Oncolytics Biotech® Inc. Announces Third Quarter 2010 Results

CALGARY, Nov. 10 /PRNewswire-FirstCall/ - 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, 2010.

"We are excited to be conducting our first Phase 3 study," said Dr. Brad Thompson, President and CEO of Oncolytics.  "Moving into the fourth quarter the Company's fundamentals remain strong and we are well positioned to execute on our clinical strategy in 2011 and beyond."

Selected Highlights
Since July 1, 2010 the Company has announced:

Clinical Program

    --  Receipt of a No Objection Letter from Health Canada to conduct the
        Company's Phase 3 trial examining REOLYSIN® in combination with
        paclitaxel and carboplatin in patients with platinum-refractory head and
        neck cancers at centres in Canada;
    --  A randomized Phase 2 trial of weekly paclitaxel versus weekly paclitaxel
        with REOLYSIN in patients with persistent or recurrent ovarian,
        fallopian tube or primary peritoneal cancer to be conducted by the
        Gynecologic Oncology Group (GOG). The Cancer Therapy Evaluation Program,
        Division of Cancer Treatment and Diagnosis, U.S. National Cancer
        Institute (NCI), which is part of the National Institutes of Health,
        will sponsor the trial under its Clinical Trials Agreement with
        Oncolytics;
    --  A presentation of interim data from a U.K. translational clinical trial
        investigating intravenous administration of REOLYSIN in patients with
        metastatic colorectal cancer prior to surgical resection of liver
        metastases. The researchers concluded that reovirus can be successfully
        delivered specifically to colorectal liver metastases following
        intravenous administration as a monotherapy and that pre-operative
        treatment was safe, suggesting that application of oncolytic viral
        therapy can be widened to the neoadjuvant setting;

Preclinical Program

    --  An abstract, entitled REOLYSIN induces endoplasmic reticular stress in
        multiple myeloma and enhances the activity of bortezomib, indicating
        that the combination of REOLYSIN and bortezomib significantly reduced
        tumor burden in both xenograft and syngeneic multiple myeloma mouse
        models. The authors concluded that REOLYSIN is a promising anticancer
        agent that displays activity against multiple myeloma alone and in
        combination with bortezomib and warrants further investigation for the
        treatment of multiple myeloma and other malignancies;

Intellectual Property

    --  Grant of U.S. Patent, # 7,803,385 entitled Reoviruses Having Modified
        Sequences. This is a composition of matter patent that covers the
        reovirus variant the Company is using in its clinical trial program and
        expires in 2028; and

Financial

    --  Completion of a bought deal financing issuing 6,256,000 units of the
        Company at a price of $4.60 per Unit for gross proceeds to the Company
        of approximately $28.77 million.






                                     Oncolytics Biotech Inc.

                            INTERIM CONSOLIDATED BALANCE SHEETS

                                              (unaudited)

As at,

                                              September 30, December 31,
                                                  2010          2009
                                                    $             $

ASSETS

Current

Cash and cash equivalents                        16,098,135    32,448,939

Short-term investments                            3,609,874     1,679,937

Accounts receivable                                  30,791        64,787

Prepaid expenses                                    499,261       507,408

                                                 20,238,061    34,701,071

Property and equipment                              215,032       208,320

Long term investment                                684,000       684,000

                                                 21,137,093    35,593,391

LIABILITIES AND SHAREHOLDERS EQUITY

Current

Accounts payable and accrued liabilities          1,809,914     4,226,933

Shareholders equity

Share capital

Authorized: unlimited number of common shares

Issued: 61,573,469
(December 31, 2009 - 61,549,969)                131,992,086   131,908,274

Warrants                                          2,073,441     4,511,441

Contributed surplus                              16,551,859    13,734,743

Deficit                                       (131,290,207) (118,788,000)

                                                 19,327,179    31,366,458

                                                 21,137,093    35,593,391







Oncolytics Biotech Inc.

