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Oncolytics Biotech(R) Inc. Announces Second Quarter 2010 Results

July 29, 2010

CALGARY, July 29 /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 June 30, 2010.

“We have recently passed a number of key milestones in our clinical program, most notably the opening of enrollment in our Phase 3 head and neck cancer study, the expansion of the study to other jurisdictions internationally, and the reporting of positive results from an earlier study with an emphasis on squamous cell carcinoma of the head and neck,” said Dr. Brad Thompson, President and CEO of Oncolytics. “While our Phase 3 study remains our primary focus, we have also successfully expanded our clinical program to include other indications as REOLYSIN(R) may be effective in treating a variety of cancers.”

    Selected Highlights
    -------------------

Since April 1, 2010 the Company has announced:

Clinical Trial Results

        -  A poster presentation at the American Society of Clinical Oncology
           2010 Annual Meeting, entitled "A Phase I/II study of oncolytic
           reovirus plus carboplatin/paclitaxel in patients with advanced
           solid cancers with emphasis on squamous cell carcinoma of the head
           and neck (SCCHN)," showing that of 19 head and neck cancer
           patients evaluable for response, eight (42%) had partial responses
           and six (32%) had stable disease; mean overall survival in 24
           treated head and neck cancer patients was more than eight months;
        -  Publication of a paper entitled "Two-Stage Phase I Dose-Escalation
           Study of Intratumoural Reovirus Type 3 Dearing and Palliative
           Radiotherapy in Patients with Advanced Cancers," in the online
           version of the journal Clinical Cancer Research that showed that
           100% of 14 evaluable patients were stable disease or better (7
           partial responses, and 7 stable disease);
        -  A poster presentation at the American Association for Cancer
           Research's 101st Annual Meeting in Washington, DC entitled
           "Reovirus replication in ovarian and peritoneal tumors after
           intravenous administration," covering correlative results from a
           Phase 1/2 study with reovirus in patients with ovarian, primary
           peritoneal and fallopian tube carcinoma, sponsored by the National
           Cancer Institute under its Clinical Trials Agreement with
           Oncolytics;

Clinical Program

        -  Opening of enrollment in the Phase 3 trial examining REOLYSIN in
           combination with paclitaxel and carboplatin in patients with
           platinum-refractory head and neck cancers;
        -  Receipt of a No Objection Letter from Health Canada to conduct its
           Phase 3 trial examining REOLYSIN in combination with paclitaxel
           and carboplatin in patients with platinum-refractory head and neck
           cancers;
        -  Receipt of approval from the Belgian Federal Agency for Medicines
           and Health Products (FAMHP) to conduct its Phase 3 trial examining
           REOLYSIN in combination with paclitaxel and carboplatin in
           patients with platinum-refractory head and neck cancers;
        -  Start of enrollment in a U.S. Phase 2 clinical trial using
           intravenous administration of REOLYSIN in combination with
           gemcitabine (Gemzar(R)) in patients with advanced pancreatic
           cancer at the Cancer Therapy & Research Center at the University
           of Texas Health Science Center in San Antonio;
        -  Poster presentations at the ASCO 2010 Annual Meeting covering the
           structures of a "Phase II study of reovirus with paclitaxel (P)
           and carboplatin (C) in patients with metastatic non-small cell
           lung cancer (NSCLC) who have Kras or EGFR-activated tumors" and a
           "Phase I/II trial of reovirus serotype 3-Dearing strain in
           patients with recurrent ovarian cancer";
        -  The decision to initiate a U.S. Phase I study of REOLYSIN in
           combination with FOLFIRI (Folinic Acid (leucovorin) + Fluorouracil
           (5-FU) + Irinotecan) in patients with oxaliplatin
           refractory/intolerant Kras mutant colorectal cancer (REO 022);
        -  Completion of Phase I patient enrollment in a Phase I/II clinical
           trial to investigate the use of REOLYSIN for patients with
           recurrent malignant gliomas (REO 007);

Preclinical Program

        -  A paper entitled "Antiangiogenic cancer therapy combined with
           oncolytic virotherapy leads to regression of established tumors in
           mice," co-senior authored by Dr. Richard Vile of the Department of
           Immunology, Mayo Clinic, Rochester, Minnesota, USA, and Dr. Kevin
           Harrington of the Institute of Cancer Research, London, UK, was
           published in the online version of the Journal of Clinical
           Investigation;
        -  A poster presentation at the AACR Annual Meeting entitled
           "Molecular pathways associated with REOLYSIN and gemcitabine
           synergy in ras-mutated human HCT116 cells," covering work done to
           better understand the mechanisms associated with the cytotoxic
           synergies in this combined approach in colorectal cancer cell
           lines;
        -  A poster presentation at the AACR Annual Meeting entitled "The
           addition of REOLYSIN, an oncolytic reovirus, to irinotecan shows
           synergistic anticancer activity in colorectal cancer cell lines,"
           covering research done in vitro into a novel therapeutic approach
           for treating patients with colorectal cancer tumors that harbor a
           mutation in the Kras oncogene that have failed first line therapy;
        -  A poster presentation at the AACR Annual Meeting entitled
           "Reovirus successfully purges multiple myeloma ex vivo and does
           not affect human CD34+ cell engraftment in a murine
           transplantation model," covering the utility of reovirus in
           treating hematological malignancies; and

