With a full slate of ongoing and planned Phase I and Phase II trials of its cancer drug Reolysin, Oncolytics Biotech Inc. bolstered its cash position with a C$12 million (US$10.3 million) public offering.

The Calgary, Alberta-based firm issued 4 million units - each unit comprising one common share and one-half of one share purchase warrant - priced at C$3 apiece. If underwriter Canaccord Capital Corp. exercises its full overallotment option for an additional 600,000 units, Oncolytics' proceeds could increase to C$13.8 million.

Combined with its existing cash, those funds should take the company "well into 2009," said Doug Ball, chief financial officer. Oncolytics had C$31.5 million in the bank as of Sept. 30, 2006.

While the company expects some of the proceeds to go toward manufacturing costs and for general corporate purposes, the bulk will be used to support the clinical program for Reolysin, a formulation of the human reovirus that has been shown to target the activated Ras pathway found in many tumor cells. Promising early results demonstrated the product's ability to "self-replicate in cancer cells without any genetic modification or alteration, and with no significant side effects," Ball told BioWorld Today.

Oncolytics recently expanded its early clinical program to include a variety of both monotherapy and combination trials in multiple cancer indications. That includes two recently approved trials. The first aims at testing Reolysin plus gemcitabine in patients with advanced pancreatic, lung and ovarian cancers; and the second will evaluate Reolysin plus docetaxel in patients with advanced bladder, prostate, lung and upper gastrointestinal cancers. In both those trials, Reolysin will be administered systemically.

There also is an ongoing Phase II study of an intratumoral injection of Reolysin in combination with radiation in patients with several different tumor types, including head and neck cancer and esophageal cancer. As a monotherapy, Reolysin is expected to be the subject of two trials sponsored by the National Cancer Institute in melanoma and ovarian cancer.

The studies primarily involve small numbers of patients, and are designed at help the company determine which specific indications initially to investigate in larger, late-stage trials.

"We wanted to make sure we've explored as many of these alternatives as we can," Ball said, "so when we set the final targets to commercialization, we've got adequate information and a good compilation of data" that could help support broader approval down the road.

Oncolytics retains all rights to Reolysin, though the company plans "to bring a partner on board at the appropriate time," Ball said, likely when it has data "that gives a good indication" of the product's efficacy.

Shares of Oncolytics gained 1 cent to close at $2.16 on the Nasdaq exchange (NASDAQ:ONCY) and remained unchanged on the Toronto Stock Exchange (TSX:ONC) to close at C$2.50.

In other financings news:

• Cobalis Corp., of Irvine, Calif., received a second closing of $675,000 under terms of its December security purchase agreement. Previously, a $2.5 million debenture was issued as the first closing, and the second closing was to be for shares underlying the $3.85 million funding. Cobalis intends to use the proceeds from its second closing to complete data collection and analysis and to report top-line efficacy results from its 10-week twin Phase III allergy trials for PreHistin. The trials, which completed dosing of 1,551 patients in October, are designed to test the efficacy of pre-seasonal treatment with PreHistin on moderate to moderately severe seasonal ragweed allergy patients.

• Toxin Alert Inc., of Toronto, closed a previously announced private placement of 400,000 units, each consisting of one common share and one nontransferrable warrant to purchase additional shares, priced at C60 cents each for gross proceeds of about C$240,000 (US$206,706.) Those funds will be added to working capital and will support commercialization of the company's Toxin Guard, a system of placing antibody-based tests on polymer packaging films to enable the detection of pathogens or other selected microorganisms.

• Pharmaxis Ltd., of Sydney, Australia, filed a shelf registration statement to issue, from time to time, up to $250 million over the next three years. The statement also covers potential future resale of up to 40 million shares held by current venture shareholders. Terms of any issue or resale will be established at the time of the offering. Shares of Pharmaxis (NASDAQ:PXSL) remained unchanged Thursday at $39.51.