INTERIM CONSOLIDATED STATEMENTS OF LOSS
AND COMPREHENSIVE LOSS
(unaudited)


                                                                    Cumulative
              Three Month                Nine Month                    from
                Period     Three Month     Period                    inception
                Ending     PeriodEnding    Ending     Nine Month    on April 2,
               September    September    September   Period Ending    1998 to
                  30,          30,          30,      September 30,   September
                 2010          2009         2010         2009         30,2010
                   $            $            $             $             $

Revenue

Rights                  -             -           -              -      310,000
revenue

                        -             -           -              -      310,000

Expenses

Research and    2,500,607     1,954,367   8,901,088      8,006,232   95,039,379
development

Operating         895,659       736,024   2,978,402      2,703,509   31,597,934

Stock based       397,675         7,982     400,103         28,163    5,593,220
compensation

Foreign           216,859      (16,793)     214,009         42,345      983,152
exchange
loss/(gain)

Amortization            -             -           -        180,750    3,615,000
-
intellectual
property

Amortization       15,981        15,772      45,487         49,612      607,568
- property
and equipment

                4,026,781     2,697,352  12,539,089     11,010,611  137,436,253

Loss before     4,026,781     2,697,352  12,539,089     11,010,611  137,126,253
the
following:

Interest         (17,759)       (3,360)    (36,882)       (24,216)  (6,600,328)
income

Gain on sale            -             -           -              -    (299,403)
of BCY
LifeSciences
Inc.

Loss on sale            -             -           -              -    2,156,685
of Transition
Therapeutics
Inc.

Loss before     4,009,022     2,693,992  12,502,207     10,986,395  132,383,207
income taxes

Future income           -             -           -              -  (1,093,000)
tax recovery

Net loss and    4,009,022     2,693,992  12,502,207     10,986,395  131,290,207
comprehensive
loss for the
period

Basic and            0.07          0.05        0.20           0.23
diluted loss
pershare

Weighted       61,570,046    49,465,849  61,558,859     46,942,128
average
numberof
shares (basic
and diluted)






Oncolytics Biotech Inc.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)



                                                                     Cumulative
              Three Month  Three Month   Nine Month    Nine Month       from
                Period       Period        Period        Period       inception
                Ending       Ending        Ending        Ending      on April 2,
               September    September    September     September       1998 to
                  30,          30,          30,           30,       September 30,
                 2010         2009          2010          2009          2009
                   $            $            $             $              $

OPERATING
ACTIVITIES

Net loss for  (4,009,022)  (2,693,992)  (12,502,207)  (10,986,395)  (131,290,207)
the period

Deduct
non-cash
items

 Amortization           -            -             -       180,750      3,615,000
 -
 intellectual
 property

 Amortization      15,981       15,772        45,487        49,612        607,568
 - property
 and
 equipment

 Stock based      397,675        7,982       400,103        28,163      5,593,220
 compensation

 Other            211,990            -       213,369             -      1,707,706
 non-cash
 items

Net changes   (1,582,647)       60,253   (2,374,876)   (1,517,967)      1,279,862
in non-cash
working
capital

              (4,966,023)  (2,609,985)  (14,218,124)  (12,245,837)  (118,486,851)

INVESTING
ACTIVITIES

Capital           (8,701)      (1,325)      (52,199)       (4,674)      (875,267)
assets

Purchase of   (1,929,937)            -   (1,929,937)             -   (53,026,738)
short-term
investments

Redemption of           -            -             -     5,846,634     48,998,380
short-term
investments

Investment in           -            -             -             -        464,602
BCY
LifeSciences
Inc.

Investment in           -            -             -             -      2,532,343
Transition
Therapeutics
Inc.

              (1,938,638)      (1,325)   (1,982,136)     5,841,960    (1,906,680)

FINANCING
ACTIVITIES

Proceeds from       8,825      342,570        62,825       715,835     30,574,103
exercise of
warrants and
stock options

Proceeds from           -            -             -     1,800,120      1,800,120
acquisition
of private
company

Proceeds from           -            -             -             -     38,137,385
private
placements

Proceeds from           -     (59,893)             -     6,112,746     66,320,777
public
offerings

                    8,825      282,677        62,825     8,628,701    136,832,385

Increase      (6,895,836)  (2,328,633)  (16,137,435)     2,224,824     16,438,854
(decrease) in
cash and cash
equivalents
during the
period

Impact of       (211,990)            -     (213,369)             -      (340,719)
foreign
exchange on
cash and cash
equivalents

Cash and cash  23,205,961   11,983,352    32,448,939     7,429,895              -
equivalents,
beginning of
the period

Cash and cash  16,098,135    9,654,719    16,098,135     9,654,719     16,098,135
equivalents,
end of the
period