20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended
December 31, 2017
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
OR
o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report:

Commission file number: 000-31062

ONCOLYTICS BIOTECH INC.

(Exact name of Registrant as specified in its charter)

Province of Alberta, Canada

(Jurisdiction of incorporation or organization)

Suite 210, 1167 Kensington Crescent, N.W. Calgary, Alberta, T2N 1X7

(Address of principal executive offices)

Kirk Look

Suite 210, 1167 Kensington Crescent, N.W. Calgary, Alberta, T2N 1X7

Tel: (403) 670-7377

E-mail: info@oncolytics.ca

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Shares, no par value

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:  None

Indicate the number of outstanding shares of each of the Registrant’s classes of capital or common stock as of the close of the period covered by the annual report: 141,805,722 common shares as at December 31, 2017

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No ý

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every  Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ý

No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.  See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company in Rule 12b-2 of the Exchange Act.  (Check one)

Large accelerated filer o	Accelerated filer o	Non-accelerated filer x
		Emerging growth company o

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

US GAAP	International Financial Reporting Standards as issued  by the International Accounting Standards Board	Other
o	x	o

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 o                      Item 18  o

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o No ý

ONCOLYTICS BIOTECH INC.

FORM 20-F

TABLE OF CONTENTS

Item 1.      Identity of Directors, Senior Management and Advisers	5
Item 2.      Offer Statistics and Expected Timetable	5
Item 3.      Key Information	5
Item 4.      Information on the Company	17
Item 4A. Unresolved Staff Comments	24
Item 5.      Operating and Financial Review and Prospects	24
Item 6.      Directors, Senior Management and Employees	25
Item 7.      Major Shareholders and Related Party Transactions	42
Item 8.       Financial Information	43
Item 9.      The Offer and Listing	43
Item 10.    Additional Information	45
Item 11.    Quantitative and Qualitative Disclosures About Market Risk	56
Item 12.    Description of Securities Other Than Equity Securities	56
Item 13.    Defaults, Dividend Arrearages and Delinquencies	57
Item 14.    Material Modifications to the Rights of Security Holders and Use of Proceeds	57
Item 15.     Controls and Procedures	57
Item 16. [Reserved]	58
Item 16A.  Audit Committee Financial Expert	58
Item 16B.   Code of Ethics	58
Item 16C.   Principal Accountant Fees and Services	58
Item 16D.   Exemptions from the Listing Standards for Audit Committees	59
Item 16E.   Purchase of Equity Securities by the Issuer and Affiliated Purchases	59
Item 16F.   Change in Registrant's Certifying Accountants	59
Item 16G.  Corporate Governance	59
Item 16H. Mine Safety Disclosure	59
Item 17.      Financial Statements	59
Item 18       Financial Statements	60
Item 19.      Exhibits	61
Signatures	62
Financial Statements	F1 - F26

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

All references in this annual report on Form 20-F to the terms “we”, “our”, “us”, “the Company” and “Oncolytics” refer to Oncolytics Biotech Inc.

Certain statements in this annual report on Form 20-F and the documents attached as exhibits to this annual report, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Oncolytics Biotech Inc., or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts, and include, but are not limited to, estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to the efficacy of our technologies; the timing and results of clinical studies related to our technologies; future operations, products and services; the impact of regulatory initiatives on our operations; the size of and opportunities related to the markets for our technologies; general industry and macroeconomic growth rates; expectations related to possible joint and/or strategic ventures and statements regarding future performance. Forward-looking statements generally, but not always, are identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “projects”, “potential”, “possible” and similar expressions, or that events or conditions “will,” “may,” “could” or “should” occur.

The forward-looking statements in this annual report are subject to various risks and uncertainties, most of which are difficult to predict and generally beyond our control, including without limitation:

• risks related to all of our products, including REOLYSIN^®, being in the research and development stage and requiring further development and testing before they can be marketed commercially;

• risks inherent in pharmaceutical research and development;

• risks related to timing and possible delays in our clinical trials;

• risks related to some of our clinical trials being conducted in, and subject to the laws of foreign countries;

• risks related to our pharmaceutical products being subject to intense regulatory approval processes in the United States and other foreign jurisdictions;

• risks related to being subject to government manufacturing and testing regulations;

• risks related to the extremely competitive biotechnology industry and our competition with larger companies with greater resources;

• risks related to our reliance on patents and proprietary rights to protect our technology;

• risks related to potential products liability claims;

• risks related to our limited manufacturing experience and reliance on third parties to commercially manufacture our products, if and when developed;

• risks related to our new products not being accepted by the medical community or consumers;

• risks related to our technologies becoming obsolete;

• risks related to our dependence on third party relationships for research and clinical trials;

• risks related to our license, development, supply and distribution agreement (the “Licensing Agreement”) with Adlai Nortye Biopharma Co. Ltd. (“Adlai”);

• risks related to our lack of operating revenues and history of losses;

• uncertainty regarding our ability to obtain third-party reimbursement for the costs of our product;

• risks related to other third-party arrangements;

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• risks related to our ability to obtain additional financing to fund future research and development of our products and to meet ongoing capital requirements;

• risks related to potential increases in the cost of director and officer liability insurance;

• risks related to our dependence on key employees and collaborators;

• risks related to Barbados law;

• risks related to the effect of changes in the law on our corporate structure;

• risks related to expenses in foreign currencies and our exposure to foreign currency exchange rate fluctuations;

• risks related to our compliance with the Sarbanes-Oxley Act of 2002, as amended;

• risks related to our status as a foreign private issuer;

•  risk related to  possible “passive foreign investment company” status;

• risks related to fluctuations in interest rates;

• risks related to information technology systems; and

• risks related to our common shares. 

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements.  Some of the important risks and uncertainties that could affect forward-looking statements are described further under the section heading “Item 3. Key Information – D. Risk Factors” below.  If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected.  Forward-looking statements in this document are not a prediction of future events or circumstances, and those future events or circumstances may not occur.  Given these uncertainties, users of the information included herein, including investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements.  Investors should consult our quarterly and annual filings with the Canadian and US securities commissions for additional information on risks and uncertainties relating to forward-looking statements.  We do not assume responsibility for the accuracy and completeness of these statements.

Forward-looking statements are based on our beliefs, opinions and expectations at the time they are made, and we do not assume any obligation to update our forward-looking statements if those beliefs, opinions, or expectations, or other circumstances, should change, except as required by applicable law.

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CURRENCY AND EXCHANGE RATES

Canadian Dollars Per US Dollar

The following table sets out the exchange rates for United States dollars (“US$”) expressed in terms of Canadian dollars (“Cdn$”) including the average exchange rates (based on the average of the exchange rates on the last day of each month in such periods) and the range of high and low exchange rates for such periods.

	Canadian Dollars Per One US Dollar
	2017	2016	2015	2014	2013
Average for the period	1.2986	1.3248	1.2787	1.1045	1.0299

For the Month of
	February 2018	January 2018	December 2017	November 2017	October 2017	September 2017
High for the period	1.2809	1.2535	1.2886	1.2888	1.2893	1.2480
Low for the period	1.2288	1.2293	1.2545	1.2683	1.2472	1.2128

Exchange rates are based on the Bank of Canada average daily exchange rates (prior to April 2017, rates were based on the Bank of Canada nominal noon exchange rates). The average daily exchange rate on March 15, 2018 as reported by the Bank of Canada for the conversion of United States dollars into Canadian dollars was US$1.00 = Cdn$1.3032.  Unless otherwise indicated, in this annual report on Form 20-F, all references herein are to Canadian Dollars.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable

ITEM 3. KEY INFORMATION

A. Selected Financial Data

The selected financial data presented below for the five years ended December 31, 2017 is presented in Canadian dollars and is derived from our consolidated financial statements in Canadian dollars and in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The information set forth below should be read in conjunction with our consolidated financial statements (including notes thereto) included under Item 18 and "Operating and Financial Review and Prospects" included under Item 5. For exchange rate data please see the section heading “Currency and Exchange Rates” above.

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	2017		2016		2015		2014		2013
	$		$		$		$		$
Revenues	—		—		—		—		—
Net loss(1)	(15,616,851	)	(15,139,979	)	(13,722,995	)	(18,619,335	)	(23,532,647	)
Net comprehensive loss	(15,797,181	)	(15,346,897	)	(13,242,060	)	(18,418,990	)	(23,395,834	)
Basic and diluted loss per share(2)	(0.12	)	(0.13	)	(0.12	)	(0.21	)	(0.28	)
Total assets(2)	18,150,449		14,758,284		27,383,798		17,193,190		28,222,027
Shareholders’ equity(2)	8,283,846		10,689,620		24,674,306		13,819,193		22,213,366
Cash dividends declared per share(3)	Nil		Nil		Nil		Nil		Nil
Weighted average number of common shares outstanding	132,395,752		119,880,200		112,613,845		87,869,149		83,530,981

Notes:

1) Included in net loss and net loss per share for the year ended December 31, 2017 are share based payment expenses of $578,703 (2016 - $406,078; 2015 - $429,537; 2014 - $980,325; 2013 - $424,384).

2) We issued 20,547,500 common shares for net cash proceeds of $12,812,704 in 2017 (2016 - 3,106,600 common shares for net cash proceeds of $956,133; 2015 - 24,639,128 common shares for net cash proceeds of $23,667,654; 2014 - 8,708,676 common shares for net cash proceeds of $9,044,492; 2013 - 8,093,533 common shares for net cash proceeds of 30,398,036).

3) We have not declared or paid any dividends since incorporation.

B. Capitalization and Indebtedness

Not Applicable

C. Reasons for the Offer and Use of Proceeds

Not Applicable

D. Risk Factors

Investment in our common shares ("Common Shares") involves a high degree of risk. You should carefully consider, among other matters, the following risk factors in addition to the other information in this Annual Report on Form 20-F when evaluating our business because these risk factors may have a significant impact on our business, financial condition, operating results or cash flow. If any of the material risks described below or in subsequent reports we file with the SEC actually occur, they may materially harm our business, financial condition, operating results or cash flow. Additional risks and uncertainties that we have not yet identified or that we presently consider to be immaterial may also materially harm our business, financial condition, operating results or cash flow.

Research and Development Risks

All of our potential products, including REOLYSIN, are in the research and development stage and will require further development and testing before they can be marketed commercially.

Prospects for companies in the biotechnology industry generally may be regarded as uncertain given the nature of the industry and, accordingly, investments in biotechnology companies should be regarded as speculative. We are currently in the research and development stage on one product, REOLYSIN, for human application, the riskiest stage for a company in the biotechnology industry. It is not possible to predict, based upon studies in animals and early stage human clinical trials, whether REOLYSIN will prove to be safe and effective in humans. REOLYSIN will require additional research and development, including extensive additional clinical testing, before we will be able to obtain the approvals of the relevant regulatory authorities in applicable countries to market REOLYSIN commercially. There can be no assurance that the research and development programs we conduct will result in REOLYSIN or any other products becoming commercially viable products, and in the event that any product or products result from the research and development program, it is unlikely they will be commercially available for a number of years.

To achieve profitable operations we, alone or with others, must successfully develop, introduce and market our products. To obtain regulatory approvals for products being developed for human use, and to achieve commercial success, human clinical trials must demonstrate that the product is safe for human use and that the product shows efficacy. Unsatisfactory results obtained from a

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particular study relating to a program may cause us to abandon our commitment to that program or the product being tested. No assurances can be provided that any current or future animal or human test, if undertaken, will yield favourable results. If we are unable to establish that REOLYSIN is a safe, effective treatment for cancer, we may be required to abandon further development of the product and develop a new business strategy.

There are inherent risks in pharmaceutical research and development.

Pharmaceutical research and development is highly speculative and involves a high and significant degree of risk. The marketability of any product we develop will be affected by numerous factors beyond our control, including but not limited to:

• the discovery of unexpected toxicities or lack of sufficient efficacy of products which make them unattractive or unsuitable for human use;

• preliminary results as seen in animal and/or limited human testing may not be substantiated in larger, controlled clinical trials;

• manufacturing costs or other production factors may make manufacturing of products ineffective, impractical and non-competitive;

• proprietary rights of third parties or competing products or technologies may preclude commercialization;

• requisite regulatory approvals for the commercial distribution of products may not be obtained; and

• other factors may become apparent during the course of research, up-scaling or manufacturing which may result in the discontinuation of research and other critical projects.

Our products under development have never been manufactured on a commercial scale, and there can be no assurance that such products can be manufactured at a cost or in a quantity to render such products commercially viable. Production and utilization of our products may require the development of new manufacturing technologies and expertise. The impact on our business in the event that new manufacturing technologies and expertise are required to be developed is uncertain. There can be no assurance that we will successfully meet any of these technological challenges or others that may arise in the course of development.

Any failure or delay in clinical trials for our products, including REOLYSIN, may cause us to incur additional costs or delay or prevent the commercialization of our products and could severely harm our business.

We must conduct extensive clinical trials to demonstrate the safety and efficacy of our products in humans. Clinical testing, in particular, is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome.  A failure of one or more of our clinical trials can occur at any stage of testing. We may experience numerous unforeseen events during, or as a result of, the clinical trial process, which could delay or prevent us from receiving marketing approval or commercializing our product candidates, including the following:

• Our clinical trials may produce negative or inconclusive results, and we may decide, or regulatory authorities may require us, to conduct additional clinical trials or we may abandon projects that we expect to be promising;

• The number of subjects required for our clinical trials may be larger than we anticipate, enrollment in our clinical trials may be slower than we anticipate, or participants may drop out of our clinical trials at a higher rate than we anticipate;

• We might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable health risks;

• Regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or our clinical protocols;

• Regulators may refuse to accept or consider data from clinical trials for various reasons, including noncompliance with regulatory requirements or our clinical protocols;

• The cost of our clinical trials may be greater than we anticipate; and

• The supply or quality of our products or other materials necessary to conduct our clinical trials may be insufficient or inadequate.

Additionally, subject enrollment, which is a significant factor in the timing of clinical trials, is affected by a variety of factors, including the following:

• The size and nature of the subject population;

• The proximity of subjects to clinical sites;

• The eligibility criteria for the trial;

• The design of the clinical trial;

• Competing clinical trials; and

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• Clinicians’ and subjects’ perceptions as to the potential advantages of the medication being studied in relation to other available therapies, including any new medications that may be approved for the indications we are investigating.

Furthermore, we plan to rely on clinical trial sites to ensure the proper and timely conduct of our clinical trials, and while we have agreements governing their committed activities, we have limited influence over their actual performance. Any delays or unanticipated problems during clinical testing, such as enrollment in our clinical trials being slower than we anticipate or participants dropping out of our clinical trials at a higher rate than we anticipate, could increase our costs, slow down our product development and approval process and jeopardize our ability to commence product sales and generate revenues.

Financial Condition Risks

We have no operating revenues and a history of losses.

To date, we have not generated sufficient revenues to offset our research and development costs and accordingly have not generated positive cash flow or made an operating profit. As of December 31, 2017, we had an accumulated deficit of $294.4 million and we incurred net losses of $15.6 million, $15.1 million and $13.7 million for the years ended December 31, 2017, 2016, and 2015, respectively. We anticipate that we will continue to incur significant losses during 2018 and in the foreseeable future. We do not expect to reach profitability at least until after successful and profitable commercialization of one or more of our products. Even if one or more of our products are profitably commercialized, the initial losses incurred by us may never be recovered.

We may not be able to obtain third-party reimbursement for the cost of our product.

Government authorities and third party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary trend in the US healthcare industry and elsewhere is cost containment. Government authorities and these third party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Uncertainty exists regarding the reimbursement status of newly-approved pharmaceutical products and reimbursement may not be available for REOLYSIN.  Any reimbursements granted may not be maintained or limits on reimbursements available from third-party payors may reduce the demand for, or negatively affect the price of, these products. If REOLYSIN does not qualify for reimbursement, if reimbursement levels diminish, or if reimbursement is denied, our sales and profitability would be adversely affected.

Third-Party Risk

In the normal course of our business, we have entered into contractual arrangements with third parties which subject us to the risk that such parties may default on their obligations. Oncolytics may be exposed to third party credit risk through our contractual arrangements with our current contract manufacturer, the institutions which operate our clinical trials, or our contract research organizations and other parties.  In the event such entities fail to meet their contractual obligations to Oncolytics, such failures could have a material adverse effect on Oncolytics and our operations.

We may need additional financing in the future to fund the research and development of our products and to meet our ongoing capital requirements.

As of December 31, 2017, we had cash and cash equivalents (including short-term investments) of $11.8 million. Working capital was approximately $12.6 million.  We anticipate that we will need additional financing in the future to fund research and development and to meet our ongoing capital requirements.  The amount of future capital requirements will depend on many factors, including continued scientific progress in our drug discovery and development programs, progress in our pre-clinical and clinical evaluation of drug candidates, time and expense associated with filing, prosecuting and enforcing our patent claims and costs associated with obtaining regulatory approvals.  In order to meet such capital requirements, we will consider contract fees, collaborative research and development arrangements, and additional public or private financings (including the incurrence of debt and the issuance of additional equity securities) to fund all or a part of particular programs as well as potential partnering or licensing opportunities.

Oncolytics, from time to time, along with all other pharmaceutical research and development entities, may have restricted access to capital, bank debt and equity, and, from time to time, may face increased borrowing costs. Although our business and asset base have not changed, the lending capacity of all financial institutions fluctuates causing a corresponding change in risk premiums. As future operations will be financed out of funds generated from financing activities, our ability to do so is dependent on, among other factors, the overall state of capital markets and investor appetite for investments in the pharmaceutical industry and our securities in particular.

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Should we elect to satisfy our cash commitments through the issuance of securities, by way of either private placement or public offering or otherwise, there can be no assurance that our efforts to raise such funding will be successful, or achieved on terms favourable to us or our existing shareholders.  If adequate funds are not available on terms favorable to us, we may have to reduce substantially or eliminate expenditures for research and development, testing, production and marketing of our proposed product, or obtain funds through arrangements with corporate partners that require us to relinquish rights to certain of our technologies or product.  There can be no assurance that we will be able to raise additional capital if our current capital resources are exhausted.

Regulatory Risks

Pharmaceutical products are subject to intense regulatory approval processes.

The regulatory process for pharmaceuticals, which includes preclinical studies and clinical trials of each compound to establish its safety and efficacy, takes many years and requires the expenditure of substantial resources. Moreover, if regulatory approval of a drug is granted, such approval may entail limitations on the indicated uses for which it may be marketed. Failure to comply with applicable regulatory requirements can, among other things, result in suspension of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. Further, government policy may change, and additional government regulations may be established that could prevent or delay regulatory approvals for our products. In addition, a marketed drug and its manufacturer are subject to continual review. Later discovery of previously unknown problems with the product or manufacturer may result in restrictions on such product or manufacturer, including withdrawal of the product from the market.

The United States Food and Drug Administration (“FDA”) and similar regulatory authorities in other countries may deny approval of a new drug application if required regulatory criteria are not satisfied, or may require additional testing. Product approvals may be withdrawn if compliance with regulatory standards is not maintained or if problems occur after the product reaches the market. The FDA and similar regulatory authorities in other countries may require further testing and surveillance programs to monitor the pharmaceutical product that has been commercialized. Non-compliance with applicable requirements can result in fines and other judicially imposed sanctions, including product withdrawals, product seizures, injunction actions and criminal prosecutions.

In addition to our own pharmaceuticals, we may supply active pharmaceutical ingredients and advanced pharmaceutical intermediates for use in our customers’ drug products. The final drug products in which the pharmaceutical ingredients and advanced pharmaceutical intermediates are used, however, are subject to regulation for safety and efficacy by the FDA and possibly other regulatory authorities in other jurisdictions.  Such products must be approved by such agencies before they can be commercially marketed. The process of obtaining regulatory clearance for marketing is uncertain, costly and time consuming. We cannot predict how long the necessary regulatory approvals will take or whether our customers will ever obtain such approval for their products. To the extent that our customers do not obtain the necessary regulatory approvals for marketing new products, our product sales could be adversely affected.

The FDA and other governmental regulators have increased requirements for drug purity and have increased environmental burdens upon the pharmaceutical industry. Because pharmaceutical drug manufacturing is a highly regulated industry, requiring significant documentation and validation of manufacturing processes and quality control assurance prior to approval of the facility to manufacture a specific drug, there can be considerable transition time between the initiation of a contract to manufacture a product and the actual initiation of manufacture of that product. Any lag time in the initiation of a contract to manufacture product and the actual initiation of manufacture could cause us to lose profits or incur liabilities.

The pharmaceutical regulatory regime in Europe and other countries is generally similar to that of the United States. We could face similar risks in these other jurisdictions as the risks described above.

Our operations and products may be subject to other government manufacturing and testing regulations.

Securing regulatory approval for the marketing of therapeutics by the FDA in the United States and similar regulatory agencies in other countries is a long and expensive process, which can delay or prevent product development and marketing. Approval to market products may be for limited applications or may not be received at all.

The products we anticipate manufacturing will have to comply with the FDA’s current Good Manufacturing Practices (“cGMP”) and other FDA and local government guidelines and regulations, including other international regulatory requirements and guidelines. Additionally, certain of our customers may require the manufacturing facilities contracted by us to adhere to additional manufacturing standards, even if not required by the FDA. Compliance with cGMP regulations requires manufacturers to expend time, money and effort in production and to maintain precise records and quality control to ensure that the product meets applicable specifications and other requirements. The FDA and other regulatory bodies periodically inspect drug-manufacturing facilities to ensure compliance with applicable cGMP requirements. If the manufacturing facilities contracted by us fail to comply with the

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cGMP requirements, the facilities may become subject to possible FDA or other regulatory action and manufacturing at the facility could consequently be suspended. We may not be able to contract suitable alternative or back-up manufacturing facilities on terms acceptable to us or at all.

The FDA or other regulatory agencies may also require the submission of any lot of a particular product for inspection. If the lot product fails to meet the FDA requirements, then the FDA could take any of the following actions: (i) restrict the release of the product; (ii) suspend manufacturing of the specific lot of the product; (iii) order a recall of the lot of the product; or (iv) order a seizure of the lot of the product.

We are subject to regulation by governments in many jurisdictions.  If we do not comply with healthcare, drug, manufacturing and environmental regulations, among others, in such jurisdiction, our existing and future operations may be curtailed, and we could be subject to liability.

In addition to the regulatory approval process, we may be subject to regulations under local, provincial, state, federal and foreign law, including, but not limited to, requirements regarding occupational health, safety, laboratory practices, environmental protection and hazardous substance control, and may be subject to other present and future local, provincial, state, federal and foreign regulations.

Intellectual Property Risks

We rely on patents and proprietary rights to protect our technology.

Our success will depend, in part, on our ability to obtain patents, maintain trade secret protection and operate without infringing the rights of third parties. We have received Granted Patents in countries throughout the world, including the United States, Canada, Europe, and Japan.  We file our Applications for Patent in the United States and under the PCT, allowing us to subsequently file in other jurisdictions.  Our success will depend, in part, on our ability to obtain, enforce and maintain patent protection for our technology in Canada, the United States and other countries. We cannot be assured that patents will issue from any pending applications or that claims now or in the future, if any, allowed under issued patents will be sufficiently broad to protect our technology. In addition, no assurance can be given that any patents issued to, or licensed by us, will not be challenged, invalidated, infringed or circumvented, or that the rights granted thereunder will provide continuing competitive advantages to us.

The patent positions of pharmaceutical and biotechnology firms, including us, are generally uncertain and involve complex legal and factual questions. In addition, it is not known whether any of our current research endeavours will result in the issuance of patents in Canada, the United States, or elsewhere, or if any patents already issued will provide significant proprietary protection or will be circumvented or invalidated. Since patent applications in the United States and Canada may be maintained in secrecy until at least 18 months after filing of the original priority application, and since publication of discoveries in the scientific or patent literature tends to lag behind actual discoveries by several months, we cannot be certain that we or any licensor were the first to create inventions claimed by pending patent applications or that we or the licensor were the first to file patent applications for such inventions. Loss of patent protection could lead to generic competition for these products, and others in the future, which would materially and adversely affect our financial prospects for these products.

Similarly, since patent applications filed before November 29, 2000 in the United States may be maintained in secrecy until the patents issue or foreign counterparts, if any, publish, we cannot be certain that we or any licensor were the first creator of inventions covered by pending patent applications or that we or such licensor were the first to file patent applications for such inventions. There is no assurance that our patents, if issued, would be held valid or enforceable by a court or that a competitor’s technology or product would be found to infringe such patents.

Accordingly, we may not be able to obtain and enforce effective patents to protect our proprietary rights from use by competitors.  If other such parties obtain patents for certain information relied on by us in conducting our business, then we may be required to stop using, or pay to use, certain intellectual property, and as such, our competitive position and profitability could suffer as a result.

Third parties may choose to file patent infringement claims against us; defending ourselves from such allegations would be costly, time-consuming, distracting to management and could materially affect our business.

Our development and commercialization activities, as well as any product candidates or products resulting from these activities, may infringe or be claimed to infringe patents and other intellectual property rights of third parties under which we do not hold sufficient licenses or other rights. Additionally, third parties may be successful in obtaining patent protection for technologies that cover development activities in which we are already engaged. Third parties may own or control these patents and intellectual

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property rights in the United States and abroad. These third parties may have substantially greater financial resources than us and could bring claims against us that could cause us to incur substantial expenses to defend against these claims and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement or other similar suit were brought against us, we could be forced to stop or delay development, manufacturing or sales of the product or product candidate that is the subject of the suit. Intellectual property litigation in the biopharmaceutical industry is common, and we expect this trend to continue.

As a result of patent infringement or other similar claims, or to avoid potential claims, we may choose or be required to seek a license from the third party and be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we were able to obtain a license, the rights may be non-exclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms, if at all, or if an injunction is granted against us, which could harm our business significantly.

If we are unable to protect the confidentiality of our proprietary information andknow-how, the value of our technology and products could be adversely affected.

In addition to patented technology, we rely upon unpatented proprietary technology, processes and know-how. However, these types of trade secrets can be difficult to protect. We seek to protect this confidential information, in part, through agreements with our employees, consultants and third parties as well as confidentiality policies and audits, although these may not be successful in protecting our trade secrets and confidential information.

These agreements may be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise become known, including through a potential cyber security breach, or may be independently developed by competitors. If we are unable to protect the confidentiality of our proprietary information and know-how, competitors may be able to use this information to develop products that compete with our products, which could adversely impact our business.

Other Business Risks

The biotechnology industry is extremely competitive and we must successfully compete with larger companies with substantially greater resources.

Technological competition in the pharmaceutical industry is intense and we expect competition to increase. Other companies are conducting research on therapeutics involving innate and adaptive immune responses as well as other novel treatments or therapeutics for the treatment of cancer which may compete with our product. Many of these competitors are more established, benefit from greater name recognition and have substantially greater financial, technical and marketing resources than us. In addition, many of these competitors have significantly greater experience in undertaking research, preclinical studies and human clinical trials of new pharmaceutical products, obtaining regulatory approvals and manufacturing and marketing such products. In addition, there are several other companies and products with which we may compete from time to time, and which may have significantly better and larger resources than we do. Accordingly, our competitors may succeed in manufacturing and/or commercializing products more rapidly or effectively, which could have a material adverse effect on our business, financial condition or results of operations.

We anticipate that we will face increased competition in the future as new products enter the market and advanced technologies become available. There can be no assurance that existing products or new products developed by our competitors will not be more effective, or be more effectively manufactured, marketed and sold, than any that may be developed or sold by us. Competitive products may render our products obsolete and uncompetitive prior to recovering research, development or commercialization expenses incurred with respect to any such products.

Our products may fail or cause harm, subjecting us to product liability claims.

Use of our product during current clinical trials may entail risk of product liability.  We maintain clinical trial liability insurance; however, it is possible this coverage may not provide full protection against all risks.  Given the scope and complexity of the clinical development process, the uncertainty of product liability litigation, and the shrinking capacity of insurance underwriters, it is not possible at this time to assess the adequacy of current clinical trial coverage, nor the ability to secure continuing coverage at the same level and at reasonable cost in the foreseeable future.  While we carry, and intend to continue carrying amounts believed to be appropriate under the circumstances, it is not possible at this time to determine the adequacy of such coverage.

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In addition, the sale and commercial use of our product entails risk of product liability. We currently do not carry any product liability insurance for this purpose. There can be no assurance that we will be able to obtain appropriate levels of product liability insurance prior to any sale of our pharmaceutical products. An inability to obtain insurance on economically feasible terms or to otherwise protect against potential product liability claims could inhibit or prevent the commercialization of products developed by us. The obligation to pay any product liability claim or a recall of a product could have a material adverse effect on our business, financial condition and future prospects.

Future legal proceedings and the impact of any finding of liability or damages could adversely impact the company and its financial condition and results of operations.

From time to time, we may be named as a defendant in various legal actions or other proceedings, inlcuding class action lawsuits. Certain of these actions include and future actual or threatened legal actions may include, claims for substantial and indeterminate amounts of damages, or may result in other results adverse to us. Management does not currently know of any pending, material legal proceedings against the Company, but such legal action could be brought in the future.

The results of possible future legal proceedings cannot be predicted with certainty. Accordingly, we cannot determine whether our insurance coverage would be sufficient to cover the costs or potential losses, if any. Regardless of merit, litigation may be both time-consuming and disruptive to our operations and cause significant expense and diversion of management attention. If we do not prevail in future legal proceedings, we may be faced with significant monetary damages or injunctive relief against us that may adversely affect our business, financial condition and results of operations, possibly materially.

We have limited manufacturing experience and intend to rely on third parties to commercially manufacture our products, if and when developed.

To date, we have relied upon a contract manufacturer to manufacture small quantities of REOLYSIN. The manufacturer may encounter difficulties in scaling up production, including production yields, quality control and quality assurance. Only a limited number of manufacturers can supply therapeutic viruses and failure by the manufacturer to deliver the required quantities of REOLYSIN on a timely basis at a commercially reasonable price may have a material adverse effect on us. We have completed a program for the development of a commercial process for manufacturing REOLYSIN and have filed a number of patent applications related to the process. There can be no assurance that we will successfully obtain sufficient patent protection related to our manufacturing process.

New products may not be accepted by the medical community or consumers.

Our primary activity to date has been research and development and we have no experience in marketing or commercializing products. We will likely rely on third parties to market our products, assuming that they receive regulatory approvals. If we rely on third parties to market our products, the commercial success of such product will be subject to a number of risks that may be outside of our control, including:

• competition in relation to alternative treatments, including efficacy advantages and cost advantages;

• perceived ease of use;

• the availability of coverage or reimbursement by third-party payors;

• uncertainties regarding marketing and distribution support; and

• distribution or use restrictions imposed by regulatory authorities.

