High Tea With Oncolytics Biotech ($oncyf) Ceo Dr. Matthew Coffey

The phone rings. It’s an exuberant Matt Coffey, Ph.D, M.B.A., on the other end of the line, in Calgary.

“This has been a good week for us!”

I envision Coffey standing at his desk, giddy and weaving. He’s a tall man with soft pale boyish white skin adorned from above by thick handfuls of salt-and-pepper hair swept vertically above his forehead into a kind of professorial cock’s comb. You get that he’s formidably smart, and you sense immediately too that he’s cultured. He’d be just as much in his groove having high tea with the Queen, a pinky extended, as he is among colleagues at oncology meetings. When he proposed to his wife he gave her a book of poems by Pablo Neruda:

“I want to do to you what spring does with the cherry trees.
You can cut all the flowers but you cannot keep spring from coming.”

wrote Neruda. Which is fitting because springtime is clearly a tide rolling now through his firm, Oncolytics Biotech ($ONCYF).

Oncolytics has just secured “three or four new collaborations, new projects,” I’m told. Pharma companies furtively requesting meetings are coming through with requests to use Reolysin, the company’s lead agent and a patented invention of Coffey, in new tumor settings. Someone or something (frappe of zeitgeist perhaps) is beating the bushes and driving would-be acolytes to Coffey, but it’s not necessarily Coffey, at least not directly. Coffey and his company are on some ethereal hotlist and corporate shoes are tramping to his Alberta doorstep. Though invigorated interest on the heals of a bravura showing at AACR (I saw the $ONCYF posters…and they scintillated) is probably not an accident.

The oncolytics space is heating up like no other. First, Australian firm Viralytics was purchased this year by Merck ($MRK).

Janssen, a unit of Johnson and Johnson ($JNJ), recently inked a deal to acquire the preclinical Maryland-based oncolytic virus firm BeneVir Biopharm.

A kind of furor was set into motion BioVex was taken over by Amgen ($AMGN) in 2011. Amgen got down to business, and on 27 October 2015, the FDA bestowed its first approval of an oncolytic virus, Amgen’s talimogene  laherparapvec, for melanoma. At the time, I didn’t really understand what oncolytic viruses were about, and may have naively likened them to bacteriophages, viruses that selectively kill certain bacteria. Ah, I said to myself: so Amgen thinks this virus is going to come along like some black hole sun and gobble up melanoma: good luck with that (melanoma can be astoundingly aggressive). But I didn’t know enough.

Pfizer ($PFE) invested in oncolytic firm Ignite in 2017. Also in 2017, Celgene ($CELG) invested in OncorusBristol-Myers Squib ($BMY) has a research collaboration with UK-based PsiOxus, which also kicked off in 2017. Meanwhile, Duke University researchers have made no secret of being in phase 1 trials with a modified poliovirus as therapy for glioblastoma. Many commentators regard Duke’s neurosurgery and neuro-oncology programs as the most elite on earth.

Right now, it’s as if oncolytic viruses have declared open season on cancer, and the ways this fervor could play itself out are vast, are protean….and still have a pleasant unknownness about them. Among Coffey’s largest concerns right now, however, is public perception of the science. The average person could be forgiven for thinking that an oncolytic virus comes along, sniffs out a cancer cell, and in a happy accident of fellow-traveling in nature, devours the cell and slakes its own appetite in so doing. He wants to set the record straight.

An oncolytic virus does come along and infect cancer cells, and perhaps does some membrane shredding as it infects, but it hardly pummels cancer cells and leaves them to die. Recall that cancer cells are expressing all kinds of proteins not seen in normal cells. Tweaking by the oncolytic virus has a way of exposing these malignant proteins and all the fresh immune targets they represent (neoantigens). A veritable ants-at-a-picnic phenomenon ensues, drawing the attention of both the innate (NK cells) and adaptive arms (T-lymphocytes) of the immune system.

“An oncolytic virus totally revamps the immune milieu at the cancer cell,” explains Coffey. In fact, if checkpoint inhibitors represented Immuno-Oncology V1.0, oncolytic viruses are now shaping up to be the de facto Immuno-Oncology V2.0. The latter already looks like an improvement upon the former: remember that $MRK’s Keytruda (pembrolizumab) and $BMY’s Opdivo (nivolumab), both of which work on the PD-1/PD-L1 axis, have been modest letdowns, making a difference in only about 20 percent of cancer cases.

Oncolytic viruses have in common with the phospholipid ether manufactured by Cellectar ($CLRB) an extreme cancer cell tropism, and most readers are familiar with the latter, and how it hunts down lipid rafts unique to the membranes of cancer cells. In the case of an oncolytic virus like $ONCYF’s pelareorep (Reolysin), a double-stranded RNA virus agent discovered and patented by Coffey, the virus is cancer-selective because of how cancer (cancer perturbs biology in thousands of ways) confounds and impairs normal interferon signaling and action. Used as a drug, interferon-alfa, for example, exerts strong antiviral and anticancer properties. In the body, a cancer cell cannot thrive unless interferon actions are disabled…and this very event is an exploitable weakness in cancer defenses. Enter oncolytic viruses, ready to opportunize this Achilles’ heel.

An analogy leaps to mind: the third Star Trek film, The Search for Spock, featured the Genesis device, said to reformulate and rejigger the very molecular structure itself on a young planet to favor life. Oncolytic viruses come along after they are administered i.v. as drugs, don’t particularly sicken the recipient, but home in on cancer cells, where they rejigger how the immune system regards the cell. The cancer cell goes from being camouflaged and cloaked to being extruded from concealment. In current cancer parlance, they convert a tumor from “cold” to “hot,” and when the oncolytic virus is done, the tumor often now finds itself aswim in cells of the immune system grown curious, and now expressing checkpoint molecules also. An oncolytic virus can make a tumor newly responsive to checkpoint inhibitor treatment.

