Oncolytics Biotech (ONCY) - 2023 Q2 - Quarterly Report

Condensed Interim Consolidated Financial Statements Consolidated Statements of Financial Position Total assets decreased to $35.3 million from $37.3 million as of March 31, 2023, driven by reduced marketable securities Key Balance Sheet Items (in thousands of Canadian dollars) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $15,872 | $11,666 | | Marketable securities | $13,798 | $20,472 | | Total current assets | $34,261 | $35,684 | | Total assets | $35,328 | $37,334 | | Liabilities | | | | Accounts payable and accrued liabilities | $2,232 | $3,650 | | Total current liabilities | $2,469 | $3,945 | | Total liabilities | $9,577 | $10,832 | | Shareholders' Equity | | | | Total shareholders' equity | $25,751 | $26,502 | Consolidated Statements of Loss and Comprehensive Loss Q1 2023 net loss improved to $6.4 million from $6.8 million in Q1 2022, due to lower R&D and increased interest income Quarterly Loss and Expense Comparison (in thousands of Canadian dollars) | Item | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Research and development | $3,539 | $3,708 | | General and administrative | $3,195 | $2,602 | | Interest income, net | $265 | $18 | | Net loss | ($6,437) | ($6,779) | | Net comprehensive loss | ($6,440) | ($6,826) | | Basic and diluted loss per share | ($0.10) | ($0.12) | Consolidated Statements of Changes in Equity Shareholders' equity declined in Q1 2023, primarily due to the net loss, partially offset by ATM equity program proceeds Reconciliation of Shareholders' Equity for Q1 2023 (in thousands of Canadian dollars) | Description | Amount | | :--- | :--- | | Balance as at December 31, 2022 | $26,502 | | Net loss and other comprehensive loss | ($6,440) | | Proceeds from 'At the Market' Agreement | $5,552 | | Share issue costs | ($180) | | Share-based compensation expense | $317 | | Balance as at March 31, 2023 | $25,751 | Consolidated Statements of Cash Flows Cash and cash equivalents increased by $4.1 million in Q1 2023, driven by financing and investing activities, offset by operating cash usage Cash Flow Summary for Q1 (in thousands of Canadian dollars) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Cash used in operating activities | ($7,829) | ($6,252) | | Cash provided by (used in) investing activities | $6,669 | ($36) | | Cash provided by financing activities | $5,271 | $5,014 | | Increase (decrease) in cash | $4,111 | ($1,274) | | Cash and cash equivalents, end of period | $15,872 | $39,483 | Notes to Condensed Interim Consolidated Financial Statements Notes provide context on the company's biopharmaceutical operations, financing, cash sufficiency, share capital, commitments, and financial risks Note 1: Nature of Operations Oncolytics is a clinical-stage biopharmaceutical company developing pelareorep for cancer, funding operations via equity, with sufficient cash for 12 months - The company is a clinical-stage biopharmaceutical firm developing pelareorep, an intravenously delivered immunotherapeutic agent, with a primary focus on advancing programs in HR+/HER2- metastatic breast cancer and pancreatic cancer[12] - The company has not been profitable since inception and funds operations mainly through issuing capital. As of March 31, 2023, the accumulated deficit was $424.7 million[13] - As of March 31, 2023, the company had cash, cash equivalents, and marketable securities of $29.7 million, which it believes is sufficient to fund operations for at least the next twelve months[13] Note 6: Share Capital The company raised $5.55 million (US$4.1 million) in Q1 2023 through ATM share sales, part of a larger US$65 million offering program - In Q1 2023, the company sold 2,663,036 common shares under its ATM agreement for gross proceeds of $5,552,000 (US$4,100,000) at an average price of $2.08 per share[33] - The current ATM agreement, established in June 2022, allows the company to issue common shares with an aggregate offering value of up to US$65 million over a 25-month period[33] Note 9: Commitments As of March 31, 2023, the company has approximately $16.6 million in financial commitments for clinical trials and manufacturing - The company is committed to payments totaling approximately $16,600,000 for activities mainly related to its clinical trial and manufacturing programs, expected to occur over the next three years[40] Note 10: Capital Disclosures Capital management supports R&D via equity issuances, leveraging a shelf prospectus for up to $150 million in securities until July 2024 - The company's objective is to maintain a strong statement of financial position to support its clinical trial program, manufacturing, and other costs, primarily through obtaining cash resources via equity financing[41] - In June 2022, the company renewed its short form base shelf prospectus, qualifying for the distribution of up to $150,000,000 of securities in Canada and/or the U.S. until July 16, 2024[45][47] Note 11: Financial Instruments The company manages credit, foreign exchange, and liquidity risks; a $0.01 USD/CAD increase would decrease net loss by $231,000 - The company is primarily exposed to foreign exchange risk from the U.S. dollar. As of March 31, 2023, it held a net position of US$18.3 million in financial instruments[55][56] - A hypothetical $0.01 increase in the value of the U.S. dollar against the Canadian dollar would have decreased the company's net comprehensive loss in 2023 by approximately $231,000[55] - Credit risk is managed by holding cash with Schedule I banks in Canada and restricting investments to investment-grade securities with short-term maturities[51][52] Note 13: Components of Expenses Q1 2023 R&D expenses were $3.5 million (down from $3.7 million), while G&A increased to $3.2 million (up from $2.6 million) Expense Breakdown for Q1 (in thousands of Canadian dollars) | Expense Category | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Research and Development | | | | Clinical trial expenses | $909 | $1,093 | | Personnel-related expenses | $1,380 | $1,226 | | Total R&D Expenses | $3,539 | $3,708 | | General and Administrative | | | | Public company-related expenses | $2,201 | $1,564 | | Office expenses | $774 | $660 | | Total G&A Expenses | $3,195 | $2,602 |