Oncolytics Biotech(R) Inc. Announces 2009 Year End Results

CALGARY, March 9 /CNW/ - Oncolytics Biotech Inc. (TSX:ONC, NASDAQ: ONCY) ("Oncolytics" or the "Company") today announced its financial results and operational highlights for the year ended December 31, 2009.

"In 2009, we executed on our business plan focused on preparing the Company for late stage clinical testing and ultimately commercial launch by making substantial clinical progress, strengthening our intellectual property position and balance sheet, and scaling up manufacturing to near commercial levels," said Dr. Brad Thompson, President and CEO of Oncolytics. "Our focus in the year ahead will be on advancing our first Phase 3 trial, which we expect to begin in the second quarter."

    
    Selected Highlights
    -------------------
    In the last 14 months the Company:

    Clinical Trial Results

    -   Announced positive updated results from a U.K. Phase 1/2 combination
        REOLYSIN(R) and paclitaxel/carboplatin trial for patients with
        advanced head and neck cancers (REO 011). Of 19 evaluable patients
        with head and neck cancer, mostly squamous cell carcinoma of the head
        and neck refractory to prior platinum-based chemotherapy for
        recurrent/metastatic disease, eight experienced partial responses
        (PR) and six had stable disease (SD), for a clinical benefit rate
        (complete response (CR) + PR + SD) of 74%;
    -   Presented updated U.S. Phase 2 sarcoma trial (REO 014) data at the
        15th Annual Connective Tissue Oncology Society Meeting demonstrating
        that 19 of 44 evaluable patients experienced stable disease ranging
        from two to 20 months, resulting in a total clinical benefit rate of
        43%;
    -   Announced positive results from a U.K. combination REOLYSIN and
        docetaxel trial for patients with a variety of advanced cancers
        (REO 010). Fifteen of the 17 evaluable patients experienced SD or
        better, including two PR, three minor responses and 10 SD, giving a
        clinical benefit rate of 88%;
    -   Announced positive results of a U.K. Phase 2 REOLYSIN and radiation
        combination clinical trial (REO 008). Of 14 evaluable patients, 13
        patients had SD or better in the treated target lesions, including
        four PRs and two minor responses, for a clinical benefit rate of 93%
        in the treated lesions;
    -   Presented a poster at ASCO demonstrating that the combination of
        REOLYSIN and gemcitabine in a U.K. Phase 1 trial (RE0 009) was well
        tolerated, and resulted in disease control for a majority of the
        patients. Of the ten patients evaluable for response, two patients
        (breast and nasopharyngeal) had partial responses and/or clinical
        responses and five patients had SD for 4-8 cycles, for a total
        disease control rate (CR+PR+SD) of 70%;

    Clinical Program

    -   Completed an agreement with the U.S. Food and Drug Administration
        (FDA) under the Special Protocol Assessment (SPA) process for the
        design of a Phase 3 trial examining REOLYSIN in combination with
        paclitaxel and carboplatin in patients with platinum refractory head
        and neck cancers;
    -   Received a letter of approval from the U.K. Medicines and Healthcare
        products Regulatory Agency (MHRA) to conduct its Phase 3 trial
        examining REOLYSIN in combination with paclitaxel and carboplatin in
        patients with platinum-refractory head and neck cancers.
    -   Started patient enrolment in a U.S. Phase 2 Combination REOLYSIN and
        paclitaxel/carboplatin clinical trial (REO 016) for patients with
        non-small cell lung cancer with Kras or EGFR-activated tumours.
        Eligible patients include those who have not received chemotherapy
        treatment for their metastatic or recurrent disease;
    -   Started patient enrolment in a U.K. translational clinical trial
        (REO 013) investigating REOLYSIN in patients with metastatic
        colorectal cancer;
    -   Announced multi-trial clinical research collaboration with the Cancer
        Therapy & Research Center (CTRC) at the University of Texas Health
        Science Center involving up to five, open-label, Phase 2 studies
        exploring the use of REOLYSIN in combination with chemotherapy for
        various cancer indications. These indications are expected to include
        melanoma, pancreatic cancer, squamous cell lung, liver and Kras
        mutated colorectal cancers in combination with standard
        chemotherapeutics;
    -   Started enrollment in a U.S. Phase 2 clinical trial using intravenous
        administration of REOLYSIN in combination with paclitaxel and
        carboplatin in patients with metastatic melanoma being conducted at
        CTRC;