Moreover, there can be no assurance that physicians, patients or the medical community will accept our product, even if it proves to be safe and effective and is approved for marketing by Health Canada, the FDA and other regulatory authorities. A failure to successfully market our product would have a material adverse effect on our revenue.

Our technologies may become obsolete.

The pharmaceutical industry is characterized by rapidly changing markets, technology, emerging industry standards and frequent introduction of new products. The introduction of new products embodying new technologies, including new manufacturing processes and the emergence of new industry standards may render our products obsolete, less competitive or less marketable. The process of developing our products is extremely complex and requires significant continuing development efforts and third party commitments. Our failure to develop new technologies and products and the obsolescence of existing technologies could adversely affect our business.

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We may be unable to anticipate changes in our potential customer requirements that could make our existing technology obsolete. Our success will depend, in part, on our ability to continue to enhance our existing technologies, develop new technology that addresses the increasing sophistication and varied needs of the market, and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. The development of our proprietary technology entails significant technical and business risks. We may not be successful in using our new technologies or exploiting our niche markets effectively or adapting our businesses to evolving customer or medical requirements or preferences or emerging industry standards.

We are highly dependent on third-party relationships for research and clinical trials.

We rely upon third party relationships for assistance in the conduct of research efforts, pre-clinical development and clinical trials, and manufacturing. In addition, we expect to rely on third parties to seek regulatory approvals for and to market our product. Although we believe that our collaborative partners will have an economic motivation to commercialize our product included in any collaborative agreement, the amount and timing of resources diverted to these activities generally is expected to be controlled by the third party. Furthermore, if we cannot maintain these relationships, our business may suffer.

Our license, development, supply and distribution agreement with Adlai Nortye Biopharma Co. is subject to certain risks and uncertainties related to our dependence on Adlai and doing business in foreign jurisdictions.

On November 16, 2017, we announced that we had entered into the Licensing Agreement with Adlai. Under the terms of the Licensing Agreement, Adlai will have exclusive development and commercialization rights to REOLYSIN in China, Hong Kong, Macau, Singapore, South Korea and Taiwan (the “Territories”). Pursuant to the Licensing Agreement, along with payments to be received by us upon meeting certain requirements and milestones, we are also eligible to receive royalty payments in excess of 10% associated with the commercialization of REOLYSIN for all indications, subject to regulatory approval. Under the terms of the Licensing Agreement, Adlai will be responsible for all clinical, regulatory and commercialization activities respecting REOLYSIN in the Territories and therefore the Company will be dependent upon Adlai in successfully undertaking those actions in a timely and economic manner and in compliance with all applicable legal and regulatory requirements within the Territories. If Adlai is unable to fulfill its obligations under the terms of the Licensing Agreement and in compliance with all applicable legal and regualtory requirements, including clinical, regulatory and commercialization of REOLYSIN, our prospective revenue from royalty payments related to the commercialization of REOLYSIN in the Territories may be materially diminished, delayed or never realized, which could negatively effect our operating results and financial condition.

Further, conducting business with Adlai within the Territories, and specifically China, subjects us to certain economic, political, currency and legal risks and uncertainties regarding, among other things, the development and commercialization of REOLYSIN and the release and receipt of payments under the terms of the Licensing Agreement, including the payment of royalties upon commercialization of REOLYSIN. These risks include:

• different regulatory requirements for drug approvals in foreign countries;

• different standards of care in various countries that could complicate the evaluation of our product candidates;

• different U.S. and foreign drug import and export rules;

• reduced protection for intellectual property rights in certain countries;

• unexpected changes in tariffs, trade barriers and regulatory requirements;

• different reimbursement systems and different competitive drugs indicated to treat the indications for which our product candidates are being developed;

• economic weakness, including inflation, or political instability in particular foreign economies and markets;

• compliance with the FCPA, and other anti-corruption and anti-bribery laws;

• U.S. and foreign taxes;

• foreign currency fluctuations, which could result in reduced revenues, and other obligations incident to doing business in another country;

• a reliance on CROs, clinical trial sites, principal investigators and other third parties that may be less experienced with clinical trials or have different methods of performing such clinical trials than we are used to in the U.S.;

• potential liability resulting from development work conducted by foreign distributors; and

• business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters.

The government’s of the Territories, and specifically the Chinese government, exercise significant control over all aspects of their respective economies.  Accordingly, any adverse change in the economy, the legal system or governmental, economic or other policies could have a material adverse effect on the business prospects of the the Licensing Agreement with Adlai, including our ability to receive and transfer money out of China under the terms of the Licensing Agreement. Any disruption in relations, inability to work efficiently or disadvantageous treatment of Adlai by the governments of the Territories or other authorities could have a material adverse effect on our business prospects under the Licensing Agreement. Additionally, the regulatory environment in the

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Territories is evolving, and officials in the governments in the Territories exercise broad discretion in deciding how to interpret and apply regulations. There can be no assurance that Adlai will be successful in the development and commercialization of REOLYSIN in the Territories.

The cost of director and officer liability insurance may increase substantially and may affect our ability to retain quality directors and officers.

We carry liability insurance on behalf of our directors and officers. Given a number of large director and officer liability insurance claims in the US equity markets, director and officer liability insurance has become increasingly more expensive with increased restrictions. Consequently, there is no assurance that we will continue to be offered this insurance or be able to obtain adequate coverage. The inability to acquire the appropriate insurance coverage may limit our ability to attract and maintain directors and officers as required to conduct our business.

We are dependent on our key employees and collaborators.

Our ability to develop the product will depend, to a great extent, on our ability to attract and retain highly qualified scientific personnel and to develop and maintain relationships with leading research institutions. Competition for such personnel and relationships is intense. We are highly dependent on the principal members of our management staff as well as our advisors and collaborators, the loss of whose services might impede the achievement of development objectives. The persons working with us are affected by a number of influences outside of our control. The loss of key employees and/or key collaborators may affect the speed and success of product development.

Barbados law differs from the laws in effect in Canada and the United States and may afford less protection to holders of our securities.

Certain of our assets and intellectual property are held by our wholly-owned subsidiary, Oncolytics Barbados, which is organized under the laws of Barbados. It may not be possible to enforce court judgments obtained in Canada or the United States against Oncolytics Barbados in Barbados based on the civil liabilities provisions of applicable securities laws. In addition, there is some doubt as to whether the courts of Barbados would recognize or enforce judgments of courts in Canada or the United States obtained against us or our directors or officers based on the civil liabilities provisions of Canadian and United States securities laws or hear actions against us or those persons based on such laws.

Changes in law could adversely affect our business and corporate structure.

There can be no assurances that changes will not occur in corporate, tax, property and other laws in Canada and/or Barbados (or the interpretation thereof by regulatory or tax authorities) which may materially and adversely affect our businesses and corporate structure.

We incur some of our expenses in foreign currencies and therefore we are exposed to foreign currency exchange rate fluctuations.

We incur some of our manufacturing, clinical, collaborative and consulting expenses in foreign currencies, primarily the US dollar, the Euro and the British pound (“GBP”).  We are therefore exposed to foreign currency rate fluctuations.  Also, as we expand to other foreign jurisdictions there may be an increase in our foreign exchange exposure.

We earn interest income on our excess cash reserves and are exposed to changes in interest rates.

We invest our excess cash reserves in investment vehicles that provide a rate of return with little risk to principal. As interest rates change the amount of interest income we earn will be directly impacted.

Our operations may be adversely affected by disruptions to our information technology ("IT") systems, including disruptions from cybersecurity breaches of our IT infrastructure.

We rely on information technology networks and systems, including those of third-party service providers, to process, transmit and store electronic information. In particular, we depend on our information technology infrastructure for a variety of functions, including financial reporting, data management, and email communications. Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, terrorist attacks, sabotage and similar events. Global cybersecurity threats and incidents can range from uncoordinated individual attempts to gain unauthorized access to our information technology systems to sophisticated and targeted measures known as advanced persistent threats. The ever-increasing use and evolution of

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technology, including cloud-based computing, creates opportunities for the unintentional dissemination or intentional destruction of confidential information stored in our systems or in non-encrypted portable media or storage devices. We could also experience a business interruption, information theft of confidential information, or reputational damage from industrial espionage attacks, malware or other cyber attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. Despite the implementation of network security measures and disaster recovery plans, our systems and those of third parties on which we rely may also be vulnerable to computer viruses, break-ins and similar disruptions. If we or our vendors are unable (or are perceived as unable) to prevent such outages and breaches, our operations may be disrupted and our business reputation could be adversely affected.

We expect that risks and exposures related to cybersecurity attacks will remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats.

The Company may fail to achieve and maintain adequate internal control over financial reporting pursuant to the requirements of the Sarbanes-Oxley Act and equivalent Canadian legislation.

The Company documented and tested during its most recent fiscal year its internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”) and equivalent Canadian legislation. SOX requires an annual assessment by management of the effectiveness of the Company’s internal controls over financial reporting and an attestation report by the Company’s independent auditors addressing this assessment, if applicable. The Company may fail to achieve and maintain the adequacy of its internal controls over financial reporting as such standards are modified, supplemented, or amended from time to time, and the Company may not be able to ensure that it can conclude, on an ongoing basis, that it has effective internal controls over financial reporting in accordance with Section 404 of SOX. The Company’s failure to satisfy the requirements of Section 404 of SOX on an ongoing, timely basis could result in the loss of investor confidence in the reliability of its financial statements, which in turn could harm the Company’s business and negatively impact the trading price of the common shares or the market value of its other securities. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm the Company’s operating results or cause it to fail to meet its reporting obligations. Future acquisitions of companies, if any, may provide the Company with challenges in implementing the required processes, procedures and controls in its acquired operations. No evaluation can provide complete assurance that the Company’s internal controls over financial reporting will detect or uncover all failures of persons within the Company to disclose material information otherwise required to be reported. The effectiveness of the Company’s processes, procedures and controls could also be limited by simple errors or faulty judgments. In addition, if the Company expands, the challenges involved in implementing appropriate internal controls over financial reporting will increase and will require that the Company continue to improve its internal controls over financial reporting.

Because the Company is a Canadian Company and some of its directors and officers are resident outside the United States, it may be difficult for investors in the United States to enforce civil liabilities against the Company based solely upon the federal securities laws of the United States.

The Company is a Canadian company, with its principal place of business in Canada. Some of the Company’s directors and officers, including the Company's Chief Executive Officer and Chief Financial Officer, are residents outside the United States and a significant portion of the Company’s assets are located outside the United States. Consequently, it may be difficult for US investors to effect service of process within the United States upon the Company or these directors or officers who are not residents of the United States, or to realize in the United States upon judgments of courts of the United States predicated upon civil liabilities under the US Securities Act of 1933, as amended. Investors should not assume that Canadian courts (1) would enforce judgments of US courts obtained in actions against the Company or such directors or officers predicated upon the civil liability provisions of the US federal securities laws or the securities or “blue sky” laws of any state within the United States or (2) would enforce, in original actions, liabilities against the Company or such directors or officers predicated upon the US federal securities laws or any such state securities or “blue sky” laws. In addition, the protections afforded by Canadian securities laws may not be available to investors in the United States.

As a foreign private issuer, our shareholders may have less complete and timely data.

The Company is a “foreign private issuer” as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the “US Exchange Act”). Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the US Exchange Act pursuant to Rule 3a12-3 of the US Exchange Act. Therefore, the Company is not required to file a Schedule 14A proxy statement in relation to its annual meeting of shareholders. The submission of proxy and annual meeting of  shareholder information on Form 6-K may result in shareholders having less complete and timely information in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and purchases

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and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having less data and there being fewer restrictions on insiders’ activities in our securities.

The Company is likely a "passive foreign investment company" which may have adverse US federal income tax consequences for US shareholders.

US shareholders of the Common Shares should be aware that the Company believes it was classified as a passive foreign investment company (“PFIC”) for the tax year ended December 31, 2017, and based on current business plans and financial expectations, the Company anticipates that it may qualify as a PFIC for its current and subsequent taxable years.  If the Company is a PFIC for any year during a US shareholder’s holding period, then such US shareholder generally will be required to treat any gain realized upon a disposition of Common Shares, or any so-called “excess distribution” received on its common shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective "qualified electing fund" election (“QEF Election”) or a "mark-to-market" election with respect to the Common Shares.  A US shareholder who makes a QEF Election generally must report on a current basis its share of the Company's net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders.  However, US shareholders should be aware that there can be no assurance that the Company will satisfy the record keeping requirements that apply to a qualified electing fund, or that the Company will supply US shareholders with information that such U.S. shareholders require to report under the QEF Election rules, in the event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election. Thus, US shareholders may not be able to make a QEF Election with respect to their Common Shares. A US shareholder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer’s basis therein.  This paragraph is qualified in its entirety by the discussion below under the heading “Certain United States Federal Income Tax Considerations.”  Each US shareholder should consult its own tax advisor regarding the PFIC rules and the US federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.

Risks related to our Common Shares

Our share price may be highly volatile.

Market prices for securities of biotechnology companies generally are volatile and the share price for our common shares has been historically volatile. This increases the risk of securities litigation. Factors such as announcements (publicly made or at scientific conferences) of technological innovations, new commercial products, patents, the development of proprietary rights, results of clinical trials, regulatory actions, publications, quarterly financial results, our financial position, public concern over the safety of biotechnology, future sales of shares by us or our current shareholders and other factors could have a significant effect on the market price and volatility of the Common Shares.

Potential dilution of present and prospective shareholdings.

In order to finance future operations and development efforts, the Company may raise funds through the issue of common shares or the issue of securities convertible into common shares. The Company cannot predict the size of future issues of common shares or the issue of securities convertible into common shares or the effect, if any, that future issues and sales of the Company’s common shares will have on the market price of its common shares. Any transaction involving the issue of previously authorized but unissued shares, or securities convertible into shares, would result in dilution, possibly substantial, to present and prospective holders of shares.

The Company does not intend to pay cash dividends in the foreseeable future.

The Company has not declared or paid any dividends since its incorporation. The Company intends to retain earnings, if any, to finance the growth and development of its business and does not intend to pay cash dividends on the Common Shares in the foreseeable future. Any return on an investment in the common shares will come from the appreciation, if any, in the value of the Common Shares. The payment of future cash dividends, if any, will be reviewed periodically by the board of directors and will depend upon, among other things, conditions then existing including earnings, financial condition and capital requirements, restrictions in financing agreements, business opportunities and conditions and other factors.

“Penny stock” rules may make buying or selling our securities difficult, which may make our stock less liquid and make it harder for investors to buy and sell our securities.

On November 5, 2015, we were delisted from the NASDAQ Capital Markets and are now only quoted on an over-the-counter market, the OTCQX International, maintained by OTC Markets, Inc. Trading in our securities is now subject to the SEC’s “penny

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stock” rules and it is anticipated that trading in our securities will continue to be subject to the penny stock rules for the foreseeable future. The Securities and Exchange Commission has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities.

ITEM 4.  INFORMATION ON THE COMPANY

A. History and Development of the Company

Oncolytics Biotech Inc. was formed under the Business Corporations Act (Alberta) on April 2, 1998 as 779738 Alberta Ltd.  On April 8, 1998, we changed our name to Oncolytics Biotech Inc.

Our principal executive office is located at 210, 1167 Kensington Cres. NW, Calgary, Alberta, Canada, T2N 1X7, telephone (403) 670-7377. Our agent for service in the US is CT Corporation, 111 Eighth Avenue, 13^th Floor, New York, New York 10011.

A description of the important events in our development including licensing transactions, our principal capital expenditures and divestitures and a description of acquisitions of material assets can be found in our MD&A and in the notes to our financial statements included elsewhere in this annual report.

B. Business Overview

Since our inception in April of 1998, Oncolytics Biotech Inc. has been a development stage company and we have focused our research and development efforts on the development of REOLYSIN (pelareorep), a systemically administered immuno-oncology (I-O) viral agent with the potential to treat a variety of cancers. We have not been profitable since our inception and expect to continue to incur substantial losses as we continue research and development efforts. We do not expect to generate significant revenues until, if and when, pelareorep becomes commercially viable.

Our Business

Our potential product for human use, pelareorep, an unmodified reovirus, is a first in class systemically administered I-O viral agent for the treatment of solid tumors and hematological malignancies.

Scientific Background

Pelareorep’s anti-tumor activity is based on three modes of action which are complementary but not interdependent (Figure 1):

• Selective viral replication in permissive cancer cells which leads to tumor cell lysis.

• Activation of innate immunity in response to the infection which results in a cascade of chemokines/cytokines causing natural killer (NK) cells to be activated and attack cancer cells.

• A specific adaptive immune response triggered by tumor- and viral-associated antigens displayed by antigen-presenting cells (APCs, infected tumor cells and/or dendritic cells) to T cells.

Summary of Research and Development highlights

Preclinical and Translational Research data to date indicate the following:

• Pelareorep has anticancer effects in models of metastatic cancers that can prolong survival in these models when using immuno-competent rodents.

• The survival benefit in animal models can be enhanced when pelareorep is given in combination with chemotherapy, immunotherapy (e.g., checkpoint inhibitors, IMiDs, rituximab, etc.) or radiotherapy.

• A toxic dose of reovirus T3D has not been reached/established in animal models and infection presents with minimal side-effects.

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Clinical data to date indicate the following:

• More than 1,400 patients have been enrolled in clinical studies conducted in the US, Canada and EU. Of these, more than 1,000 patients received pelareorep, with over 930 via intravenous (IV) administration and over 90 by intratumoral injections (ITu). The remaining patients were randomized to control arms.

• Pelareorep has been administered as single or multiple doses (intratumoral or intravenous), either as a mono-therapy or in combination with chemotherapy, immunotherapy (e.g., checkpoint inhibitors), and radiotherapy.

• No Maximum Tolerated Dose (MTD) for intravenous pelareorep as mono-therapy was defined in the two Phase 1 trials (REO 004 and 005). Dose-limiting toxicities (DLTs) were seen in some of the combination trials with pelareorep and chemotherapy, which generally enrolled heavily pre-treated patients.

• When combined with chemotherapeutic agents, pelareorep does not appear to enhance either the frequency or severity of the adverse effects of the chemotherapeutic agents.

• There is emerging evidence that pelareorep may impact overall survival (OS) in metastatic breast cancer (MBC) and metastatic adenocarcinoma of the pancreas (MAP):

• In a randomized, controlled Phase 2 study of paclitaxel with pelareorep versus paclitaxel alone in MBC (CCTG IND.213) median survival time was greater for subjects treated with paclitaxel and pelareorep (median 17.4 months) than subjects treated with paclitaxel alone (10.4 months, hazard ratio [HR] 0.65).

• In a single arm study with gemcitabine plus pelareorep in first line MAP (REO 017) the median overall survival (mOS) was 10 months with a 1 year and 2-year survival of 46% and 24%, respectively.

• In a two-arm Phase 2 randomized study (NCI 8601), patients with MAP were randomized to receive either carboplatin, paclitaxel and pelareorep (test arm) or carboplatin and paclitaxel alone (control arm). The median OS was similar for both arms, but the probability of survival at Year 2 was 20% in the test arm vs 9% in the control arm.

Mechanism of Action

Figure 1. Proposed mechanism of action for pelareorep.

1. Direct cell lysis - Reovirus Replication in Permissive Cancer Cells

Selective viral replication and lysis in cancer cells and not normal cells is mediated by the host cellular protein PKR (dsRNA-activated protein kinase). In non-cancer cells that are infected with reovirus, PKR activates in the presence of the virus which in turn inhibits viral gene translation. However, in permissive cancer cells, PKR activation is inhibited, allowing for viral gene translation and eventual cell lysis.

It was originally established that selective lysis with reoviruswas mediated by tumor cells with an activated RAS-pathway, since active RAS inhibits PKR activation. However, more recent investigations have revealed that reovirus replication is not just restricted

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to cells with an active RAS pathway, oncogenic mutations and amplifications in upstream (EGFR) and downstream (BRAF) mediators of the RAS-pathway also allow for viral replication and oncolysis. Moreover, active RAS is known to stimulate over 18 downstream effector proteins, many of which have been shown to facilitate viral replication, such as activation of Raf/MEK/ERK, RalGEF/p38, and JNK signalling pathways. Cells bearing dysfunctional or deleted tumor suppressor genes (p53, ATM and Rb) and or chemo- or radiation-induced cell stress also show increased sensitivity to reovirus replication and lysis.

2. Induction of Innate Immunity

Preclinical and clinical studies provide compelling lines of evidence that pelareorep functions as an immunogenic agent. Indeed, preclinical studies by Steele and colleagues demonstrated that melanoma cells infected with pelareorep can produce an innate immune response triggering the release of inflammatory cytokines. This inflammatory milieu promotes a chemotactic response in NK cells, dendritic cells, and cytotoxic T-cells, altering the tumour microenvironment to support bystander immune-mediated cancer cell death. Intriguingly, preclinical studies have also demonstrated that the beneficial immunogenic functions of pelareorep can occur independent of viral replication. Pelareorep performs this immunogenic function, in part, by activating dendritic cells, key regulators of both adaptive and innate immunity. Dendritic cells activated by reovirus in turn stimulate the innate antitumor activity of NK (natural killer) cells through the release of proinflammatory cytokines, demonstrating that dendritic cells' recognition of reovirus may trigger a beneficial innate immune response.

A clinical trial with pelareorep (REO 013) provided an opportunity to study human NK cell activation, in humans,in a controlled manner. Ten colorectal cancer patients with liver metastases received between one and five doses of pelareorep prior to surgical resection of their tumor. NK cell activation peaked 24-48 hours post-infection, coincident with a peak of pro-inflammatory cytokines. NK cells within reovirus-treated blood mononuclear cells were stimulated to kill tumor targets, but not normal hepatocytes. Moreover, NK cells were able to hand-off virus to tumors for direct oncolytic killing. Similarly, NK cells within liver mononuclear cells became selectively cytotoxic towards tumor cells when activated by reovirus. These results showed that reovirus modulates human NK cell activity in vivo and suggest that this may contribute to the therapeutic effect of pelareorep.

3. Induction of Adaptive Immunity

Adaptive anti-tumor immunity allows for elimination of existing cancer cells and performs constant surveillance, preventing relapse, and increasing patient overall survival. An adaptive immune response requires two signals: a signal from an antigen presenting cell (APC), as well as a co-stimulation signal in the form of cytokines. In the absence of both signals, the adaptive immune response fails. Therapy with pelareorep has the potential to activate both signals. Following its therapeutic administration, pelareorep enhances the expression of ‘foreign’ antigens/markers on tumor cells. Oncolysis of tumor cells exposes tumor-associated antigens (TAAs) and viral-associated antigens (VAAs) for processing and presentation by APCs, such as dendritic cells. Through the combined actions of these immunological events, pelareorep facilitates the display of novel ‘foreign’ antigens on the surface of infected tumor cells and APCs. Simultaneously, pelareorep induces an inflammatory response promoting the expression of co-stimulatory molecules and inflammatory cytokines. Together, pelareorep mediated immunological events over-rule tumor antigen presentation impairments and initiate adaptive anti-tumor immunity.

By promoting the expression of novel antigens and the release of inflammatory cytokines, pelareorep, promotes an inflamed tumor phenotype. An inflamed tumor phenotype is characterized by NK and T-cell infiltration, increased expression of chemokines/cytokines, and increased expression of checkpoint ligands. This phenotype correlates with an increase in overall survival and has a positive prognostic value for early stage cancers. In patients with metastatic cancer, an inflamed tumor phenotype is associated with better clinical outcomes when treated with immunotherapies, including immune checkpoint blockade inhibitors, cancer vaccines, and adoptive T-cell therapies. By promoting an inflamed tumor phenotype, pelareorep primes an anti-cancer immune response (Figure 2).

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Figure 2. Pelareorep (REOLYSIN) primes an anti-cancer immune response

Clinical Development Plan

We are directing a three-part clinical development program with the objective of developing pelareorep as a human cancer therapeutic. Our clinical development program focuses on the three components of pelareorep's mechanism of action and includes the following:

1. Chemo combinations - Our primary focus has been on the investigation of chemotherapy combination clinical trials investigating the use of different chemotherapy agents in various cancer indications. In 2017, we reported additional clinical data from our randomized clinical program which includes the clinical trial collaborations with the Canadian Cancer Trials Group (CCTG, formerly known as the National Cancer Institute of Canada). Specifically, subgroup analysis in the IND.213 trial in MBC revealed a significant improvement in overall survival of patients that are hormone receptor positive (HR+) / human epidermal growth factor receptor 2 negative (HER2-). In HR+/HER2- patients, REOLYSIN therapy in combination with paclitaxel doubled the overall survival from 10.8 month with paclitaxel therapy alone to 21.8 months with REOLYSIN plus paclitaxel. This increase in overall survival is consistent with previous survival data reported from our NCI pancreatic trial which suggests a long term survival benefit when comparing test and control arms at 24 months.

2. Combination with IMiDs/targeted therapy - Our second program focuses on the potential of pelareorep to stimulate a patient's innate immunity and the potential for an infection to cause a cascade of chemokines/cytokines activating natural killer (NK) cells to attack cancer cells. In 2017, patient enrollment commenced on a clinical collaboration with Myeloma UK and Celgene that combines pelareorep with immune modulator therapies (IMiDs) which enhance NK cell activation.

3. Immunotherapy combinations - Our third program focuses on the potential for pelareorep to cause a specific adaptive immune response triggered by tumor- and viral-associated antigens displayed by antigen-presenting cells (APCs, infected tumor cells and/or dendritic cells) to T cells. In 2017 we announced our first data set combining a checkpoint inhibitor with pelareorep and pembrolizumab (Keytruda®) in pancreatic cancer, which demonstrated safety and tolerability and in five efficacy evaluable patients, one had a partial response (six-month duration) and two had stable disease (lasting 126 and 221 days). Additional basket study concepts are now being planned.

Patents and Trade Secrets

The patent positions and proprietary rights of pharmaceutical and biotechnology firms, including us, are generally uncertain and involve complex legal and factual questions. We believe there will continue to be significant litigation in the industry regarding patent and other intellectual property rights.

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Currently, we have over 411 issued patents including 47 issued in the US and 21 in Canada. We also have 35 patents pending in the US, Canada, and other jurisdictions, but we cannot be certain whether any given patent application filed by us will result in the issuance of a patent or if any given patent issued to us will later be challenged and invalidated. Nor can we be certain whether any given patent that may be issued to us will provide any significant proprietary protection to our product and business.

Litigation or other proceedings may also be necessary to enforce or defend our proprietary rights and patents. In Europe, patents can be revoked through opposition or nullity proceedings. In the United States patents may be revoked or invalidated in court actions or challenged in interference, post-grant review, derivation or re-examination proceedings in the USPTO. Such litigation or proceedings could result in substantial cost or distraction to us, or result in an adverse decision as to our or our licensors’ patent applications and patents.

Our commercial success depends, in part, on not infringing the patents or proprietary rights of others and not breaching licenses granted that may be granted to us. Competitors may have filed patent applications and obtained patents and may in the future file patent applications and obtain patents relevant to our product and technologies.  We are not aware of competing intellectual property relating to our pelareorep project.  While we currently believe that we have the necessary freedom to operate in these areas, there can be no assurance that others will not challenge our position in the future.  Litigation to defend our position could be costly and time consuming. We also cannot be certain that we will be successful. We may be required to obtain a license from a prevailing party in order to continue the portion of our business that relates to the proceeding. We may also be required to obtain licenses to other third-party technologies necessary in order to market our products. Such licenses may not be available to us on acceptable terms or on any terms and we may have to discontinue that portion of our business. Any failure to license any technologies required to commercialize our technologies or products at reasonable cost may have a material adverse effect on our business, results of operations, financial condition, cash flow and future prospects. We are not currently involved in any litigation concerning our competitors’ patent applications and patents. We may be involved in such litigation in the future.

We also rely on unpatented trade secrets and improvements, unpatented know-how and continuing technological innovation to develop and maintain our competitive position. No assurance can be given that others will not independently develop substantially equivalent proprietary information and techniques, or otherwise gain access to our trade secrets or disclose such technology, or that we can meaningfully protect our rights to our unpatented trade secrets.

We require our employees and consultants to execute confidentiality agreements upon the commencement of employment and consulting relationships with us. These agreements provide that all confidential information developed by or made known to an individual during the course of the employment or consulting relationship generally must be kept confidential. In the case of employees, the agreements provide that all inventions conceived by the individual, while employed by us, relating to our business are our exclusive property. While we have implemented reasonable business measurements to protect confidential information, these agreements may not provide meaningful protection for our trade secrets in the event of unauthorized use or disclosure of such information.

Business Strategy

Our business strategy is to develop and market pelareorep in an effective and timely manner, and access additional technologies at a time and in a manner that we believe is best for our development.  We intend to achieve our business strategy by focusing on these key areas:

• Develop pelareorep through our clinical development plan assessing the safety and efficacy in human subjects;

• Establish collaborations with experts to assist us with scientific and clinical developments of this new potential pharmaceutical product;

• Implement strategic alliances with selected pharmaceutical and biotechnology companies and selected laboratories, at a time and in a manner where such alliances may complement and expand our research and development efforts on the product and provide sales and marketing capabilities;

• Utilize our broadening patent base and collaborator network as a mechanism to meet our strategic objectives; and

• Develop relationships with companies that could be instrumental in assisting us to access other innovative therapeutics.

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Our business strategy is based on attaining a number of commercial objectives, which, in turn, are supported by a number of product development goals.  Our new product development presently being conducted is primarily of a research and development nature.  In the context of this Annual Report, statements of our "belief" are based primarily upon our results derived to date from our research and development program with animals, early stage human trials and our most recent data in HR+/HER2- mBC patients, and upon which we believe that we have a reasonable scientific basis to expect the particular results to occur.  It is not possible to predict, based upon studies in animals, or early stage human trials, whether a new therapeutic will ultimately prove to be safe and effective in humans.  There are no assurances that the particular result expected by us will occur.

At this time we do not intend to become a fully integrated pharmaceutical company with substantial in-house research and development, marketing and distribution or manufacturing capabilities.  We are pursuing a strategy of establishing relationships with larger companies as strategic partners.  We intend to partner or joint venture with larger pharmaceutical companies that have existing and relevant marketing capability for our products.  It is anticipated that future clinical development into large international or pivotal trials would generally occur in conjunction with a strategic partner or partners, who would contribute expertise and financial assistance.  In exchange for certain product rights and commitments to market our products, the strategic partners would be expected to share in gross proceeds from the sale of our product or products and potentially share in various market or manufacturing opportunities.  The proceeds generated from partnering or joint venturing projects are expected to be distributed on the basis of relative risk taken and resources contributed by each party to the partnership or joint venture.

