Oncolytics Biotech signs $20m share purchase deal with Alumni Capital to advance pelareorep development

How is Oncolytics Biotech funding pelareorep’s clinical pipeline through this new agreement?

Oncolytics Biotech Inc., a clinical-stage immunotherapy company focused on oncology, has entered a strategic share purchase agreement with institutional investor Alumni Capital LP to raise up to US$20 million. The agreement, structured to enable flexible financing over a 15-month period, allows Oncolytics Biotech to continue the development of its lead candidate, pelareorep, while minimising equity dilution and safeguarding shareholder interests.

Under the terms of the share purchase agreement (SPA), Oncolytics has full discretion to determine both the timing and quantum of equity sales to Alumni Capital, which is obligated to purchase the shares at prevailing market prices. This controlled financing framework is especially critical for clinical-stage companies that are advancing therapeutics through capital-intensive trials but must balance dilution risks with research continuity.

Pelareorep, an intravenously delivered oncolytic virus-based immunotherapy, is being explored for a range of solid tumour indications, most notably metastatic breast cancer and pancreatic cancer. Both indications have received Fast Track designation from the U.S. Food and Drug Administration (FDA), highlighting the urgency and therapeutic promise associated with the candidate.

What are the key terms and structure of the Alumni Capital agreement?

Oncolytics Biotech has secured the right to sell up to US$20 million worth of its common shares to Alumni Capital over a 15-month window, with no associated warrants, derivatives, or other securities instruments. Importantly, the shares will be priced based on the market value at the time of each sale, maintaining a fair valuation mechanism that reflects real-time investor sentiment and trading behaviour.

To facilitate the agreement, Oncolytics has issued 816,326 commitment shares to Alumni Capital. A further issuance of an equal number of commitment shares is also planned, contingent on the delivery of purchase notices under the SPA. The arrangement is structured to provide immediate capital availability while aligning with regulatory compliance in both the U.S. and Canada.

The common shares that may be issued under the SPA have received conditional listing approval from the Toronto Stock Exchange (TSX), and the necessary filings have been made with the Nasdaq. Notably, Oncolytics has relied on the “Eligible Interlisted Issuer” exemption under Section 602.1 of the TSX Company Manual to expedite the listing process.

Shares will not be offered or sold directly in Canada or through any Canadian marketplace, underscoring the international, cross-border compliance approach taken under this structure.

How will the raised capital support pelareorep’s clinical trajectory?

The funding from this agreement is directly aimed at supporting pelareorep’s ongoing and planned clinical trials, particularly in combination therapies for metastatic breast and pancreatic cancers. Oncolytics has already reported positive outcomes from two randomized Phase 2 trials in metastatic breast cancer and encouraging signals from Phase 1 and 2 trials in pancreatic cancer.

Pelareorep operates by leveraging an immunological mechanism of action that turns immunologically ‘cold’ tumours ‘hot’, enabling stronger innate and adaptive immune responses. This ability to induce an inflamed tumour microenvironment has made it a compelling candidate for combination strategies with immune checkpoint inhibitors and other approved cancer therapies.

The company is now preparing for pivotal or registrational trials, which will require substantial financial backing for patient recruitment, trial expansion, regulatory documentation, and manufacturing scale-up. The non-dilutive, flexible structure of the Alumni Capital agreement offers Oncolytics the latitude to raise funds in alignment with its clinical milestones and market conditions.

What regulatory filings have been completed for the share issuance?

To comply with cross-border securities laws, Oncolytics has filed the Base Shelf Prospectus and Prospectus Supplement in Alberta, Canada, and the United States. These documents form part of a broader registration statement on Form F-10 under the U.S. Securities Act of 1933, utilising the Multi-Jurisdictional Disclosure System (MJDS).

The filing enables Alumni to potentially reoffer and resell the acquired shares under an established framework. In line with disclosure standards, access to the prospectuses has been made available via both SEDAR+ (Canada) and EDGAR (U.S.). Oncolytics has also filed a Form 6-K with the U.S. Securities and Exchange Commission (SEC), containing a copy of the SPA for public reference.

The company has made it clear that no securities regulatory authority has endorsed or opposed the content of the release, a standard disclaimer accompanying forward-looking financing strategies in the life sciences sector.

How does the stock market view Oncolytics Biotech’s financing and clinical outlook?

Following the announcement of the SPA, Oncolytics Biotech Inc. (NASDAQ: ONCY; TSX: ONC) experienced a sharp rally in its share price. On April 11, 2025, the stock climbed approximately 24.56% to close at $0.6229, reflecting renewed investor confidence driven by the firm’s enhanced liquidity position and progress on pelareorep.

Despite this short-term boost, Oncolytics’ stock remains down 31.83% year-to-date and has declined 45.36% over the past 12 months, mirroring broader volatility within the clinical-stage biotech sector. Analysts, however, continue to maintain a “Buy” consensus rating, with an average 12-month price target of $3.74—suggesting significant potential upside from current levels.

This bullish sentiment stems from the company’s ongoing trials in difficult-to-treat cancers and its strategic use of non-dilutive financing. Yet, risks remain, particularly due to the company’s lack of profitability and reliance on external capital. The recent quarterly EPS stood at -$0.07, reinforcing the importance of prudent capital management to sustain operations and pipeline development.

Investor perception appears to be shifting positively, supported by Fast Track status for pelareorep, promising trial data, and the disciplined structure of the Alumni Capital financing. With potential clinical readouts and regulatory milestones expected later in 2025, many analysts are advising a “Hold” strategy in the near term, with the potential to upgrade to a “Buy” contingent on upcoming clinical and financial catalysts.

What does this financing reveal about trends in biotech capital strategy?

The Alumni Capital agreement reflects a growing trend among biotech firms toward adaptive financing solutions that align with clinical timelines and investor expectations. Unlike traditional secondary offerings or venture financing rounds, which often lead to immediate and substantial dilution, share purchase agreements allow companies to draw capital incrementally and tactically.

For Oncolytics, this approach provides not just financial runway but operational autonomy. The flexibility to time share issuances based on trial needs and market performance ensures the company remains in control of its valuation narrative—critical during pivotal development stages.

As the immuno-oncology field becomes increasingly competitive, access to agile capital is more than a financing tactic—it is a strategic necessity. With this agreement, Oncolytics Biotech positions itself for clinical acceleration and potential value inflection, particularly in metastatic breast and pancreatic cancer indications where therapeutic innovation remains in high demand.