    Financial

    -   Announced the results of two warrant expiry date acceleration
        programs for warrants generating proceeds of approximately
        $14.9 million;
    -   Completed a public offering consisting of 3.45 million units at $2.00
        per unit, for gross proceeds of $6.9 million;
    -   Completed a public offering consisting of 4,887,500 units at US$3.00
        per unit, for gross proceeds of US$14.7 million;
    -   Completed the acquisition of an inactive private company with net
        cash of $2.1 million by issuing 1,875,121 common shares;

    Intellectual Property

    -   Announced the grant of the Company's 32nd U.S. Patent, No. 7,582,289,
        entitled "Viruses for the Treatment of Cellular Proliferative
        Disorders" with the claims covering methods of using modified
        parapoxvirus orf virus to treat Ras-mediated cancers;
    -   Announced the grant of the Company's 33rd U.S. Patent, No. 7,608,257,
        entitled "Sensitization of Chemotherapeutic Agent Resistant
        Neoplastic Cells with a Virus." The patent claims cover methods of
        using reovirus in combination with currently approved
        chemotherapeutic agents to treat patients that are refractory to
        those chemotherapeutic agents alone;

    Manufacturing

    -   Completed of the lyophilized (freeze-dried) formulation development
        program for REOLYSIN;
    -   Completed an initial 100-litre production run of REOLYSIN under cGMP
        conditions; and

    Management Team

    -   Appointed Dr. Alan Warrander to the role of Senior Vice President,
        Global Licensing and Business Development.


                           Oncolytics Biotech Inc.

                         CONSOLIDATED BALANCE SHEETS

    As at December 31
                                                      2009          2008
                                                        $             $
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                       32,448,939     7,429,895
    Short-term investments                           1,679,937     5,846,634
    Accounts receivable                                 64,787        86,322
    Prepaid expenses                                   507,408       179,668
    -------------------------------------------------------------------------
                                                    34,701,071    13,542,519

    Property and equipment                             208,320       263,926

    Intellectual property                                    -       180,750

    Long term investment                               684,000             -
    -------------------------------------------------------------------------
                                                    35,593,391    13,987,195
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities         4,226,933     4,534,111
    -------------------------------------------------------------------------

    Commitments and contingency
    Shareholders' equity
    Share capital
      Authorized: unlimited
      Issued: 61,549,969 (2008 - 43,830,748)       131,908,274    95,234,924
    Warrants                                         4,511,441     3,425,110
    Contributed surplus                             13,734,743    13,349,801
    Deficit                                       (118,788,000) (102,556,751)
    -------------------------------------------------------------------------
                                                    31,366,458     9,453,084
    -------------------------------------------------------------------------

                                                    35,593,391    13,987,195
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                           Oncolytics Biotech Inc.

           CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

    For the periods ended December 31

                                                                Cumulative
                                                              from inception
                                                                on April 2,
                                                                  1998 to
                                                                December 31,
                          2009          2008          2007          2009
                            $             $             $             $
    -------------------------------------------------------------------------

    Revenue
    Rights revenue               -             -             -       310,000
    -------------------------------------------------------------------------
                                 -             -             -       310,000
    -------------------------------------------------------------------------