Regulatory Requirements

The development of new pharmaceuticals is strongly influenced by a country's regulatory environment.  The drug approval process in Canada is regulated by Health Canada.  The primary regulatory body in the United States is the FDA and in Europe is the European Medicines Agency (the “EMA”).  Similar processes are conducted in specific countries by equivalent regulatory bodies.  Regulations in each jurisdiction require the licensing of manufacturing facilities and mandate strict research and product testing standards.  Companies must establish the safety and efficacy of their products, comply with current Good Manufacturing Practices and submit marketing materials before being allowed to market pharmaceutical products.  While we plan to pursue or support the pursuit of the approval of our product, success in acquiring regulatory approval for any product is not assured.

In order to market our pharmaceutical product in Canada, the United States, Europe and other jurisdictions, we must successfully meet the requirements of those jurisdictions. The requirements of the Appropriate Regulatory Authority will generally include the following stages as part of the regulatory process:

• Pre-Pharmacological Studies- Pre-Pharmacological studies involve extensive testing on laboratory animals to determine if a potential therapeutic product has utility in an in vivo disease model and has any adverse toxicology in a disease model.

• Investigational New Drug Application - An Investigational New Drug ("IND") Submission, or the equivalent, must be submitted to the appropriate regulatory authority prior to conducting Pharmacological Studies.

• Pharmacological Studies (or Phase 1 Clinical Trials)- Pharmacological studies are designed to assess the potential harmful or other side effects that an individual receiving the therapeutic compound may experience.  These studies, usually short in duration, are often conducted with healthy volunteers or actual patients and use up to the maximum expected therapeutic dose.

• Therapeutic Studies (or Phase 2 and 3 Clinical Trials) - Therapeutic studies are designed primarily to determine the appropriate manner for administering a drug to produce a preventive action or a significant beneficial effect against a disease.  These studies are conducted using actual patients with the condition that the therapeutic is designed to remedy. Prior to initiating these studies, the organization sponsoring the program is required to satisfy a number of requirements via the submission of documentation to support the approval for a clinical trial.

• New Drug Submission - After all three phases of a clinical trial have been completed, the results are submitted with the original IND Submission to the appropriate regulatory authority for marketing approval.  Once marketing approval is granted, the product is approved for commercial sales.

Marketing Approvals

The results of the preclinical and clinical testing, together with manufacturing and controls information, are submitted to regulatory agencies in order to obtain approval to commence commercial sales. In responding to such an application, regulatory agencies may grant marketing approval, request additional information or further research, or deny the application if they determine that

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the application does not satisfy their regulatory approval criteria. Approval for a pharmaceutical or biologic product may not be granted on a timely basis, if at all, or if granted may not cover all the clinical indications for which approval is sought, or may contain significant limitations in the form of warnings, precautions or contraindications with respect to conditions of use.

Satisfaction of pre-market approval requirements for new drugs and biologics typically takes several years, and the actual time required may vary substantially based upon the type, complexity and novelty of the product or targeted disease. Government regulation may delay or prevent marketing of potential products for a considerable period of time and impose costly procedures upon our activities. Success in early stage clinical trials or with prior versions of products does not assure success in later stage clinical trials. Data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations that could delay, limit or prevent regulatory approval.

Post-Marketing Regulations

Once approved, regulatory agencies may withdraw the product approval if compliance with pre- and/or post-marketing regulatory standards is not maintained or if problems occur after the product reaches the marketplace. In addition, they may require post-marketing studies, referred to as Phase 4 studies, to monitor the effect of an approved product, and may limit further marketing of the product based on the results of these post-market studies. The FDA and other foreign regulatory agencies have broad post-market regulatory and enforcement powers, including the ability to levy fines and penalties, suspend or delay issuance of approvals, seize or recall products, or withdraw approvals.

Manufacturing Regulations

We use contract toll manufacturers to produce pelareorep.  Our toll manufacturers are subject to periodic inspection by the FDA, the United States Drug Enforcement Administration, or DEA, and other domestic and foreign authorities where applicable, and must comply with cGMP regulations. Manufacturers of biologics also must comply with general biological product standards. Failure to comply with the statutory and regulatory requirements subjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing, seizure of product, or mandatory or voluntary recall of a product.  Adverse experiences with the product must be reported to the FDA and foreign agencies and could result in the imposition of market restrictions through labeling changes or in product removal. Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval.

Advertising and Promotion Regulations

With respect to both pre- and post-market product advertising and promotion, the FDA and similar foreign agencies impose a number of complex regulations on entities that advertise and promote pharmaceuticals and biologics, which include, among other things, standards and regulations relating to direct-to-consumer advertising, off-label promotion, industry sponsored scientific and educational activities, and promotional activities involving the Internet. These agencies have very broad enforcement authority and failure to abide by these regulations can result in penalties including the issuance of a warning letter directing the entity to correct deviations from requisite standards, a requirement that future advertising and promotional materials be pre-cleared by the FDA or relevant foreign agencies, and foreign, state and federal civil and criminal investigations and prosecutions.

Other Government Regulations

We are subject to various laws and regulations regarding laboratory practices, the experimental use of animals, and the use and disposal of hazardous or potentially hazardous substances in connection with our research. In each of these areas, as above, the government has broad regulatory and enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of approvals, seize or recall products, and withdraw approvals, any one or more of which could have a material adverse effect upon us.

Market and Competition

According to estimates for 2018 from the American Cancer Society, 1.7 million Americans are expected to be diagnosed with cancer in the year, and 609,640 Americans are expected to die of cancer.  Cancer is the second most common cause of death in the United States, exceeded only by heart disease. In the United States, the relative lifetime risk of a male or female developing cancer is 1 in 3 (Source: American Cancer Society's Cancer Facts & Figures 2018). The prevalence of breast cancer in the United States in 2016 was 3.56 million, of which there were 2.6 million patients with HR+/HER2- subtype and 154,885 patients with HR+/HER2- stage IV breast cancer. (Source: https://seer.cancer.gov/statfacts/html/breast.html. Accessed on March 28, 2017. Howlader, Nadia, et al. US Incidence of Breast Cancer Subtypes Defined by Joint Hormone Receptor and HER2 Status. Journal of the National Cancer Institute. Accessed March 28, 2017).

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The costs of this disease state are also significant.  In the United States, the American Cancer Society reported in its Cancer Facts & Figures 2018 that the Agency for Healthcare Research and Quality estimated the 2015 direct medical costs for cancer were $80.2 billion. (Source: American Cancer Society's Cancer Facts & Figures 2018).

We face substantial competition in the development of products for cancer and other diseases. This competition from other manufacturers of the same types of products and from manufacturers of different types of products designed for the same uses is expected to continue in both US and international markets.  Oncolytic virus therapies, our primary focus area, are rapidly evolving areas in the biotechnology industry and are expected to undergo many changes in the coming years as a result of technological advances. We are currently aware of a number of groups that are developing oncolytic virus therapies including early-stage and established biotechnology companies, pharmaceutical companies, academic institutions, government agencies and research institutions. We face competition from all of these groups in areas such as recruiting employees, acquiring technologies that might enhance our ability to commercialize products, establishing relationships with certain research and academic institutions, enrolling patients in clinical trials and seeking program partnerships and collaborations with larger pharmaceutical companies. It is possible that our competitors could achieve earlier market commercialization, could have superior patent protection, or could have safer, more effective or more cost-effective products. These factors could render our potential products less competitive, which could adversely affect our business.

Product Marketing Strategy

The markets for the cancer product being developed by us may be large and could require substantial sales and marketing capability.  Before or upon successful completion of the development of a cancer product, we intend to enter into one or more strategic partnerships or other collaborative arrangements with a pharmaceutical company or other company with marketing and distribution expertise to address this need.  If necessary, we will establish arrangements with various partners for different geographical areas or specific applications at various times in the development process.  Our management and consultants have relevant experience with the partnering process.

Seasonality of Business

Our results of operations have not been materially impacted by seasonality.

C. Organizational Structure

On December 31, 2017, we had one material wholly-owned operating subsidiary; Oncolytics Biotech (Barbados) Inc. (“OBB”), a Barbados company.  In addition, Oncolytics Biotech (US) Inc., a Delaware corporation, is a material wholly owned subsidiary of OBB.

D.      Property, Plant and Equipment

We currently lease our head office in Calgary, Alberta, Canada as well as our office spaces in San Diego, California, US and Barbados. We do not own or lease any other office space, manufacturing facilities or equipment and do not have any current plans to construct or acquire any facilities.

ITEM 4A.  UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Our Management Discussion and Analysis (“MD&A”) contains forward-looking statements, including our belief as to the potential of REOLYSIN, a therapeutic reovirus, as a cancer therapeutic and our expectations as to the success of our research and development and manufacturing programs in 2018 and beyond, future financial position, business strategy and plans for future operations, and statements that are not historical facts, involve known and unknown risks and uncertainties, which could cause our actual results to differ materially from those in the forward-looking statements.  See “Cautionary Note Regarding Forward-Looking Statements”.

With respect to the forward-looking statements made within our MD&A, we have made numerous assumptions regarding among other things: our ability to obtain financing to fund our development program, our ability to receive regulatory approval to commence enrollment in our clinical trial program, the final results of our co-therapy clinical trials, our ability to maintain our supply of REOLYSIN and future expense levels being within our current expectations.  Investors are cautioned against placing undue reliance

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on forward-looking statements.  We do not undertake to update these forward-looking statements except as required by applicable law.

A. Operating Results

Please see our 2017 Management Discussion and Analysis in Exhibit 15.1, which is incorporated herein by reference.

B. Liquidity and Capital Resources

Please see our 2017 Management Discussion and Analysis in Exhibit 15.1, which is incorporated herein by reference.

C. Research and Development, Patents, and Licenses, etc.

Please see the disclosure in "Item 4.  Information on the Company B. Business Overview" for information on the Company’s research and development policies. Our research and development expenses were $9,392,623, $9,770,007, and $8,601,864 for 2017, 2016 and 2015, respectively.

D. Trend Information

It is important to note that historical patterns of expenditures cannot be taken as an indication of future expenditures.  The amount and timing of expenditures and availability of capital resources vary substantially from period to period, depending on the level of research and development activity being undertaken at any one time and the availability of funding from investors and prospective commercial partners. See our 2017 Management Discussion and Analysis in Exhibit 15.1 for our comparative discussion on our expenditures between 2015 - 2017 and our expectations for 2018.

Except as disclosed elsewhere in our annual report, we know of no trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our liquidity or capital resources or that would cause reported financial information not necessarily to be indicative of future operating results or financial conditions.

E. Off-Balance Sheet Arrangements

As at December 31, 2017, we had not entered into any off-balance sheet arrangements.

F. Tabular Disclosure of Contractual Obligations

We have the following contractual obligations as at December 31, 2017:

Contractual Obligations	Payments Due by Period
	Total $	Less than 1 year $	2 -3 years $	4 - 5 years $	After 5 years $
Capital lease obligations	Nil	—	—	—	—
Operating lease(1)	740,850	285,987	411,733	43,130	—
Purchase obligations	5,980,454	5,980,454	—	—	—
Other long term obligations	Nil	—	—	—	—
Total contractual obligations	6,721,304	6,266,441	411,733	43,130	—

Note:

(1) Our operating leases are comprised of our office leases and exclude our portion of operating costs.

We expect to fund our capital expenditure requirements and commitments with existing working capital.

G. Safe Harbor

We seek safe harbor for our forward-looking statements contained in Items 5.E and F.  See “Cautionary Note Regarding Forward-Looking Statements”.

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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table sets forth the names and places of residence of all our directors and officers as at December 31, 2017, as well as the positions and offices held by such persons and their principal occupations.

Name and Place of Residence	Position with the Company	Principal Occupation	Director of the Company Since
Deborah M. Brown, BSc, MBA(1)(2) Ontario, Canada	Director	In addition to being a Management Consultant since 2014, Ms. Brown is currently the Managing Partner at Accelera CANADA, a specialty consultancy firm that assists emerging biopharma ventures in the United States and Europe with the development and implementation of Canadian market strategies. She held progressively senior roles at EMD Serono from 2000 to 2014, including Executive Vice President of Neuroimmunology for the company's U.S. operations, and President and Managing Director of the company's Canadian operations. In 2012, Ms. Brown was Chair of the Canadian National Pharmaceutical Organization (now Innovative Medicines Canada) and served on its Board of Directors from 2007 to 2014. She currently sits on the Boards of Life Sciences Ontario, the Strategic Executive Advisory Council for Canadian Cancer Trials Group, and her local SPCA. Ms. Brown holds an MBA from University of Western Ontario's Ivey School of Business, an Hons B.Sc. from the University of Guelph and completed the Merck executive development programme at the University of Hong Kong, INSEAD and Northwestern University's Kellogg School of Management.	November 2, 2017
Matthew C. Coffey, PhD Alberta, Canada	Chief Executive Officer and Director	A co-founder of the Company, Dr. Coffey has been the President and Chief Executive Officer of the Company since January 2017. Dr. Coffey completed his doctorate degree in oncology at the University of Calgary with a focus on the oncolytic capabilities of the reovirus. The results of his research have been published in various respected scientific journals, including Science, Human Gene Therapy, and The EMBO Journal. Dr. Coffey has held the positions of Interim President and Chief Executive Officer from November 2016 to January 2017, Chief Operating Officer of the Company from December 2008 to November 2016, Chief Scientific Officer from December 2004 to December 2008, Vice-President of Product Development from July 1999 to December 2004 and Chief Financial Officer from September 1999 to May 2000.	May 11, 2011
Andrew de Guttadauro California, USA	Global Head of Business Development, President, Oncolytics Biotech (U.S.) Inc.	Andrew de Guttadauro has more than 25 years of biopharmaceutical commercialization and business development experience in. He has held executive and senior-level positions at leading pharmaceutical and biotechnology companies, working on initiatives across both developed and emerging markets globally. Mr. de Guttadauro began his career at TAP Pharmaceuticals, supporting the launch of blockbuster drugs, Lupron® and Prevacid®. He held a variety of marketing positions at Amgen, contributing to the success of Enbrel®, Aranesp®, and Epogen® before joining MedImmune to lead marketing efforts for the FluMist® inhaled influenza vaccine. Following a two-year assignment overseeing the commercial development of Zevalin®, the first radioimmunotherapy product approved for use in the United States, Mr. de Guttadauro took on the role of Senior Director of Strategy at Biogen Idec. He then served as Vice President of Corporate Development at Vical, supporting the execution of distribution agreements for Allovectin®. Prior to joining Oncolytics, Mr. de Guttadauro was a Principal at 1798 Consultants Inc., a healthcare consulting firm providing commercialization, market access, and compliance strategic advice to leading and emerging biopharmaceutical companies. Mr. de Guttadauro has a Bachelor of Science degree in engineering from the United States Military Academy at West Point.	N/A

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Name and Place of Residence	Position with the Company	Principal Occupation	Director of the Company Since
Andres A. Gutierrez, MD, PhD New Jersey, USA	Chief Medical Officer	Dr. Gutierrez is board certified in internal medicine and completed a fellowship in medical oncology. Most recently he has held progressively senior clinical development positions designing and implementing both early and later-stage oncology clinical studies at a range of U.S. and European companies including Sellas Life Sciences Group, Bristol-Myers Squibb, Sunesis Pharmaceuticals Inc., Biomarin Pharmaceutical Inc., Proteolix, and Oculus Innovative Sciences. Prior to that, he held a series of academic and consulting positions. Over his 32 year career, he has authored and co-authored more than 90 peer-reviewed publications and abstracts and presented at numerous conferences. He received his MD and a PhD in Biomedical Sciences from the National Autonomous University of Mexico.	N/A
Angela Holtham, MBA, FCPA, FCMA, ICD.D(1)(2) Ontario, Canada	Director	Ms. Holtham held a number of financial positions over a 19-year career with the Canadian subsidiary of Nabisco Inc., rising to become Senior Vice President and Chief Financial Officer. Then in 2002, she joined Toronto, Ontario-based Hospital for Sick Children as Vice President, Finance and Chief Financial Officer, a position she held for eight years. Through her career she has participated in many initiatives ranging from traditional finance functions and operations oversight to intellectual property portfolio management and mergers and acquisitions. Ms. Holtham is an FCPA, FCMA, holds an MBA from the University of Toronto and has completed the Institute of Corporate Directors Designation (ICD.D). Ms. Holtham holds a number of board and audit committee positions in both private and public sectors, including audit committee chair and director of Jamieson Wellness.	June 18, 2014
J. Mark Lievonen, CM, FCPA, FCA, LLD(1)(3) Ontario, Canada	Director	Mr. Lievonen held the position of President of Sanofi Pasteur Limited, a vaccine development, manufacturing and marketing company, from 1999 to 2016. He is a Director of Acerus Pharmeceuticals Corporation, Quest PharmaTech Inc., and the Gairdner Foundation. Mr. Lievonen has served on a number of industry and not-for-profit boards including as the chair of Rx&D (now Innovative Medicines Canada), BIOTECanada, and the Markham Stouffville Hospital Foundation, as Vice-Chair of the Ontario Institute for Cancer Research, as a Director of the Public Policy Forum, and as a Governor of York University Mr. Lievonen was appointed to the Order of Canada in 2015, named a Chevalier de l'Ordre National de Mérite by the government of France in 2007, and inducted into the Canadian Healthcare Marketing Hall of Fame in 2013.	April 5, 2004
Kirk J. Look, CA Alberta, Canada	Chief Financial Officer	Mr. Look is a Chartered Accountant with more than fifteen years of experience in accounting, finance, tax and treasury. Mr. Look joined Oncolytics as the Company's Controller in April 2003, and assumed the role of Chief Financial Officer in November 2012. Prior to joining Oncolytics, from 2000 to April 2003, Mr. Look was Manager of Audit and Assurance Services with Ernst & Young LLP in Canada. From 1998 to the end of 1999, Mr. Look held the positions of Audit Manager and Senior Accountant at Ernst & Young LLP in Chile.	N/A
Wayne Pisano, MBA(1)(2)(5)                                                            New Jersey, USA	Chair of the Board	Mr. Pisano has more than 30 years of experience as a pharmaceutical industry executive and was recognized in 2010 as Pharma Executive of the Year by the World Vaccine Congress. Mr. Pisano is the former president and CEO of Sanofi Pasteur, one of the largest vaccine companies in the world. He is credited with driving Sanofi Pasteur's leadership within the worldwide influenza market and capturing 50 percent of global sales. He also laid the foundation for the company's global pediatric vaccines strategy. During his tenure as CEO, Mr. Pisano bolstered the Sanofi Pasteur pipeline with the acquisitions of Acambis PLC, a bio-tech based in Boston in 2008 and Shantha Biotechnics, a highly regarded Indian vaccine company in 2010. Prior to joining Sanofi Pasteur, he spent 11 years with Novartis (formerly Sandoz). He has a bachelor's degree in biology from St. John Fisher College, New York and an MBA from the University of Dayton, Ohio. Mr. Pisano is a Board director and Chairman of the compensation and Governance Committee for Immunovaccine; a biotech based in Halifax.	May 9, 2013

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Name and Place of Residence	Position with the Company	Principal Occupation	Director of the Company Since
William G. Rice, PhD(3)(4) California, USA	Director	Dr. Rice holds the position of Chairman, President and Chief Executive Officer of Aptose Biosciences Inc. since 2013. Also, from 2003 to present, he has served as Chairman, President and Chief Executive Officer of Cylene Pharmaceutics Inc., prior to which he was the Founder, President, Chief Executive Officer and Director of Achillion Pharmaceuticals, Inc. He served as Senior Scientist and Head of the Drug Mechanism Laboratory at the National Cancer Institute-Frederick Cancer Research and Development Center, and as a faculty member in the Division of Pediatric Hematology and Oncology at Emory School of Medicine. Dr. Rice holds a PhD in biochemistry from Emory University and was a post-doctoral trainee in the Department of Internal Medicine, Division of Hematology and Oncology at the University of Michigan Medical Center.	June 8, 2015
Bernd R. Seizinger, MD, PhD(2)(4) New Jersey, USA and Munich, Germany	Director	Dr. Seizinger is currently Chairman and/or Board member of a number of biotech companies in the U.S. and Europe, including: Oxford BioTherapeutics Ltd., CryptoMedicx Inc., Opsona Ltd., Aprea AB, and Vaccibody AS. From 1998 to 2009, he served as President and Chief Executive Officer of GPC Biotech. He also served as Vice President of Oncology Drug Discovery and, in parallel, Vice President of Corporate and Academic Alliances at Bristol-Myers Squibb in Princeton, NJ. Prior to his appointments in the biotechnology and pharmaceuticals sectors, Dr. Seizinger held professorships and senior staff appointments at Harvard Medical School, Princeton University and Massachusetts General Hospital.	June 8, 2015

Notes:

(1) Member of the Audit Committee. Ms. Holtham is Chair of this Committee.

(2) Member of the Compensation Committee. Mr. Pisano is Chair of this Committee.

(3) Member of the Governance Committee. Mr. Lievonen is Chair of this Committee.

(4) Member of the Science and Technology Committee. Dr.'s Rice and Seizinger serve as Co-Chairs of this Committee.

(5) Mr. Pisano, as Chair of the Board, serves as an ex-officio member of the Governance and Science and Technology Committees.

As at March 19, 2018, the directors and senior officers as a group beneficially owned, directly or indirectly, 400,250 of our common shares, representing 0.28% of the issued and outstanding common shares.

Certain of our directors are associated with other companies, which may give rise to conflicts of interest.  In accordance with theABCA, directors who have a material interest in any person who is a party to a material contract or a proposed material contract with us are required, subject to certain exceptions, to disclose that interest and abstain from voting on any resolution to approve that contract.  In addition, the directors are required to act honestly and in good faith with a view to the best interests of Oncolytics Biotech Inc.

None of our directors have been a director or officer of a company that went bankrupt in the last 10 years.

None of our directors or officers are related by blood, marriage or adoption to any other director or officer.

We are not aware of any arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or officer.

B. Compensation

Directors

The following table sets forth information concerning the total compensation paid in 2017 to each director.

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Name	Fees Earned ($)(1)	Share- Based Awards ($)(2)	Option- Based Awards ($)(2)	Non-Equity Incentive Plan Compensation ($)	Pension Value ($)	All Other Compensation ($)	Total ($)
Deborah Brown(3)	17,249	25,278	14,666	Nil	N/A	Nil	57,193
Angela Holtham	53,003	82,275	Nil	Nil	N/A	Nil	135,278
Mark Lievonen	75,270	53,278	Nil	Nil	N/A	Nil	128,548
Wayne Pisano	75,270	92,770	Nil	Nil	N/A	Nil	168,040
William Rice	75,270	53,278	Nil	Nil	N/A	Nil	128,548
Bernd Seizinger	30,108	99,164	Nil	Nil	N/A	Nil	129,272

Notes:

(1) Directors are paid fees in US Dollars. These amounts are presented in Canadian dollars and have been converted at a US/CDN exchange rate of $1.2545.

(2) The value of share based and option based awards are based on the grant date assumptions as disclosed in note 8 "Share Based Payments" in our 2017 audited consolidated financial statements.

(3) Ms. Brown was appointed as a director on November 2, 2017.

Officers

Summary Compensation Table

The following table sets forth information concerning the total compensation paid to our officers in 2017.

Name and principal position	Year	Salary $	Share- based awards $(1)	Option- based awards    $(1)	Bonus $	Non-equity incentive plan compensation $	Pension value $	All other compensation $(2)	Total compensation $
Dr. Matthew C. Coffey(3) Chief Executive Officer	2017	430,000	—	61,964	172,000	N/A	N/A	62,235	726,199
Kirk J. Look Chief Financial Officer	2017	345,000	—	46,473	120,750	N/A	N/A	55,223	567,446
Dr. Andres A. Gutierrez(4) Chief Medical Officer	2017	376,350	—	—	131,723	N/A	N/A	35,482	543,555
Andrew de Guttadauro(4)(5) President, Oncolytics Biotech (US) Inc.	2017	144,267	31,200	38,487	72,134	N/A	N/A	13,815	299,903

Notes:

(1) The value of share and option based awards are based on the grant date assumptions as disclosed in note 8 "Share Based Payments" in our 2017 audited consolidated financial statements.

(2) The dollar amounts set forth under this column are related to contributions to the officers' respective retirement savings plan and amounts provided for health care benefits by the Company.

(3) None of the compensation paid to Dr. Coffey related to his role as a director of the Company.

(4) US Employees are paid salaries, bonuses and other compensation in US Dollars.  These amounts are presented in Canadian dollars and have been converted at a US/CDN exchange rate of $1.2545, $1.3427 and $1.3840 for the years 2017, 2016 and 2015, respectively.

(5) Mr. de Guttadauro was appointed as President, Oncolytics Biotech (US) Inc., a wholly-owned subsidiary of the Corporation, on June 29, 2017.

Narrative Discussion

We have entered into employment agreements with each of the following Executive Officers (each an "Employment Agreement").  Pursuant to the terms of the Employment Agreements,

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Name and principal position	Year	Salary $
Dr. Matthew C. Coffey Chief Executive Officer	2018	475,000
Kirk J. Look, C.A. Chief Financial Officer	2018	365,000
Dr. Andres A. Gutierrez(1) Chief Medical Officer	2018	330,000
Andrew de Guttadauro(1) President, Oncolytics Biotech (US) Inc.	2018	253,000

Note 1: US Employees are paid in US Dollars and salaries above for those US employees are presented in US dollars.

Further, each Executive Officer is entitled to additional benefits and performance-based bonuses.  As well, the Employment Agreements provide that each Executive Officer is subject to certain confidentiality and non-competition restrictions during and following the course of their respective employment with the Company.  Each Employment Agreement shall continue until terminated by either party in accordance with the notice provisions thereof.

The Company does not provide pension plan benefits to its Executive Officers and employees. The Company does not currently have a stock appreciation rights plan.

Termination of Employment or Change of Control

The following table reflects amounts payable to the Executive Officers based on each Executive Officer's employment agreement assuming that their employment was terminated on December 31, 2017 without cause or due to a change of control of the Company.

Name	Termination without Cause Severance(1) $	Change of Control Severance(2) $
Dr. Matthew C. Coffey Chief Executive Officer	541,168	1,082,335
Kirk J. Look, C.A. Chief Financial Officer	422,093	844,185
Dr. Andres A. Gutierrez(3) Chief Medical Officer	349,619	699,238
Andrew de Guttadauro(3) President, Oncolytics Biotech (US) Inc.	131,727	526,908

Notes:

(1) As at December 31, 2017, all options granted to Officers had fully vested except for the options granted on December 1, 2015, November 10, 2016 and July 3, 2017. As a result, all Officers shall be entitled to exercise all or any part of their vested Options, within the period ending on the earlier of the date of expiration of the Option and the 90th day after the date such Officer is terminated unless otherwise approved by the Board of Directors.

(2) On a change of control of the Company, the Officers shall be entitled to exercise all or a part of their Options, whether vested or not, within the period ending on the earlier of the date of expiration of the Option and the 90th day after the date such Officer is terminated.

(3) US Employees are paid in US Dollars and are presented in US dollars.

C. Board Practices

Our directors are elected by the shareholders at each Annual General Meeting (or Annual Special Meeting) and typically hold office until the next meeting, at which time they may be re-elected or replaced.  Casual vacancies on the board are filled by the remaining directors and the persons filling those vacancies hold office until the next Annual General Meeting (or Annual Special Meeting), at which time they may be re-elected or replaced.  The officers are appointed by the Board of Directors and hold office indefinitely at the pleasure of the Board of Directors.

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Name and Place of Residence	Position with the Corporation	Director of the Corporation Since	Date of Expiration of Current Term of Office
Matthew C. Coffey Ph.D Alberta, Canada	President and Chief Executive Officer and Director	May 11, 2011	Date of 2018 Annual General Meeting of the Shareholders
Deborah Brown, B.Sc., MBA Ontario, Canada	Director	November 2, 2017	Date of 2018 Annual General Meeting of the Shareholders
Angela HolthamFCPA, FCMA, ICD.D Ontario, Canada	Director	June 18, 2014	Date of 2018 Annual General Meeting of the Shareholders
J. Mark Lievonen, CM, FCPA, FCA, LLD Ontario, Canada	Director	April 5, 2004	Date of 2018 Annual General Meeting of the Shareholders
Wayne Pisano, MBA New Jersey, USA	Chair and Director	May 9, 2013	Date of 2018 Annual General Meeting of the Shareholders
William G. Rice, Ph.D. California, USA	Director	June 8, 2015	Date of 2018 Annual General Meeting of the Shareholders
Bernd R. Seizinger, M.D., Ph.D. New Jersey, USA and Munich Germany	Director	June 8, 2015	Date of 2018 Annual General Meeting of the Shareholders

Directors’ Contracts

We receive a director’s consent from each of the independent directors upon their acceptance of their director’s position.  We also enter into an Indemnity Agreement and Directors Confidentiality and Intellectual Property Assignment Agreement with each director.

The Company does not have any contracts with any of its directors which provide for benefits upon the termination of employment.

Compensation of Directors

Each director who is not a salaried employee of the Company is entitled to the following fees:

Annual Retainer

Each director receives a base retainer of US$40,000. In addition to the base retainer directors are eligible to receive the following additional fees depending on committee involvement:

Additional Retainers (USD):

Board chair                                $40,000

Audit Committee chair                            $20,000

Governance & Compensation Committee chair                $10,000

Science & Technology co-chair                        $15,000

Non-chair member of the Audit Committee                    $10,000

Non-chair member of the Governance or Compensation Committee        $ 5,000

Directors, annually, may opt to take up to 100% of their respective annual retainer in restricted share awards.

Restricted Share Units

In addition to the combined retainer, the Corporation will grant annually $20,000 of restricted share awards that will vest over a three year period. The annual restricted share unit award will be granted on or about October 1 of each year.

We also grant to directors, from time to time, stock options in accordance with the Option Plan and the reimbursement of any reasonable expenses incurred by them while acting in their directors' capacity.  During the year ended December 31, 2017, total compensation of $746,879 was paid to the independent directors which consisted of fee payments of $326,170, share based awards of $406,043 and option based awards of $14,666.

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Compensation Committee

The Corporation has formed a compensation committee (the “Compensation Committee”) which consists of four outside, independent directors, Dr. Seizinger, Ms. Holtham and Ms. Brown, and Mr. Pisano, the Chair of the Board. Mr. Pisano is the Chair of the Compensation Committee. No member of the Compensation Committee has been an employee or officer of the Company or any of its affiliates.

The objectives of the Corporation’s compensation arrangements are: (i) to attract and retain key personnel; (ii) to encourage commitment to the Corporation and its goals; (iii) to align executive interests with those of its shareholders; and (iv) to reward executives for performance in relation to overall corporate progress goals.

The key elements of the compensation program are the base salary, health benefits, and payments allocated to employees to be directed by them to their personal retirement accounts. Bonuses and the granting of Options (as defined herein) and Share Awards (as defined herein) are also part of the Corporation’s compensation program and are based on corporate performance. Part of corporate performance includes goals and objectives that are determined based on the strategic planning and budgeting process, which is conducted at least annually. The elements of the compensation plan are intended to reward performance, and the various elements are intended to provide a blend of short-term and long-term incentives to align the interests of management and the shareholders.

