ONCOLYTICS BIOTECH INC Annual Report - How They Did This Year

I’m breaking down Oncolytics Biotech’s latest report into plain English. My goal is to help you understand the company’s performance so you can decide if it fits your investment strategy.

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1. What does this company do?

Oncolytics Biotech is a clinical-stage company developing pelareorep. This is a proprietary, non-pathogenic virus designed to fight cancer. Unlike traditional chemotherapy, pelareorep acts as an immunotherapy by helping the body’s immune system identify and destroy tumors.

The company focuses on metastatic breast cancer and gastrointestinal cancers, such as pancreatic and colorectal cancer. They are currently running the GOBLET and BRACELET-1 studies, which aim to prove that pelareorep makes existing cancer treatments more effective.

2. Financial health: The "Going Concern" warning

This is the most critical part of the report. The company has never made a profit and reported a loss of approximately $18.5 million (CAD) for the year ending December 31, 2025. They do not expect to earn revenue until they receive regulatory approval, which is still years away.

Management included a "going concern" warning. As of December 31, 2025, the company had about $16.2 million (CAD) in cash. With annual spending between $15–$18 million, management admits they do not have enough cash to fund operations for the next 12 months. They must raise more money or find a partner to survive. If they fail to secure funding, they may have to stop their research programs entirely.

3. How they raise money (and why it matters to you)

Because they have no sales, they fund research by selling more stock. As of March 2026, they had about 116 million shares outstanding.

When they issue new shares to raise cash, they create more shares, which reduces your ownership percentage. This is called dilution. Historically, these offerings have reduced existing shareholders' stakes by 10% to 20% annually. While this keeps the company alive, it lowers the potential value of your individual shares over time.

4. Major wins and challenges

The company wants to move its GI cancer programs into final, large-scale Phase 3 trials, which are required for FDA approval. These trials typically cost $50 million to $100 million.

Oncolytics is actively seeking a "big pharma" partner to fund these trials. They have shared positive data from the GOBLET study, showing better results in pancreatic cancer patients. The company’s success hinges on turning this data into a partnership deal. Without a partner, they must pay for these expensive trials by issuing more shares, further diluting investors.

5. Key risks

• The "All or Nothing" Risk: The company’s value depends entirely on one drug, pelareorep. If a clinical trial fails to meet its goals, the stock price could drop significantly.
• Cash Crunch: With only about 12 months of cash, the company is vulnerable. If the market turns sour, they may struggle to raise money, forcing them to issue even more shares at lower prices.
• Regulatory Hurdles: The FDA requires strict, large-scale trials. Many oncology drugs fail when moving from mid-stage to final-stage testing. The path to approval is expensive and unpredictable.

6. The Bottom Line

Oncolytics is a high-risk, high-reward investment. You are not buying a profitable company with steady assets; you are making a speculative bet on the success of one drug.

Before you invest, ask yourself:

• Am I comfortable with the high probability of further share dilution?
• Do I have the risk tolerance for a company that may need to raise capital within the next year to avoid shutting down?
• Do I believe the GOBLET trial data is strong enough to attract a major pharmaceutical partner?

If you aren't prepared for significant price swings and the potential for a long, capital-intensive road to approval, this may not be the right fit for your portfolio.