Intellectual Property

        -  Grant of the Company's 35th U.S. Patent, # 7,731,951 entitled
           "Viruses for the Treatment of Cellular Proliferative Disorders."
           The patent claims cover methods for treating cell proliferative
           disorders by administering modified vaccinia virus to
           proliferating cells having an activated Ras-pathway.

                           Oncolytics Biotech Inc.

                         CONSOLIDATED BALANCE SHEETS
                                 (unaudited)

    As at,

                                                     June 30,    December 31,
                                                       2010          2009
                                                         $             $
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                       23,205,961    32,448,939
    Short-term investments                           1,679,937     1,679,937
    Accounts receivable                                 58,645        64,787
    Prepaid expenses                                   718,418       507,408
    -------------------------------------------------------------------------
                                                    25,662,961    34,701,071
    -------------------------------------------------------------------------

    Property and equipment                             222,312       208,320
    Long term investment                               684,000       684,000
    -------------------------------------------------------------------------
                                                    26,569,273    35,593,391
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities         3,639,572     4,226,933
    -------------------------------------------------------------------------

    Shareholders' equity
    Share capital
      Authorized: unlimited number of common shares
      Issued: 61,569,969
       (December 31, 2009 - 61,549,969)            131,980,274   131,908,274
    Warrants                                         2,073,441     4,511,441
    Contributed surplus                             16,157,171    13,734,743
    Deficit                                       (127,281,185) (118,788,000)
    -------------------------------------------------------------------------
                                                    22,929,701    31,366,458
    -------------------------------------------------------------------------

                                                    26,569,273    35,593,391
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           Oncolytics Biotech Inc.

           CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
                                 (unaudited)

                                     Three Month   Three Month    Six Month
                                        Period        Period       Period
                                     Ending June   Ending June   Ending June
                                       30, 2010      30, 2009      30, 2010
                                           $             $             $
    -------------------------------------------------------------------------
    Revenue
    Rights revenue                             -             -             -
    -------------------------------------------------------------------------
                                               -             -             -
    Expenses
    Research and development           3,561,168     3,239,210     6,400,481
    Operating                          1,133,319       980,721     2,082,743
    Stock based compensation               1,399         8,544         2,428
    Foreign exchange loss/(gain)        (349,229)        3,103        (2,850)
    Amortization - intellectual
     property                                  -        90,375             -
    Amortization - property and
     equipment                            14,621        16,536        29,506
    -------------------------------------------------------------------------
                                       4,361,278     4,338,489     8,512,308
    -------------------------------------------------------------------------
    Loss before the following:         4,361,278     4,338,489     8,512,308

    Interest income                       (9,304)       (3,732)      (19,123)
    Gain on sale of BCY LifeSciences Inc.      -             -             -
    Loss on sale of Transition
     Therapeutics Inc.                         -             -             -
    -------------------------------------------------------------------------
    Loss before income taxes           4,351,974     4,334,757     8,493,185
    Future income tax recovery                 -             -             -
    -------------------------------------------------------------------------
    Net loss and comprehensive loss
     for the period                    4,351,974     4,334,757     8,493,185
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and diluted loss per share        0.07          0.09          0.14
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of shares
     (basic and diluted)              61,556,343    47,449,182    61,553,173
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                    Cumulative
                                                       from
                                                     inception
                                      Six Month     on April 2,
                                        Period        1998 to
                                     Ending June      June 30,
                                       30, 2009        2010
                                           $             $
    -----------------------------------------------------------
    Revenue
    Rights revenue                             -       310,000
    -----------------------------------------------------------
                                               -       310,000
    Expenses
    Research and development           6,051,865    92,538,772
    Operating                          1,967,485    30,702,275
    Stock based compensation              20,181     5,195,545
    Foreign exchange loss/(gain)          59,138       766,293
    Amortization - intellectual
     property                            180,750     3,615,000
    Amortization - property and
     equipment                            33,840       591,587
    -----------------------------------------------------------
                                       8,313,259   133,409,472
    -----------------------------------------------------------
    Loss before the following:         8,313,259   133,099,472

    Interest income                      (20,856)   (6,582,569)
    Gain on sale of BCY
     LifeSciences Inc.                         -      (299,403)
    Loss on sale of Transition
     Therapeutics Inc.                         -     2,156,685
    -----------------------------------------------------------
    Loss before income taxes           8,292,403   128,374,185
    Future income tax recovery                 -    (1,093,000)
    -----------------------------------------------------------
    Net loss and comprehensive loss
     for the period                    8,292,403   127,281,185
    -----------------------------------------------------------
    -----------------------------------------------------------
    Basic and diluted loss per share        0.18
    ---------------------------------------------
    ---------------------------------------------
    Weighted average number of shares
     (basic and diluted)              45,659,353
    ---------------------------------------------
    ---------------------------------------------

                           Oncolytics Biotech Inc.