In arriving at its recommendations for compensation, the Compensation Committee considers the long-term interests of the Corporation as well as its current stage of development and the economic environment within which it operates. The market for biotechnology companies in the development phase is challenging. Based on these factors, the Compensation Committee recognized the need to strike a balance between compensation to retain employees and resources expended to maintain operations. In the past, the Compensation Committee has engaged specialist consultants to assist in benchmarking its compensation practices and provide recommendations to the committee with respect to compensation for directors and officers. In 2017, the Committee engaged Radford, An Aon Hewitt Company as a specialist consultant to assist with the benchmarking of officer compensation for 2018.

Following a review of the risks in the Corporation’s compensation policies and practices, the Compensation Committee found no risks that are reasonably likely to have a material adverse effect on the Corporation. The Compensation Committee’s role of approving the compensation policies and practices includes considering whether the compensation policies and practices could encourage an officer of the Company to take inappropriate or excessive risks.

Under the Corporation’s corporate trading policy, insiders (including officers and directors) are not permitted to hedge their position in Common Shares, Options, Share Awards, deferred share units, performance share units, debentures or other debt instruments by use of any financial instrument, which would include but is not limited to options, puts, calls, warrants or short sells, designed to benefit the holder from a change in the market value of the Common Shares of the Corporation.

For 2017, the following guidelines were employed by the Board in granting bonuses, Options and Share Awards to the Corporation’s executive and senior officers. For 2018, similar guidelines are expected to be applied.

Annual Bonus, Option Grants and Share Award Grants

In 2017, the Chief Executive Officer of the Corporation is eligible for a cash bonus of up to 40% of his base salary, the Chief Financial Officer and the Chief Medical Officer is eligible for a cash bonus of up to 35% of his base salary and the other senior officers are eligible for a cash bonus of up to 15 to 25% of their respective base salaries. In addition, when available, the officers are eligible for a combination of Option and Share Award grants. The amount of each grant is determined and approved by the Board with the actual bonus provided and the number of Options and Share Awards granted based upon the overall performance of the Corporation as assessed by the Compensation Committee and approved by the Board. The overall performance of the Corporation is determined by the annual goals and objectives approved by the Board and includes specific objectives with respect to the clinical, manufacturing, and intellectual property plans in combination with financial goals. Previous grants are taken into account when considering new grants of Options and Share Awards.

For 2018, similar guidelines are expected to be applied except the cash bonus target for the Chief Executive Officer will increase to up to 50% of base salary and for the Chief Financial Officer and Chief Medical Officer the cash bonus target will increase to up to 40% of base salary. For the other senior officers the cash bonus target will increase to up to 30% of base salary.

Compensation Committee Mandate

1. Policy Statement

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It is the policy of Oncolytics Biotech Inc. (the "Corporation") to establish and maintain a Compensation Committee (the "Committee"), composed entirely of independent directors, to assist the Board of Directors of the Corporation (the "Board") in carrying out its responsibility for the Corporation’s human resources and compensation policies and processes. The Committee will be provided with resources commensurate with the duties and responsibilities assigned to it by the Board, including administrative support. If determined necessary by the Committee, it will have the discretion to investigate and conduct reviews of any human resource or compensation matter including the standing authority to retain experts and special counsel. In the event of a conflict of interest or potential conflict of interest involving one or more of the directors or members of management, the Committee may modify the procedures and requirements set out in this Mandate restrict communication and sharing of information to independent directors or otherwise take reasonable measures to manage the conflict of interest or potential conflict of interest.

2. Composition of Committee

(a) The Committee shall consist of a minimum of three (3) directors. The Board shall appoint the members (“Members”) of the Committee and may seek the advice and assistance of the Governance Committee in identifying qualified candidates. The Board shall appoint one Member of the Committee to be the Chair of the Committee, or delegate such authority to appoint the Chair of the Committee to the Committee.

(b) The Chair of the Committee shall be responsible for the leadership of the Committee, including preparing or approving the agenda, presiding over the meetings, and making committee assignments.

(c) Each director appointed to the Committee by the Board shall be an outside director who is unrelated. An outside, unrelated director is a director who meets the requirements of NASDAQ Rule 5605 and National Instrument 58-101 who is independent of management and is free from any interest, any business or other relationship which could, or could reasonably be perceived, to materially interfere with the director’s ability to be independent of management and to act with a view to the best interests of the Corporation, including, but not limited to the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Corporation to such director and whether such director is affiliated with the Corporation, a subsidiary of the Corporation or an affiliate of a subsidiary of the Corporation other than interests and relationships arising from shareholding. In determining whether a director is independent of management, the Board shall make reference to the then current legislation, rules, policies and instruments of applicable regulatory authorities.

(d) Each Member shall be appointed by the Board annually at the next scheduled meeting of the Board following the AGM. The Members will be appointed to hold office until the next annual general meeting of shareholders or until their successors are appointed. The Board may remove a Member at any time and may fill any vacancy occurring on the Committee. A Member may resign at any time and a Member will automatically cease to be a Member upon ceasing to be a director.

(e) The Chair of the Board shall be an ex officio Member of the committee.

3. Meetings of the Committee

(a) The Committee shall meet a minimum of twice per year at such time and place as may be designated by the Chair of the Committee and whenever a meeting is requested by the Board, a Member of the Committee, or the Chief Executive Officer of the Corporation (the "CEO").

(b) Notice of each meeting of the Committee shall be given to each Member of the Committee. The CEO shall attend each meeting of the Committee whenever requested to do so by a Member of the Committee.

(c) Notice of a meeting of the Committee shall:

(i) be in writing, including by electronic communication facilities;

(ii) state the nature of the business to be transacted at the meeting in reasonable detail;

(iii) to the extent practicable, be accompanied by copies of documentation to be considered at the meeting; and

(iv) be given at least two business days prior to the time stipulated for the meeting or such shorter period as the Members of the Committee may permit.

(d) A quorum for the transaction of business at a meeting of the Committee shall consist of a majority of the Members of the Committee.

(e) A Member or Members of the Committee may participate in a meeting of the Committee by means of such telephonic, electronic or other communication facilities, as permits all persons participating in the meeting to communicate adequately with each other. A Member participating in such a meeting by any such means is deemed to be present at the meeting.

(f) In the absence of the Chair of the Committee, the Members of the Committee shall choose one of the Members present to be Chair of the meeting. If the Board has appointed a Corporate Secretary, the Corporate Secretary

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shall be the secretary of the meeting. If the Board has not appointed a Corporate Secretary, the Members of the Committee shall choose one of the persons present to be the secretary of the meeting or may have another person who is not a Member of the Committee present to record the minutes of the meeting.

(g) Minutes shall be kept of all meetings of the Committee and shall be signed by the Chair and the secretary of the meeting. Minutes of the meetings of the Committee shall be distributed to members of the Committee, to other members of the Board and, with the exception of “in camera” items, to the Chief Executive Officer and Chief Financial Officer. Notwithstanding the foregoing, distribution of minutes of meetings or parts thereof may be restricted to independent directors in the event of a conflict of interest or potential conflict of interest or if otherwise necessary for the Committee to properly discharge its responsibilities, but only for as long as is reasonably necessary.

4. Duties and Responsibilities of the Committee

(a) The Committee shall, at the earliest opportunity after each meeting, report to the Board the results of its activities and any reviews undertaken and make recommendations to the Board as deemed appropriate.

(b) The Committee’s primary duties and responsibilities are to review and make recommendations to the Board in respect of:

(i) human resource policies, practices and structures (to monitor consistency with the Corporation’s goals and near and long-term strategies, support of operational effectiveness and efficiency, and maximization of human resources potential);

(ii) compensation policies and guidelines;

(iii) management incentive and perquisite plans and any non-standard remuneration plans;

(iv) senior management, executive and officer appointments and their compensation;

(v) management succession plans, management training and development plans, termination policies and termination arrangements; and

(vi) Board compensation matters.

(c) In carrying out its duties and responsibilities, the Committee shall:

(i) annually assess and make a recommendation to the Board with regard to the competitiveness and appropriateness of the compensation package of the CEO, all other officers of the Corporation and such other key employees of the Corporation or any subsidiary of the Corporation as may be identified by the CEO and approved by the Committee (collectively, the "Designated Employees");

(ii) annually review the performance goals and criteria for the CEO and evaluate the performance of the CEO against such goals and criteria and recommend to the Board the amount of regular and incentive compensation to be paid to the CEO;

(iii) annually, review and make a recommendation to the Board regarding the CEO’s performance evaluation of Designated Employees and the CEO’s recommendations with respect to the amount of regular and incentive compensation to be paid to such Designated Employees;

(iv) review and make a recommendation to the Board regarding any employment contracts or arrangements with each of the Designated Employees, including any retiring allowance arrangements or any similar arrangements to take effect in the event of a termination of employment;

(v) periodically, review the compensation philosophy statement of the Corporation and make recommendations for change to the Board as considered necessary;

(vi) from time to time, review and make recommendations to the Board in respect of the design, benefit provisions, investment options and text of applicable pension, retirement and savings plans or related matters;

(vii) annually, in conjunction with the Corporation’s general and administrative budget, review and make recommendations to the Board regarding compensation guidelines for the forthcoming budget period;

(viii) when requested by the CEO, review and make recommendations to the Board regarding short term incentive or reward plans and, to the extent delegated by the Board, approve awards to eligible participants;

(ix) review and make recommendations to the Board regarding incentive stock option plans or any other long term incentive plans and to the extent delegated by the Board, approve grants to participants and the magnitude and terms of their participation;

(x) as required, fulfill the obligations assigned to the Committee pursuant to any other employee benefit plans approved by the Board;

(xi) annually, prepare or review the report on executive compensation required to be disclosed in the Corporation’s information circular or any other human resource or compensation matter required to be publicly disclosed by the Corporation;

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(xii) annually, review and make a recommendation to the Board regarding the compensation of the Board of Directors;

(xiii) as determined in the sole discretion of the Committee, retain independent advice in respect of human resources and compensation matters from a compensation consultant, legal counsel or other advisor (the “Advisor”) and, if deemed necessary by the Committee, meet separately with the Advisor; the Committee shall be directly responsible for the appointment, compensation and oversight of the work of the Advisor retained by the Committee;

(xiv) select, or receive advice from, an Advisor to the Committee, other than in-house legal counsel, after taking into consideration the following factors:

(i) the provision of other services to the Corporation by the entity that employs the Advisor ;

(ii) the amount of fees received from the Corporation by the entity that employs the Advisor, as a percentage of the total revenue of the entity that employs the Advisor;

(iii) the policies and procedures of the entity that employs the Advisor that are designed to prevent conflicts of interest;

(iv) any business or personal relationship of the Advisor with a member of the Board;

(v) any stock of the Corporation owned by the Advisor; and

(vi) any business or personal relationship of the Advisor or the entity employing the Advisor with an executive officer of the Corporation;

provided however, none of the above factors shall prevent the Committee from retaining any Advisor as the Committee deems appropriate, in its sole discretion, after consideration of the above factors.

(xv) review and consider the implications of the risks associated with the Corporation’s compensation policies and practices, specifically, situations that could potentially encourage an insider to expose the Corporation to inappropriate or excessive risks; and

(xvi) assess, on an annual basis, the adequacy of this Mandate and the performance of the Committee.

(d) In addition to the foregoing, the Committee shall undertake on behalf of the Board such other initiatives as may be necessary or desirable to assist the Board in discharging its responsibility for the Corporation’s human resources development, performance evaluation, compensation and succession planning programs are in place and operating effectively.

(e) The Committee shall assess, on an annual basis, the adequacy of this Mandate and the performance of the Committee.

5. Reporting

The Committee shall, at the earliest opportunity after each meeting, report to the Board the results of its activities and any reviews undertaken and make recommendations to the Board as deemed appropriate. The Committee may restrict such reports to independent directors in the event of a conflict of interest or potential conflict of interest or if otherwise necessary for the Committee to properly discharge its responsibilities, but only for as long as is reasonably necessary.

6. External Advisors

If, in order to properly discharge its function, duties and responsibilities, it is necessary, in the opinion of the Committee that the Committee obtains the advice and counsel of external advisors, the Chair shall, at the request of the Committee, engage the necessary experts. The Committee shall keep the Board apprised of both the selection of experts and the expert’s findings through the Committee’s regular reports to the Board. The Committee may restrict such reports to independent directors in the event of a conflict of interest or potential conflict of interest or if otherwise necessary for the Committee to properly discharge its responsibilities, but only for as long as is reasonably necessary.

7. Date of Mandate

This Mandate was last reviewed, amended and approved by the Board on March 9, 2018.

Audit Committee

The Corporation has formed an Audit Committee in accordance with Section 3(a)(58)(A) of the United States Securities Exchange Act of 1934, as amended ("Exchange Act"), consisting of four independent directors pursuant to the Rule 5605(a)(2) of the NASDAQ Capital Market and Rule 10A-3 of the Exchange Act: Ms. Deborah Brown, Ms. Angela Holtham, Mr. Lievonen and Mr. Pisano, none of whom are nor have been employees or officers of the Company or any of its affiliates.  Ms. Holtham is presently the Chair of the Audit Committee.  Each Audit Committee member is financially literate.

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Audit Committee Mandate

1. Policy Statement

It is the policy of Oncolytics Biotech Inc. (the "Corporation") to establish and maintain an Audit Committee, composed entirely of independent directors, to assist the Board of Directors (the "Board") in carrying out their oversight responsibility for the Corporation’s internal controls, financial reporting and financial risk management processes. The Audit Committee will be provided with resources commensurate with the duties and responsibilities assigned to it by the Board including administrative support. If determined necessary by the Audit Committee, it will have the discretion to institute investigations of improprieties, or suspected improprieties within the scope of its responsibilities, including the standing authority to retain special counsel or experts. In the event of a conflict of interest or potential conflict of interest involving one or more of the directors or members of management, the Audit Committee may modify the procedures and requirements set out in this Mandate restrict communication and sharing of information to independent directors or otherwise take reasonable measures to manage the conflict of interest or potential conflict of interest.

2.Composition of the Committee

(a) The Audit Committee shall consist of a minimum of three (3) directors. The Board shall appoint the members (“Members”) of the Audit Committee and may seek the advice and assistance of the Governance Committee in identifying qualified candidates. The Board shall appoint one Member of the Audit Committee to be the Chair of the Audit Committee, or delegate such authority to appoint the Chair of the Audit Committee to the Audit Committee.

(b) The Chair of the Committee shall be responsible for leadership of the Committee, including preparing or approving the agenda, presiding over the meetings, and making committee assignments.

(c) Each director appointed to the Audit Committee by the Board shall be an outside director who is unrelated and independent. An outside, unrelated and independent director is a director who meets the requirements of NASDAQ Rule 5605(a)(2) and National Instrument 52-110. A director appointed to the audit committee shall also meet the requirements of NASDAQ Rule 5605(c)(2) and Rule 10A-3(b)(1) of the United States Securities Exchange Act of 1934, as amended. Such director shall be independent of management and free from any interest, any business or other relationship which could, or could reasonably be perceived, to materially interfere with the director’s ability to act with a view to the best interests of the Corporation, other than interests and relationships arising from shareholding. In determining whether a director is independent of management, the Board shall make reference to the abovementioned rules and any applicable revisions thereto, and any additional relevant and then current legislation, rules, policies and instruments of applicable regulatory authorities.

(d) Each Member of the Audit Committee shall be financially literate. In order to be financially literate, a director must be, at a minimum, able to read and understand financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation's financial statements. At least one Member shall have accounting or related financial management expertise, meaning the ability to analyze and interpret a full set of financial statements, including the notes attached thereto, in accordance with generally accepted accounting principles and shall be a “financial expert” as defined in Item 407 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission and “financially sophisticated” as defined in NASDAQ Rule 5605(c)(2).

(e) In determining whether a Member of the Audit Committee is financially literate or has accounting or related financial expertise, reference shall be made to the then current legislation, rules, policies and instruments of applicable regulatory authorities.

(f) Each Member of the Audit Committee shall be appointed by the Board annually at the next scheduled meeting of the Board following the AGM. The Members will be appointed to hold office until the next annual general meeting of shareholders or until their successors are appointed. The Board may remove a Member at any time and may fill any vacancy occurring on the Audit Committee. A Member may resign at any time and a Member will automatically cease to be a Member upon ceasing to be a director.

(g) The Chair of the Board shall be an ex officio Member of the committee.

3. Meetings of the Committee

(a) The Audit Committee shall convene a minimum of four times each year at such times and places as may be designated by the Chair of the Audit Committee and whenever a meeting is requested by the Board, a Member of the Audit Committee, the auditors, or senior management of the Corporation. Scheduled meetings of the

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Audit Committee shall correspond with the review of the year-end and quarterly financial statements and management discussion and analysis.

(b) Notice of each meeting of the Audit Committee shall be given to each Member of the Audit Committee and to the auditors, who shall be entitled to attend each meeting of the Audit Committee and shall attend whenever requested to do so by a Member of the Audit Committee.

(c) Notice of a meeting of the Audit Committee shall:

(i) be in writing, including by electronic communication facilities;

(ii) state the nature of the business to be transacted at the meeting in reasonable detail;

(iii) to the extent practicable, be accompanied by copies of documentation to be considered at the meeting; and

(iv) be given at least two business days prior to the time stipulated for the meeting or such shorter period as the Members of the Audit Committee may permit.

(d) A quorum for the transaction of business at a meeting of the Audit Committee shall consist of a majority of the Members of the Audit Committee. However, it shall be the practice of the Audit Committee to require review, and, if necessary, approval of certain important matters by all Members of the Audit Committee.

(e) A Member or Members of the Audit Committee may participate in a meeting of the Audit Committee by means of such telephonic, electronic or other communication facilities, as permits all persons participating in the meeting to communicate adequately with each other. A Member participating in such a meeting by any such means is deemed to be present at the meeting.

(f) In the absence of the Chair of the Audit Committee, the Members of the Audit Committee shall choose one of the Members present to be Chair of the meeting. If the Board has appointed a Corporate Secretary, the Corporate Secretary shall act as the secretary of the meeting. If the Board has not appointed a Corporate Secretary, the Members of the Committee shall choose one of the persons present to be the secretary of the meeting or may have another person who is not a Member of the Committee present to record the minutes of the meeting.

(g) A member of the Board, senior management of the Corporation and other parties may attend meetings of the Audit Committee; however the Audit Committee (i) shall, at each meeting, meet with the external auditors independent of other individuals other than the Audit Committee; (ii) may exclude: (A) management, (B) directors who are not independent directors, or (C) any party that has a conflict of interest or potential conflict of interest, from part or all of a meeting of the Audit Committee if reasonably necessary for the Audit Committee to properly discharge its responsibilities; and (iii) may meet separately with management.

(h) The Chief Executive Officer and the Chief Financial Officer shall each attend meetings of the Audit Committee when requested to do so by a Member of the Audit Committee.

(i) Minutes shall be kept of all meetings of the Audit Committee and shall be signed by the Chair and the secretary of the meeting. Minutes of the meetings of the Audit Committee shall be distributed to Members of the Audit Committee, to other members of the Board and, with the exception of “in camera” items, to the Chief Executive Officer and Chief Financial Officer. Notwithstanding the foregoing, distribution of minutes of meetings or parts thereof may be restricted to independent directors in the event of a conflict of interest or potential conflict of interest or if otherwise necessary for the Audit Committee to properly discharge its responsibilities, but only for as long as is reasonably necessary.

4. Duties and Responsibilities of the Committee

(a) The Audit Committee’s primary duties and responsibilities are to:

(i) identify and monitor the management of the principal risks that could impact the financial reporting of the Corporation;

(ii) monitor the integrity of the Corporation’s financial reporting process and system of internal controls regarding financial reporting and accounting compliance;

(iii) monitor the independence and performance of the Corporation’s external auditors. This will include receipt, review and evaluation, at least annually, of a formal written statement from the independent auditors confirming their independence, and qualifications, including their compliance with the requirements of the relevant oversight boards and actively engage in a dialogue with the auditors with respect to any disclosed relationships or services that may impact objectivity and independence of the auditors and take, or recommend that the full board take, appropriate action to oversee the independence of the external auditors;

(iv) deal directly with the external auditors to pre-approve external audit plans, other services (if any) and fees;

(v) directly oversee the external audit process and results (in addition to items described in Section 4(d) below);

(vi) provide an avenue of communication among the external auditors, management and the Board;

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(vii) carry out a review designed to ensure that an effective "whistle blowing" procedure exists to permit stakeholders to express any concerns to an appropriately independent individual;

(viii) pre-approve any related party transactions to be entered into by the Company, and ensure appropriate disclosure thereof;

(ix) ensure financial disclosure incorporates inclusion of any material correcting adjustments required by the external auditors; and

(x) require and ensure that the external auditors are directly responsible to the Audit Committee, to whom they report.

(b) The Audit Committee shall have the authority to:

(i) inspect any and all of the books and records of the Corporation and its affiliates;

(ii) discuss with the management of the Corporation and its affiliates, any affected party and the external auditors, such accounts, records and other matters as any Member of the Audit Committee considers necessary and appropriate;

(iii) engage independent counsel and other advisors as it determines necessary to carry out its duties. The Audit Committee shall keep the Board apprised of both the selection of experts and the expert’s findings through the Audit Committee’s regular reports to the Board. The Audit Committee may restrict such reports to independent directors in the event of a conflict of interest or potential conflict of interest or if otherwise necessary for the Audit Committee to properly discharge its responsibilities, but only for as long as is reasonably necessary;

(iv) communicate directly with the external auditors; and

(v) set and pay the compensation for (A) any external auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the Corporation, (b) any advisors employed by the Audit Committee, and (C) ordinary administrative expenses of the Audit Committee.

(c) The Audit Committee shall, at the earliest opportunity after each meeting, report to the Board the results of its activities and any reviews undertaken and make recommendations to the Board as deemed appropriate. The Audit Committee may restrict such reports to independent directors in the event of a conflict of interest or potential conflict of interest or if otherwise necessary for the Audit Committee to properly discharge its responsibilities, but only for as long as is reasonably necessary.

(d) The Audit Committee shall:

(i) review the audit plan with the Corporation’s external auditors and with management;

(ii) review with the independent auditors the matters required to be discussed relating to the conduct of the audit, including (a) the proposed scope of their examination, with emphasis on accounting and financial areas where the Committee, the independent auditors or management believes special attention should be directed; (b) the results of their audit, including their audit findings report and resulting letter, if any, of recommendations for management; (c) their evaluation of the adequacy and effectiveness of the Company’s internal controls over financial reporting; (d) significant areas of disagreement, if any, with management; (e) co-operation received from management in the conduct of the audit; (f) significant accounting, reporting, regulatory or industry developments affecting the Company; and (g) any proposed changes in major accounting policies or principles proposed or contemplated by the independent auditors or management, the presentation and impact of material risks and uncertainties and key estimates and judgements of management that may be material to financial reporting;

(iii) review with management and with the external auditors material financial reporting issues arising during the most recent fiscal period and the resolution or proposed resolution of such issues;

(iv) review any problems experienced or concerns expressed by the external auditors in performing an audit, including any restrictions imposed by management or material accounting issues on which there was a disagreement with management;

(v) review with senior management the process of identifying, monitoring and reporting the principal risks affecting financial reporting;

(vi) review audited annual financial statements (including management discussion and analysis) and related documents in conjunction with the report of the external auditors and obtain an explanation from management of all material variances between comparative reporting periods. Without restricting the generality of the foregoing, the committee will discuss with management and the independent auditors to the extent required, any issues and disclosure requirements regarding (a) the use of “pro forma” or “adjusted” non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies, (b) any off balance sheet arrangements, and (c) any going concern qualification.

(vii) consider and review with management, the internal control memorandum or management letter containing the recommendations of the external auditors and management’s response, if any, including

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an evaluation of the adequacy and effectiveness of the internal financial controls of the Corporation and subsequent follow-up to any identified weaknesses;

(viii) review with financial management and the external auditors the quarterly unaudited financial statements, management discussion and analysis, letter to shareholders and press release (all to be considered the “Quarterly Financial Reports”) and recommend the Quarterly Financial Reports to the Board for approval by the Board before release to the public;

(ix) before release, review and if appropriate, recommend for approval by the Board, all public disclosure documents containing audited or unaudited financial information, including any prospectuses, financial statements, including the notes thereto, annual reports, annual information forms, management discussion and analysis and press releases; and

(x) oversee, any of the financial affairs of the Corporation or its affiliates, and, if deemed appropriate, make recommendations to the Board, external auditors or management.

(e) The Audit Committee shall:

(i) evaluate the independence and performance of the external auditors;

(ii) recommend the nomination of the external auditors to the Board for appointment by the shareholders at the Corporation’s annual general meeting;

(iii) recommend the discharge of the external auditor when circumstances warrant;

(iv) monitor the rotation of the audit partner of the external auditors as required by applicable law or regulations;

(v) consider the recommendations of management in respect of the appointment of the external auditors;

(vi) pre-approve all non-audit services to be provided to the Corporation or its subsidiary entities by its external auditors, or the external auditors of affiliates of the Corporation subject to the over-riding principle that the external auditors are not permitted to be retained by the Corporation to perform specifically listed categories of non-audit services as set forth by the Securities and Exchange Commission as well as internal audit outsourcing services, financial information systems work and expert services. Notwithstanding, the foregoing the pre-approval of non-audit services may be delegated to a Member of the Audit Committee, with any decisions of the Member with the delegated authority reporting to the Audit Committee at the next scheduled meeting;

(vii) approve the engagement letter for non-audit services to be provided by the external auditors or affiliates, together with estimated fees, and considering the potential impact of such services on the independence of the external auditors;

(viii) when there is to be a change of external auditors, review all issues and provide documentation related to the change, including the information to be included in the Notice of Change of Auditors and documentation required pursuant to the then current legislation, rules, policies and instruments of applicable regulatory authorities and the planned steps for an orderly transition period; and

(ix) review all reportable events, including disagreements, unresolved issues and consultations, as defined by applicable securities policies, on a routine basis, whether or not there is to be a change of external auditors.

(f) The Audit Committee shall enquire into and determine the appropriate resolution of any conflict of interest in respect of audit or financial matters, which are directed to the Audit Committee.

(g) The Audit Committee shall review the Corporation’s accounting and reporting of revenues, costs, liabilities and contingencies.

(h) The Audit Committee shall establish and maintain procedures for:

(i) the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal controls, or auditing matters; and

(ii) the confidential, anonymous submission by employees of the Corporation or concerns regarding questionable accounting or auditing matters.

(i) The Audit Committee shall review and approve the Corporation's hiring policies regarding partners and employees and former partners and employees of the present and former external auditors.

(j) The Audit Committee shall review with the Corporation's legal counsel, on no less than an annual basis, any legal matter that could have a material impact on the Corporation's financial statements, and any enquiries received from regulators, or government agencies.

(k) The Audit Committee shall review with management and the Corporation’s external auditors, on no less than an annual basis, any taxation matters that could have a material impact on the Corporation’s financial statements.

(l) The Audit Committee, through the Chair, shall receive notice from management of any instance of non-trivial fraud or other failure or weakness of the control system promptly upon management becoming aware of such.

(m) The Audit Committee shall review and approve the signing authority for the Corporation at least annually or when a change is required.

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(n) The Audit Committee shall assess, on an annual basis, the adequacy of this Mandate and the performance of the Audit Committee.

5. Reporting

The Committee shall, at the earliest opportunity after each meeting, report to the Board the results of its activities and any reviews undertaken and make recommendations to the Board as deemed appropriate. The Audit Committee may restrict such reports to independent directors in the event of a conflict of interest or potential conflict of interest or if otherwise necessary for the Audit Committee to properly discharge its responsibilities, but only for as long as is reasonably necessary.

6. Date of Mandate

This Mandate was last reviewed and approved by the Board on March 9, 2018.

D. Employees

The following table sets out the number of our employees at the end of each of the last three fiscal years by activity and geographic location.

Activity	2017	2016	2015
Research and development	12	12	12
Operating	11	9	9
Total	23	21	21

Geographic location	2017	2016	2015
Canada	14	14	15
United States of America	5	3	2
Other	4	4	4
Total	23	21	21

E. Share Ownership

The following table sets out the share ownership and options held of our directors and officers as of March 19, 2018.

	Common Shares	% of   Ownership(1)	Options(2)	Exercise Price	Expiry Date	% of Outstanding(3)
Officers
Dr. Matthew C. Coffey	288,550	**	30,000	3.06	December 8, 2019
			115,000	6.72	December 14, 2020
			18,000	4.31	July 27, 2021
			125,000	3.89	December 14, 2021
			125,000	4.21	December 17, 2022
			240,000	1.74	December 11, 2023
			734,000	0.42	December 1, 2025
			400,000	0.28	January 16, 2027
			1,267,200	0.78	March 8, 2022
			3,054,200			1.96	%
Kirk J. Look	38,700	**	10,000	3.06	December 8, 2019

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			25,000	6.72	December 14, 2020
			35,000	3.89	December 14, 2021
			200,000	2.00	November 13, 2022
			40,000	4.21	December 17, 2022
			160,000	1.74	December 11, 2023
			464,000	0.42	December 1, 2025
			300,000	0.28	January 16, 2027
			567,200	0.78	March 8, 2022
			1,801,200			1.08	%
Dr. Andres A. Gutierrez	—	**	150,000	0.26	November 10, 2026
			300,000	0.78	March 8, 2022
			450,000			**
Andrew de Guttadauro	—	**	125,000	0.52	July 3, 2027
			140,000	0.78	March 8, 2022
			265,000			**
Directors
Deborah Brown	—	**	50,000	0.57	November 7, 2027
			50,000			**
Angela Holtham	30,000	**	50,000	1.46	June 18, 2024
			50,000			**
Mark Lievonen	23,000	**	17,500	3.06	December 8, 2019
			30,000	6.72	December 14, 2020
			35,000	3.89	December 14, 2021
			35,000	4.21	December 17, 2022
			35,000	1.74	December 11, 2023
			152,500			**
Wayne Pisano	20,000	**	50,000	2.89	May 9, 2023
			30,000	1.74	December 11, 2023
			80,000			**
William Rice	—	**	50,000	0.80	June 8, 2025
			50,000			**
Bernd Seizinger	—	**	50,000	0.80	June 8, 2025
			50,000			**
TOTAL:	400,250		6,002,900

** Less than 1% ownership

Notes:

1) Based on 142,325,222 common shares issued and outstanding on March 15, 2018.

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2) Options exercisable to acquire common shares.

3) Ownership percentage assumes aggregate beneficial ownership of common shares, common shares acquirable upon exercise of options and fully diluted shares outstanding of 170,544,856.

