Oncolytics Biotech(R) Inc. Closes $6.9 Million Public Offering


    CALGARY, May 13 /CNW/ - Oncolytics Biotech Inc. ("Oncolytics") (TSX:ONC;
NASDAQ:  ONCY) is pleased to announce that it has closed its previously
announced prospectus offering. Oncolytics issued 3.45 million units, which
includes the full exercise of the overallotment option of 450,000 units. Each
unit is comprised of one common share of Oncolytics and one common share
purchase warrant. The units were issued at a price of $2.00 per unit for gross
proceeds of $6.9 million. Each whole common share purchase warrant entitles
the holder to acquire one common share of Oncolytics upon payment of $2.40 for
a three-year period commencing on the closing date, subject to an acceleration
of the expiry date in certain circumstances.
    Net proceeds after expenses are expected to be approximately $6.2
million, and will be used by Oncolytics for its clinical trial program,
manufacturing activities in support of the clinical trial program and for the
company's general corporate purposes.
    After giving effect to this transaction, Oncolytics has 49,200,869 common
shares issued and outstanding.

    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 Phase I/II and Phase II human trials
using REOLYSIN(R), its proprietary formulation of the human reovirus, alone
and in combination with radiation or chemotherapy. For further information
about Oncolytics, please visit www.oncolyticsbiotech.com

    This press release contains forward-looking statements. Forward-looking
statements, including the Company's expectations related to the placement of
the units and the estimate of net proceeds received, as to progress in the
clinical trial program and the Company's belief as to the potential of
REOLYSIN as a cancer therapeutic, 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, ability of the Company to complete the
offering on the terms set forth in its agreements, the Company's ability to
obtain regulatory approval for the offering, 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 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 may be required pursuant to applicable
securities laws.

For further information:

For further information: Oncolytics Biotech Inc., Cathy Ward, 210, 1167
Kensington Cr NW, Calgary, Alberta, T2N 1X7, Tel: (403) 670-7377, Fax: (403)
283-0858, cathy.ward@oncolytics.ca; The Equicom Group, Nick Hurst, 600, 205
5th Ave. SW, Calgary, Alberta, T2P 2V7, Tel: (403) 538-4845, Fax: (403)
266-2453, nhurst@equicomgroup.com

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