This point confuses some people: if a tumor does not express checkpoints, you can be sure checkpoint inhibitors will have no effect. OK, oncolytic virus comes along, and now tumor expresses checkpoints. But wait, you’re just going to silence those checkpoints with inhibitors (Keytruda or Opdivo). How is that different from having no checkpoints to begin with? The difference is that now the tumor is hot: it’s now been infiltrated by NK cells and armed T-lymphocytes ready to contemplate dirty work. The oncolytic virus foments a local immune insurrection.

Which is why lots of companies are interested in them. Indeed, here’s a summary of current oncolytic virus trials. It’s not a short list.

$ONCYF will be presenting a poster this year at ASCO; the abstract will be released 16 May, and pertains to validating a patient population to be studied in an upcoming phase 3 trial by the company. The company plans to pursue breast cancer but sees rationale for directing efforts away from TNBC patients.

Coffey co-founded Oncolytics Biotech soon after finishing his Ph.D. at University of Calgary,  and began there in 1999 as VP of Product Development. He’s served as chief financial officer and chief operating officer. Following departure of former CEO Brad Thompson and prior issues with management lack of efficacy, Coffey became CEO and President in January 2017. Like the tumors it treats, Coffey’s ascension has taken Oncolytics from “cold” to “hot,” generated promising clinical data, drawn attention from the larger pharma world, and fiscally invigorated the company enough for it to pursue NASDAQ uplisting later this year.

I still have the sense that Coffey hasn’t disgorged himself of everything that’s got him excited right now. I’m reluctant to ask. We know from the present context of this space that Oncolytics could easily be now getting sussed out for takeover, the happy fate of so many of its peers since 2011. In prior conversation, Coffey has been forthcoming and not denied a certain swirl of attention and activity around the company that could augur a sale, but he offers no specifics and of course cannot. When we first met in New York City, he’d momentarily diverted his gaze, stared down, grinned and said, “Wish I could say more.” But in fact I am speaking with Coffey the afternoon before the next morning’s announcement by the FDA that it has granted Special Protocol Approval to Oncolytics for its phase 3 pelareorep (Reolysin) trial in metastatic breast cancer. Coffey probably knew already. This particular SPA bestowal is hardly a bolt out of the blue given the effect size seen in phase 2. Still most companies lack the gumption and muscular data to request SPA, and only a minority requesting SPA actually win it. Special Protocol Assessment means the FDA is limiting its own wiggle room, its own right to change its mind. In SPA, the FDA is agreeing in advance that if your study design and plan for statistical analysis rises to the bar you have set, the agency will not backpedal and request more trials; it will allow you to apply for marketing authorization for your indication. You get SPA when your work is compelling, when it’s unassailable.

“Matt, of all the tumor types where you anticipate Reolysin could make a difference…and that’s a lot of tumors,” I said, “where do you see things shaking out? Which tumors do you think we’ll be talking about in the context of this company in one or two years?”

His reply: “I call breast cancer, pancreatic ductal adenocarcinoma, and multiple myeloma.”

“A liquid tumor [multiple myeloma]… interesting,” I said.

“Well, why not? But multiple myeloma has certain special attributes that might make it game,” he said. “I’ll tell you about those sometime.”

It’s fair here to assert that the advent of oncolytic viruses promises to accomplish better what Syndax ($SNDX) was hoping for with entinostat.

“So,” Coffey begins, “the oncolytic virus movement is just the next generation of the immuno-oncology movement.” Coffey is in the enviable catbird seat of that movement.

This V2.0 is a logical place to go next because it does not sicken patients, can be bolted onto many regimens, and confers new responsivity to checkpoint inhibitors on many cancers tested. Being double-stranded, Reolysin is hypovirulent and less likely to make patients freshly ill….but this is not to say it’s hypo-effective. Trials are pending, but we suspect Reolysin has Goldilocks attributes of efficacy, virulence, versatility, and tolerability.

Coffey notes that in laboratory studies of pancreas cancer, which some worry is a field of blighted therapeutics because of dense hyaluronan stroma peri-tumor, Reolysin has no difficulty sashaying right on through that supposedly impervious barrier. (Gee, what if you could put a hyaluronidase gene in Reolysin?). Reolysin likely has a future in this indication if only because the virus’s small size allows it to permeate challenging tissues.

$ONCYF’s poster presentations from AACR are housed in our site media center, and these include a collaborative presentation with gastroenterologists and researchers at Montefiore Medical Center, including Titto Augustine, Ph.D., using Reolysin in a murine model of colon cancer. I spoke at length with Augustine at AACR; he presented an enormous bolus of data, reflecting both his own immense capacity for hard work and the extreme potential promise of Reolysin in an advanced or metastatic colon cancer indication. One is cautious not to play favorites, but as a gastroenterologist, Augustine’s poster may have been my favorite at AACR.

We’ll next hear from Coffey at our July BioPub conference call (Friday, 6 July 2018, 12:30 pm Eastern time). CORRECTION: Dr. Coffey joins us for our June call, Friday, 1 June. My goof…and neither my first nor my last.

Disclosures: Of companies mentioned above, I have a long positions in $ONCYF. I have no short positions or options. Before investing, diligence is due. This column is intended neither as advice to purchase $ONCYF shares nor as solicitation for such a purchase. As always, I have received nothing of pecuniary value from companies we cover, and this applies to $ONCYF as well. William Rice, Ph.D., CEO, President and Chairman of $APTO, is a board member at $ONCYF. I have a long position in $APTO.

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