Restricted Share Units

The following table sets out the restricted share units held by our directors as of March 19, 2018.

	RSUs Granted	RSUs Vested	RSUs Unvested
Deborah Brown	37,729	—	37,729
Angela Holtham	313,498	—	313,498
Mark Lievonen	267,315	—	267,315
Wayne Pisano	438,311	—	438,311
William Rice	267,315	—	267,315
Bernd Seizinger	384,899	—	384,899
	1,709,067	—	1,709,067

The following table sets out the restricted share units held by our officers as of March 19, 2018.

	RSUs Granted	RSUs Vested	RSUs Unvested
Andrew de Guttadauro	60,000	—	60,000
	60,000	—	60,000

Performance Share Units

The following table sets out the performance share units held by our officers as of March 19, 2018.

	PSUs Granted	PSUs Vested	PSUs Unvested
Matthew Coffey	330,000	—	330,000
Kirk Look	210,000	—	210,000
Andres Gutierrez	300,000	—	300,000
	840,000	—	840,000

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

We are not directly or indirectly owned or controlled by another corporation(s) or by any foreign government. To the knowledge of our directors and senior officers, as at March 19, 2018, we are not aware of any shareholder who beneficially owns, directly or indirectly, or exercises control or direction over, our common shares carrying more than 5% of the voting rights.

Shares Held in the United States

The following table indicates, as of February 19, 2018, the total number of common shares issued and outstanding, the approximate total number of holders of record of common shares, the number of holders of record of common shares with US addresses, the portion of the outstanding common shares held by US holders of record, and the percentage of common shares held by US holders of record. This table does not indicate beneficial ownership of common shares.

Total Number of Holders of Record	Total Number of Common Shares Issued and Outstanding	Number of US Holders of Record	Number of Common Shares Held by US Holders of Record	Percentage of Common Shares Held by US Holders of Record
195	142,325,222	55	69,230,108	48.64	%

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Change of Control

As of March 19, 2018, there were no arrangements known to the Company which may, at a subsequent date, result in a change of control of the Company.

Control by Others

To the best of the Company’s knowledge, the Company is not directly or indirectly owned or controlled by another corporation, any foreign government, or any other natural or legal person, severally or jointly.

B. Related Party Transactions

We have entered into employment contracts with each of our officers (see Item 6).  

In November 2017, with the signing of a regional licensing agreement with upfront license fees, the Company triggered a liability of US$178,125 to an officer as detailed in the Assumption Agreement. As at December 31, 2017, US$178,125 was included in accounts payable and accrued liabilities. US$35,625 was paid in January 2018 and the balance will be paid after receipt of the contract receivable from Adlai (see Notes 10 and 12 in our audited consolidated financial statements included under Item 18).

Since the beginning of the fiscal year ended December 31, 2017 up to March 19, 2018, we did not enter into any other related party transactions and we do not have any loans outstanding with any officer, director or major shareholder.

C. Interests of Experts and Council

Not Applicable

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Statements

Financial Statements

The consolidated financial statements filed as part of this annual report are filed under Item 18.

Legal Proceedings

The directors and the management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation.

The directors and the management of the Company know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.

Dividend Policy

The Company has not paid any dividends on its common shares.  The Company may pay dividends on its common shares in the future if it generates profits.  Any decision to pay dividends on common shares in the future will be made by the board of directors on the basis of the earnings, financial requirements and other conditions existing at such time.

B. Significant Changes

There have been no significant changes to our annual financial statements.

ITEM 9. THE OFFER AND LISTING

A. Offering and Listing Details

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Our Common Shares are traded on the TSX under the symbol ONC. As well, effective November 5, 2015, our Common Shares commenced quotations on the OTCQX International ("OTCQX") under the symbol ONCYF. Prior to November 5, 2015 our Common Shares traded on the NASDAQ Capital Market under the symbol ONCY. On November 5, 2015, our Common Shares were delisted from the NASDAQ. The last reported sales price of our common shares on March 15, 2018 on the TSX was Cdn$0.79 and on the OTCQX was US$0.62.  The following table sets forth the high and low per share sales prices for our common shares on the NASDAQ and TSX for the periods indicated. In relation to the OTCQX, the following quotations reflect inter-dealer prices without retail mark-up, mark-down or commission and may not represent actual transactions.  The following table sets forth the range of high and low bid prices during the periods indicated on the OTCQX.

Common Shares
	OTCQX		NASDAQ		TSX
	High	Low	High	Low	High	Low
2013	N/A	N/A	4.93	1.45	4.94	1.54
2014	N/A	N/A	1.99	0.40	2.20	0.45
2015	0.37	0.24	1.16	0.29	1.44	0.35
2016	0.57	0.15	N/A	N/A	0.75	0.21
2017	0.82	0.20	N/A	N/A	1.10	0.26
2016
Quarter 1	0.43	0.25	N/A	N/A	0.56	0.36
Quarter 2	0.57	0.34	N/A	N/A	0.75	0.44
Quarter 3	0.37	0.25	N/A	N/A	0.49	0.34
Quarter 4	0.25	0.15	N/A	N/A	0.33	0.21
2017
Quarter 1	0.48	0.20	N/A	N/A	0.64	0.26
Quarter 2	0.82	0.33	N/A	N/A	1.10	0.44
Quarter 3	0.56	0.38	N/A	N/A	0.69	0.48
Quarter 4	0.60	0.43	N/A	N/A	0.77	0.54
September	0.56	0.41	N/A	N/A	0.69	0.51
October	0.54	0.43	N/A	N/A	0.64	0.54
November	0.60	0.44	N/A	N/A	0.77	0.56
December	0.60	0.52	N/A	N/A	0.77	0.67
2018
January	0.85	0.56	N/A	N/A	1.06	0.70
February	0.61	0.48	N/A	N/A	0.80	0.60
March (1 – 15)	0.64	0.59	N/A	N/A	0.83	0.75

Market Price Volatility of Common Shares

Market prices for the securities of biotechnology companies, including our securities, have historically been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. Factors, such as fluctuations in our operating results, the aftermath of our public announcements, and general market conditions, can have an adverse effect on the market price of our common shares and other securities.

B. Plan of Distribution

Not Applicable

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C. Markets

Our Common Shares, no par value, are traded/quoted on the OTCQX and the TSX under the symbol “ONCYF" and “ONC”, respectively.

D. Selling Shareholders

Not Applicable

E. Dilution

Not Applicable

F. Expenses of the Issue

Not Applicable

ITEM 10.  ADDITIONAL INFORMATION

A. Share Capital

Not Applicable

B. Memorandum and Articles of Association

Articles of Continuance

We are governed by our amended articles of incorporation (the "Articles") under the Business Corporations Act of Alberta (the “Act”) and by our by-laws (the "By-laws"). Our Alberta corporate access number is 207797382. Our Articles provide that there are no restrictions on the business we may carry on or on the powers we may exercise. Companies incorporated under the Act are not required to include specific objects or purposes in their articles or by-laws.

Directors

Subject to certain exceptions, including in respect of voting on any resolution to approve a contract that relates primarily to the director's remuneration, directors may not vote on resolutions to approve a material contract or material transaction if the director is a party to such contract or transaction. The directors are entitled to remuneration as shall from time to time be determined by the Board of Directors with no requirement for a quorum of independent directors. The directors have the ability under the Act to exercise our borrowing power, without authorization of the shareholders. The Act permits shareholders to restrict this authority through a company's articles or by-laws (or through a unanimous shareholder agreement), but no such restrictions are in place for us. Our Articles and By-laws do not require directors to hold shares for qualification.

Rights, Preferences and Dividends Attaching to Shares

The holders of common shares have the right to receive dividends if and when declared. Each holder of common shares, as of the record date prior to a meeting, is entitled to attend and to cast one vote for each common share held as of such record date at such annual and/or special meeting, including with respect to the election or re-election of directors. Subject to the provisions of our By-laws, all directors may, if still qualified to serve as directors, stand for re-election. The numbers of our Board of Directors are not replaced at staggered intervals but are elected annually.

On a distribution of assets on a winding-up, dissolution or other return of capital (subject to certain exceptions) the holders of common shares shall have a right to receive their pro rata share of such distribution. There are no sinking fund or redemption provisions in respect of the common shares. Our shareholders have no liability to further capital calls as all shares issued and outstanding are fully paid and non-assessable.

No other classes of shares are currently permitted to be issued.

Action Necessary to Change the Rights of Shareholders

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The rights attaching to the different classes of shares may be varied by special resolution passed at a meeting of that class's shareholders.

Annual and Special Meetings of Shareholders

Under the Act and our By-laws, we are required to mail a Notice of Meeting and Management Information Circular to registered shareholders not less than 21 days and not more than 50 days prior to the date of the meeting. Such materials must be filed concurrently with the applicable securities regulatory authorities in Canada and the US. Subject to certain provisions of the By-laws, a quorum of two or more shareholders in person or represented by proxy holding or representing by proxy not less than five (5%) percent of the total number of issued and outstanding shares enjoying voting rights at such meeting is required to properly constitute a meeting of shareholders.  Shareholders and their duly appointed proxies and corporate representatives are entitled to be admitted to our annual and/or special meetings.

Limitations on the Rights to Own Shares

The Articles do not contain any limitations on the rights to own shares. Except as described below, there are currently no limitations imposed by Canadian federal or provincial laws on the rights of non-resident or foreign owners of Canadian securities to hold or vote the securities held. There are also no such limitations imposed by the Articles and By-laws with respect to our common shares.

Disclosure of Share Ownership

In general, under applicable securities regulation in Canada, a person or company who beneficially owns, directly or indirectly, voting securities of an issuer or who exercises control or direction over voting securities of an issuer or a combination of both, carrying more than 10% of the voting rights attached to all the issuer's outstanding voting securities is an insider and must, within 10 days of becoming an insider, file a report in the required form effective the date on which the person became an insider. The report must disclose any direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer. Additionally, securities regulation in Canada provides for the filing of a report by an insider of a reporting issuer whose holdings change, which report must be filed within 10 days from the day on which the change takes place.

The rules in the US governing the ownership threshold above which shareholder ownership must be disclosed are more stringent than those discussed above. Section 13 of the Exchange Act imposes reporting requirements on persons who acquire beneficial ownership (as such term is defined in Rule 13d-3 under the Exchange Act) of more than 5% of a class of an equity security registered under Section 12 of the Exchange Act.  In general, such persons must file, within 10 days after such acquisition, a report of beneficial ownership with the SEC containing the information prescribed by the regulations under Section 13 of the Exchange Act. This information is also required to be sent to the issuer of the securities and to each exchange where the securities are traded.

Other Provisions of Articles and By-laws

There are no provisions in the Articles or By-laws:

• delaying or prohibiting a change in control of our company that operate only with respect to a merger, acquisition or corporate restructuring;

• discriminating against any existing or prospective holder of shares as a result of such shareholder owning a substantial number of shares;

• requiring disclosure of share ownership; or

• governing changes in capital, where such provisions are more stringent than those required by law.

C. Material Contracts

We have employment contracts with each of our officers as summarized in Item 6B. Other than these employment contracts and the Licensing Agreement described below, we have not entered into any other contract other than in the ordinary course of business over the last two years.

On November 16, 2017, the Company announced that it had, through its subsidiary, Oncolytics Biotech (Barbados) Inc., entered into a license, development, supply and distribution agreement (the “Licensing Agreement”) with Adlai Nortye Biopharma Co., Ltd. (“Adlai”), a biopharmaceutical company focused on discovering and developing new treatments for cancer and metabolic diseases.

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Under the terms of the Licensing Agreement, Adlai will have exclusive development and commercialization rights to REOLYSIN in China, Hong Kong, Macau, Singapore, South Korea and Taiwan (the “Territories”). Pursuant to the Licensing Agreement, Oncolytics is entitled to receive an upfront payment of approximately US$5.3 million; payment of US$7.9 million upon certain regulatory milestones being achieved; and payment of up to US$65.4 million upon certain clinical, regulatory and commercialization milestones being achieved.Oncolytics is also eligible to receive royalty payments in excess of 10% associated with the commercialization of REOLYSIN for all indications, subject to regulatory approval.

Under the terms of the Licensing Agreement, Adlai will be responsible for all clinical, regulatory and commercialization activities respecting REOLYSIN in the Territories. Oncolytics will maintain exclusive rights to REOLYSIN outside of the Territories and will be responsible for all development activities respecting REOLYSIN outside of the Territories.

In conjunction with the entering into of the Licensing Agreement, the Company and Adlai also entered into a warrant agreement pursuant to which the Company issued to Adlai:

(a) a common share purchase warrant (the “First Warrant”) entitling Adlai to purchase, for a period of 12 months from the date of the Warrant Agreement, up to US$2 million of common shares (“Common Shares”) of the Company, at a price equal to 120% of the five-day weighted average price of the Common Shares on the Toronto Stock Exchange (the “Principal Market”, unless the Common Shares begin trading on the NASDAQ Capital Market, in which case the Principal Market shall mean the NASDAQ Capital Market as of the date such trading commences) immediately preceding the exercise date; and

(b) a Common Share purchase warrant (the “Second Warrant”) entitling Adlai to purchase, for a period of 36 months from the date of the Warrant Agreement, up to US$6 million of Common Shares, at a price equal to 120% of the five-day weighted average price of the Common Shares on the Principal immediately preceding the exercise date.

Under the terms of the Warrant Agreement, the Company has the right to require the exercise by Adlai, within five business days of receipt of notice thereof, of:

(a) the First Warrant, upon the later of: (i) six months after the effective date of the Licensing Agreement; and (ii) the date of the enrollment of the first patient in the Global mBC Study (as such term is defined in the Licensing Agreement); and

(b) the Second Warrant, upon the date of the enrollment of the fiftieth (50th) patient in the Global mBC Study.

D. Exchange Controls

Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of our securities, except as discussed below in Section E, Taxation.

Restrictions on Share Ownership by Non-Canadians

There are no limitations under the laws of Canada or in our organizational documents on the right of foreigners to hold or vote securities of our company, except that the Investment Canada Act (the "Investment Canada Act") may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of our Company by a "non-Canadian."

Investment Canada Act

Under the Investment Canada Act, transactions exceeding certain financial thresholds, and which involve the acquisition of control of a Canadian business by a non-Canadian, are subject to review and cannot be implemented unless the Minister of Industry and/or, in the case of a Canadian business engaged in cultural activities, the Minister of Canadian Heritage, are satisfied that the transaction is likely to be of "net benefit to Canada". If a transaction is subject to review (a "Reviewable Transaction"), an application for review must be filed with the Investment Review Division of Industry Canada and/or the Department of Canadian Heritage prior to the implementation of the Reviewable Transaction. The responsible Minister is then required to determine whether the Reviewable Transaction is likely to be of net benefit to Canada taking into account, among other things, certain factors specified in the Investment Canada Act and any written undertakings that may have been given by the applicant. The Investment Canada Act contemplates an initial review period of up to 45 days after filing; however, if the responsible Minister has not completed the review by that date, the Minister may unilaterally extend the review period by up to 30 days (or such longer period as may be agreed to by the applicant and the Minister) to permit completion of the review. Direct acquisitions of control of most Canadian businesses by or from World Trade Organization ("WTO") investors are reviewable under the Investment Canada Act only if, in

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the case of an acquisition of voting securities, the value of the worldwide assets of the Canadian business or, in the case of an acquisition of substantially all the assets of a Canadian business, the value of those assets exceed C$295 million for the year 2008 (this figure is adjusted annually to reflect inflation). Indirect acquisitions (e.g., an acquisition of a US corporation with a Canadian subsidiary) of control of such businesses by or from WTO investors are not subject to review, regardless of the value of the Canadian businesses' assets. Significantly lower review thresholds apply where neither the investor nor the Canadian business is WTO investor controlled or where the Canadian business is engaged in uranium mining, certain cultural businesses, financial services or transportation services.

Even if the transaction is not reviewable because it does not meet or exceed the applicable financial threshold, the non-Canadian investor must still give notice to Industry Canada and, in the case of a Canadian business engaged in cultural activities, Canadian Heritage, of its acquisition of control of a Canadian business within 30 days of its implementation.

Competition Act

The Competition Act (Canada) (the "Competition Act") requires that a pre-merger notification filing be submitted to the Commissioner of Competition (the "Commissioner") in respect of proposed transactions that exceed certain financial and other thresholds. If a proposed transaction is subject to pre-merger notification, a pre-merger notification filing must be submitted to the Commissioner and a waiting period must expire or be waived by the Commissioner before the transaction may be completed. The parties to a proposed transaction may choose to submit either a short-form filing (in respect of which there is a 14-day statutory waiting period) or a long-form filing (in respect of which there is a 42-day statutory waiting period). However, where the parties choose to submit a short-form filing, the Commissioner may, within 14 days, require that the parties submit a long-form filing, in which case the proposed transaction generally may not be completed until 42 days after the long-form filing is submitted by the parties.

The Commissioner may, upon request, issue an advance ruling certificate ("ARC") in respect of a proposed transaction where she is satisfied that she would not have sufficient grounds on which to apply to the Competition Tribunal for an order under the merger provisions of the Competition Act. If the Commissioner issues an ARC in respect of a proposed transaction, the transaction is exempt from the pre-merger notification provisions. In addition, if the transaction to which the ARC relates is substantially completed within one year after the ARC is issued, the Commissioner cannot seek an order of the Competition Tribunal under the merger provisions of the Competition Act in respect of the transaction solely on the basis of information that is the same or substantially the same as the information on the basis of which the ARC was issued.

If the Commissioner is unwilling to issue an ARC, she may nevertheless issue a "no action" letter waiving notification and confirming that she is of the view that grounds do not then exist to initiate proceedings before the Competition Tribunal under the merger provisions of the Competition Act with respect to the proposed transaction, while preserving, during the three years following completion of the proposed transaction, her authority to initiate proceedings should circumstances change.

Regardless of whether pre-merger notification is required, the Commissioner may apply to the Competition Tribunal (a special purpose tribunal) for an order under the merger provisions of the Competition Act. If the Competition Tribunal finds that the transaction is or is likely to prevent or lessen competition substantially, it may order that the parties not proceed with the transaction or part of it or, in the event that the transaction has already been completed, order its dissolution or the disposition of some of the assets or shares involved. In addition, the Competition Tribunal may, with the consent of the person against whom the order is directed and the Commissioner, order that person to take any other action as is deemed necessary to remedy any substantial lessening or prevention of competition that the Competition Tribunal determines would or would likely result from the transaction.

E. Taxation

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership and disposition of Common Shares.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of Common Shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder,including, without limitation, specific tax consequences to a U.S. Holder under an applicable income tax treaty. Accordingly, this summary is not

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intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences to U.S. Holders of the acquisition, ownership, and disposition of Common Shares. In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of Common Shares.

No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the conclusions described in this summary.

Scope of this Summary

Authorities

This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “Canada-U.S. Tax Convention”), and U.S. court decisions that are applicable, and, in each case, as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied retroactively. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation.

U.S. Holders

For purposes of this summary, the term "U.S. Holder" means a beneficial owner of Common Shares that is for U.S. federal income tax purposes:

• an individual who is a citizen or resident of the United States;

• a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

• an estate whose income is subject to U.S. federal income taxation regardless of its source; or

• a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a “functional currency” other than the U.S. dollar; (e) own Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) acquire Common Shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold Common Shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); (h) own, have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power or value of the outstanding shares of the Company or (i) a person required to accelerate the recognition of an item of income with respect to the Common Shares as a result of such income being recognized on an applicable financial statement. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold Common Shares in connection with carrying on a business in Canada; (d) persons whose Common Shares constitute “taxable Canadian property” under the Tax Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should

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consult their own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of Common Shares.

If an entity or arrangement that is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax consequences to such entity or arrangement and the partners (or other owners or participants) of such entity or arrangement generally will depend on the activities of the entity or arrangement and the status of such partners (or owners or participants). This summary does not address the tax consequences to any such partner (or owner or participants). Partners (or other owners or participants) of entities or arrangements that are classified as partnerships or as “pass-through” entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership and disposition of Common Shares.

Passive Foreign Investment Company Rules

PFIC Status of the Company

If the Company were to constitute a “passive foreign investment company” under the meaning of Section 1297 of the Code (a “PFIC”, as defined below) for any year during a U.S. Holder’s holding period, then certain potentially adverse rules may affect the U.S. federal income tax consequences to a U.S. Holder as a result of the acquisition, ownership and disposition of Common Shares. The Company believes that it was classified as a PFIC for the tax year ended December 31, 2017, and based on current business plans and financial expectations, the Company anticipates that it may be a PFIC for its current tax year and subsequent tax years. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or any subsidiary of the Company) concerning its PFIC status. Each U.S. Holder should consult its own tax advisors regarding the PFIC status of the Company and each subsidiary of the Company.

In any year in which the Company is classified as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. In addition to penalties, a failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621.

The Company generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Company is passive income (the “PFIC income test”) or (b) 50% or more of the value of the Company’s assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets (the “PFIC asset test”). “Gross income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources, and “passive income” generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

For purposes of the PFIC income test and PFIC asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and PFIC asset test described above, and assuming certain other requirements are met, “passive income” does not include certain interest, dividends, rents, or royalties that are received or accrued by the Company from certain “related persons” (as defined in Section 954(d)(3) of the Code) also organized in Canada, to the extent such items are properly allocable to the income of such related person that is not passive income.

Under certain attribution rules, if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company’s direct or indirect equity interest in any company that is also a PFIC (a ‘‘Subsidiary PFIC’’), and will generally be subject to U.S. federal income tax on their proportionate share of (a) any “excess distributions,” as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the Company or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of Common Shares. Accordingly, U.S. Holders should be aware that they could be subject to tax under the PFIC rules even if no distributions are received and no redemptions or other dispositions of Common Shares are made.

Default PFIC Rules Under Section 1291 of the Code

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If the Company is a PFIC for any tax year during which a U.S. Holder owns Common Shares, the U.S. federal income tax consequences to such U.S. Holder of the acquisition, ownership, and disposition of Common Shares will depend on whether and when such U.S. Holder makes an election to treat the Company and each Subsidiary PFIC, if any, as a “qualified electing fund” or “QEF” under Section 1295 of the Code (a “QEF Election”) or makes a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”). A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing U.S. Holder.”

A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other taxable disposition of Common Shares and (b) any “excess distribution” received on the Common Shares. A distribution generally will be an “excess distribution” to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder’s holding period for the Common Shares, if shorter).

Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of Common Shares (including an indirect disposition of the stock of any Subsidiary PFIC), and any “excess distribution” received on Common Shares or with respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the respective Common Shares. The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income (and not eligible for certain preferred rates). The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as “personal interest,” which is not deductible.

If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds Common Shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such Common Shares were sold on the last day of the last tax year for which the Company was a PFIC.

QEF Election

A U.S. Holder that makes a timely and effective QEF Election for the first tax year in which the holding period of its Common Shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its Common Shares. A U.S. Holder that makes a timely and effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings and profits” over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as “personal interest,” which is not deductible.

A U.S. Holder that makes a timely and effective QEF Election with respect to the Company generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents “earnings and profits” of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder’s tax basis in the Common Shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of Common Shares.

The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF Election will be treated as “timely” if such QEF Election is made for the first year in the U.S. Holder’s holding period for the Common Shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year. If a U.S. Holder does not make a timely and effective QEF Election for the first year in the U.S. Holder’s holding period for the Common Shares, the U.S. Holder may still be able to make a timely and effective QEF Election in a subsequent year if such U.S. Holder meets certain requirements and makes a “purging” election to recognize gain (which will be

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taxed under the rules of Section 1291 of the Code discussed above) as if such Common Shares were sold for their fair market value on the day the QEF Election is effective. If a U.S. Holder makes a QEF Election but does not make a “purging” election to recognize gain as discussed in the preceding sentence, then such U.S. Holder shall be subject to the QEF Election rules and shall continue to be subject to tax under the rules of Section 1291 discussed above with respect to its Common Shares. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.

A QEF Election will apply to the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC.

U.S. Holders should be aware that there can be no assurances that the Company will satisfy the record keeping requirements that apply to a QEF, or that the Company will supply U.S. Holders with information that such U.S. Holders are required to report under the QEF rules, in the event that the Company is a PFIC. Thus, U.S. Holders may not be able to make a QEF Election with respect to their Common Shares. Each U.S. Holder should consult its own tax advisors regarding the availability of, and procedure for making, a QEF Election.

A U.S. Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income tax return. However, if the Company does not provide the required information with regard to the Company or any of its Subsidiary PFICs, U.S. Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules of Section 1291 of the Code discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.

Mark-to-Market Election

A U.S. Holder may make a Mark-to-Market Election only if the Common Shares are marketable stock. The Common Shares generally will be “marketable stock” if the Common Shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange effectively promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Provided that the Common Shares are “regularly traded” as described in the preceding sentence, the Common Shares are expected to be marketable stock. However, each U.S. Holder should consult its own tax advisor in this regard.

A U.S. Holder that makes a Mark-to-Market Election with respect to its Common Shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such Common Shares. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder’s holding period for the Common Shares for which the Company is a PFIC and such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the Common Shares.

A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the Common Shares, as of the close of such tax year over (b) such U.S. Holder’s adjusted tax basis in such Common Shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder’s adjusted tax basis in the Common Shares, over (b) the fair market value of such Common Shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).

A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holder’s tax basis in the Common Shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition of Common Shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election

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for prior tax years). Losses that exceed this limitation are subject to the rules generally applicable to losses provided in the Code and Treasury Regulations.

A U.S. Holder makes a Mark-to-Market Election by attaching a completed IRS Form 8621 to a timely filed United States federal income tax return. A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the Common Shares cease to be “marketable stock” or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market Election.

Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the Common Shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to avoid the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC to its shareholder.

Other PFIC Rules

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of Common Shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which Common Shares are transferred.

Certain additional adverse rules may apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses Common Shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such Common Shares.

Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

The PFIC rules are complex, and each U.S. Holder should consult its own tax advisors regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.

General Rules Applicable to the Ownership and Disposition of Common Shares

The following discussion describes the general rules applicable to the ownership and disposition of the Common Shares but is subject in its entirety to the special rules described above under the heading “Passive Foreign Investment Company Rules.”

Distributions on Common Shares

A U.S. Holder that receives a distribution, including a constructive distribution, with respect to a Common Share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current and accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates if the Company is a PFIC for the tax year of such distribution or the preceding tax year. To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in the Common Shares and thereafter as gain from the sale or exchange of such Common Shares. (See “Sale or Other Taxable Disposition of Common Shares” below). However, the Company may not maintain the calculations of its earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder may have to assume that any distribution by the Company with respect to the Common Shares will constitute ordinary dividend income. Dividends received on Common Shares by corporate U.S. Holders generally will not be eligible for the “dividends received deduction.” Subject to applicable limitations and provided the Company is eligible for the benefits of the Canada-U.S. Tax Convention, dividends paid by the Company to non-corporate U.S. Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including

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that the Company not be classified as a PFIC in the tax year of distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisors regarding the application of such rules.

Sale or Other Taxable Disposition of Common Shares

Upon the sale or other taxable disposition of Common Shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the U.S. dollar value of cash received plus the fair market value of any property received and such U.S. Holder's tax basis in such Common Shares sold or otherwise disposed of. A U.S. Holder’s tax basis in Common Shares generally will be such holder’s U.S. dollar cost for such Common Shares. Gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the Common Shares have been held for more than one year.

Preferential tax rates currently apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

Additional Considerations

Additional Tax on Passive Income

Certain U.S. Holders that are individuals, estates or trusts (other than trusts that are exempt from tax) will be subject to a 3.8% tax on all or a portion of their “net investment income,” which includes dividends on the Common Shares and net gains from the disposition of the Common Shares. Further, excess distributions treated as dividends, gains treated as excess distributions under the PFIC rules discussed above, and mark-to-market inclusions and deductions are all included in the calculation of net investment income.

Treasury Regulations provide, subject to the election described in the following paragraph, that solely for purposes of this additional tax, that distributions of previously taxed income will be treated as dividends and included in net investment income subject to the additional 3.8% tax. Additionally, to determine the amount of any capital gain from the sale or other taxable disposition of Common Shares that will be subject to the additional tax on net investment income, a U.S. Holder who has made a QEF Election will be required to recalculate its basis in the Common Shares excluding QEF basis adjustments.

Alternatively, a U.S. Holder may make an election which will be effective with respect to all interests in controlled foreign corporations and QEFs held in that year or acquired in future years. Under this election, a U.S. Holder pays the additional 3.8% tax on QEF income inclusions and on gains calculated after giving effect to related tax basis adjustments. U.S. Holders that are individuals, estates or trusts should consult their own tax advisors regarding the applicability of this tax to any of their income or gains in respect of the Common Shares.

Receipt of Foreign Currency

The amount of any distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of Common Shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method. Each U.S. Holder should consult its own U.S. tax advisors regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

Foreign Tax Credit

Subject to the PFIC rules discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the Common Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.

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Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” Generally, dividends paid by a foreign corporation should be treated as foreign source for this purpose, and gains recognized on the sale of stock of a foreign corporation by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made under the Code. However, the amount of a distribution with respect to the Common Shares that is treated as a “dividend” may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. The foreign tax credit rules are complex, and each U.S. Holder should consult its own U.S. tax advisors regarding the foreign tax credit rules.

Backup Withholding and Information Reporting

Under U.S. federal income tax law, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of certain thresholds. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may be subject to these reporting requirements unless their Common Shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938.

Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, Common Shares will generally be subject to information reporting and backup withholding tax, at the rate of 24%, if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.

The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.

THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.

F. Dividends and Paying Agents

Not Applicable

G. Statements by Experts

Not Applicable

H. Documents on Display

We are subject to the informational requirements of the Exchange Act and file reports and other information with the SEC. You may read and copy any of our reports and other information at, and obtain copies upon payment of prescribed fees from, the Public

55

Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. In addition, the SEC maintains a Website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC at http://www.sec.gov. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We are required to file reports and other information with the securities commissions in Canada. You are invited to read and copy any reports, statements or other information, other than confidential filings, that we file with the provincial securities commissions. These filings are also electronically available from the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") (http://www.sedar.com), the Canadian equivalent of the SEC's electronic document gathering and retrieval system.

We "incorporate by reference" information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this Form 20-F and more recent information automatically updates and supersedes more dated information contained or incorporated by reference in this Form 20-F.

As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders.

We will provide without charge to each person, including any beneficial owner, to whom a copy of this annual report has been delivered, on the written or oral request of such person, a copy of any or all documents referred to above which have been or may be incorporated by reference in this annual report (not including exhibits to such incorporated information that are not specifically incorporated by reference into such information). Requests for such copies should be directed to us at the following address: Oncolytics Biotech Inc., 210 – 1167 Kensington Crescent, NW, Calgary, Alberta, Canada, T2N 1X7, Attention:  Kirk Look.  Telephone (403) 670 - 7377. Facsimile (403) 283-0858 EMAIL: info@oncolytics.ca.

