Advancing Pelareorep: Compelling Early Efficacy and High-Risk, High-Reward Valuation Support Buy Rating and $3 Target

Maxim Group analyst Jason McCarthy maintained a Buy rating on Oncolytics Biotech yesterday and set a price target of $3.00.

Jason McCarthy has given his Buy rating due to a combination of factors tied to both clinical progress and valuation. He highlights that pelareorep, when combined with atezolizumab, has produced a response rate in third-line metastatic anal cancer that is roughly three times higher than what has been seen historically, with responses lasting well over a year in a heavily pretreated population that currently lacks approved treatment options. He also emphasizes pelareorep’s differentiated profile as an intravenously administered oncolytic virus that can reach metastatic lesions systemically and enhance immune activity in the tumor microenvironment, potentially improving the effectiveness of checkpoint inhibitors. In his view, these data support advancing the program toward a potential single-arm, accelerated approval trial, pending regulatory discussions with the FDA expected by the end of the first quarter of 2026.

McCarthy further underpins his Buy rating with a forward-looking valuation framework centered on future commercialization of pelareorep in pancreatic cancer and HR+/HER2- metastatic breast cancer in the U.S., beginning in 2028. His model incorporates substantial risk adjustments to account for clinical and development uncertainty, as well as a high discount rate to reflect the early-stage nature of the programs, yet still supports a 12‑month price target of $3.00 per share. This suggests meaningful upside relative to current levels, in his assessment, driven by a combination of promising efficacy signals in difficult-to-treat cancers and a pipeline strategy that could unlock multiple value-creating indications over time.

In another report released today, H.C. Wainwright also reiterated a Buy rating on the stock with a $10.00 price target.