News Releases
Oncolytics Biotech Inc. Announces 2008 Third Quarter Results

CALGARY, Nov. 4 /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, 2008.

Recent Pivotal Trial Decision

Oncolytics made a decision in early November to pursue a pivotal (Phase II/III) randomized trial using the combination of REOLYSIN® with paclitaxel/carboplatin in refractory patients with head and neck cancers. The decision was made following a review of results by the Company's Board of Directors from the Company's ongoing U.K. Phase I and Phase II combination REOLYSIN® and paclitaxel/carboplatin clinical trials. The results were presented November 1, 2008 at the International Society for Biological Therapy of Cancer (iSBTc) annual meeting in San Diego, CA.

Selected Third Quarter Highlights:-

Treatment of the 200th patient in clinical studies with REOLYSIN®;

-

Completion of patient enrolment in the dose escalation portion of its

U.K. clinical trial to evaluate the anti-tumour effects of systemic

administration of REOLYSIN® in combination with docetaxel

(Taxotere®) in patients with advanced cancers including bladder,

prostate, lung and upper gastro-intestinal;

-

The U.S. National Cancer Institute (NCI), part of the National

Institutes of Health, started enrolment in a Phase II clinical trial

for patients with metastatic melanoma using systemic administration

of REOLYSIN®;

-

The start of patient enrolment in a U.S. Phase II clinical trial

using intravenous administration of REOLYSIN® in combination with

paclitaxel and carboplatin in patients with advanced head and neck

cancers;

-

Initiation of a U.S. Phase II clinical trial using intravenous

administration of REOLYSIN® in combination with paclitaxel and

carboplatin in patients with NSCLC with K-RAS or EGFR-activated

tumours;

-

The grant of the Company's 28th U.S. patent which covers methods of

purifying reassorted reovirus from an FDA-approved cell line.

Latest Highlights

Subsequent to quarter end, the Company announced:

-

Eight of nine refractory head and neck cancer patients treated to

date have experienced either a partial response or stabilization of

disease in our Phase I and Phase II U.K. combination REOLYSIN® and

carboplatin/paclitaxel trials;

-

Nine of eleven evaluable patients have experienced stable disease or

better for at least four cycles in our U.K. combination REOLYSIN®

and docetaxel trial;

-

The selection of refractory head and neck cancers for the Company's

first pivotal trial;

-

Results of two preclinical studies which demonstrated synergy in

vitro and in vivo with the combination of REOLYSIN® and

chemotherapy;

-

Results of a preclinical study demonstrating that a single IV

administration of ReoT3D can result in substantial tumor growth delay

in melanoma-bearing nude mice;

-

The grant of the Company's 29th U.S. patent, which covers methods of

selectively removing cancer cells ex vivo from blood stem cells and

other organs using reovirus; and,

-

Successful completion of initial scale-up of its manufacturing

process for REOLYSIN® to the 100L commercial scale from the current

40L level.

Oncolytics Biotech Inc.

CONSOLIDATED BALANCE SHEETS

(unaudited)

As at,

September 30, December 31,

2008

2007

$

$

(Restated)

-------------------------------------------------------------------------

ASSETS

Current

Cash and cash equivalents

12,680,162

6,715,096

Short-term investments

-

18,498,733

Accounts receivable

47,891

80,085

Prepaid expenses

307,697

260,300

-------------------------------------------------------------------------

13,035,750

25,554,214

Property and equipment

235,542

201,103

Intellectual

property

271,125

542,250

-------------------------------------------------------------------------

13,542,417

26,297,567

-------------------------------------------------------------------------

-------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current

Accounts payable and accrued liabilities

2,800,857

2,821,227

-------------------------------------------------------------------------

Shareholders' equity

Share capital

Authorized: unlimited number of common shares

Issued: 41,180,748 (December 31, 2007

- 41,180,748)

92,759,665

92,759,665

Warrants

5,346,260

5,346,260

Contributed surplus

10,431,917

10,376,962

Deficit

(97,796,282) (85,006,547)

-------------------------------------------------------------------------

10,741,560

23,476,340

-------------------------------------------------------------------------

13,542,417

26,297,567

-------------------------------------------------------------------------

-------------------------------------------------------------------------

Oncolytics Biotech Inc.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(unaudited)

Cumulative

from

Three Month

Three Month

Nine Month

Nine Month

inception

Period

Period

Period

Period

on April 2,

Ending

Ending

Ending

Ending

1998 to

September

September

September

September

September

30, 2008

30, 2007

30, 2008

30, 2007

30, 2008

$

$

$

$

$

(Restated)

(Restated)

(Restated)