                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (unaudited)

                                    Three Month   Three Month    Six Month
                                        Period        Period       Period
                                     Ending June   Ending June   Ending June
                                       30, 2010      30, 2009      30, 2010
                                           $             $             $
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net loss for the period           (4,351,974)   (4,334,757)   (8,493,185)
    Deduct non-cash items
      Amortization - intellectual
       property                                -        90,375             -
      Amortization - property and
       equipment                          14,621        16,536        29,506
      Stock based compensation             1,399         8,544         2,428
      Other non-cash items              (415,280)            -       (46,483)
    Net changes in non-cash working
     capital                             384,452    (1,414,201)     (792,229)
    -------------------------------------------------------------------------
                                      (4,366,782)   (5,633,503)   (9,299,963)
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Capital assets                       (39,851)            -       (43,498)
    Purchase of short-term
     investments                               -             -             -
    Redemption of short-term
     investments                               -     1,925,600             -
    Investment in BCY LifeSciences Inc.        -             -             -
    Investment in Transition
     Therapeutics Inc.                         -             -             -
    -------------------------------------------------------------------------
                                         (39,851)    1,925,600       (43,498)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Proceeds from exercise of
     warrants and stock options           54,000       351,835        54,000
    Proceeds from acquisition of
     private company                           -     1,800,120             -
    Proceeds from private placements           -             -             -
    Proceeds from public offerings             -     6,172,819             -
    -------------------------------------------------------------------------
                                          54,000     8,324,774        54,000
    -------------------------------------------------------------------------
    (Decrease) increase in
     cash and cash equivalents
     during the period                (4,352,633)    4,616,871    (9,289,461)
    Impact of foreign exchange on
     cash and cash equivalents           415,280             -        46,483
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     beginning of the period          27,143,314     7,366,481    32,448,939
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of the period                23,205,961    11,983,352    23,205,961
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                    Cumulative
                                                       from
                                                     inception
                                      Six Month     on April 2,
                                        Period        1998 to
                                     Ending June      June 30,
                                       30, 2009        2010
                                           $             $
    -----------------------------------------------------------
    OPERATING ACTIVITIES
    Net loss for the period           (8,292,403) (127,281,185)
    Deduct non-cash items
      Amortization - intellectual
       property                          180,750     3,615,000
      Amortization - property and
       equipment                          33,840       591,587
      Stock based compensation            20,181     5,195,545
      Other non-cash items                     -     1,447,854
    Net changes in non-cash working
     capital                          (1,578,220)    2,862,509
    -----------------------------------------------------------
                                      (9,635,852) (113,568,690)
    -----------------------------------------------------------
    INVESTING ACTIVITIES
    Capital assets                        (3,349)     (866,566)
    Purchase of short-term
     investments                               -   (51,096,801)
    Redemption of short-term
     investments                       5,846,634    48,998,380
    Investment in BCY LifeSciences Inc.        -       464,602
    Investment in Transition
     Therapeutics Inc.                         -     2,532,343
    -----------------------------------------------------------
                                       5,843,285        31,958
    -----------------------------------------------------------
    FINANCING ACTIVITIES
    Proceeds from exercise of
     warrants and stock options          373,085    30,565,278
    Proceeds from acquisition of
     private company                   1,800,120     1,800,120
    Proceeds from private placements           -    38,137,385
    Proceeds from public offerings     6,172,819    66,320,777
    -----------------------------------------------------------
                                       8,346,024   136,823,560
    -----------------------------------------------------------
    (Decrease) increase in
     cash and cash equivalents
     during the period                 4,553,457    23,286,828
    Impact of foreign exchange on
     cash and cash equivalents                 -       (80,867)
    -----------------------------------------------------------
    Cash and cash equivalents,
     beginning of the period           7,429,895             -
    -----------------------------------------------------------
    Cash and cash equivalents,
     end of the period                11,983,352    23,205,961
    -----------------------------------------------------------
    -----------------------------------------------------------

To view the Company’s Second Quarter 2010 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 III 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 2010 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.

SOURCE Oncolytics Biotech Inc.


Source: newswire



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