Oncolytics Biotech Inc. Announces Public Offering

CALGARY, Feb. 5 /PRNewswire-FirstCall/ – Oncolytics Biotech Inc.
(“Oncolytics”) (TSX:ONC; NASDAQ:ONCY) announced today that it has filed a
preliminary short form prospectus with Canadian securities regulators and a
related registration statement with the U.S. Securities and Exchange
Commission under the U.S.-Canada multi-jurisdictional disclosure system,
relating to a proposed public offering of units. Each unit will be composed of
one common share and one-half of one common share purchase warrant. The number
of units to be distributed and the price of each unit will be determined in
the context of the market with final terms to be determined at the time of

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.

A preliminary short form prospectus relating to the units has been filed
in the provinces of British Columbia, Alberta, Manitoba and Ontario, and a
registration statement under the U.S.-Canada multi-jurisdictional disclosure
system has been filed with the U.S. Securities and Exchange Commission, but
has not yet become effective. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement becomes
effective. 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withdrawn or revoked, without obligation or commitment of any kind, at any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. A
copy of the preliminary 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

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.