Oncolytics Biotech® Inc. Announces Amendment to Common Share Purchase Agreement with Lincoln Park Capital Fund, LLC

CALGARY, Oct. 20, 2014 /PRNewswire/ – Oncolytics Biotech® Inc. (“Oncolytics” or the “Company”) (TSX:ONC; NASDAQ:ONCY) announced
today that it has reached an agreement on amendments to its share
purchase agreement (the “Agreement”) with Lincoln Park Capital Fund,
LLC (“LPC”) dated February 27, 2014.

The specific amendments to the Agreement include allowing the Company to
sell shares to LPC at the Company’s sole option independent of the
closing price of the Common Stock, increasing the number of shares that
may be sold to LPC at certain price levels and changes to the way the
number of Commitment Shares issuable are calculated. In consideration
of the amendments to the Agreement, the Company shall issue 146,397
shares of Common Stock to LPC.  All other terms and conditions of the
Agreement remain in force without amendment.

“Amending our agreement with Lincoln Park provides us with an option to
incrementally access additional capital and better manage our balance
sheet,” said Dr. Brad Thompson, President and CEO of Oncolytics. “This
should allow us to maintain our focus on core operating initiatives in
the quarters ahead.”

The Company has filed a prospectus supplement, dated October 20, 2014,
with respect to its U.S. registration statement on Form F-10 (the
“Registration Statement”) and Canadian final base shelf prospectus (the
“Base Shelf Prospectus”), each dated August 1, 2014, pursuant to which
the Company may issue up to US$3,900,000 of common shares pursuant to
the terms of the Purchase Agreement (representing an aggregate market
value of not more than 10% of the market value of the Company’s
outstanding common shares based on the determination date under
applicable securities laws). Pursuant to the Purchase Agreement, the
Company may file additional prospectus supplements in the United States
and in Canada in the future to qualify the sale of additional common
shares to LPC that would result in aggregate gross proceeds to the
Company of up to US$26,000,000. No offers or sales of any common shares
will be made in Canada pursuant to the Purchase Agreement or the
prospectus supplement.

The Company plans to use the net proceeds for working capital and other
general corporate purposes, including funding ongoing operations.

The common shares to be issued in the Financing have been approved for
listing on the NASDAQ. The Toronto Stock Exchange has accepted notice
of the Financing and the Company is relying on the section 602(g)
exemption under the Toronto Stock Exchange Company Manual.

This news release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
common shares in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.

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 later-stage,
randomized human trials in various indications using REOLYSIN®, its proprietary formulation of the human reovirus. For further
information about Oncolytics, please visit: www.oncolyticsbiotech.com.

About Lincoln Park Capital
Lincoln Park Capital (LPC) is an institutional investor headquartered in
Chicago, Illinois. LPC’s experienced professionals manage a portfolio
of investments in public and private entities. These investments are in
a wide range of companies and industries emphasizing life sciences,
specialty financing, energy and technology. LPC’s investments range
from multiyear financial commitments to fund growth to special
situation financings to long-term strategic capital offering companies
certainty, flexibility and consistency. For more information, please
visit: www.lpcfunds.com.

This press release contains forward-looking statements within the
meaning of the U.S. Securities Act of 1933, as amended, and U.S.
Securities Exchange Act of 1934, as amended, and forward-looking
information within the meaning of Canadian securities laws. Statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that Oncolytics
expects or anticipates will or may occur in the future, including such
things as the proposed offering of common shares and the intended use
of proceeds and other such matters are forward-looking statements and
forward-looking information and 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 and
forward-looking information. Such risks and uncertainties include,
among others, risks related to the market conditions of the offering
and risks related to the Company’s business which may result in the
intended use of proceeds changing. 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 statement and
forward-looking information. Investors are cautioned against placing
undue reliance on forward-looking statements and forward-looking
information. The Company does not undertake to update these
forward-looking statements and forward-looking information, except as
required by applicable laws.

SOURCE Oncolytics Biotech Inc.