I. Subsidiary Information

Not applicable.

ITEM 11.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Foreign Currency Risk

We operate primarily in Canada, the US, the U.K. and Europe. Therefore, we are exposed to foreign currency risk associated with our expenses outside of Canada.  We do not use financial derivative instruments to manage this market risk.

Interest Rate Risk

The primary objective of our policy for the investment of temporary cash surpluses is the protection of principal, and, accordingly, we generally invest in investment-grade debt securities with varying maturities.  As it is our intent and policy to hold these investments until maturity, we do not have a material exposure to interest rate risk.

We do not currently have any long-term debt, nor do we currently utilize interest rate swap contracts to hedge against interest rate risk.

We do not use financial instruments for trading purposes and are not parties to any leverage derivatives.  We do not currently engage in hedging transactions.  See “Currency and Exchange Rates” and Item 4 – “Information on the Company”.

ITEM 12.   DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.

A. Debt Securities

Not Applicable

B. Warrants and Rights

Not Applicable

C. Other Securities

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Not Applicable

D. American Depository Shares

The Company’s Common Shares are not represented by American Depository Receipts.

PART II

ITEM 13.   DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.

None

ITEM 14.   MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.

A. Modification of Instruments Defining Rights of Security Holders

None

B. Modification or Issuance of Other Class of Securities

None

C. Withdrawal or Substitution of Security

None

D. Change of Trustee or Paying Agent

None

E. Use of Proceeds

There has been no change to the information provided in our first annual report on Form 20-F.

ITEM 15.  CONTROLS AND PROCEDURES

A. Evaluation of Disclosures and Procedures

It is the conclusion of our Chief Executive Officer and Chief Financial Officer that our Company's disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)), based on their evaluation of these controls and procedures as of the end of the period covered by this annual report, are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

B. Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Reporting Standards as issued by the International Accounting Standards Board ("IFRS"), and includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material

57

effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Management, including the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, 2013 Framework, (COSO) in Internal Control-Integrated Framework.  Based on this assessment, management believes that, as of December 31, 2017, the Company’s internal control over financial reporting was effective based on those criteria.

C. Attestation Report of the Registered Public Accounting Firms

In accordance with Securities and Exchange Commission’s rules regarding non-accelerated filers, this Annual Report does not include an attestation report of the Company's independent registered public accounting firm regarding the Company's internal control over financial reporting.

D. Changes in Internal Controls over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the period that is covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. 

ITEM 16 .  [RESERVED]

ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT

Our Board has determined that each of the Audit Committee members, Angela Holtham, Wayne Pisano, Mark Lievonen and Deborah Brown, is a financial expert and each is independent pursuant to the Rule 5605(d)(2) of the NASDAQ Capital Market and Rule 10A-3 of the Exchange Act.

ITEM 16B.  CODE OF ETHICS

Our Board of Directors has adopted a Code of Ethics for our Chief Executive Officer, Chief Financial Officer and Accounting Officer that applies to our Chief Executive Officer, Chief Financial Officer and Controller.  A copy of this Code of Ethics may be found on the Company’s website at http://www.oncolyticsbiotech.com.  Requests for such copies should be directed to us at the following address: Oncolytics Biotech Inc., 210 – 1167 Kensington Crescent, NW, Calgary, Alberta, Canada, T2N 1X7, Attention:  Kirk Look  Telephone (403) 670 - 7377. Facsimile (403) 283-0858 EMAIL: info@oncolyticsbiotech.com.

There were no amendments to our Code of Ethics during the fiscal year ended December 31, 2017. We did not grant any waivers to the provisions of our Code of Ethics during the fiscal year ended December 31, 2017.

ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees and Services

During the financial years ended December 31, 2017, 2016, and 2015, Ernst & Young LLP received the following fees:

	2017	2016	2015
Item	$	$	$
Audit fees	104,555	163,910	291,509
Audit-related fees (1),(3)	144,327	152,145	105,017
Tax fees (2)	19,037	40,843	23,861
All other fees	—	—	—

Notes:

1) Includes review of interim financial statements, accounting consultations and subscription to on-line accounting services.

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2) Comprised of tax return preparation, scientific research and development return and other tax consultation fees.

3) Includes fees associated with matters relating to the provision of a consent letter for various filings.

Audit Fees

Audit fees were for professional services rendered by Ernst & Young, LLP for the audit of our annual financial statements and services provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees

Audit-related fees were for assurance and related services reasonably related to the performance of the audit or review of the annual statements and are not reported under the heading Audit Fees above.  These services consisted of accounting consultations, assistance with prospectus filings and assistance with preparations for compliance with section 404 of the Sarbanes-Oxley Act of 2002.

Tax Fees

Tax fees were for tax compliance and professional tax consultations.

All Other Fees

Other fees are for products and services other than those described under the headings Audit Fees, Audit-Related Fees and Tax Fees above.

The Audit Committee pre-approves all audit services to be provided to us by our independent auditors. The Audit Committee’s policy regarding the pre-approval of non-audit services to be provided to us by our independent auditors is that all such services shall be pre-approved by the Audit Committee or by the Chair of the Audit Committee, who must report all such pre-approvals to the Audit Committee at their next meeting following the granting thereof. Non-audit services that are prohibited to be provided to us by our independent auditors may not be pre-approved. In addition, prior to the granting of any pre-approval, the Audit Committee or the Chair, as the case may be, must be satisfied that the performance of the services in question will not compromise the independence of the independent auditors.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

None

ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES

None

ITEM 16F.  CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANTS

None

ITEM 16G. CORPORATE GOVERNANCE

None

ITEM 16H.  MINE SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS.

Not applicable.

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ITEM 18 FINANCIAL STATEMENTS

The financial statements appear on pages F-1 through F-26.

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ITEM 19. EXHIBITS.

The following exhibits are filed as part of this annual report:

EXHIBIT NUMBER	DESCRIPTION
	Constating Documents
1.1(a)	Articles of Incorporation
1.2(a)	By-laws
	Material Contracts
4.1(b)*	Services Agreement, dated October 16, 2002, between the Company and its Senior Vice President, Clinical and Regulatory Affairs, George Gill
4.2(c)*	Amending Agreement No. 1, dated January 6, 2005, to the Services Agreement between the Company and its Senior Vice President, Clinical and Regulatory Affairs, George Gill, dated October 16, 2001
4.3(c)*	Employment Agreement, dated January 12, 2007, between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty
4.4(c)*	Executive Employment Agreement, dated May 29, 2007, between the Company and its Chief Scientific Officer, Matthew Coffey
4.5(c)*	Executive Employment Agreement, dated May 29, 2007, between the Company and its Chief Medical Officer, Dr. Karl Mettinger
4.6(c)*	Executive Employment Agreement, dated May 30, 2007, between the Company and its Chief Financial Officer, Douglas Ball
4.7(c)*	Executive Employment Agreement, dated June 6, 2007, between the Company and its Chief Executive Officer, Bradley Thompson
4.8(c)*	Amending Agreement No. 1, dated December 3, 2007, to the Employment Agreement between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty, dated January 12, 2007
4.9(c)*	Amendment No. 1, dated March 7, 2008, to the Executive Employment Agreement between the Company and its Chief Financial Officer, Douglas Ball, dated May 30, 2007
4.10(c)*	Amendment No.1, dated March 7, 2008, between the Company and its Chief Scientific Officer, Matthew Coffey, dated May 29, 2007
4.11(c)*	Amendment No. 1, dated March 7, 2008, to the Executive Employment Agreement between the Company and its Chief Executive Officer, Bradley Thompson, dated June 6, 2007
4.12(c)*	Amendment No. 1, dated March 20, 2008, to the Employment Agreement between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty, dated January 12, 2007
4.13(c)*	Amendment No. 1, dated March 28, 2008, to the Executive Employment Agreement between the Company and its Chief Medical Officer, Dr. Karl Mettinger, dated May 29, 2007
4.14(c)*	Amendment No. 2, dated March 31, 2008, to the Services Agreement between the Company and its Senior Vice President, Clinical and Regulatory Affairs, George Gill, dated October 16, 2001
4.15(d)*	Executive Employment Agreement, dated January 26, 2009, between Oncolytics Biotech (U.S.) Inc. and its Chief Medical Officer, Dr. Karl Mettinger
4.16(d)*	Executive Employment Agreement, dated January 22, 2009 between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty.
4.17(e)*	Amendment No. 2, dated January 1, 2011, to the Executive Employment Agreement between the Company and its Chief Executive Officer, Bradley Thompson, dated June 6, 2007
4.18(f)*	Employment Agreement, dated January 1, 2011 between the Company and its Senior Vice President, Clinical and Regulatory Affairs, George Gill.
4.19(f)*	Executive Employment Agreement, dated November 10, 2011 between the Company and its Senior Vice President of Clinical Development and Chief Medical Officer, Gerard T. Kennealey.
4.20(g)*	Executive Employment Agreement, dated March 22, 2013, between the Company and its Chief Operating Officer, Matthew Coffey
4.21(g)*	Executive Employment Agreement, dated September 27, 2012, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Medical and Clinical Affairs Chief Medical Officer, Dr. Alan Tuchman
4.22(g)*	Executive Employment Agreement, dated March 22, 2013, between the Company and its Chief Financial Officer, Kirk Look
4.23(g)*	Executive Employment Agreement, dated March 22, 2013, between the Company and its Chief Executive Officer, Bradley Thompson
4.24(h)*	Amending Agreement, dated March 12, 2014, between the Company and its Chief Executive Officer, Bradley Thompson
4.25(h)*	Amending Agreement, dated March 12, 2014, between the Company and its Chief Financial Officer, Kirk Look
4.26(h)*	Amending Agreement, dated March 12, 2014, between the Company and its Chief Operating Officer, Matthew Coffey
4.27(i)*	Amending Agreement, dated March 12, 2015, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Medical and Clinical Affairs Chief Medical Officer, Dr. Alan Tuchman
4.28(i)*	Amending Agreement, dated March 12, 2015, between Oncolytics Biotech (U.S.) Inc. and its Vice President, Intellectual Property, Mary Ann Dillahunty.
4.29(i)*	Amending Agreement, dated March 12, 2015, between the Company and its Chief Executive Officer, Bradley Thompson
4.30(i)*	Amending Agreement, dated March 12, 2015, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Clinical and Regulatory Affairs, George Gill.
4.31(i)*	Amending Agreement, dated March 12, 2015, between the Company and its Chief Financial Officer, Kirk Look
4.32(i)*	Amending Agreement, dated March 12, 2015, between the Company and its Chief Operating Officer, Matthew Coffey
4.33(j)*	Amending Agreement, dated March 8, 2016, between the Company and its Chief Executive Officer, Bradley Thompson
4.34(j)*	Amending Agreement, dated March 8, 2016, between the Company and its Chief Financial Officer, Kirk Look
4.35(j)*	Amending Agreement, dated March 8, 2016, between the Company and its Chief Operating Officer, Matthew Coffey
4.36(j)*	Amending Agreement, dated November 10, 2015, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Medical and Clinical Affairs Chief Medical Officer, Dr. Alan Tuchman
4.37(j)*	Amending Agreement, dated March 8, 2016, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Medical and Clinical Affairs Chief Medical Officer, Dr. Alan Tuchman
4.38(j)*	Amending Agreement, dated March 8, 2016, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Clinical and Regulatory Affairs, George Gill.
4.39(k)*	Executive Employment Agreement, dated October 27, 2016, between Oncolytics Biotech (U.S.) Inc. and its Chief Medical Officer, Dr. Andres Gutierrez.
4.40(k)*	Amending Agreement, dated February 23, 2017, between the Company and its Chief Executive Officer, Matthew Coffey.
4.41(k)*	Amending Agreement, dated February 23, 2017, between the Company and its Chief Financial Officer, Kirk Look.
4.42(k)*	Settlement Agreement and Release, dated December 5, 2016 between the Company and its former Chief Executive Officer, Brad Thompson.
4.43*	Employment Agreement, dated June 29, 2017 between Oncolytics Biotech (U.S.) Inc. and its President, Andrew de Guttadauro
4.44#	License, development, supply and distribution agreement with Adlai Nortye Biopharma Co., Ltd dated November 14, 2017
4.45*	Amending Agreement, dated March 8, 2018, between the Company and its Chief Executive Officer, Matthew Coffey.
4.46*	Amending Agreement, dated March 8, 2018, between the Company and its Chief Financial Officer, Kirk Look.
4.47*	Amending Agreement, dated March 8, 2018 between Oncolytics Biotech (U.S.) Inc. and its President, Andrew de Guttadauro
4.48*	Amending Agreement, dated March 8, 2018, between Oncolytics Biotech (U.S.) Inc. and its Chief Medical Officer, Dr. Andres Gutierrez.
	Subsidiaries
8.0	List of subsidiaries
	Certifications
12.1	Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2	Certificate of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1	Certificate of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2	Certificate of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	Other Exhibits
15.1	The Registrant's Management's Discussion and Analysis for the Year Ended December 31, 2017
15.2	Consent of Ernst & Young LLP
101.1	Interactive Data Files (XBRL-Related Documents)

* - Denotes management contract or agreement

# - Certain portions of this exhibit have been redacted pursuant to a confidential treatment request filed with the SEC on March 19, 2018

(a) Previously filed with the SEC on Form 20-F dated June 14, 2002.

(b) Previously filed with the SEC on Form 20-F dated June 27, 2003.

(c) Previously filed with the SEC on Form 20-F dated May 23, 2008.

(d) Previously filed with the SEC on Form 20-F dated March 6, 2009.

(e) Previously filed with the SEC on Form 20-F dated March 24, 2011.

(f) Previously filed with the SEC on Form 20-F dated March 23, 2012.

(g) Previously filed with the SEC on Form 20-F dated March 22, 2013.

(h) Previously filed with the SEC on Form 20-F dated March 19, 2014.

(i) Previously filed with the SEC on Form 20-F dated March 20, 2015.

(j) Previously filed with the SEC on Form 20-F dated March 24, 2016.

(k) Previously filed with the SEC on Form 20-F dated March 28, 2017.

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SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Date: March 19, 2018

ONCOLYTICS BIOTECH INC.

/s/ Matthew Coffey	/s/ Kirk Look
Matthew Coffey, Ph.D	Kirk Look, CA
Chief Executive Officer	Chief Financial Officer

62

Consolidated Financial Statements

Oncolytics Biotech^® Inc.

December 31, 2017 and 2016

STATEMENT OF MANAGEMENT’S RESPONSIBILITY

Management is responsible for the preparation and presentation of the consolidated financial statements, Management’s Discussion and Analysis (“MD&A”) and all other information in the Annual Report.

In management’s opinion, the accompanying consolidated financial statements have been properly prepared within reasonable limits of materiality and in accordance with the appropriately selected International Financial Reporting Standards as issued by the International Accounting Standards Board consistently applied and summarized in the consolidated financial statements.

The MD&A has been prepared in accordance with the requirements of securities regulators as applicable to Oncolytics Biotech Inc.

The consolidated financial statements and information in the MD&A generally include estimates that are necessary when transactions affecting the current accounting period cannot be finalized with certainty until future periods.  Based on careful judgments by management, such estimates have been properly reflected in the accompanying consolidated financial statements and MD&A.  The MD&A also includes information regarding the impact of current transactions and events, sources of liquidity and capital resources and risks and uncertainty.  Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.

Systems of internal controls, including organizational and procedural controls and internal controls over financial reporting, assessed as reasonable and appropriate in the circumstances, are designed and maintained by management to provide reasonable assurance that assets are safeguarded from loss or unauthorized use and to produce reliable records for financial purposes.

We, as the Chief Executive Officer and Chief Financial Officer, will certify to our annual filings with the CSA and the SEC as required in Canada by National Instrument 52-109 (Certification of Disclosure in Issuers’ Annual Interim Filings) and in the United States by the Sarbanes-Oxley Act.

The external auditors conducted an independent examination of corporate and accounting records in accordance with generally accepted auditing standards to express their opinion on the consolidated financial statements.  Their examination included such tests and procedures as they considered necessary to provide reasonable assurance that the consolidated financial statements are presented fairly.  The external auditors have full and free access to our Board of Directors and its Committees to discuss audit, financial reporting and related matters.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control.  The Board exercises this responsibility through the Audit Committee of the Board.  This Committee meets with management and the external auditors to satisfy itself that management’s responsibilities are properly discharged and to review the consolidated financial statements and MD&A before they are presented to the Board of Directors for approval.

/s/ Matt Coffey	/s/ Kirk Look
Matt Coffey, Ph.D	Kirk Look, CA
Chief Executive Officer	Chief Financial Officer

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and Directors of Oncolytics Biotech Inc.

Opinion on the consolidated financial statements

We have audited the accompanying consolidated financial statements of Oncolytics Biotech Inc. [the “Company”], which comprise the consolidated statements of financial position as at December 31, 2017 and December 31, 2016, the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes, comprising a summary of significant accounting policies and other explanatory information [collectively referred to as the “consolidated financial statements”].

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2017 and December 31, 2016, and its consolidated financial performance and its consolidated cash flows for each of the years in the three-year period ended December 31, 2017, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for opinion

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States) [“PCAOB”]. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement, whether due to error or fraud. Those standards also require that we comply with ethical requirements, including independence. We are required to be independent with respect to the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We are a public accounting firm registered with the PCAOB.

An audit includes performing procedures to assess the risks of material misstatements of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included obtaining and examining, on a test basis, audit evidence regarding the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Accordingly, we express no such opinion.

An audit also includes evaluating the appropriateness of accounting policies and principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a reasonable basis for our audit opinion.

We have served as the Company’s auditor since 1999.

Calgary, Canada
March 8, 2018

F-2

ONCOLYTICS BIOTECH INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at December 31,	Notes	2017 $		2016 $
Assets
Current assets
Cash and cash equivalents	5	11,836,119		12,034,282
Short-term investments	5	—		2,088,800
Contract receivable	10	4,767,100		—
Other receivables		37,726		54,406
Prepaid expenses		1,176,063		260,841
Total current assets		17,817,008		14,438,329
Non-current assets
Property and equipment	6	333,441		319,955
Total non-current assets		333,441		319,955
Total assets		18,150,449		14,758,284
Liabilities And Shareholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities		3,684,023		4,068,664
Contract liability	10	1,545,645		—
Total current liabilities		5,229,668		4,068,664
Non-current liabilities
Contract liability	10	4,636,935		—
Total non-current liabilities		4,636,935		—
Total liabilities		9,866,603		4,068,664
Commitments and contingencies	11, 12 and 17
Shareholders’ equity
Share capital   Authorized: unlimited   Issued: December 31, 2017 – 141,805,722 December 31, 2016 – 121,258,222	7	271,710,138		262,321,825
Warrants	7	3,617,900		—
Contributed surplus	8	27,028,238		26,643,044
Accumulated other comprehensive income		373,730		554,060
Accumulated deficit		(294,446,160	)	(278,829,309	)
Total shareholders’ equity		8,283,846		10,689,620
Total liabilities and equity		18,150,449		14,758,284

See accompanying notes

On behalf of the Board:
/s/ Angela Holtham	/s/ Wayne Pisano
Director	Director

F-3

ONCOLYTICS BIOTECH INC.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

For the years ending December 31,	Notes	2017 $		2016 $		2015 $
Expenses
Research and development	8, 19, 20	9,392,623		9,770,007		8,601,864
Operating	8, 19, 20	6,212,831		5,524,500		5,315,837
Loss before the following		(15,605,454	)	(15,294,507	)	(13,917,701	)
Interest		130,101		163,902		197,859
Loss before income taxes		(15,475,353	)	(15,130,605	)	(13,719,842	)
Income tax expense	13	(141,498	)	(9,374	)	(3,153	)
Net loss		(15,616,851	)	(15,139,979	)	(13,722,995	)
Other comprehensive (loss) income items that may be reclassified to net loss
Translation adjustment		(180,330	)	(206,918	)	480,935
Net comprehensive loss		(15,797,181	)	(15,346,897	)	(13,242,060	)
Basic and diluted loss per common share	9	(0.12	)	(0.13	)	(0.12	)
Weighted average number of shares (basic and diluted)		132,395,752		119,880,200		112,613,845

See accompanying notes

F-4

ONCOLYTICS BIOTECH INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

	Notes	Share Capital $		Warrants $	Contributed Surplus $		Accumulated Other Comprehensive Income $		Accumulated Deficit $		Total $
As at December 31, 2014		237,657,056		—	25,848,429		280,043		(249,966,335	)	13,819,193
Net loss and other comprehensive income		—		—	—		480,935		(13,722,995	)	(13,242,060	)
Issued pursuant to Share Purchase Agreement	7	4,371,687		—	—		—		—		4,371,687
Issued pursuant to "At the Market" Agreement	7	20,049,693		—	—		—		—		20,049,693
Share based compensation	8	—		—	429,537		—		—		429,537
Share issue costs	7	(753,744	)	—	—		—		—		(753,744	)
As at December 31, 2015		261,324,692		—	26,277,966		760,978		(263,689,330	)	24,674,306
Net loss and other comprehensive loss		—		—	—		(206,918	)	(15,139,979	)	(15,346,897	)
Issued pursuant to incentive share award plan	8	41,000		—	(41,000	)	—		—		—
Issue pursuant to "At the Market" Agreement	7	1,456,296		—	—		—		—		1,456,296
Share based compensation	8	—		—	406,078		—		—		406,078
Share issue costs	7	(500,163	)	—	—		—		—		(500,163	)
As at December 31, 2016		262,321,825		—	26,643,044		554,060		(278,829,309	)	10,689,620
Net loss and other comprehensive loss		—		—	—		(180,330	)	(15,616,851	)	(15,797,181	)
Issued pursuant to stock option plan	8	536,949		—	(193,509	)	—		—		343,440
Issued pursuant to "At the Market" Agreement	7	2,348,821		—	—		—		—		2,348,821
Issued pursuant to public offering	7	7,893,600		3,617,900	—		—		—		11,511,500
Share based compensation	8	—		—	578,703		—		—		578,703
Share issue costs	7	(1,391,057	)	—	—		—		—		(1,391,057	)
As at December 31, 2017		271,710,138		3,617,900	27,028,238		373,730		(294,446,160	)	8,283,846

See accompanying notes

F-5

ONCOLYTICS BIOTECH INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ending December 31,	Notes	2017 $		2016 $		2015 $
Operating Activities
Net loss for the year		(15,616,851	)	(15,139,979	)	(13,722,995	)
Amortization - property and equipment		90,768		162,233		180,411
Share based compensation	8, 19, 20	578,703		406,078		429,537
Unrealized foreign exchange gain	19	(124,793	)	(139,810	)	(816,319	)
Net change in non-cash working capital	16	180,855		2,233,865		(1,105,464	)
Cash used in operating activities		(14,891,318	)	(12,477,613	)	(15,034,830	)
Investing Activities
Acquisition of property and equipment	6	(105,765	)	(23,527	)	(108,268	)
Redemption (purchase) of short-term investments	5	2,088,800		(27,823	)	(29,292	)
Cash provided by (used in) investing activities		1,983,035		(51,350	)	(137,560	)
Financing Activities
Proceeds from Share Purchase Agreement	7	—		—		4,305,396
Proceeds from "At the Market" equity distribution agreement	7	2,103,166		956,133		19,362,240
Proceeds from public offering	7	10,366,098		—		—
Proceeds from exercise of stock options	8	343,440		—		—
Cash provided by financing activities		12,812,704		956,133		23,667,636
(Decrease) increase in cash		(95,579	)	(11,572,830	)	8,495,246
Cash and cash equivalents, beginning of year		12,034,282		24,016,275		14,152,825
Impact of foreign exchange on cash and cash equivalents		(102,584	)	(409,163	)	1,368,204
Cash and cash equivalents, end of year		11,836,119		12,034,282		24,016,275

See accompanying notes

F-6

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Note 1: Incorporation and Nature of Operations

Oncolytics Biotech Inc. was incorporated on April 2, 1998 under the Business Corporations Act (Alberta) as 779738 Alberta Ltd. On April 8, 1998, we changed our name to Oncolytics Biotech Inc.

Our consolidated financial statements for the year ended December 31, 2017, were authorized for issue in accordance with a resolution of the Board of Directors (the "Board") on March 8, 2018. We are a limited company incorporated and domiciled in Canada. Our shares are publicly traded and our registered office is located at 210, 1167 Kensington Crescent NW, Calgary, Alberta, Canada.

We are a development stage biopharmaceutical company that focuses on the discovery and development of pharmaceutical products for the treatment of cancers that have not been successfully treated with conventional therapeutics. Our lead product, REOLYSIN^®, is a potential immuno-oncology viral-agent that may be a novel treatment for certain types of cancer and may be an alternative to existing cytotoxic or cytostatic therapies. Our clinical development program for REOLYSIN emphasizes three programs: chemotherapy combinations to trigger selective tumor lysis; immune modulator (IMiD) combinations to facilitate innate immune responses; and immuno-therapy combinations to produce adaptive immune responses.

Note 2: Basis of Financial Statement Presentation

Our consolidated financial statements include our financial statements and the financial statements of our subsidiaries Oncolytics Biotech (Barbados) Inc., Oncolytics Biotech (US) Inc., and Oncolytics Biotech (UK) Inc. and are presented in Canadian dollars, our functional currency.

The accounts are prepared on the historical cost basis, except for certain assets and liabilities which are measured at fair value as explained in the notes to these financial statements.

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

Basis of consolidation

Our accounts include the accounts of Oncolytics Biotech Inc. and our subsidiaries. Subsidiaries are entities over which we have control which is achieved when we are exposed, or have the rights, to variable returns from our involvement with the investee and has the ability to affect those returns through our power to govern. Accounting policies of subsidiaries are consistent with our accounting policies and all intra-group transactions, balances, income and expenses are eliminated on consolidation.

A change in ownership interest of a subsidiary, without a change in control, is accounted for as an equity transaction.

Note 3: Summary of Significant Accounting Policies

The consolidated financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below.

Deferred income taxes

We follow the liability method of accounting for income taxes. Under the liability method, deferred income taxes are recognized for the difference between financial statement carrying values and the respective income tax basis of assets and liabilities (temporary differences). Deferred income tax assets and liabilities are measured using substantively enacted income tax rates and laws expected to apply in the years in which temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is charged or credited to income, except when it is related to items charged or credited to either other comprehensive income or directly to equity.

F-7

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Financial instruments

Financial assets

Financial assets are comprised of cash and cash equivalents, contract receivable, other receivables and short-term investments. Financial assets are initially recorded at fair market value and are classified as follows:

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and interest bearing deposits with our bank and have been designated as held for trading.

Contract receivable and other receivables

Contract receivable and other receivables have been classified as loans and receivables.

Short-term investments

We determine the appropriate classification of our short-term investments at the time of purchase and re-evaluate such classification as of each reporting date. We classify our short-term investments as held-to-maturity as we have the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at original cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest rate method. Such amortization and interest on securities classified as held-to-maturity are included in interest income.

Impairment of financial assets

We assess at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

Financial liabilities

Trade accounts payable

Trade accounts payable are non interest-bearing and recorded at fair market value. They are classified as other financial liabilities and are subsequently measured at amortized cost using the effective interest rate method.

Fair Value Measurement

Fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. In determining the fair value measurement of our financial instruments we prioritize the related inputs used in measuring fair value into the following hierarchy:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;

Level 3 - Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

Transaction Costs

Transaction costs are expensed as incurred for financial instruments designated as held for trading. Transaction costs for other financial instruments are recognized as part of the financial instrument's carrying value.

Foreign currency translation

The financial statements for each of our subsidiaries are prepared using their functional currency. Our presentation currency is the Canadian dollar which is also Oncolytics Biotech Inc.'s functional currency. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Exchange differences resulting from the settlement of such transactions and from the translation at exchange rates ruling at the statement of financial position date of

F-8

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

monetary assets and liabilities denominated in currencies other than the functional currency are recognized directly in the consolidated statement of loss and comprehensive loss.

Exceptions to this are where the monetary items form part of the net investment in a foreign operation and the foreign operation's functional currency is the local currency. These exchange differences are initially recognized in equity. The statement of financial position of foreign operations is translated into Canadian dollars using the exchange rate at the statement of financial position date and the income statements are translated into Canadian dollars using the average exchange rate for the period. Where this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, the exchange rate on the transaction date is used. Exchange differences on translation into Canadian dollars are recognized as a separate component of equity. On disposal of a foreign operation, any cumulative exchange differences held in equity are transferred to the consolidated statement of loss and comprehensive loss.

Investment tax credits

Investment tax credits ("ITCs") relating to qualifying scientific research and experimental development expenditures that are refundable are accounted for as a reduction in research and development expenditures. ITCs that are non-refundable, but are recoverable against future taxes payable, are accrued only when there is reasonable assurance that the credits will be realized.

ITCs are subject to technical and financial review by the Canadian tax authorities on a project-by-project basis. Therefore, amounts ultimately received may vary significantly from the amounts recorded. Any such differences are recorded as an adjustment to the recognized amount in the year the review by the Canadian tax authority is completed and the results are made known to us.

Loss per common share

Basic loss per common share is determined using the weighted average number of common shares outstanding during the period.

We use the treasury stock method to calculate diluted loss per common share. Under this method, diluted loss per common share is computed in a manner consistent with basic loss per common share except that the weighted average common shares outstanding are increased to include additional common shares from the assumed exercise of options and warrants, if dilutive. The number of additional common shares is calculated by assuming that any outstanding “in the money” options, restricted share units, performance share units and warrants were exercised at the later of the beginning of the period or the date of issue and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reporting period.

Property and equipment

Property and equipment are recorded at cost. Depreciation is provided on bases and at rates designed to amortize the cost of the assets over their estimated useful lives. Depreciation is recorded using the declining balance method at the following annual rates:

Office equipment and furniture	20%
Medical equipment	20%
Computer equipment	30%
Leasehold improvements	Straight-line over the term of the lease

Research and development costs

Research costs are expensed as incurred, net of recoveries. We record accruals for the estimated costs of our clinical trial activities performed by third parties. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of certain clinical trial activities. We generally accrue costs associated with the treatment phase of clinical trials based on the total estimated cost of the treatment phase on a per patient basis and we expense the per patient cost ratably over the estimated patient treatment period based on patient enrollment in the trials. Advance payments for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses and recognized as expense as the related goods are delivered or the related services are performed. We base our estimates on the best information available at the time. However, additional information may become available to us which

F-9

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified.

Development costs that meet specific criteria related to technical, market and financial feasibility will be capitalized. To date, all development costs have been expensed.

Revenue recognition

Revenue relates to a long-term contract associated with a regional licensing agreement (the "Agreement") with Adlai Nortye Biopharma Co., Ltd. ("Adlai"). The pricing for the contract was based on the specific negotiations with Adlai and includes non-refundable upfront license fees, development and regulatory milestone payments, royalties and sales-based milestone payments.

