Pelareorep Platform Breakthrough Drives $10 Target and Buy Rating on Oncolytics Biotech

H.C. Wainwright analyst Patrick Trucchio reiterated a Buy rating on Oncolytics Biotech today and set a price target of $10.00.

Patrick Trucchio has given his Buy rating due to a combination of factors related to both clinical progress and valuation. He highlights the FDA’s Fast Track Designation for pelareorep in second-line KRAS‑mutant MSS metastatic colorectal cancer as a key regulatory win that supports a potentially registrational trial design, with near-term catalysts from site activations and interim data expected by year-end. He views pelareorep as an emerging platform immunotherapy in gastrointestinal cancers, particularly in settings where there are currently no approved immuno-oncology options, including upcoming registrational efforts in third-line squamous cell anal carcinoma. Early clinical results in combination with standard-of-care Avastin plus FOLFIRI demonstrate substantial improvements versus historical benchmarks, with response rates roughly tripling and progression-free and overall survival more than doubling in this hard‑to‑treat MSS population.
Trucchio interprets these outcomes as evidence that pelareorep can convert immunologically “cold” tumors into “hot” ones and potentially unlock responsiveness to checkpoint inhibitors, addressing a major unmet need in the majority of metastatic colorectal cancer patients. On the financial side, his risk‑adjusted DCF model incorporates conservative probabilities of success across anal, colorectal, pancreatic, and additional gastrointestinal cancers, as well as anticipated equity raises and a disciplined discount rate and terminal multiple. After adjusting for currency effects, these assumptions support an estimated firm value of about $2.6 billion and a $10 per share price target, which he views as attractive relative to the current market valuation. While he acknowledges multiple risks—including clinical, competitive, modality, reimbursement, pricing, capital markets, and geopolitical trial disruption—he concludes that the upside potential from pelareorep’s development program justifies maintaining a Buy recommendation on Oncolytics Biotech.

Based on the recent corporate insider activity of 24 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of ONCY in relation to earlier this year.