Oncolytics Biotech® Inc. Announces Initial US$1.0 Million Investment and Up to US$25.0 Million Common Share Purchase Agreement with Lincoln Park Capital Fund, LLC

CALGARY, Feb. 27, 2014 /PRNewswire/ – Oncolytics Biotech Inc. (“Oncolytics” or
the “Company”) (TSX:ONC; NASDAQ:ONCY) announced today that it has
entered into a share purchase agreement (the “Purchase Agreement”) with
Lincoln Park Capital Fund, LLC (“LPC”) that will provide an initial
investment in Oncolytics of US$1.0 million and make available
additional periodic investments of up to US$25.0 million over a
30-month term (the “Financing”).

Upon execution of the Purchase Agreement today, Oncolytics received an
investment of US$1.0 million in exchange for the issuance of 600,962
common shares to LPC at a per share purchase price of US$1.664. In
addition, subject to the terms and conditions of the Purchase
Agreement, Oncolytics, at its sole discretion, may sell up to US$25.0
million worth of common shares to LPC over the 30-month term. The
purchase price of the common shares will be based on prevailing market
prices of Oncolytics’ common shares immediately preceding the notice of
a sale without any fixed discount. Subject to the Purchase Agreement,
Oncolytics controls the timing and amount of any future investment and
LPC is obligated to make such purchases, if and when the Company
elects.  The Purchase Agreement does not impose any upper price limit
restrictions, negative covenants or restrictions on the Company’s
future financing activities. Oncolytics can terminate the Purchase
Agreement at any time at its sole discretion without any monetary cost
or penalty.  The Company will issue a commitment fee in common shares
to LPC in connection with the Purchase Agreement and on a pro rata
basis as the US$26,000,000 is funded by LPC.  LPC has also agreed not
to cause, or engage in any manner whatsoever in, any direct or indirect
short selling or hedging of the Company’s common shares.

“We are very pleased to have entered into a share purchase agreement
with Lincoln Park Capital,” said Dr. Brad Thompson, President and Chief
Executive Officer of Oncolytics. “The initial investment and commitment
by LPC provides us with increased flexibility as we continue with our
clinical programs.”

The Company has filed a prospectus supplement, dated February 27, 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 July 3, 2012, pursuant to which
the Company may issue up to US$13,300,000 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 Biotech Inc. 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.

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.