Oncolytics Biotech(R) Inc. Announces 2009 Third Quarter Results

CALGARY, Nov. 5 /CNW/ - Oncolytics Biotech Inc. (TSX:ONC, NASDAQ: ONCY) ("Oncolytics" or the "Company") today announced its financial results for the three and nine-month periods ended September 30, 2009.

"In the third quarter, we passed a number of key milestones in our evolving REOLYSIN(R) development program, including making progress on a number of Phase II clinical initiatives and in manufacturing," said Dr. Brad Thompson, President and CEO of Oncolytics. "Subsequent to quarter-end, we met our most important milestone to date in the advancement of our clinical program as we reached an agreement with the U.S. FDA on the design of a Phase 3 trial examining REOLYSIN in combination with paclitaxel and carboplatin in patients with platinum-refractory head and neck cancers."

    
    Selected Third Quarter Highlights:

    During the quarter, the Company announced:

    -   Conclusion of patient enrollment in the Phase II component of the
        Company's U.K. REOLYSIN and paclitaxel/carboplatin clinical trial
        (REO 11);
    -   Successful completion of the lyophilized (freeze-dried) formulation
        development program for REOLYSIN;
    -   Successful completion of an initial 100-litre production run of
        REOLYSIN under cGMP conditions;
    -   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;
    -   Acceleration of the warrant expiry date on warrants issued in
        connection with a financing completed in December 2008; and
    -   The start of 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 the Cancer Therapy & Research Center at the University of Texas
        Health Science Center (CTRC).

    Latest Highlights

    Subsequent to quarter end, the Company announced:

    -   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;
    -   Acceleration of the warrant expiry date on warrants issued in
        connection with a financing completed in May 2009;
    -   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;
    -   The results of the two warrant expiry date acceleration programs for
        warrants issued and amended in December 2008 and issued in 2009,
        generating proceeds of approximately $14.9 million.


                           Oncolytics Biotech Inc.

                         CONSOLIDATED BALANCE SHEETS
                                 (unaudited)

    As at,
                                                  September 30,  December 31,
                                                       2009          2008
                                                         $             $
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                        9,654,719     7,429,895
    Short-term investments                                   -     5,846,634
    Accounts receivable                                 59,314        86,322
    Prepaid expenses                                   306,926       179,668
    -------------------------------------------------------------------------
                                                    10,020,959    13,542,519

    Capital assets                                     218,988       263,926

    Intellectual property                                    -       180,750
    -------------------------------------------------------------------------
                                                    10,239,947    13,987,195
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities         3,116,394     4,534,111
    -------------------------------------------------------------------------

    Shareholders' equity
    Share capital
      Authorized: unlimited number of common shares
      Issued: 49,608,569
       (December 31, 2008 - 43,830,748)            102,532,889    95,234,924
    Warrants                                         4,755,846     3,425,110
    Contributed surplus                             13,377,964    13,349,801
    Deficit                                       (113,543,146) (102,556,751)
    -------------------------------------------------------------------------
                                                     7,123,553     9,453,084
    -------------------------------------------------------------------------
                                                    10,239,947    13,987,195
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                           Oncolytics Biotech Inc.

           CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
                                 (unaudited)

                                      Three Month   Three Month    Nine Month
                                         Period        Period        Period
                                         Ending        Ending        Ending
                                       September     September     September
                                        30, 2009      30, 2008      30, 2009
                                           $             $             $
    -------------------------------------------------------------------------

    Revenue
    Rights revenue                             -             -             -
    -------------------------------------------------------------------------
                                               -             -             -
    -------------------------------------------------------------------------

    Expenses
    Research and development           1,954,367     3,210,294     8,006,232
    Operating                            736,024       880,438     2,703,509
    Stock based compensation               7,982        17,339        28,163
    Foreign exchange loss/(gain)         (16,793)       29,026        42,345
    Amortization - intellectual
     property                                  -        90,375       180,750
    Amortization - property and
     equipment                            15,772        11,853        49,612
    -------------------------------------------------------------------------
                                       2,697,352     4,239,325    11,010,611
    -------------------------------------------------------------------------

    Loss before the following:         2,697,352     4,239,325    11,010,611

    Interest income                       (3,360)      (98,493)      (24,216)

    Gain on sale of BCY
     LifeSciences Inc.                         -             -             -

    Loss on sale of Transition
     Therapeutics Inc.                         -             -             -
    -------------------------------------------------------------------------

    Loss before income taxes           2,693,992     4,140,832    10,986,395

    Future income tax recovery                 -             -             -
    -------------------------------------------------------------------------

    Net loss and comprehensive loss
     for the period                    2,693,992     4,140,832    10,986,395
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted loss per share        0.05          0.10          0.23
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of shares
     (basic and diluted)              49,465,849    41,180,748    46,942,128
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                    Cumulative
                                                       from
                                       Nine Month    inception
                                         Period     on April 2,
                                         Ending       1998 to
                                       September     September
                                        30, 2008      30, 2009
                                           $             $
    -----------------------------------------------------------