-------------------------------------------------------------------------

Revenue

Rights

revenue

-

-

-

-

310,000

-------------------------------------------------------------------------

-

-

-

-

310,000

-------------------------------------------------------------------------

Expenses

Research

and

develop-

ment

3,210,294

3,134,340

9,650,595

9,621,760

70,750,311

Operating

880,438

812,939

3,250,830

2,711,962

23,856,466

Stock based

compen-

sation

17,339

38,909

54,955

142,878

4,759,760

Foreign

exchange

loss/gain

29,026

18,917

(20,059)

2,829

637,651

Amortization

- intellec-

tual

property

90,375

90,375

271,125

271,125

3,343,875

Amortization

- property

and

equipment

11,853

10,197

35,233

30,061

483,630

-------------------------------------------------------------------------

4,239,325

4,105,677

13,242,679

12,780,615

103,831,693

-------------------------------------------------------------------------

Loss

before

the

follow-

ing:

4,239,325

4,105,677

13,242,679

12,780,615

103,521,693

Interest

income

(98,493)

(319,221)

(452,944)

(946,826)

(6,467,693)

Gain on

sale of

BCY

LifeSciences

Inc.

-

-

-

-

(299,403)

Loss on

sale of

Transition

Therapeutics

Inc.

-

-

-

-

2,156,685

-------------------------------------------------------------------------

Loss before

income

taxes

4,140,832

3,786,456

12,789,735

11,833,789

98,911,282

Future

income

tax

recovery

-

-

-

-

(1,115,000)

-------------------------------------------------------------------------

Net loss

and

compre-

hensive

loss for

the

period

4,140,832

3,786,456

12,789,735

11,833,789

97,796,282

-------------------------------------------------------------------------

-------------------------------------------------------------------------

Basic and

diluted

loss per

share

0.10

0.09

0.31

0.29

------------------------------------------------------------

------------------------------------------------------------

Weighted

average

number of

shares

(basic

and

diluted) 41,180,748

41,120,748

41,180,748

40,181,777

------------------------------------------------------------

------------------------------------------------------------

Oncolytics Biotech Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Cumulative

from

Three Month

Three Month

Nine Month

Nine Month

inception

Period

Period

Period

Period

on April 2,

Ending

Ending

Ending

Ending

1998 to

September

September

September

September

September

30, 2008

30, 2007

30, 2008

30, 2007

30, 2008

$

$

$

$

$

(Restated)

(Restated)

(Restated)

-------------------------------------------------------------------------

OPERATING

ACTIVITIES

Net loss

for the

period

(4,140,832)

(3,786,456) (12,789,735) (11,833,789) (97,796,282)

Deduct

non-cash

items

Amorti-

zation -

intel-

lectual

property

90,375

90,375

271,125

271,125

3,343,875

Amorti-

zation -

property

and

equip-

ment

11,853

10,197

35,233

30,061

483,630

Stock

based

compen-

sation

17,339

38,909

54,955

142,878

4,759,760

Other

non-cash

items

-

-

-

-

1,383,537

Net changes

in non-cash

working

capital

(1,217,916)

316,534

(35,573)

(46,262)

2,445,269

-------------------------------------------------------------------------

(5,239,181)

(3,330,441) (12,463,995) (11,435,987) (85,380,211)

-------------------------------------------------------------------------

INVESTING

ACTIVITIES

Capital

assets

(10,927)

(11,386)

(69,672)

(49,691)

(771,839)

Purchase

of short-

term

investments (62,435)

(255,688)

(314,631)

(742,853) (49,383,594)

Redemption

of short-

term

invest-

ments

9,813,364

-

18,813,364

-

48,965,110

Investment

in BCY

LifeSciences

Inc.

-

-

-

-

464,602

Investment

in

Transition

Therapeutics

Inc.

-

-

-

-

2,532,343

-------------------------------------------------------------------------

9,740,002

(267,074)

18,429,061

(792,544)

1,806,622

-------------------------------------------------------------------------

FINANCING

ACTIVITIES

Proceeds

from

exercise

of

warrants

and stock

options

-

-

-

-

15,259,468

Proceeds

from

private

placements

-

-

-

-

38,137,385

Proceeds

from

public

offerings

-

-

-

12,063,394

42,856,898

-------------------------------------------------------------------------

-

-

-

12,063,394

96,253,751

-------------------------------------------------------------------------

Increase

(decrease)

in cash

and cash

equiva-

lents

during

the

period

4,500,821

(3,597,515)

5,965,066

(165,137)

12,680,162

Cash and

cash

equiva-

lents,

beginning

of the

period

8,179,341

6,923,889

6,715,096

3,491,511

-

-------------------------------------------------------------------------

Cash and

cash

equiva-

lents,

end of

the

period

12,680,162

3,326,374

12,680,162

3,326,374

12,680,162

-------------------------------------------------------------------------

-------------------------------------------------------------------------To view the 2008 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 Phase I/II and Phase II human trials using REOLYSIN®, 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, 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 2008 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