ex99.htm

210, 1167 Kensington Cr. N.W

Calgary, Alberta

Canada T2N 1X7

FOR IMMEDIATE RELEASE

Oncolytics Biotech® Inc. Announces Third Quarter 2011 Results

CALGARY, AB, November 10th, 2011 --- Oncolytics Biotech Inc. (TSX:ONC, NASDAQ:ONCY) (“Oncolytics” or the “Company”) today announced its financial results and operational highlights for the quarter ended September 30, 2011.

“During the quarter we achieved significant increases in the number of enrolling countries in the first stage of our Phase III head and neck cancer study,” said Dr. Brad Thompson, President and CEO of Oncolytics. “We currently have approval to conduct the trial in 12 countries in North America and Europe and are focusing on completing enrolment for this stage.”

Selected Highlights

Since July 1, 2011, the Company has made a number of significant announcements:

Clinical Trial Results

The presentation of interim preliminary results from a Phase 2 clinical trial using intravenous administration of REOLYSIN® in combination with paclitaxel and carboplatin in patients with non-small cell lung cancer (NSCLC) with Kras or EGFR-activated tumours at the International Association for the Study of Lung Cancer World Conference on Lung Cancer. As of the presentation date, response evaluation in 21 patients showed six partial responses (PR) (28.6%), 13 stable disease (SD) (61.9%) and two progressive disease (PD) (9.5%), translating into a clinical benefit rate (complete response (CR) + PR + SD) of 90.5% and a response rate (CR + PR) of 28.6%;

Preclinical Program

The posting of a study in the online version of Molecular Therapy, a publication of The American Society of Gene and Cell Therapy, investigating the timing of chemotherapy delivery that optimizes the efficacy of systemic REOLYSIN. The paper, authored by Kottke et al., was entitled “Precise Scheduling of Chemotherapy Primes VEGF-producing Tumors for Successful Systemic Oncolytic Virotherapy.” It describes when best to administer taxanes with reovirus to optimize viral delivery to the tumor mass. The researchers demonstrated that this drug combination yielded superior results to either treatment alone. They were able to reproducibly cure nearly half of the treated animals by employing this optimized schedule of paclitaxel/REOLYSIN;

Corporate

·	The appointment of Gerard Kennealey, MD as Senior Vice President of Clinical Development and Chief Medical Officer (CMO). Dr. Kennealey most recently held the position of Vice President of Scientific Affairs at Cephalon Inc.; and

·	The appointment of George M. Gill, MD as Senior Vice President of Regulatory Affairs and Chief Safety Officer. Dr. Gill has been an officer of Oncolytics since 2002.

ONCOLYTICS BIOTECH INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited)

As at,	September 30, 2011 $			December 31, 2010 $			January 1, 2010 $
Assets
Current assets
Cash and cash equivalents		40,243,302			39,296,682			32,448,939
Short-term investments		1,929,306			3,609,246			1,679,937
Accounts receivable		77,511			284,988			64,787
Prepaid expenses		533,149			278,934			507,408
Total current assets		42,783,268			43,469,850			34,701,071

Non-current assets
Property and equipment		269,580			226,911			208,320
Long term investment		—			—			684,000
Total non-current assets		269,580			226,911			892,320


Asset held for sale		—			735,681			—
Total assets		43,052,848			44,432,442			35,593,391


Liabilities And Shareholders’ Equity


Current Liabilities
Accounts payable and accrued liabilities		3,477,615			2,500,682			4,226,933
Warrant liability		—			5,536,800			1,023,051
Total current liabilities		3,477,615			8,037,482			5,249,984




Shareholders’ equity
Share capital Authorized: unlimited Issued: September 30, 2011 – 71,239,918 December 31, 2010 – 67,958,302 January 1, 2010 – 61,549,969		177,240,848			155,439,610			131,908,274
Warrants		2,653,627			4,108,652			2,437,460
Contributed surplus		19,572,183			19,399,489			13,734,743
Accumulated other comprehensive loss		(127,916	)		(156,660	)		—
Deficit		(159,763,509	)		(142,396,131	)		(117,737,070	)

Total shareholders’ equity		39,575,233			36,394,960			30,343,407

Total liabilities and equity		43,052,848			44,432,442			35,593,391

ONCOLYTICS BIOTECH INC.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(unaudited)

	Three Month Period Ending September 30, 2011 $			Three Month Period Ending September 30, 2010 $			Nine Month Period Ending, September 30, 2011 $			Nine Month Period Ending, September 30, 2010 $

Expenses
Research and development		5,315,134			2,711,392			13,769,876			8,990,422
Operating		1,019,335			1,307,640			3,214,969			3,419,889
		6,334,469			4,019,032			16,984,845			12,410,311

Loss before the following		(6,334,469	)		(4,019,032	)		(16,984,845	)		(12,410,311	)


Write down of asset available for sale		—			—			(735,681	)		—
Change in fair value of warrant liability		—			(2,521,950	)		36,000			(2,672,439	)
Interest		102,445			17,759			317,148			36,882
Loss before income taxes		(6,232,024	)		(6,523,223	)		(17,367,378	)		(15,045,868	)

Income taxes		—			—			—			—
Net loss		(6,232,024	)		(6,523,223	)		(17,367,378	)		(15,045,868	)
Other comprehensive loss (gain) – translation adjustment		(9,587	)		(7,749	)		28,744			(128,778	)
Net comprehensive loss		(6,241,611	)		(6,530,972	)		(17,338,634	)		(15,174,646	)
Basic and diluted loss per share		(0.09	)		(0.11	)		(0.25	)		(0.24	)
Weighted average number of shares (basic and diluted)		71,221,218			61,570,046			70,800,114			61,558,859

