further endpoints became event-driven, rather than time-driven, Thompson said in the conference call. Asked when more complete data – on PFS, overall survival (OS) and objective response rate – will be available, he could only estimate.

"It's really when the PFS's stabilize, so that the remaining patients on study don't affect the median PFS, and the same with the OS endpoints," he said. "That window for PFS is between now and sometime in the first quarter of next year. Then, of course, we have to collect the data and get it out."

Tentative as they are, the results so far in hand "expand our universe rather markedly," Thompson said, adding that Oncolytics is exploring neoadjuvant use and "looking at metastatic disease as a separate indication. That's a rather new world," he said. "We'll take a little bit of time and energy to consider and ponder that."

The company has six more trials in metastatic cancers – breast, colorectal, lung, ovarian, pancreatic and prostate – and most should have all patients aboard next year.