Oncolytics Biotech Inc. Announces Pricing of Previously Announced Public Offering

CALGARY, Feb. 6 /PRNewswire-FirstCall/ – Oncolytics Biotech Inc.
(“Oncolytics” or the “Company”) (TSX:ONC; NASDAQ:ONCY) is pleased to announce
that in connection with the previously announced short form prospectus
offering, it has entered into an underwriting agreement with Canaccord Capital
Corporation, pursuant to which Oncolytics has agreed to issue 4,000,000 units,
each unit comprised of one common share and one-half of one common share
purchase warrant, at a price of $3.00 per unit for gross proceeds of
$12,000,000.00. Each whole common share purchase warrant shall entitle the
holder thereof to acquire one common share of the Company upon payment of
$3.50 at any time until 5:00 p.m. (Calgary time) on the date that is 36 months
following the closing of the offering. Additionally, Oncolytics has granted
Canaccord Capital Corporation an over-allotment option to purchase up to an
additional 600,000 units at a price of $3.00 per unit, exercisable at any time
up until 30 days after closing of the offering, increasing the gross proceeds
of the offering to $13,800,000.00.

The net proceeds from this offering 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. The offering
is expected to close on or about February 22, 2007 and is subject to the
receipt of all necessary regulatory and stock exchange approvals.

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. No offer to buy the securities can be
accepted and no part of the purchase price can be received until the
registration statement has become effective, and any such offer may be
withdrawn or revoked, without obligation or commitment of any kind, at any
time prior to the notice of its acceptance given after the effective date.

Canaccord Capital Corporation is acting as lead manager on the offering.
Once filed and receipted, a copy of the amended and restated short form
prospectus may be obtained from Canaccord Capital Corporation – in Canada,
call 416-869-7708, 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 – 416-869-7708).

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 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.