Oncolytics Biotech Inc. Announces Closing of Public Share Offering

CALGARY, Feb. 22 /PRNewswire-FirstCall/ – Oncolytics Biotech Inc.
(“Oncolytics” or the “Company”) (TSX:ONC; NASDAQ:ONCY) is pleased to announce
that it has closed its previously announced prospectus offering. Oncolytics
issued 4,000,000 units to purchasers in Canada and the United States, each
unit being comprised of one common share and one-half of one common share
purchase warrant, at a price of Cdn.$3.00 per unit for gross proceeds of
Cdn.$12,000,000. Each whole common share purchase warrant entitles the holder
to acquire one common share of Oncolytics upon payment of Cdn.$3.50 at any
time until 5:00 p.m. (Calgary time) on February 22, 2010.

Oncolytics has granted Canaccord Capital Corporation, as the underwriter,
an over-allotment option to purchase up to an additional 600,000 units at any
time on or before March 24, 2007, the full exercise of which option would
increase the gross proceeds of the offering to Cdn.$13,800,000.

Oncolytics will use the net proceeds from this offering for its clinical
trial program, manufacturing activities in support of the clinical trial
program and for general corporate purposes.

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 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 shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any state or province in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such state or province. A copy of the final short form prospectus
relating to the units is available at www.sedar.com or may be obtained from
Canaccord Capital Corporation – in Canada, call 416-869-3290 in the U.S. call
1-617-788-1554, or send requests to: Attention: Lee Ward, P.O. Box 516, 161
Bay Street, Suite 3000, Toronto, Ontario M5J 2S1 (fax requests –

This press release contains forward-looking statements, within the meaning
of Section 21E of the United States Securities Exchange Act of 1934, as
amended. Forward-looking statements, including the Company’s expectations
related to the placement of the units, as to progress in the clinical trial
program and the Company’s belief as to the potential of REOLYSIN(R) 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 and maintain regulatory
approval for the offering, the availability of funds and resources to pursue
Research and Development projects, the efficacy of REOLYSIN(R) as a cancer
treatment, the success and timely completion of clinical studies and trials,
the Company’s ability to successfully commercialize REOLYSIN(R), 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 may be required pursuant to applicable
securities laws.

SOURCE Oncolytics Biotech Inc.