ONCOLYTICS BIOTECH INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited)

	For the nine month period ending, September 30, 2011
	Share capital		Contributed Surplus			Warrants			Accumulated Other Comprehensive Income		Deficit				Total Equity
	$		$			$			$			$			$
As at December 31, 2010		155,439,610		19,399,489			4,108,652			(156,660	)		(142,396,131	)		36,394,960

Net loss and comprehensive loss for the period		—		—			—			28,744			(17,367,378	)		(17,338,634	)
Exercise of warrants		21,487,080		—			(1,455,025	)		—			—			20,032,055
Exercise of stock options		314,158		(51,831	)		—			—			—			262,327
Stock based compensation		—		224,525			—			—			—			224,525
As at September 30, 2011		177,240,848		19,572,183			2,653,627			(127,916	)		(159,763,509	)		39,575,233

	For the nine month period ending, September 30, 2010
	Share capital		Contributed Surplus			Warrants			Accumulated Other Comprehensive Income		Deficit					Total Equity
	$		$			$			$			$			$
As at January 1, 2010		131,908,274		13,734,743			2,437,460			—			(117,737,070	)		30,343,407

Net loss and comprehensive loss for the period		—		—			—			(128,778	)		(15,045,868	)		(15,174,646	)
Expired warrants		—		2,438,000			(2,438,000	)		—			—			—
Exercise of stock options		83,812		(20,987	)		—			—			—			62,825
Stock based compensation		—		400,103			—			—			—			400,103
Other		—		—			540			—			—			540
As at September 30, 2010		131,992,086		16,551,859			—			(128,778	)		(132,782,938	)		15,632,229

ONCOLYTICS BIOTECH INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three Month Period Ending September 30, 2011 $			Three Month Period Ending September 30, 2010 $			Nine Month Period Ending, September 30, 2011 $			Nine Month Period Ending, September 30, 2010 $
Cash Flows
Operating Activities
Net loss for the period		(6,232,024	)		(6,523,223	)		(17,367,378	)		(15,045,868	)
Amortization - property and equipment		21,258			15,981			68,525			45,487
Stock based compensation		181,183			397,675			224,525			400,103
Change in fair value of warrant liability		—			2,521,950			(36,000	)		2,672,439
Write down of asset available for sale		—			—			735,681			—
Unrealized foreign exchange loss (gain)		(121,391	)		204,241			98,736			84,591
Net change in non-cash working capital		(427,319	)		(1,582,647	)		930,195			(2,374,876	)
Cash used in operating activities		(6,578,293	)		(4,966,023	)		(15,345,716	)		(14,218,124	)

Investing Activities
Redemption (purchase) of short-term investments		—			(1,929,937	)		1,679,940			(1,929,937	)
Acquisition of property and equipment		(62,087	)		(8,701	)		(111,194	)		(52,199	)
Cash provided by (used in) investing activities		(62,087	)		(1,938,638	)		1,568,746			(1,982,136	)

Financing Activities
Proceeds from exercise of stock options and warrants		54,985			8,825			14,793,582			62,825
Cash provided by financing activities		54,985			8,825			14,793,582			62,825

Increase (decrease) in cash		(6,585,395	)		(6,895,836	)		1,016,612			(16,137,435	)
Cash and cash equivalents, beginning of period		46,640,231			23,205,961			39,296,682			32,448,939
Impact of foreign exchange on cash and cash equivalents		188,466			(211,990	)		(69,992	)		(213,369	)
Cash and cash equivalents, end of period		40,243,302			16,098,135			40,243,302			16,098,135

To view the Company’s Third Quarter 2011 Consolidated Financial Statements, related Notes to Consolidated Financial Statements, and Management’s Discussion and Analysis, please see the Company’s quarterly filings which will be available on www.sedar.com and on www.oncolyticsbiotech.com.

About Oncolytics Biotech Inc.

Oncolytics is a Calgary-based biotechnology company focused on the development of oncolytic viruses as potential cancer therapeutics. Oncolytics’ clinical program includes a variety of human trials including a Phase 3 trial in head and neck cancers using REOLYSIN, its proprietary formulation of the human reovirus. For further information about Oncolytics, please visit: www.oncolyticsbiotech.com.

This press release contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, including the Company’s belief as to the potential of REOLYSIN as a cancer therapeutic; the Company’s expectations as to the success of its research and development programs in 2011 and beyond, the Company’s planned operations, the value of the additional patents and intellectual property; the Company’s expectations related to the applications of the patented technology; the Company’s expectations as to adequacy of its existing capital resources; the design, timing, success of planned clinical trial programs; and other statements related to anticipated developments in the Company’s business and technologies involve known and unknown risks and uncertainties, which could cause the Company’s actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, the availability of funds and resources to pursue research and development projects, the efficacy of REOLYSIN as a cancer treatment, the success and timely completion of clinical studies and trials, the Company’s ability to successfully commercialize REOLYSIN, uncertainties related to the research and development of pharmaceuticals, uncertainties related to the regulatory process and general changes to the economic environment. Investors should consult the Company’s quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Investors are cautioned against placing undue reliance on forward-looking statements. The Company does not undertake to update these forward-looking statements, except as required by applicable laws.

FOR FURTHER INFORMATION PLEASE CONTACT:

The Equicom Group

Nick Hurst

300 – 5th Ave. SW, 10th Floor

Calgary, Alberta T2P 3C4

Tel: 403.218.2835

Fax: 403.218.2830

nhurst@equicomgroup.com

The Investor Relations Group

Erika Moran

11 Stone St, 3rd Floor

New York, NY 10004

Tel: 212.825.3210

Fax: 212.825.3229

emoran@investorrelationsgroup.com

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