Oncolytics Announces 2012 Year End Results

Oncolytics Biotech Inc. has announced its financial results and operational highlights for the year ended December 31, 2012.

"We were very pleased to present our first randomized clinical data from our head and neck cancer clinical study in 2012," said Dr. Brad Thompson, President and CEO of Oncolytics.

Dr. Thompson continued, "In addition, in order to support our program, which now includes seven randomized studies in different indications, we completed two financings over the last 14 months raising gross proceeds in excess of $50 million."

Selected Highlights

Since January 1, 2012, the Company has made a number of significant announcements including:

Clinical Trial Results

• Reporting initial positive top line data from the first endpoint in the double-blinded randomized Phase III clinical study examining REOLYSIN® in combination with carboplatin and paclitaxel in second-line patients with platinum-refractory, taxane-naïve head and neck cancers (REO 018).

The endpoint examined initial percentage tumour changes between the pre-treatment and first post-treatment scans (typically performed at six weeks post-first treatment) of all patients enrolled in the study and was designed to assess early differences in response between loco-regional tumours and metastatic tumours, as classified and observed by the investigators;

• Reaching the primary endpoint in the first stage of a U.S. Phase 2 clinical trial in patients with squamous cell carcinoma of the lung (SCCLC) using intravenous administration of REOLYSIN in combination with carboplatin and paclitaxel (REO 021) and subsequently reporting positive percent overall tumour shrinkage data;

• Poster presentations at the EORTC-NCI-AACR Symposium on Molecular Targets and Cancer Therapeutics reporting positive clinical data from a study in 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 (REO 016) and a U.S. Phase 2 clinical trial using intravenous administration of REOLYSIN in combination with gemcitabine (Gemzar®) in patients with advanced pancreatic cancer (REO 017);

• Publication of a paper entitled "Cell Carriage, Delivery, and Selective Replication of an Oncolytic Virus in Tumor in Patients," in the June 13, 2012 issue of the journal Science Translational Medicine (Vol. 4 Issue 138 138ra77), covering findings from a U.K. translational clinical trial (REO 013) investigating intravenous administration of REOLYSIN in patients with metastatic colorectal cancer prior to surgical resection of liver metastases.

The researchers found that intravenously-administered reovirus could specifically target and infect metastatic liver tumors in 90% of the patients, even though all patients treated had had a pre-existing immunity to the virus;

Clinical Trial Program

• Expansion of enrollment in the first stage of a Phase III head and neck cancer clinical trial (REO 18) to include 167 patients and introduction of an additional patient segregation to differentiate between patients with local recurrent disease, with or without metastases, and patients with distal metastases while maintaining the blind;

• Completion of patient enrollment in a U.S. Phase 2 clinical trial evaluating 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 (REO 016);

• Completion of patient enrollment in a U.S. Phase 2 clinical trial using intravenous administration of REOLYSIN in combination with gemcitabine (Gemzar®) in patients with advanced or metastatic pancreatic cancer (REO 017);

• Completion of enrollment in a U.K. Phase I clinical trial using intravenously-administered REOLYSIN in combination with cyclophosphamide in patients with advanced malignancies (REO 012);

• Completion of enrollment in a U.S. Phase 1 clinical trial using intravenously-administered REOLYSIN in combination with FOLFIRI in patients with colorectal cancer (REO 022);

• Entry into multiple agreements whereby the NCIC Clinical Trials Group (CTG) at Queen's University in Kingston, Ontario, will sponsor and conduct randomized Phase II studies of REOLYSIN in patients with recurrent or metastatic castration resistant prostate cancer, advanced or metastatic colorectal cancer, advanced or metastatic non-small cell lung cancer, and advanced or metastatic breast cancer;

Management

• Appointment of Mr. Kirk Look to the role of Chief Financial Officer;

• Appointment of Dr. Alan Tuchman to the role of Chief Medical Officer and Senior Vice President, Clinical and Medical Development;

Financial

• Closing of a bought deal financing in February 2012, which was increased post-announcement from $15 million to $18.5 million, for gross proceeds of $21.3 million following the full exercise of the over-allotment option by the syndicate of underwriters; and

• Subsequent to year-end, closing of an underwritten public offering of 8.0 million common shares, at a public offering price of US$4.00 per common share for aggregate gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses, of approximately US$32.0 million.