We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

Under the Agreement, we have granted a regional license to our intellectual property. The granting of this license is accounted for as one performance obligation. We have determined that we provide Adlai with a right to access our intellectual property, and therefore recognize revenue related to the upfront license fee over time. Revenue is recognized based on the extent of progress towards completion of the performance obligation using the input method. Under the input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. We use this method because Adlai receives and consumes the benefit of our intellectual property as we undertake activities that impact the intellectual property. Management must use judgment in making assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables.

The contract also provides for development and regulatory milestone payments, royalties and sales-based milestone payments. These amounts are contingent on the occurrence of a future event and therefore give rise to variable consideration. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price when it becomes highly probable that the amount will not be subject to significant reversal when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. Based on this information and related analysis, any quarterly adjustments to revenue are recognized as necessary in the period they become known.

The upfront license fee is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect us from the other party failing to adequately complete some or all of its obligations under the contract.

Revenue from sales-based royalties and the achievement of annual sales volumes will be recognized when the subsequent sale occurs, as the license of the intellectual property is the predominant item to which the royalty relates. We consider payments associated with the achievement of annual sales volumes to be, in substance, royalty payments and we will recognize such sales-based payments upon achievement of such sales volumes, provided that collection is reasonably assured.

Contract receivable - Contract receivable includes amounts billed and currently due from customers. When appropriate, we provide for an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. We perform a review of our customer’s credit risk and payment histories, including payments made subsequent to year-end.

Contract liability - Our contract liability includes upfront license fees and billings in excess of revenue recognized. Contract liabilities are recognized as revenue as or when we perform under the contract. We classify our contract liability as current or noncurrent based on the timing of when we expect to recognize revenue.

F-10

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Share based payments

Stock option plan

We have one stock option plan (the “Option Plan”) available to officers, directors, employees, consultants and suppliers with grants under the Option Plan approved from time to time by our Board of Directors (the “Board”). Under the Option Plan, the exercise price of each option is set at equal to or higher than the trading price of our stock on the date of grant in accordance with Toronto Stock Exchange guidelines. Vesting is provided for at the discretion of the Board and the expiration of options is to be no greater than 10 years from the date of grant. Exercised stock options are settled with common shares issued from treasury.

We use the fair value based method of accounting for stock option awards granted under the Option Plan. We recognize compensation expense and a corresponding adjustment to contributed surplus equal to the fair value of the stock options granted using the Black Scholes Option Pricing Model. The fair value of stock options with a graded vesting schedule is determined based on different expected lives for the options that vest each year, as it would be if the award were viewed as several separate awards, each with a different vesting date, and it is accounted for over the respective vesting period taking into consideration forfeiture estimates. Compensation expense is adjusted for subsequent changes in management’s estimate of the number of options that are expected to vest.

Share based payments to non-employees are measured at the date we obtain the goods or the date the counterparty renders the service.

Incentive share award plan

Our incentive share award plan (the "Share Plan") is available to directors, officers and employees. Under our Share Plan, performance share units and restricted share units may be approved from time to time by the Board. Performance share units ("PSUs") are an award to certain officers and employees to which common shares shall be issued based upon achieving the applicable performance criteria. Restricted share units ("RSUs") are an award to certain officers and employees and to non-employee directors to which common shares shall be issued in accordance with the Share Plan.

We recognize compensation expense and a corresponding adjustment to contributed surplus equal to the market value of our common shares at the date of grant based on the number of PSUs/RSUs expected to vest, recognized over the term of the vesting period. Compensation expense is adjusted for subsequent changes in management’s estimate of the number of PSUs/RSUs that are expected to vest. The effect of these changes is recognized in the period of the change.

Adoption of New Accounting Standards

IFRS 15 - Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers. The new standard will replace IAS 18 Revenue and IAS 11 Construction Contracts. IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised, and also contains new requirements related to presentation. The core principle in that framework is that revenue should be recognised dependent on the transfer of promised goods or services to the customer for an amount that reflects the consideration which should be received in exchange for those goods or services. The objective of the standard is to provide a five-step approach to revenue recognition that includes identifying contracts with customers, identifying performance obligations, determining transaction prices, allocating transaction prices to performance obligations, and recognising revenue when or as performance obligations are satisfied. Judgment will need to be applied, including making estimates and assumptions, for multiple-element contracts in identifying performance obligations, in constraining estimates of variable consideration and in allocating the transaction price to each performance obligation. This new standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. We early adopted this standard effective for our year ended December 31, 2017 using the full retrospective method. There were no adjustments to our consolidated financial statements resulting from this early adoption.

F-11

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Accounting Standards and Interpretations Issued but Not Yet Effective

IFRS 9 - Financial Instruments

In July 2014, on completion of the impairment phase of the project to reform accounting for financial instruments and replace IAS 39 Financial Instruments: Recognition and Measurement, the IASB issued the final version of IFRS 9 Financial Instruments. IFRS 9 includes guidance on the classification and measurement of financial assets and financial liabilities and impairment of financial assets (i.e. recognition of credit losses).

Under the classification and measurement requirements for financial assets, financial assets must be classified and measured at either amortized cost or at fair value through profit or loss or through other comprehensive income, depending on the basis of the entity’s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset.

The classification requirements for financial liabilities are unchanged from IAS 39. IFRS 9 requirements address the problem of volatility in net earnings arising from an issuer choosing to measure certain liabilities at fair value and require that the portion of the change in fair value due to changes in the entity’s own credit risk be presented in other comprehensive income, rather than within net earnings.

The new requirements for impairment of financial assets introduce an expected loss impairment model that requires more timely recognition of expected credit losses. IAS 39 impairment requirements are based on an incurred loss model where credit losses are not recognized until there is evidence of a trigger event. IFRS 9 is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted. We are assessing the impact of adopting this standard on our consolidated financial statements.

IFRS 16 - Leases

In January 2016, the IASB issued IFRS 16 - Leases (“IFRS 16”), which replaces IAS 17 - Leases (“IAS 17”) and related interpretations. IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease term is 12-months or less or the underlying asset has a low value. IFRS 16 substantially carries forward the lessor accounting in IAS 17 with the distinction between operating leases and finance leases being retained. IFRS 16 will be applied retrospectively for annual periods beginning on or after January 1, 2019. Early adoption is permitted under certain circumstances. We are assessing the potential impact of adopting this standard on our consolidated financial statements.

Note 4: Significant Judgments, Estimates and Assumptions

Judgments

The preparation of our consolidated financial statements requires us to make judgments, estimates and assumptions that affect the reported amount of expenses, assets, liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and assumptions

Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates and such differences could be significant. Significant estimates made by management affecting our consolidated financial statements include:

Revenue recognition

We entered into an Agreement which provides, among other payments, for upfront license fees in exchange for a regional license to our intellectual property. Management uses its judgment in applying the input method when determining the extent of progress towards completion of the performance obligation. Revenue recognition requires assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables.

F-12

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Share based payments

Part of our share based payment expense is measured by reference to the fair value of our stock options at the date at which they are granted. Estimating fair value for granted stock options requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility, dividend yield, and rate of forfeitures and making assumptions about them. The value of the share based payment expense for the year along with the assumptions and model used for estimating fair value for share based compensation transactions are disclosed in Note 8.

Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Currently, we are accumulating tax loss carry forward balances in various tax jurisdictions creating a deferred tax asset. Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

To date we have determined that none of our deferred tax assets should be recognized. Our deferred tax assets are mainly comprised of our net operating losses from prior years, prior year research and development expenses, and non-refundable investment tax credits. These tax pools relate to entities that have a history of losses, have varying expiry dates, and may not be used to offset taxable income within our other subsidiaries. As well, there are no taxable temporary differences or any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets.

Note 5: Cash Equivalents and Short Term Investments

Cash Equivalents

Cash equivalents consist of interest bearing deposits with our bank totaling $9,204,919 (December 31, 2016 – $10,679,992).  The current annual interest rate earned on these deposits is 1.38% (December 31, 2016 – 0.96%).

Short-Term Investments

Short-term investments consisted of guaranteed investment certificates which are liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.  The objectives for holding short-term investments were to invest our excess cash resources in investment vehicles that provided a better rate of return compared to our interest bearing bank account with limited risk to the principal invested.  We intended to match the maturities of these short-term investments with the cash requirements of the Company’s activities and treat these as held-to-maturity short-term investments.

	Face Value $	Original Cost $	Accrued Interest $	Carrying Value $	Fair Value $	Effective Interest Rate %
December 31, 2017
Short-term investments	—	—	—	—	—	—%
December 31, 2016
Short-term investments	2,088,800	2,088,800	—	2,088,800	2,088,800	1.41%

Fair value is determined by using published market prices provided by our investment advisor.

F-13

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Note 6: Property and Equipment

	Medical Equipment	Computer Equipment		Office Furniture	Office Equipment	Leasehold Improvements	Total
Cost
As at December 31, 2015	197,870	685,277		214,085	87,964	465,865	1,651,061
Additions, net of foreign exchange impact	—	20,098		—	1,502	770	22,370
As at December 31, 2016	197,870	705,375		214,085	89,466	466,635	1,673,431
Additions, net of foreign exchange impact	—	24,778		11,811	—	67,665	104,254
Disposals	—	(48,168	)	—	—	—	(48,168	)
As at December 31, 2017	197,870	681,985		225,896	89,466	534,300	1,729,517
Amortization
As at December 31, 2015	133,477	505,245		127,383	58,759	366,379	1,191,243
Amortization for the year	11,492	48,929		10,241	5,408	86,163	162,233
As at December 31, 2016	144,969	554,174		137,624	64,167	452,542	1,353,476
Amortization for the year	9,365	43,558		9,710	4,620	23,515	90,768
Disposals	—	(48,168	)	—	—	—	(48,168	)
As at December 31, 2017	154,334	549,564		147,334	68,787	476,057	1,396,076
Net book value
As at December 31, 2017	43,536	132,421		78,562	20,679	58,243	333,441
As at December 31, 2016	52,901	151,201		76,461	25,299	14,093	319,955

F-14

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Note 7: Share Capital

Authorized:

Unlimited number of no par value common shares

Issued:	Shares			Warrants
	Number	Amount $		Number	Amount $
Balance, December 31, 2014	93,512,494	237,657,056		—	—
Issued pursuant to Share Purchase Agreement(a)	5,778,674	4,371,687		—	—
Issued pursuant to "At the Market" sales agreement(b)	18,860,454	20,049,693		—	—
Share issue costs	—	(753,744	)	—	—
Balance, December 31, 2015	118,151,622	261,324,692		—	—
Issued pursuant to incentive share award plan	100,000	41,000		—	—
Issued pursuant to "At the Market" equity distribution agreement(c)	3,006,600	1,456,296		—	—
Share issue costs	—	(500,163	)	—	—
Balance, December 31, 2016	121,258,222	262,321,825		—	—
Issued pursuant to stock option plan	801,000	536,949		—	—
Issued pursuant to "At the Market" equity distribution agreement(c)	3,301,500	2,348,821		—	—
Issued pursuant to public offering(d)	16,445,000	7,893,600		16,445,000	3,617,900
Share issue costs	—	(1,391,057	)	—	—
Balance, December 31, 2017	141,805,722	271,710,138		16,445,000	3,617,900

(a) In 2014, we entered into a share purchase agreement (the "Share Purchase Agreement") with Lincoln Park Capital Fund, LLC ("LPC") to sell up to US$26,000,000 of common stock. Subject to the terms and conditions of the Share Purchase Agreement and at our sole discretion, we may sell up to US$26.0 million worth of common shares to LPC over the 30-month term. The purchase price of the common shares was based on prevailing market prices of our common shares immediately preceding the notice of a sale without any fixed discount. Subject to the Share Purchase Agreement, we controlled the timing and amount of each investment and LPC was obligated to make such purchases, if and when elected. The Share Purchase Agreement did not impose any upper price limit restrictions, negative covenants or restrictions on our future financing activities, but required that we maintained our NASDAQ listing. Under the Share Purchase Agreement, we issued an initial commitment fee of 292,793 common shares to LPC valued at fair value of US$455,000. An additional 292,793 common shares was to be issued on a pro rata basis under the terms of the Share Purchase Agreement as an additional commitment fee.

On October 20, 2014, we reached an agreement to amend the Share Purchase Agreement. The specific amendments included allowing the Company to sell shares to LPC at the Company's sole option independent of the closing price of the Common Stock, increasing the number of shares that may have been sold to LPC at certain price levels and changed the way the number of Commitment Shares issuable was to be calculated. In consideration of the amendments to the Agreement, the Company issued 146,397 shares of Common Stock to LPC.

In 2015, under the terms of the amended Share Purchase Agreement, we issued 5,778,674 common shares for net proceeds of approximately US$3.5 million. As part of the shares issued, we issued 78,674 commitment shares. The commitment shares have been valued at fair value of US$50,024 and have been recorded as additional share issue costs. On November 5, 2015, we were delisted from the NASDAQ Capital Market and as a result we were unable to sell common shares under the Share Purchase Agreement.

F-15

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

(b) On October 24, 2014, we entered into an "at-the-market" ("ATM") equity distribution agreement with Canaccord Genuity Inc. acting as sole agent. Under the terms of the distribution agreement, we were able to, from time to time, sell shares of our common stock having an aggregate offering value of up to US$20 million through Canaccord Genuity Inc. directly to investors in the US through our NASDAQ listing. We were able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. During 2015, we issued 18,860,454 common shares for net proceeds of approximately US$15.5 million. On November 5, 2015, we were delisted from the NASDAQ Capital Market and as a result we were unable to sell common shares under our existing ATM.

(c) On February 25, 2016, we entered into an ATM equity distribution agreement with Canaccord Genuity Inc. acting as our sole agent with an aggregate offering value of up to $4.6 million which allows us to sell our common shares through the facilities of the Toronto Stock Exchange or other "marketplace” (as defined in National Instrument 21-101 Marketplace Operation) in Canada (our "Canadian ATM"). Subject to the terms of our Canadian ATM, we are able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. During 2017, we sold 3,301,500 (2016 - 3,006,600) common shares for gross proceeds of $2,348,821 (2016 - $1,456,296). We incurred share issue costs of $245,655 (2016 - $500,163).

(d) On June 1, 2017, pursuant to an underwritten public offering, 16,445,000 units were sold at a purchase price of $0.70 per unit for gross proceeds of $11,511,500. Each unit included one common share (ascribed value of $0.48) and one common share purchase warrant (ascribed value of $0.22). The ascribed value was determined using the relative fair value method. The ascribed value of the common share purchase warrants was determined using the Black Scholes option pricing model. Each common share purchase warrant entitles the holder to purchase one common share in the capital of the Company until June 1, 2022, at an exercise price of $0.95. The common share purchase warrants will be subject to acceleration if the volume weighted average price of the Company's common shares equals or exceeds $2.50 for 15 consecutive trading dates. We incurred share issue costs of $1,145,402.

Warrants

The following table summarizes the assumptions used in the Black Scholes Option Pricing Model with respect to the valuation of warrants issued:

	2017
Risk-free interest rate	0.70%
Expected hold period to exercise	2.0 years
Volatility in the price of the Company's shares	89.30%
Dividend yield	Nil

We use historical data to estimate the expected dividend yield and expected volatility of our stock in determining the fair value of the warrants. The risk-free interest rate is based on the Government of Canada benchmark bond yield rates in effect at the time of grant and the expected life of the warrants represents the estimated length of time the warrants are expected to remain outstanding.

The following table summarizes our outstanding warrants at December 31, 2017:

Exercise Price		Outstanding, Beginning of the Year	Granted During the Year	Outstanding, End of the Year	Weighted Average Remaining Contractual Life (years)
$	0.95	—	16,445,000	16,445,000	4.42

F-16

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Note 8: Share Based Payments

Stock Option Plan

We have issued stock options to acquire common stock through our stock option plan of which the following are outstanding at December 31:

	2017			2016			2015
	Stock Options		Weighted Average Exercise Price $	Stock Options		Weighted Average Exercise Price $	Stock Options		Weighted Average Exercise Price $
Outstanding, beginning of the year	8,674,227		1.83	8,561,394		2.17	5,446,394		3.19
Granted during the year	405,000		0.48	1,572,000		0.28	3,280,000		0.43
Forfeited during the year	(2,012,660	)	3.45	(737,500	)	0.65	(100,000	)	1.69
Expired during the year	(116,900	)	2.22	(721,667	)	3.61	(65,000	)	1.49
Exercised during the year	(801,000	)	0.43	—		—	—		—
Outstanding, end of the   year	6,148,667		1.39	8,674,227		1.83	8,561,394		2.17
Options exercisable, end of the year	5,453,501		1.51	6,729,643		2.27	6,476,394		2.73

The following table summarizes information about the stock options outstanding and exercisable at December 31, 2017:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price $	Number Exercisable	Weighted Average Exercise Price $
$0.26 - $0.42	3,437,000	8.46	0.35	2,921,834	0.35
$0.51 - $0.80	538,000	8.22	0.64	358,000	0.70
$1.45 - $2.00	1,002,667	5.62	1.77	1,002,667	1.77
$2.13 - $3.89	545,500	3.74	3.42	545,500	3.42
$4.01 - $6.72	625,500	3.94	5.34	625,500	5.34
	6,148,667	7.09	1.39	5,453,501	1.51

Non-exercisable options vest either annually over periods ranging from one to three years or upon satisfaction of certain performance criteria.

The estimated fair value of stock options issued during the year was determined using the Black Scholes Option Pricing Model using the following weighted average assumptions and fair value of options:

F-17

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

	2017	2016	2015
Risk-free interest rate	1.18%	0.82%	0.63%
Expected hold period to exercise	3.0 years	3.0 years	3.0 years
Volatility in the price of the Company's shares	90.73%	94.84%	90%
Rate of forfeiture	3.67%	3.67%	3.67%
Dividend yield	Nil	Nil	Nil
Weighted average fair value of options	$0.28	$0.17	$0.24

We use historical data to estimate the expected dividend yield and expected volatility of our stock in determining the fair value of the stock options. The risk-free interest rate is based on the Government of Canada benchmark bond yield rates in effect at the time of grant and the expected life of the options represents the estimated length of time the options are expected to remain outstanding.

Incentive Share Award Plan

Restricted Share Units

We have issued restricted share units ("RSUs") to non-employee directors through our incentive share award plan. Grants of RSUs to non-employee directors vest either on the third anniversary date from the grant date or when the director ceases to be a member of the board. We have also issued RSUs to certain officers and employees of the Company. Grants of RSUs to certain officers and employees of the Company vest over a three year period. The following RSUs are outstanding at December 31:

	2017	2016		2015
Outstanding, beginning of the year	1,322,829	368,831		—
Granted during the year	486,238	1,053,998		368,831
Forfeited during the year	—	—		—
Vested during the year	—	(100,000	)	—
Outstanding, end of the year	1,809,067	1,322,829		368,831

(1)The weighted average fair value of the RSUs granted was $0.63 in 2017 (2016 - $0.31).

Performance Share Units

We have also issued performance share units ("PSUs") to certain officers and employees of the Company. Grants of PSUs require completion of certain performance criteria and cliff vest after 3 years or vest over a three year period, depending on the grant. PSU grants to certain officers will vest immediately upon a change of control of the Company. If certain officers cease employment with the Company, vesting occurs on a pro rata basis prior to the third anniversary of the grant but after the first anniversary. The following PSUs are outstanding at December 31:

	2017	2016		2015
Outstanding, beginning of the year	840,000	—		—
Granted during the year	60,000	1,500,000		—
Forfeited during the year	—	(660,000	)	—
Outstanding, end of the year	900,000	840,000		—

(1)     The weighted average fair value of the PSUs granted was $0.35 in 2017 (2016 - $0.36).

We have reserved 14,180,572 common shares for issuance relating to our outstanding equity compensation plans. Compensation expense related to stock options, RSUs and PSUs for the year ended December 31, 2017 was $578,703 (2016 - $406,078; 2015 - $429,537).

F-18

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Note 9: Loss Per Common Share

Loss per common share is calculated using net loss for the year and the weighted average number of common shares outstanding for the year ended December 31, 2017 of 132,395,752 (2016 - 119,880,200; 2015 - 112,613,845). The effect of any potential exercise of our stock options and warrants outstanding during the year has been excluded from the calculation of diluted loss per common share, as it would be anti-dilutive.

Note 10: Contract liability and receivable

Regional licensing agreement

We entered into a regional licensing agreement (the "Agreement") with Adlai Nortye Biopharma Co., Ltd. ("Adlai") in November 2017. Under the terms of the Agreement, Adlai will have exclusive development and commercialization rights to REOLYSIN in China, Hong Kong, Macau, Singapore, South Korea and Taiwan. We are entitled to receive upfront license fees, development and regulatory milestone payments, royalties and sales-based milestone payments.

Warrant purchase agreement

We also entered into a warrant purchase agreement with Adlai. Under the terms of the warrant purchase agreement, we are entitled to receive two milestone payments totaling US$8 million made of of two common share purchase warrants:

• One common share purchase warrant of US$2 million whereby, upon exercise, Adlai may purchase our common shares priced at a 20% premium to the five-day weighted average closing price immediately preceding the exercise date. We have the right to call this warrant when the first patient is enrolled in the phase 3 metastatic breast cancer study or six months after execution of the Agreement, whichever is later.

• One common share purchase warrant of US$6 million whereby, upon exercise, Adlai may purchase our common shares priced at a 20% premium to the five-day weighted average closing price immediately preceding the exercise date. We have the right to call this warrant upon the enrollment of the 50th patient in the phase 3 metastatic breast cancer study.

Contract liability

Our contract liability balance at December 31, which we expect to record in revenue over the next five years, is as follows:

	2017	2016
Balance, beginning of the year	—	—
Regional licensing agreement	6,182,580	—
Revenue recognized in the year	—	—
Balance, end of the year	6,182,580	—
Contract liability - current	1,545,645	—
Contract liability - non-current	4,636,935	—
	6,182,580	—

Contract receivable

Our contract receivable due from Adlai at December 31, 2017 is $4,767,100.

Note 11: Commitments

We are committed to payments totaling $5,980,454 during 2018 for activities related to our clinical trial, manufacturing and collaboration programs.

F-19

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

We are committed to rental payments (excluding our portion of operating costs and rental taxes) under the terms of our office leases. Annual payments under the terms of these leases are as follows:

	Amount $
2018	285,987
2019	251,743
2020	159,990
2021	43,130
	740,850

Under a clinical trial agreement entered into with the Alberta Cancer Board (“ACB”), we have agreed to repay the amount funded under the agreement together with a royalty, to a combined maximum amount of $400,000 plus an overhead repayment of $100,000, upon sales of a specified product.  We agreed to repay the ACB in annual installments in an amount equal to the lesser of: (a) 5% of gross sales of a specified product; or (b) $100,000 per annum once sales of a specified product commence.

Note 12: Contingencies

Assumption Agreement

In 1999, we entered into an agreement that assumed certain obligations (the “Assumption Agreement”) in connection with a Share Purchase Agreement (the “Agreement”) between SYNSORB and our former shareholders to make milestone payments and royalty payments.

As of December 31, 2017, a milestone payment was still outstanding for $1.0 million, due within 90 days of the first receipt from an Appropriate Regulatory Authority, for marketing approval to sell REOLYSIN^® to the public or the approval of a new drug application for REOLYSIN.

This milestone payment, when payable, will be accounted for as research and development expense and will not be deductible for income tax purposes.

In addition to the milestone payment, payments may become due and payable in accordance with the Agreement upon realization of sales of REOLYSIN.  If we receive royalty payments or other payments as a result of entering into partnerships or other arrangements for the development of the reovirus technology, we are obligated to pay to the founding shareholders 10.75% (2016 - 11.75%) of the royalty payments and other payments received.  Alternatively, if we develop the reovirus treatment to the point where it may be marketed at a commercial level, the payments referred to in the foregoing sentence will be amended to a royalty payment of 2.15% (2016 - 2.35%) of Net Sales received for such products.

BRI “Work in Kind” Contribution

We entered into an engineering and process development agreement with the Biotechnology Research Institute of the National Research Council of Canada (“BRI”).  The terms of this Agreement include a “work in kind” contribution from BRI.  In exchange for this “work in kind” contribution, we agreed to provide a royalty, contingent upon receiving Sales Revenue, at the lesser of 0.5% of Sales Revenue or $20,000 per year.  The total royalty under this Agreement is equal to two times the “work in kind” contribution.  As of December 31, 2017, we estimate that the accumulated work in kind totals approximately $301,000.

F-20

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Note 13: Income Taxes

The provision for income taxes recorded in the consolidated financial statements differs from the amount which would be obtained by applying the statutory income tax rate to the loss before income taxes as follows:

	2017		2016		2015
Loss before income taxes	(15,475,353	)	(15,130,605	)	(13,719,842	)
Statutory Canadian corporate tax rate	27.00	%	27.00	%	26.00	%
Anticipated tax recovery	(4,178,345	)	(4,085,263	)	(3,567,159	)
Foreign jurisdiction tax rate difference	2,899,190		2,184,796		2,659,145
Employee stock based compensation	156,250		109,641		111,680
Change in tax rate	—		—		(1,336,941	)
Adjustment to opening tax pools	162,162		(39,569	)	(1,339,467	)
Other permanent differences	53,039		100,525		23,620
Change in deferred tax benefits deemed not probable to be recovered	1,051,725		1,739,557		3,455,622
Current income taxes	144,021		9,687		6,500
Adjustment in respect to prior periods	(2,523	)	(313	)	(3,347	)
Net current tax expense	141,498		9,374		3,153

As at December 31, 2017, we have the following non-capital losses for income tax purposes in Canada:

Expiry	$
2026	9,809,000
2027	12,170,000
2029	4,009,000
2030	4,774,000
2031	4,343,000
2032	2,873,000
2033	2,457,000
2034	2,472,000
2035	3,125,000
2036	6,430,000
2037	4,846,000
	57,308,000

F-21

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

As at December 31, 2017, we have the following non-refundable federal investment tax credits for income tax purposes in Canada:

Expiry	$
2020	189,000
2021	471,000
2022	465,000
2023	361,000
2024	228,000
2025	271,000
2026	520,000
2027	596,000
2028	622,000
2029	173,000
2030	91,000
2031	114,000
2032	381,000
2033	487,000
2034	270,000
2035	183,000
2036	41,000
2037	600
	5,463,600

As well, we have unclaimed scientific research and experimental development expenditures available to reduce future years’ taxable income of approximately $27,400,000.  We have not recorded the potential benefits of these tax pools in these consolidated financial statements.

Deferred tax assets are recognized, to the extent that it is probable that taxable income will be available, against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized. The components of our unrecognized deferred tax asset are as follows:

	2017 $	2016 $	2015 $
Net operating losses carried forward	19,160,218	17,821,631	15,950,044
Scientific research and experimental development	7,406,099	7,394,707	7,278,284
Investment tax credits	3,988,325	3,990,664	3,987,214
Undepreciated capital costs in excess of book value of property and equipment and intellectual property	1,927,640	1,908,654	1,839,107
Share issue costs	493,343	432,659	619,066
Net capital losses carried forward	7,598	7,598	7,598
Unrecognized deferred tax asset	32,983,223	31,555,913	29,681,313

Note 14: Capital Disclosures

Our objective when managing capital is to maintain a strong statement of financial position. We achieve our objective by obtaining adequate cash resources to support planned activities which include the clinical trial program, product manufacturing, administrative

F-22

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

costs and intellectual property expansion and protection.  We include shareholders’ equity, cash and cash equivalents and short-term investments in the definition of capital.

	2017 $	2016 $
Cash and cash equivalents	11,836,119	12,034,282
Short-term investments	—	2,088,800
Shareholders’ equity	8,283,846	10,689,620

We do not have any debt other than trade accounts payable and we have potential contingent obligations relating to the completion of our research and development of REOLYSIN.

In managing our capital, we estimate our future cash requirements by preparing a budget and a multi-year plan annually for review and approval by our Board. The budget establishes the approved activities for the upcoming year and estimates the costs associated with these activities. The multi-year plan estimates future activity along with the potential cash requirements and is based on our assessment of our current clinical trial progress along with the expected results from the coming year’s activity.  Budget to actual variances are prepared and reviewed by management and are presented quarterly to the Board.

Historically, funding for our plan is primarily managed through the issuance of additional common shares and common share purchase warrants that upon exercise are converted to common shares.  Management regularly monitors the capital markets attempting to balance the timing of issuing additional equity with our progress through our clinical trial program, general market conditions, and the availability of capital.  There are no assurances that funds will be made available to us when required.

On February 16, 2016, we renewed our short form base shelf prospectus (the “Base Shelf”) that qualifies for distribution of up to $150,000,000 of common shares, subscription receipts, warrants, or units (the “Securities”) in Canada. Under our Base Shelf, we may sell Securities to or through underwriters, dealers, placement agents or other intermediaries and also may sell Securities directly to purchasers or through agents, subject to obtaining any applicable exemption from registration requirements. The distribution of Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, or at prices related to such prevailing market prices to be negotiated with purchasers and as set forth in an accompanying Prospectus Supplement.

Renewing our Base Shelf provides us with additional flexibility when managing our cash resources as, under certain circumstances, it shortens the time period required to close a financing and is expected to increase the number of potential investors that may be prepared to invest in our company. Funds received from a Prospectus Supplement will be used in line with our Board approved budget and multi-year plan. Our renewed Base Shelf expires on March 16, 2018 and allowed us to enter into our Canadian ATM equity distribution agreement (see Note 7). We use this equity arrangement to assist us in achieving our capital objective.

We are not subject to externally imposed capital requirements and there have been no changes in how we define or manage our capital in 2017.

Note 15: Financial Instruments

Our financial instruments consist of cash and cash equivalents, short-term investments, contract receivable, other receivables and accounts payable.  As at December 31, 2017, there are no significant differences between the carrying values of these amounts and their estimated market values.

Credit risk

Credit risk is the risk of financial loss if a counterparty to a financial instrument fails to meet its contractual obligations.  We are exposed to credit risk on our cash and cash equivalents, short-term investments and contract receivable in the event of non-performance by counterparties, but we do not anticipate such non-performance. Our maximum exposure to credit risk at the end of the period is the carrying value of our cash and cash equivalents, short-term investments and contract receivable.

F-23

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

We mitigate our exposure to credit risk by maintaining our primary operating and investment bank accounts with Schedule I banks in Canada. For our foreign domiciled bank accounts, we use referrals or recommendations from our Canadian banks to open foreign bank accounts and these accounts are used solely for the purpose of settling accounts payable or payroll.

We also mitigate our exposure to credit risk by restricting our portfolio to investment grade securities with short-term maturities and by monitoring the credit risk and credit standing of counterparties. As at December 31, 2016, 100% of our short-term investments were in guaranteed investment certificates.

