Oncolytics Shares Drop Despite News that Cancer Drug Improves Survival Rates

Shares of Oncolytics Biotech Inc. (ONCY) were up 15 percent in premarket activity Thursday after reporting top-line data from a clinical trial showed that the Calgary-based company’s drug improved survival rates in head-and-neck cancer patients, but shares have broken sharply back down into the red shortly after the opening bell.

The phase 3 trial, called REO 018, is a randomized, double blinded, two arm, international trial evaluating Reolysin in combination with chemotherapy drugs paclitaxel and carboplatin as compared to chemotherapy alone in patients with recurrent an/or metastatic, squamous cell carcinoma of the head and neck who have progressed following prior treatment with platinum-based chemotherapy.  167 patients were enrolled in the trial.  Patients were treated every three weeks for up to eight cycles, at which time the patient would receive either blinded placebo or blinded Reolysin until patient met criteria for discontinuation from the trial.

An analysis was performed on an intent-to-treat basis of the 118 patients with loco-regional head and neck cancer, with or without metastases.  At this point, there have not been enough deaths to analyze survival rates in the metastatic-only group of the trial.

The analysis showed that patients treated with the Reolysin combination lived 94 days without their disease getting any worse, versus only 50 days in the control arm receiving paclitaxel and carboplatin alone.

88 patients in the trial did not receive any additional therapy following discontinuation of the trial.  Analysis of the data showed an overall survival rate of 150 days in the 50 patients that were in the test arm (treated with Reolysin), compared to an overall survival rate of 115 days for the 38 patients in the control arm.

Reolysin was reported to be safe and well tolerated, although patients in the test arm were reported to experience a higher incidence of flu-like symptoms, such as fever, chills, nausea and diarrhea.

"The overall goal of this clinical trial was to determine the specific parameters for the use of REOLYSIN in a registration study in head and neck cancers.  We are excited to move forward with our head and neck program, and intend to discuss the design and execution of a follow-on registration study with regulators in the near future," said Dr. Brad Thompson, president and chief executive of Oncolytics, in a Thursday morning statement.

Oncolytics is also studying Reolysin in a plethora of other clinical trials for a wide array of cancer lines, including metastatic breast cancer, colorectal cancer and prostate cancer, to name a few.

Shares have been stuck in a range between about $2.20 and $3.00 for the last six months after running as high as $4.93 early in the year.  After closing Wednesday at $2.52, shares were climbing quickly in pre-market trading, but sunk more than 10 percent less than 30 minutes in the trading session to $2.18 with nearly 2 million shares changing hands.  Through Wednesday’s close, shares of ONCY were down about 35 percent so far in 2013.