    Expenses
    Research and
     development        11,606,514    13,351,875    12,385,743    86,138,291
    Operating            3,782,507     4,311,575     3,826,195    28,619,532
    Stock based
     compensation          424,273        64,039       539,156     5,193,117
    Foreign exchange
     loss (gain)           179,716       (68,283)        8,862       769,143
    Amortization -
     intellectual
     property              180,750       361,500       361,500     3,615,000
    Amortization -
     property and
     equipment              64,930        48,754        40,714       562,081
    -------------------------------------------------------------------------
                        16,238,690    18,069,460    17,162,170   124,897,164
    -------------------------------------------------------------------------
    Loss before
     the following      16,238,690    18,069,460    17,162,170   124,587,164

    Interest income        (29,441)     (519,256)   (1,211,744)   (6,563,446)

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

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

    Loss before
     income taxes       16,209,249    17,550,204    15,950,426   119,881,000

    Income taxes            22,000             -             -    (1,093,000)
    -------------------------------------------------------------------------

    Net loss and
     comprehensive loss
     for the period     16,231,249    17,550,204    15,950,426   118,788,000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     loss per
     common share            (0.33)        (0.42)        (0.39)
    -----------------------------------------------------------
    -----------------------------------------------------------



                           Oncolytics Biotech Inc.

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

    For the periods ended December 31
                                                                Cumulative
                                                              from inception
                                                                on April 2,
                                                                  1998 to
                                                                December 31,
                          2009          2008          2007          2009
                            $             $             $             $
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES

    Net loss and
     comprehensive loss
     for the period    (16,231,249)  (17,550,204)  (15,950,426) (118,788,000)
    Add/(deduct)
     non-cash items
      Amortization -
       intellectual
       property            180,750       361,500       361,500     3,615,000
      Amortization -
       property and
       equipment            64,930        48,754        40,714       562,081
      Stock based
       compensation        424,273        64,039       539,156     5,193,117
      Other non-cash
       items               110,800             -             -     1,494,337
    Net change in
     non-cash working
     capital              (613,383)    1,787,279       586,964     3,654,738
    -------------------------------------------------------------------------
    Cash used in
     operating
     activities        (16,063,879)  (15,288,632)  (14,422,092) (104,268,727)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Acquisition of
     property and
     equipment              (9,324)     (111,577)      (92,221)     (823,068)
    Purchase of
     short-term
     investments        (1,679,937)     (347,901)     (949,496)  (51,096,801)
    Redemption of
     short-term
     investments         5,846,634    13,000,000     6,573,000    48,998,380
    Investment in BCY
     LifeSciences Inc.           -             -             -       464,602
    Investment in
     Transition
     Therapeutics Inc.           -             -             -     2,532,343
    -------------------------------------------------------------------------
    Cash provided by
     investing
     activities          4,157,373    12,540,522     5,531,283        75,456
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Proceeds from
     exercise of stock
     options and
     warrants           15,210,210        41,600        51,000    30,511,278
    Proceeds from
     private placements          -             -             -    38,137,385
    Proceeds from
     acquisition of
     private company     1,800,120             -             -     1,800,120
    Proceeds from
     public offerings   20,042,570     3,421,309    12,063,394    66,320,777
    -------------------------------------------------------------------------
    Cash provided by
     financing
     activities         37,052,900     3,462,909    12,114,394   136,769,560
    -------------------------------------------------------------------------

    Net increase in
     cash and cash
     equivalents
     during the period  25,146,394       714,799     3,223,585    32,576,289

    Impact of foreign
     exchange on cash
     and cash
     equivalents          (127,350)            -             -      (127,350)
    -------------------------------------------------------------------------

    Cash and cash
     equivalents,
     beginning of
     period              7,429,895     6,715,096     3,491,511             -
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end
     of period          32,448,939     7,429,895     6,715,096    32,448,939
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash interest
     received               47,573       769,529     1,392,866
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

To view the Company's 2009 Consolidated Financial Statements, related Notes to the Consolidated Financial Statements, and Management's Discussion and Analysis, please see the Company's year end 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 2009 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.

%SEDAR: 00013081E

SOURCE Oncolytics Biotech Inc.

For further information: For further information: 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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