The Consolidated Biotech Thread 2005

Oncolytics Biotech Inc. Announces $16.48 Million Private Placement
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THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW./

CALGARY, Dec. 13 /CNW/ - Oncolytics Biotech Inc. ("Oncolytics") (TSX:ONC,
NASDAQ:ONCY) announced today that it has entered into a private placement with
a number of institutional investors. Under the agreement, Oncolytics will
issue 3,200,000 units (the "Units") at a price of $5.15 per Unit, resulting in
gross proceeds to the Company of $16,480,000. Each Unit consists of one common
share and one-half of one common share purchase warrant, with each whole
common share purchase warrant entitling the holder to acquire one common share
upon payment of $6.15 per share for a period of 36 months following the
closing date. The net proceeds from the offering will be used to support the
initiation of the company's Phase II clinical program and for general
corporate purposes. The offering is expected to close on or about December 29,
2005 and is subject to the receipt of all necessary regulatory and stock
exchange approvals.
"The funds from this financing are expected to be used to expand the
clinical trial program for REOLYSIN(R) in 2006 and 2007," said Dr. Brad
Thompson, President and CEO of Oncolytics. "Based on indications of activity
in our ongoing U.K. Phase I systemic trial, previous clinical trials, and
preclinical examination of REOLYSIN(R) in combination with several
chemotherapeutic agents, our Phase II clinical trial program will potentially
include combination chemotherapy/REOLYSIN(R) trials in colorectal, prostate,
pancreatic and non-small cell lung cancer, and combination radiation/
REOLYSIN(R) trials in a number of tumour types."
The securities to be issued by Oncolytics have not and will not be
registered under the United States Securities Act of 1933, as amended (the
"1933 Act"), or the securities laws of any state of the United States, and may
not be offered or sold in the United States absent registration or an
applicable exemption therefrom under the 1933 Act and the securities laws of
all applicable states. This press release is not an offer of securities in the
United States.

About Oncolytics Biotech Inc.
Oncolytics is a Calgary-based biotechnology company focused on the
development of REOLYSIN(R), its proprietary formulation of the human reovirus,
as a potential cancer therapeutic. Oncolytics' researchers have demonstrated
that the reovirus is able to selectively kill cancer cells and, in vitro, kill
human cancer cells that are derived from many types of cancer including
breast, bladder, prostate, pancreatic and brain tumours, and have also
demonstrated successful cancer treatment results in a number of animal models.
Previous Phase I clinical trial results have indicated that REOLYSIN(R) was
well tolerated and that the reovirus demonstrated activity in tumours injected
with REOLYSIN(R).

This press release contains forward-looking statements, within the
meaning of Section 21E of the 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 private placement on the terms
set forth in its agreements, the use of proceeds, 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.
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For further information: Please contact: Oncolytics Biotech Inc., Doug
Ball, CFO, 210, 1167 Kensington Cr NW, Calgary, Alberta, T2N 1X7,
Tel: (403) 670-7377, Fax: (403) 283-0858, www.oncolyticsbiotech.com; The
Equicom Group, Nick Hurst, 20 Toronto Street, Toronto, Ontario, M5C 2B8, Tel:
(416) 815-0700 ext.226, Fax: (416) 815-0080, nhurst@equicomgroup.com; The
Investor Relations Group, John Nesbett or Damian McIntosh, 11 Stone St, 3rd
Floor, New York, NY, 10004, Tel: (212) 825-3210, Fax: (212) 825-3229,
dmcintosh@investorrelationsgroup.com; RenMark Financial Communications,
John Boidman, 2080 Rene Levesque Blvd. W., Montreal, PQ, H3H 1R6,
Tel: (514) 939-3989, Fax: (514) 939-3717, jboidman@renmarkfinancial.com