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Oncolytics Biotech Inc. (TSX:ONC)(NASDAQ:ONCY) is pursuing a strategy of establishing relationships with larger companies as strategic partners.

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Since the company’s inception in April of 1998, Oncolytics Biotech (TSX:ONC)(NASDAQ:ONCY) has been a development-stage company. The company has focused research and development efforts on a drug called pelareorep, a systemically administered immuno-oncology viral agent with the potential to treat a variety of cancers.

The company has not been profitable since inception, and Oncolytics expects to continue to incur substantial losses, as it continues research and development efforts. It does not expect to generate significant revenues until pelareorep becomes commercially viable. Pelareorep is a systemically administered viral agent for the treatment of solid tumours and hematological malignancies.

Exciting clinical development goals

The ultimate objective of the company’s clinical development plan is to obtain regulatory approval for pelareorep as quickly as possible. This is based on the compelling efficacy data from previous studies in breast, multiple myeloma, and selected gastrointestinal cancers. Oncolytics’s clinical development program centres on key immunotherapy combinations. This specifically includes immunotherapy combinations in which pelareorep has the potential to provoke specific adaptive immune responses when combined with chemotherapy and other targeted cancer therapies.

Currently, the company has nearly 400 issued patents including 48 issued in the United States (U.S.) and 21 in Canada. It also has 16 patents pending in the U.S., Canada, and other jurisdictions. Any given patent that may be issued to the company could provide significant proprietary protection to Oncolytics’s product and business.

Forging strategic alliances

Oncolytics’s business strategy is to develop and market pelareorep in an effective and timely manner and access additional technologies at a time and in a manner that ensures it is best for the company’s development. The company intends to achieve Oncolytics’ business strategy by developing pelareorep through a clinical development plan and by assessing the safety and efficacy in human subjects.

The company also plans to establish collaborations with experts to assist it with scientific and clinical developments of this new potential pharmaceutical product. There exists significant opportunity for Oncolytics to implement strategic alliances with select biopharmaceutical companies and laboratories to expand the company’s own research and development efforts. Such alliances could also result in an eventual expansion to include providing additive sales and marketing capabilities.

Realistic product development goals

Further, the company could also utilize Oncolytics’s broadening patent base and collaborator network as a mechanism to meet strategic objectives and develop relationships with companies that could be instrumental in assisting it to access other innovative therapeutics. Oncolytics’s business strategy is based on attaining a number of commercial objectives, which, in turn, are supported by a number of product development goals.

At this time, the company does not appear to be interested in becoming a fully integrated pharmaceutical company with substantial in-house research and development, marketing, and distribution or manufacturing capabilities. Rather, Oncolytics is pursuing a strategy of establishing relationships with larger companies as strategic partners.

This strategy will ensure that future clinical development into large international or pivotal trials will generally occur in conjunction with a strategic partner or partners, who would contribute expertise and financial assistance. This could lower risk and enhance returns for shareholders.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

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