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

    Expenses
    Research and development           9,650,595    82,538,009
    Operating                          3,250,830    27,540,534
    Stock based compensation              54,955     4,797,007
    Foreign exchange loss/(gain)         (20,059)      631,772
    Amortization - intellectual
     property                            271,125     3,615,000
    Amortization - property and
     equipment                            35,233       546,763
    -----------------------------------------------------------
                                      13,242,679   119,669,085
    -----------------------------------------------------------

    Loss before the following:        13,242,679   119,359,085

    Interest income                     (452,944)   (6,558,221)

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

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

    Loss before income taxes          12,789,735   114,658,146

    Future income tax recovery                 -    (1,115,000)
    -----------------------------------------------------------

    Net loss and comprehensive loss
     for the period                   12,789,735   113,543,146
    -----------------------------------------------------------
    -----------------------------------------------------------

    Basic and diluted loss per share        0.31
    ---------------------------------------------
    ---------------------------------------------

    Weighted average number of shares
     (basic and diluted)              41,180,748
    ---------------------------------------------
    ---------------------------------------------



                           Oncolytics Biotech Inc.

                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (unaudited)

                                      Three Month   Three Month    Nine Month
                                         Period        Period        Period
                                         Ending        Ending        Ending
                                       September     September     September
                                        30, 2009      30, 2008      30, 2009
                                           $             $             $
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES

    Net loss for the period           (2,693,992)   (4,140,832)  (10,986,395)
    Deduct non-cash items
      Amortization - intellectual
       property                                -        90,375       180,750
      Amortization - property and
       equipment                          15,772        11,853        49,612
      Stock based compensation             7,982        17,339        28,163
      Other non-cash items                     -             -             -
    Net changes in non-cash working
     capital                              60,253    (1,217,916)   (1,517,967)
    -------------------------------------------------------------------------
                                      (2,609,985)   (5,239,181)  (12,245,837)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Capital assets                        (1,325)      (10,927)       (4,674)
    Purchase of short-term
     investments                               -       (62,435)            -
    Redemption of short-term
     investments                               -     9,813,364     5,846,634
    Investment in BCY
     LifeSciences Inc.                         -             -             -
    Investment in Transition
     Therapeutics Inc.                         -             -             -
    -------------------------------------------------------------------------
                                          (1,325)    9,740,002     5,841,960
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Proceeds from exercise of
     warrants and stock options          342,570             -       715,835
    Proceeds from acquisition
     of private company                        -                   1,800,120
    Proceeds from private placements           -             -             -
    Proceeds from public offerings       (59,893)            -     6,112,746
    -------------------------------------------------------------------------
                                         282,677             -     8,628,701
    -------------------------------------------------------------------------

    Increase (decrease) in cash and
     cash equivalents during the
     period                           (2,328,633)    4,500,821     2,224,824

    Cash and cash equivalents,
     beginning of the period          11,893,352     8,179,341     7,429,895
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of the period                 9,654,719    12,680,162     9,654,719
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                    Cumulative
                                                       from
                                       Nine Month    inception
                                         Period     on April 2,
                                         Ending       1998 to
                                       September     September
                                        30, 2008      30, 2009
                                           $             $
    -----------------------------------------------------------
    OPERATING ACTIVITIES

    Net loss for the period          (12,789,735) (113,543,146)
    Deduct non-cash items
      Amortization - intellectual
       property                          271,125     3,615,000
      Amortization - property and
       equipment                          35,233       546,763
      Stock based compensation            54,955     4,797,007
      Other non-cash items                     -     1,383,537
    Net changes in non-cash working
     capital                             (35,573)    2,750,154
    -----------------------------------------------------------
                                     (12,463,995) (100,450,685)
    -----------------------------------------------------------

    INVESTING ACTIVITIES
    Capital assets                       (69,672)     (818,418)
    Purchase of short-term
     investments                        (314,631)  (49,416,864)
    Redemption of short-term
     investments                      18,813,364    48,998,380
    Investment in BCY
     LifeSciences Inc.                         -       464,602
    Investment in Transition
     Therapeutics Inc.                         -     2,532,343
    -----------------------------------------------------------
                                      18,429,061     1,760,043
    -----------------------------------------------------------

    FINANCING ACTIVITIES
    Proceeds from exercise of
     warrants and stock options                -    16,016,903
    Proceeds from acquisition
     of private company                        -     1,800,120
    Proceeds from private placements           -    38,137,385
    Proceeds from public offerings             -    52,390,953
    -----------------------------------------------------------
                                               -   108,345,361
    -----------------------------------------------------------

    Increase (decrease) in cash and
     cash equivalents during the
     period                            5,965,066     9,654,719

    Cash and cash equivalents,
     beginning of the period           6,715,096             -
    -----------------------------------------------------------
    Cash and cash equivalents,
     end of the period                12,680,162     9,654,719
    -----------------------------------------------------------
    -----------------------------------------------------------
    

To view the 2009 Third Quarter Report which includes the Consolidated Financial Statements, related Notes to Consolidated Financial Statements, and Management's Discussion and Analysis, please see the Company's third quarter 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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