Oncorus, Inc. is a preclinical-stage biopharmaceutical company pioneering the development of self-amplifying RNA immunotherapies to revolutionize cancer treatment. The company's innovative approach leverages the power of RNA viruses to selectively target and destroy tumor cells while stimulating a robust anti-tumor immune response.

Business Overview

Oncorus' core technology platform involves encapsulating the genomes of RNA viruses known to kill cancer cells within lipid nanoparticles. This creates a self-amplifying vRNA immunotherapy that can be administered intravenously. The company believes this approach has the potential to overcome the limitations of previous oncolytic virus therapies, which have struggled with rapid immune clearance when delivered systemically.

The company's lead product candidate, ONCR-021, is an intravenously administered viral RNA encoding an optimized genome of Coxsackievirus 21A. Oncorus plans to submit an investigational new drug (IND) application to the FDA in mid-2023 to evaluate ONCR-021 in multiple indications, including non-small cell lung cancer, renal cell carcinoma, melanoma, and anaplastic thyroid cancer, both as monotherapy and in combination with immune checkpoint inhibitors and other cancer treatments.

The company is also developing ONCR-788, which encodes a modified version of the Seneca Valley Virus. Following the IND submission for ONCR-021, and pending additional financing, Oncorus may submit an IND for ONCR-788 to enable its development in small cell lung cancer, neuroendocrine prostate, and other neuroendocrine cancers.

In addition to its self-amplifying RNA platform, Oncorus is developing a proprietary lipid nanoparticle (LNP) platform intended to efficiently deliver nucleic acids after both intramuscular and intravenous administration.

Financials

Oncorus has funded its operations primarily through the sale of redeemable convertible preferred stock and from its initial public offering and a follow-on public offering of common stock. From inception through March 31, 2023, the company has raised an aggregate of $306.3 million in gross proceeds from sales of its equity securities.

For the three months ended March 31, 2023, Oncorus reported a net loss of $30.9 million, including a non-cash impairment charge of $14.6 million related to the company's long-lived assets. The company's annual net loss for the year ended December 31, 2022, was $78.3 million. Oncorus has not generated any revenue to date, and the company's annual operating cash flow and free cash flow for the year ended December 31, 2022, were negative $61.7 million and negative $81.6 million, respectively.

As of March 31, 2023, Oncorus had aggregate cash, cash equivalents, and investments of $45.0 million. The company believes that its existing cash and cash equivalents and investments, following the full prepayment of its debt in May 2023, will enable it to fund its operating expenses and capital expenditure requirements into the third quarter of 2023.

Liquidity

Oncorus will need to obtain substantial additional funding to support its continuing operations and pursue its growth strategy. The company expects to finance its operations through a combination of public or private equity offerings, debt financings, or other sources, such as potential collaboration agreements, strategic alliances, and licensing arrangements.

As of March 31, 2023, the company had an accumulated deficit of $302.9 million and expects to continue to incur significant and increasing expenses and operating losses for the foreseeable future. Oncorus' ability to raise additional capital when needed is not certain, and its failure to do so could have a material adverse effect on its business, results of operations, and financial condition.

Impairment of Long-Lived Assets

In the first quarter of 2023, Oncorus recognized a non-cash impairment loss of $14.6 million related to the company's long-lived assets, consisting of property and equipment and the right-of-use asset associated with its manufacturing facility in Andover, Massachusetts. This impairment was triggered by changes in business circumstances, including continued operating losses and a sustained decline in the company's market capitalization, which indicated that the carrying amount of the long-lived assets may not be fully recoverable.

Oncorus continues to classify its long-lived assets as held for use and is evaluating opportunities to finance its continued operations and the further development of its programs, including the potential sale or lease of its facilities, property, and equipment. However, the company can provide no assurances that it will successfully achieve its financing goals or that it will be able to recover the carrying value of its facilities, property, and equipment in a potential transaction.

Nasdaq Listing Compliance

On November 1, 2022, Oncorus received a notice from Nasdaq notifying the company that it no longer complied with the minimum bid price requirement for continued listing on the Nasdaq Global Market. In April 2023, Oncorus submitted an application to transfer the listing of its common stock from the Nasdaq Global Market to the Nasdaq Capital Market, and on May 2, 2023, Nasdaq granted the company an additional 180 calendar days, or until October 30, 2023, to regain compliance with the minimum closing bid price requirement.

Oncorus intends to continue actively monitoring the bid price for its common stock and will consider available options, including a potential reverse stock split, to resolve the deficiency and regain compliance with Nasdaq's marketplace rules. However, there can be no assurance that the company will be able to regain compliance or that its common stock will not be delisted from Nasdaq.

Risks and Challenges

Oncorus' business is subject to significant risks and uncertainties, including the ability to successfully develop and commercialize its product candidates, obtain necessary regulatory approvals, manufacture its products at scale, and secure additional financing to fund its operations. The company's product candidates are in the preclinical and early clinical stages, and there is no guarantee that they will successfully complete clinical trials or receive marketing approval.

Additionally, Oncorus faces competition from other companies developing novel cancer immunotherapies, and the company's success will depend on its ability to differentiate its products and maintain a competitive advantage. The company also relies on key personnel and may be unable to attract and retain the talent necessary to advance its programs.

Outlook

Despite the challenges Oncorus faces, the company's innovative self-amplifying RNA immunotherapy platform holds significant promise for transforming cancer treatment. The company's lead product candidates, ONCR-021 and ONCR-788, target a range of solid tumors with high unmet medical need, and the company's proprietary LNP delivery technology could further enhance the therapeutic potential of its pipeline.

Conclusion

As Oncorus continues to advance its programs and navigate the regulatory landscape, investors will closely monitor the company's progress, its ability to secure additional financing, and its efforts to regain compliance with Nasdaq's listing requirements. While the path forward may be challenging, Oncorus' commitment to developing cutting-edge cancer therapies and its strong scientific foundation position the company as a compelling investment opportunity for those willing to take on the inherent risks of the preclinical biotech space.