Officials with Calgary-based Oncolytics Biotech Inc. say they were blindsided by a decision by U.S. pharma titan Pfizer Inc. to terminate plans to develop Oncolytics’ cancer-fighting therapy in animals.
The company’s shares took a pounding Friday (Jan. 11) after news that Pfizer was dropping its clinical study with animals, but Oncolytics CFO Doug Ball says the move will not affect its focus on human trials.
“It’s hard for us to speculate, because we weren’t provided a reason by Pfizer,” Ball said on Friday. “Everything up to that point in time had given us no indications that this might occur.”
The Pfizer deal was signed in November 2000 and the New York-based pharmaceutical company had already conducted some tests and set up a study with dogs, said Ball.
At the time, Oncolytics CEO Brad Thompson said a commercialized product arising out of the tests could generate annual sales as high as US $500 million a year from the U.S. pet health market.
“We thought it would be great to get additional data from a company like Pfizer, and see information supporting our human program. If it became a product, even better,” said Ball.
“Clearly it’s important to us because it’s a big name, and its an issue of news into a market that’s not terribly receptive to what it perceives to be negative news. We’re disappointed . . . but we’re not concerned about the human trial program.”
The company recently completed positive Phase 1 trials in using REOLYSIN as a human cancer therapeutic, and is now moving toward a follow-up prostate clinical trial at the Tom Baker Cancer Centre and working on protocols for other tests, including for brain tumours.
Lightyear Capital Inc. analyst Allen Davidoff said Oncolytics remains in a financially sound position and has enough cash oto cover planned clinical trials over the next 24 months.
“The Pfizer deal in the end, for us, really would have represented seven to 10 per cent of their future earnings if both products had gone to market,” he said. “As far as we’re concerned, the science hasn’t really changed. The focus of Oncolytics has always been the human side.”
While it’s “unfortunate” that the deal fell through, Canaccord Capital biotechnology analyst Shameze Rampertab says it’s not typical for a health biotech company to land a big pharmaceutical deal for veterinary uses of a drug before it is approved for humans.
Rampertab added he suspects Pfizer, which has not commented on the announcement, simply made a business decision to terminate the agreement.
Oncolytics was formed in 1998 to explore the oncolytic capability of the reovirus, a live virus that preferentially replicates and attacks cancer cells without affecting healthy cells or tissue.
Shares of Oncolytics plummeted more than 50 per cent Friday to settle at $3.10. “I appreciate for our shareholders that it’s a tough time,” adds Ball.
“It’s not something that we’re pleased with. But we don’t see it impacting on our human program, and that’s the important thing.”