We mitigate our exposure to credit risk connected to our contract receivable by performing a review of our customer's credit risk and payment histories, including payments made subsequent to year-end.

Interest rate risk

Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We are exposed to interest rate risk through our cash and cash equivalents and our portfolio of short-term investments.  We mitigate this risk through our investment policy that only allows investment of excess cash resources in investment grade vehicles while matching maturities with our operational requirements.

Fluctuations in market rates of interest do not have a significant impact on our results of operations due to the short term to maturity of the investments held.

Currency risk

Currency risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. In the normal course of our operations, we are exposed to currency risk from the purchase of goods and services primarily in the U.S., the U.K. and the European Union. In addition, we are exposed to currency risk to the extent cash is held in foreign currencies from either the purchase of foreign currencies or when we receive foreign currency proceeds from operating and financing activities. As well, we are exposed to currency risk related to our regional licensing agreement. The impact of a $0.01 increase in the value of the U.S. dollar against the Canadian dollar would have increased our net loss in 2017 by approximately $5,056.  The impact of a $0.10 increase in the value of the British pound against the Canadian dollar would have increased our net loss in 2017 by approximately $21,492. The impact of a $0.10 increase in the value of the Euro against the Canadian dollar would have increased our net loss in 2017 by approximately $11,736.

We mitigate our foreign exchange risk by maintaining sufficient foreign currencies, through the purchase of foreign currencies or receiving foreign currencies from financing activities, to settle our foreign accounts payable.

Balances in foreign currencies at December 31, 2017 are as follows:

	US dollars $		British pounds £		Euro €
Cash and cash equivalents	1,948,573		21,755		19,372
Contract receivable	3,800,000		—		—
Accounts payable	(777,271	)	(13,949	)	(1,100	)
	4,971,302		7,806		18,272

Liquidity risk

Liquidity risk is the risk that we will encounter difficulty in meeting obligations associated with financial liabilities. We manage liquidity risk through the management of our capital structure as outlined in Note 14. Accounts payable are all due within the current operating period.

F-24

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Note 16: Additional Cash Flow Disclosures

Net Change In Non-Cash Working Capital

	2017 $		2016 $	2015 $
Change in:
Contract receivable	(4,767,100	)	—	—
Other receivables	16,680		285,653	(148,308	)
Prepaid expenses	(915,222	)	245,828	(215,116	)
Accounts payable and accrued liabilities	(384,641	)	1,359,172	(664,505	)
Contract liability	6,182,580		—	—
Non-cash impact of foreign exchange	48,558		343,212	(77,535	)
Change in non-cash working capital related to operating activities	180,855		2,233,865	(1,105,464	)

Other Cash Flow Disclosures

	2017 $	2016 $	2015 $
Cash interest received	130,101	163,902	197,859
Cash taxes paid	136,163	4,468	3,421

Note 17: Indemnification of Officers and Directors

Our corporate by-laws require that, except to the extent expressly prohibited by law, we will indemnify our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment reasonably incurred in respect of any civil, criminal or administrative action or proceeding as it relates to their services to the Company.  The by-laws provide no limit to the amount of the indemnification.  We have purchased directors’ and officers’ insurance coverage to cover claims made against the directors and officers during the applicable policy periods.  The amounts and types of coverage have varied from period to period as dictated by market conditions.  We believe that we have adequate insurance coverage; however, there is no guarantee that all indemnification payments will be covered under our existing insurance policies.

There is no pending litigation or proceeding involving any of our officers or directors as to which indemnification is being sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

Note 18: Economic Dependence

We are economically dependent on our toll manufacturers. We primarily use one toll manufacturer in the US to produce the clinical grade REOLYSIN required for our clinical trial program. Any significant disruption of the services provided by our primary toll manufacturer has the potential to delay the progress of our clinical trial program. We have used another toll manufacturer in the U.K. that has also produced clinical grade REOLYSIN at a smaller scale. We have attempted to mitigate this risk by producing sufficient REOLYSIN in advance of patient enrollment in a particular clinical trial.

F-25

ONCOLYTICS BIOTECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

Note 19: Other Expenses and Adjustments

We present our expenses based on the function of each expense and therefore include realized foreign exchange gains and losses, unrealized non-cash foreign exchange gains and losses and non-cash stock based compensation associated with research and development activity as a component of research and development expenses and amortization of property and equipment and stock based compensation associated with operating activities as a component of operating expenses.

	2017 $		2016 $	2015 $
Included in research and development expenses:
Realized foreign exchange (gain) loss	(120,794	)	104,851	238,709
Unrealized non-cash foreign exchange loss (gain)	55,538		67,109	(816,319	)
Non-cash share based compensation	230,141		233,919	257,016
Included in operating expenses
Amortization of property and equipment	90,768		162,233	180,411
Non-cash share based compensation	348,562		172,159	172,521
Office minimum lease payments	231,509		148,600	196,601

Note 20: Related Party Transactions

Compensation of Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling our activities as a whole. We have determined that key management personnel consists of the members of the Board of Directors along with certain officers of the Company.

	2017 $	2016 $	2015 $
Short-term employee compensation and benefits	2,596,082	2,753,553	2,941,342
Termination benefits	779,666	1,330,828	—
Share-based payments	459,298	372,008	353,419
	3,835,046	4,456,389	3,294,761

Assumption Agreement

In November 2017, with the signing of a regional licensing agreement with upfront license fees (see Note 10), the Company triggered a liability of US$178,125 to an officer as detailed in the Assumption Agreement (see Note 12). As at December 31, 2017, US$178,125 was included in accounts payable and accrued liabilities. US$35,625 was paid in January 2018 and the balance will be paid after receipt of the contract receivable from Adlai.

F-26

EX-4.43

- 1 -

EMPLOYMENT AGREEMENT

THIS AGREEMENT made the 29st day of June, 2017.

BETWEEN:

ONCOLYTICS BIOTECH (U.S.), INC.

("OBUS")

-and-

ANDREW DE GUTTADAURO

(the "Employee")

WHEREAS:

A. OBUS and its Affiliates are engaged in the business of developing pharmaceutical products;

B. OBUS has made an offer of employment to the Employee, subject to the terms and conditions contained herein, and subject to the termination of the Services Agreement concurrent with the commencement of employment under this Agreement;

C. The Employee is prepared to accept the offer of employment;

NOW THEREFORE the parties agree as follows:

Section 1 - Definitions and Interpretation

(1)In this Agreement the following defined terms shall have the meanings indicated:

(a) ”Affiliate” means any entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a party. For the purposes of this definition, control shall mean: (i) the direct or indirect ownership of fifty percent (50%) or more of the voting stock of a corporation; or (ii) the direct or indirect ownership of fifty (50%) or more of the ownership interest of any other entity; or (iii) the ability to elect a majority of the directors of the entity;

(b) "Business" means the business currently carried on by OBUS and its Affiliates, which is the development, testing, marketing and sale of pharmaceutical products together with such additional business as OBUS or its Affiliates may decide to undertake from time to time;

(c) "Commencement Date" means July 3, 2017;

(d) “Good Reason” means any one of the following events occurring on or after the Commencement Date:

(i) Any reduction in the Employee’s then existing annual base compensation and benefits, unless comparable reductions are made for all other executive employees of Oncolytics;

(ii) Any material diminution of the Employee’s duties, responsibilities, authority or reporting structure, excluding for this purpose an isolated or inadvertent action

- 2 -

not taken in bad faith which is remedied by Oncolytics immediately after notice thereof is given by the Employee;

(iii) Any request that the Employee relocate to a work site that would increase the Employee’s one-way commute distance by more than eighty (80) kilometers from the Employee’s then principal residence, unless the Employee accepts such relocation opportunity; or

(iv) Any material breach by Oncolytics of its obligations under this agreement that is not remedied within thirty (30) days of written notice of such breach from the Employee;

(e) "Confidential Information" means all confidential information of OBUS and its Affiliates, and includes:

(i) any data or information directly or indirectly related to the Business or arising directly or indirectly in the course of, or derived from the Employee's employment with OBUS whether related to products, equipment, inventions, ideas, designs, methods, systems, improvements, processes, research or otherwise;

(ii) any technical or scientific know-how;

(iii) financial and sales information, customer lists, pricing policies, lists of suppliers, proprietary computer programs in any format whatsoever, programming techniques, the manner of plans or methods of operation and the like relating to the Business;

(iv) patent applications, drawings, blueprints, manuals, letters, notebooks, reports and all other materials (written or otherwise) related to the Business or to the agents, joint venturers or contractors of OBUS or its Affiliates; and

(v) any information provided to or received by OBUS or its Affiliates on a confidential basis;

(f) "Intellectual Property" means all information, data, designs, processes, software, algorithms and inventions, including those that may be the subject of patent, copyright, industrial design, trademarks, trade secret or other forms of legal protection, made, conceived or developed by the Employee during the term of employment with OBUS, whether alone or jointly with others and whether during or after regular working hours, that relates to or in any way pertains to or connects with any matter developed, or under investigation or development by OBUS or its Affiliates, or related to the Business;

(g) "Cause" means:

(i) breach by the Employee of any material provision of this Agreement;

(ii) material violation by the Employee of any statutory or common law duty of loyalty to OBUS and its Affiliates;

(iii) Employee’s failure to perform Employee’s duties for the Company in a competent and effective manner as judged in good faith by either the Chief

- 3 -

Executive Officer of the Company or the Company’s Board of Directors in their sole discretion.

(iv) the commission of a criminal offence by the Employee against OBUS or its Affiliates; or

(v) personal or professional conduct of the Employee which in the reasonable and good faith judgment of OBUS may significantly injure OBUS' Business or interfere with the Employee's job performance.

(2)This Agreement shall be governed by and construed in accordance with the laws of California.

(3)The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.

(4)The following schedules are attached to and form part of this Agreement:

Schedule "A" – Job Description

Schedule "B" – Benefits

Section 2 -Employment

(1)OBUS agrees to employ the Employee in the position of Vice President, Business Development and the Employee accepts the employment, starting on the Commencement Date.

(2)The Employee shall perform the duties and responsibilities associated with the position of Vice President, Business Development including those set out on the Job Description attached as Schedule "A". The Employee may, from time to time, be assigned or undertake additional duties and responsibilities consistent with those generally appropriate for a Vice President, Business Development and the Employee's duties and responsibilities may be modified or expanded from time to time.

(3)The Employee shall perform the duties and responsibilities set out in Section 2(2):

(a) diligently, faithfully and to the best of the Employee's ability; and

(b) in the best interests of OBUS.

(4)The Employee shall comply with the terms, conditions and requirements of OBUS' Policy Manual and benefit plans, as the same may be amended, revised or added to from time to time.

- 4 -

Section 3 -Remuneration

(1)OBUS shall pay to the Employee a salary of Two Hundred and Thirty Thousand ($230,000.00) United States dollars per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of Nine Thousand Five Hundred and Eighty-Three United States Dollars and Thirty-Three Cents ($9,583.33) on the fifteenth (15) and last day of each month.

(2)OBUS shall, on or before the anniversary date of this Agreement in each year, evaluate and set the Employee's salary for the next ensuing year.

(3)OBUS shall reimburse the Employee for all reasonable out-of-pocket expenses incurred by the Employee in the performance of the Employee's obligations under this Agreement, subject to OBUS' policies then in force.

(4)OBUS shall be entitled to withhold from any payments made to the Employee any amounts that OBUS is required to withhold pursuant to any Act in force that relates to income tax, social security, medicare or pension in any jurisdiction under which such payments are required to be made by or on behalf of the Employee.

Section 4 -Benefits and Equity Compensation

The Employee shall be entitled to participate in benefit plans described in Schedule "B" and in other benefit plans instituted or as amended by OBUS from time to time.

Performance Share Units

The Employee shall be granted 60,000 restricted share units (“RSU’s”) on the Commencement Date under Oncolytic Biotech Inc.’s Incentive Award Plan. One third of the RSU’s will vest after the second employment anniversary with the remaining two thirds of the RSUs vesting after three years of service.

Stock Options

The Employee shall be granted 125,000 stock options on the Commencement Date under Oncolytics Biotech Inc.’s Stock Option Plan. These options will be priced on the Commencement Date and 25% of the stock options will vest immediately, followed by 25% vesting after twelve (12) months from the Commencement Date and the final 50%vesting after twenty-four (24) months from the Commencement Date.

Section 5 -Vacations

The Employee shall, in addition to all statutory holidays, be entitled to twenty (20) Business Days paid vacation during each twelve (12) month period of employment under this Agreement. The Employee's vacation time shall be governed by applicable policies of OBUS.

- 5 -

Section 6 -Place of Employment

The Employee shall perform the majority of the Employee’s employment obligations from and out of the Company’s offices located in La Jolla, California.

The Employee shall be available to travel within the United States and outside the United States as required to fulfill his duties and responsibilities.

Section 7 -Confidential Information

(1)The Employee confirms that the Confidential Information is the sole and exclusive property of OBUS or its Affiliates and is held by the Employee in trust for the benefit of OBUS and its Affiliates. The Employee shall use the Employee's best efforts and exercise utmost diligence to protect and safeguard the Confidential Information. Neither during the period of employment by OBUS nor thereafter for a period of three years shall the Employee, directly or indirectly, use or disclose to any other person any Confidential Information, whether or not acquired, learned or obtained or developed by the Employee alone or in conjunction with others, except as such disclosure or use may be required in connection with the employment with OBUS or as may be agreed to in writing by OBUS.

(2)Subsection 7(1) shall not apply to Confidential Information that:

(a) is in the public domain at the time of its disclosure, or which, after disclosure, becomes part of the public domain other than by disclosure by the Employee;

(b) the Employee can show was in the Employee's possession at the time of disclosure and was not acquired from OBUS or its Affiliates; or

(c) was received by the Employee from a third party without a covenant of confidentiality, provided such third party is under no obligation of confidentiality with respect to the Confidential Information.

(3)The Employee shall keep informed of OBUS' policies and procedures for safeguarding OBUS' property including, without limitation, the Confidential Information and the confidentiality thereof, and will strictly comply therewith at all times. The Employee shall not, except as required in the course of the employment with OBUS, remove from OBUS' premises any OBUS property including, without limitation, Confidential Information. The Employee shall, immediately upon termination of employment with OBUS, return to OBUS all of OBUS' property in the Employee's possession, including, without limitation, all tangible parts of or relating to the Confidential Information as is in the Employee's possession or under the Employee's control without retaining any copies or record thereof or any other mechanical means that, alone or in combination with other means, would permit the Employee to reproduce or make available the Confidential Information.

(4)The Employee shall advise any future employer, associate or affiliate that the Employee has signed this Agreement and is bound by its terms and conditions.

Section 8 -Intellectual Property

(1)The Employee confirms that any and all Intellectual Property shall be the sole and exclusive property of OBUS or its Affiliates and shall be assigned by the Employee to OBUS, or its nominee. The Employee agrees to disclose promptly to OBUS or its nominee any and all Intellectual Property and to

- 6 -

execute written assignments of the Employee's right, title and interest in and to the Intellectual Property to OBUS or its nominee.

(2)With respect to any Intellectual Property, the Employee also agrees:

(a) to assist OBUS or its nominee in preparing any necessary copyright and patent applications, including Canadian and foreign applications, covering the Intellectual Property;

(b) to sign and deliver all such applications and their assignment to OBUS or its nominee; and

(c) generally to give all information and testimony, to co-operate with OBUS and its solicitors, to sign all lawful papers, and to do all lawful things that may be needed or requested by OBUS to obtain, extend, reissue, maintain or enforce copyrights or patents covering the Intellectual Property.

(3)OBUS shall bear all expenses that are incurred in obtaining, extending, reissuing, maintaining and enforcing any and all copyrights or patents in respect of the Intellectual Property assigned to OBUS or its nominee by the Employee, and in the vesting and perfecting of title thereto in OBUS or its nominee and shall pay the Employee reasonable compensation for any time that OBUS may require the Employee to expend in order to accomplish the above subsequent to the termination of employment with OBUS.

(4)The Employee hereby waives in favour of OBUS and its Affiliates, all moral rights in any and all copyright works authored or co-authored by the Employee during the term of this Agreement that directly relate to the Business of OBUS or its Affiliates.

(5)In accordance with California Labor Code Section 2870, Employee is notified that:

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(b) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

(c) Result from any work performed by the employee for the employer.”

- 7 -

Section 9 -Term and Termination

(1)The Employee's employment under this Agreement shall commence on the Commencement Date and shall continue until terminated in accordance with this Section 9.

(2)If OBUS has Cause to terminate Employee’s employment as “Cause” is defined above, OBUS shall not be required to compensate the Employee in respect of such termination or provide any period of notice in lieu of compensation with respect to such termination.

(3)Subject to Section 9(4), if this Agreement is terminated by OBUS for any reason other than for Cause, or if this Agreement is terminated by the Employee for Good Reason, the Employee shall be entitled to severance in the form of continued salary for six (6) months after the termination of Employee’s employment (the “Severance Period”) at the rate in effect on the date of Employee’s termination. Within 14 days of the end of the Severance Period, Employee shall also be entitled to a payment in an amount equal to the value of all benefits to which the Employee would otherwise have been entitled during the Severance Period.

(4)Notwithstanding Section 9(3), if there is a change of control of OBUS, as defined herein, and if this Agreement is terminated by OBUS at any time within one (1) year following the change of control other than for Cause, the Employee shall be entitled to twenty-four (24) months of continued salary at the rate in effect on the date of Employee’s termination. Within 14 days of the end of the twenty-four (24) months of continued salary, Employee shall also be entitled to a payment in an amount equal to the value of all benefits to which the Employee would otherwise have been entitled during the twelve (12) month continued salary period.

For the purposes of this section 9(4), “change of control” means any amalgamation, merger or other corporation reorganization which results in any change in the present effective voting control of OBUS, or will result in a change of the person or persons who own or control sufficient voting shares in OBUS to elect a majority of the directors of OBUS, or will result in a person acquiring sufficient voting shares in OBUS to elect a majority of the directors of OBUS, or any sale, lease, exchange, partnership, or other transfer (in one transaction or a series of transactions) of all or substantially all of the assets of OBUS or a plan of liquidation of OBUS and/or an agreement for the sale or liquidation of OBUS is approved and completed, or the Board of Directors determines in its sole discretion the a change of control has occurred, whether or not any event described has occurred or is contemplated.

(5)The Employee confirms that:

(a) any breach of this Agreement or unauthorized disclosure of Confidential Information may result in irreparable harm to the Business of OBUS or its Affiliates and considerable monetary damages to OBUS and its Affiliates;

(b) the damages suffered by OBUS may be difficult to establish; and

(c) interim and permanent injunctions may be the only suitable remedy for OBUS;

but nothing herein shall in any way limit or restrict any other remedies available to OBUS at law or in equity including an action for damages.

- 8 -

(6)Termination of the Employee's employment with OBUS for any reason whatsoever shall not terminate the Employee's obligations under Sections 7, 8 and 10 of this Agreement.

Section 10 -Non-Competition

(1)The Employee shall not, during the term of this Agreement, engage, hold an interest in or have any involvement, either directly or indirectly, in any business entity, venture or undertaking if such would materially interfere with or conflict with the Employee's duties and obligations to OBUS as provided for under this Agreement, provided that the acquisition of a non-control position in publicly traded companies will not contravene this Section.

(2)The Employee shall not, during the term of this Agreement, either individually or in partnership or jointly or in conjunction with any person, firm or corporation as principal, employee, partner, director or as a shareholder or investor (if actually involved in the management of a business which is competitive with the Business of OBUS or its Affiliates) carry on or be engaged in any business which is directly competitive with the Business of OBUS or its Affiliates.

Section 11 -Notices

All notices, reports, invoices, payments and formal communications (collectively referred to as "Notices") required or permitted to be given hereunder shall be in writing and shall be delivered personally or sent by prepaid registered mail or facsimile transmission to the following address or such other address as the relevant party may notify from time to time:

TO:    OBUS

ONCOLYTICS BIOTECH (U.S.), INC.

Attention: President

WITH COPY TO:

ONCOLYTICS BIOTECH INC.

Suite 210, 1167 Kensington Crescent N.W.

Calgary, Alberta

T2N 1X7

Attention: President

TO:    Employee

Andrew de Guttadauro

Notices sent by prepaid registered mail shall be deemed to be received by the addressee on the seventh day (excluding Saturdays, Sundays, Statutory Holidays and any period of postal disruption) following the mailing thereof. Notices personally served shall be deemed to be received when actually delivered, provided such delivery shall be during normal business hours.

Section 12 -Enurement

- 9 -

This Agreement shall enure to the benefit of and be binding upon the parties hereto and:

(a) in the case of OBUS, its successors and permitted assigns; and

(b) in the case of the Employee, his heirs, executors, administrators or other personal representatives.

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.

ONCOLYTICS BIOTECH (U.S.), INC.
Per:	/S/ Andres Gutierrez
	Andres Gutierrez Director
Per:	/S/ Gilles Gosselin
	Gilles Gosselin Director

/s/ Roshawn Blunt/S/ Andrew de Guttadauro        

Witness                Andrew de Guttadauro

SCHEDULE "A"

JOB DESCRIPTION

INSERT JOB DESCRIPTION

SCHEDULE "B"

BENEFITS

Physical Fitness Benefit:

The Employee is entitled to the Physical Fitness Benefit in the amount of Seven Hundred and Fifty ($750.00) United States Dollars per annum to use towards an item or service that promotes physical activity; the details of which are outlined in the Company Policy Manual.

Deferred Compensation:

Employee shall, if qualified to do so, be entitled to allocate a portion of his salary to a 401(K) Plan established for the Employee, up to the prescribed maximum, and in accordance with the requirements thereof.

Benefit Plan Alternatives:

Alternative 1:

Employee can elect to receive an additional amount of 9.25% of base salary. Such amount shall be the employee’s full Health Benefit Allocation, and shall be taxable in accordance with the relevant regulations.

Alternative 2:

Employee can elect to direct (the lesser of the maximum available or allowable by the employee under the Flexible Spending Plan), a portion of the Health Benefit Allocation (9.25% of base salary) to a Flexible Spending Account, and receive the remainder (9.25% of base salary less the amount directed to the Flexible Spending Account) of the Health Benefit Allocation as a taxable amount in accordance with the relevant regulations.

Alternative 3:

Whether or not the Employee elects to participate in Alternative 2, the Employee can also elect to participate in an individual Health Insurance Program utilizing any amount still remaining from the Health Benefit Allocation. Any additional amounts required to be paid for this Program would be drawn from Employee’s net pay.

EX-4.44

Exhibit 4.44

CONFIDENTIAL TREATMENT MATERIAL

*** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT.  CONFIDENTIAL PORTIONS OF THIS EXHIBIT ARE DESIGNATED BY [**].  A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

DATED     NOVEMBER 16, 2017

ONCOLYTICS BIOTECH (BARBADOS) INC.

- and -    

ADLAI NORTYE BIOPHARMA CO., LTD.

LICENSE, DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT

1

TABLE OF CONTENTS

Page

1.DEFINITIONS    2

2.MANAGEMENT OF THE RELATIONSHIP    16

2.1The Joint Steering Committee    16

2.2Membership and Governance of the JSC    18

2.3JSC Meetings    19

2.4JSC Decision Making    20

2.5Dispute Resolution    21

2.6Approval of Sub-Committee Actions    21

2.7Alliance Managers    21

3.GRANT OF RIGHTS AND EXCLUSIVITY    22

3.1License to Licensee    22

3.2Manufacturing Rights    22

3.3Sublicense Rights    22

3.4Diversion    22

3.5[**]    22

4.DEVELOPMENT OF LICENSED PRODUCTS    23

4.1Development of Licensed Products    23

4.2Development Plan    23

4.3Development in respect of the PRC    23

4.4Ongoing Clinical Studies    23

4.5Clinical Studies    23

4.6Development Plan    25

4.7Conduct of Development Plans    25

4.8Development Costs    26

4.9Obligations    26

4.10Supply Agreement    26

4.11Contract Manufacturer    27

5.AUTHORIZED USE OF MATERIALS    28

5.1Research Materials    28

5.2Limited Warranties    28

5.3Exclusion of Warranties    29

5.4Return of Materials    29

5.5Unauthorized Use of Materials    30

5.6Restriction on Use of Materials    30

5.7Compliance with Regulations    30

5.8Exceptions    31

6.REGULATORY AND CLINICAL DEVELOPMENT    31

6.1Master File    31

6.2Responsibility for Regulatory Applications in the Territory    31

6.3Dealings with Regulatory Authorities    32

- i –

6.4Oncolytics Regulatory Support    32

6.5Performance Obligation    32

7.MARKETING OF LICENSED PRODUCTS    33

7.1Use of Trademarks    33

7.2Sales and Marketing Plan    33

7.3Post-marketing and observational Studies    34

7.4Promotional Materials    34

7.5Promotional Activities    34

8.DILIGENCE    35

8.1General    35

8.2Development and Regulatory Diligence    35

8.3Compliance with Sales and Marketing Plans    35

8.4Satisfying Diligence    35

8.5Sales Data    36

8.6Recordkeeping and Inspection    36

8.7Material Terms    37

9.ADVERSE EVENTS AND PHARMACOVIGILANCE    37

9.1Pharmacovigilance    37

9.2Responsibilities of the Qualified Person    37

10.FINANCIAL TERMS    38

10.1Upfront Payment Obligations    38

10.2Purchase of Warrants    38

10.3Development and Regulatory Milestone Payments    38

10.4Sales Milestone Payments    39

10.5Running Royalties Payable by Licensee    39

10.6Duration of Royalty Obligations    40

10.7Failure to Pay    40

10.8Third Party Licenses    40

11.PAYMENT    41

11.1Currency and Timing of Payments    41

11.2Manner of Payment    42

11.3Taxes    42

11.4Interest    42

11.5Record Keeping and Audit    43

12.OWNERSHIP OF INTELLECTUAL PROPERTY    43

12.1Excluded IP    43

12.2Inventions    44

12.3[**].    44

12.4Licensee and Cooperation with Respect to Inventions    44

12.5Patent Term Extension    45

12.6Ownership of Clinical Data    45

13.MANAGEMENT OF PATENT RIGHTS    45

13.1Prosecution, Maintenance and Defense of Patent Rights    45

13.2Abandonment of Patent Rights by Oncolytics    45

- ii –

13.3Inventions: Licensee Patent Filing    45

13.4Inventions: Oncolytics Patent Filing    46

13.5Notification of Infringement    47

13.6Infringement in Territory    47

13.7Settlement    48

13.8Recovery    49

13.9Interferences and Other Proceedings    49

13.10Notice or Infringement Claims    49

13.11Product Marking    50

14.TRADEMARKS    50

14.1Ownership of Marks    50

14.2Ownership of Licensed Product Marks    50

14.3Use of Licensed Product Marks    50

14.4Registration of Licensed Product Marks    51

14.5Infringement of Licensed Product Marks    51

14.6Recovery in respect of Infringement of Licensed Product Marks    52

14.7Settlements    52

15.TERMINATION    52

15.1Term of Agreement    52

15.2Termination by Oncolytics for Patent Challenge    53

15.3Termination for Breach    53

15.4Insolvency    53

15.5Competing Product Divestment    54

16.CONSEQUENCES OF TERMINATION    55

16.2Accrued Rights    58

16.3Surviving Clauses    58

16.4Related Agreements    58

17.CONFIDENTIALITY    59

17.1Confidential Information    59

17.2Confidentiality Obligations    59

17.3Internal Disclosure of Confidential Information    60

17.4Exceptions    60

17.5Disclosure Required by Law    60

17.6Permitted Use and Disclosures    61

18.WARRANTIES    61

18.1Warranties    61

18.2Warranties by Oncolytics. Oncolytics represents and warrants to Licensee:    62

18.3Undertaking by Licensee    62

18.4No Implied Warranties    62

18.5No Warranties of Patent Rights    62

18.6No Further Representations or Warranties    63

19.LIABILITY AND INDEMNITIES    63

19.1No Consequential Damages    63

19.2Indemnification by Licensee    63

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19.3Indemnification by Oncolytics    64

19.4Notification of Liabilities/Losses    64

19.5Supply    65

19.6Mitigation    65

19.7Restriction on Limitation of Liability    65

19.8Insurance    66

20.WAIVER    66

21.ENTIRE AGREEMENT/VARIATIONS    66

22.NOTICES    67

23.AFFILIATES, ETC.    68

24.ASSIGNMENT    68

25.FORCE MAJEURE    69

26.SEVERANCE OF TERMS    70

27.NATURE OF THIS AGREEMENT    70

28.PUBLIC STATEMENTS    70

29.NO THIRD PARTY RIGHTS    71

30.COSTS    71

31.EXECUTION AND COUNTERPARTS    71

32.CONSTRUCTION    72

33.DISPUTE RESOLUTION    72

33.1Governing Law; Arbitration    72

33.2Informal Resolution    72

34.IMPORT & EXPORT CONTROL    73

SCHEDULE 1 LICENSED PRODUCT75

SCHEDULE 2 PATENT RIGHTS76

SCHEDULE 4 ONGOING CLINICAL STUDIES89

SCHEDULE 5 THE TERRITORY90

SCHEDULE 6 FORM OF WARRANT PURCHASE AGREEMENT91

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THIS LICENSE, DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT, DATED THE 16^th DAY OF NOVEMBER 2017 (the “Effective Date”)

IS MADE BETWEEN:

(a) ONCOLYTICS BIOTECH (BARBADOS) INC., a corporation organized under the laws of Barbados, having its principal offices at 1^st Floor, Hastings House, Balmoral Gap, Hastings, Christ Church, Barbados WI BB14034 (“Oncolytics”); and

(b) ADLAI NORTYE BIOPHARMA CO. LTD., a limited company organized under the laws of the Peoples Republic of China, which has principal offices at 21 Floor, Building 2, No. 452, 6^th Street, Hangzhou Eco. & Tech. Development Area, 31008, PRC (“Licensee”);

Oncolytics and Licensee are referred to from time to time herein individually as a “Party” or collectively as the “Parties”.

RECITALS

(A) Oncolytics is a wholly-owned subsidiary of Oncolytics Biotech Inc., which is a biotechnology company headquartered in Calgary, Alberta, Canada (“Oncolytics Biotech”). The Oncolytics Group has considerable expertise in developing and producing novel viral products for the treatment and prevention of various forms of cancer. The Oncolytics Group has developed and own the exclusive rights to a certain strain of reovirus (Serotype-3 Dearing Strain) identified by Oncolytics as Pelareorep. In particular, the Oncolytics Group is undertaking the Ongoing Clinical Studies (as defined below) and has developed certain intellectual property relating to the use of Pelareorep for oncological treatments.

(B) Licensee is a biopharmaceutical business dedicated to developing and commercializing new drugs, with a focus on new treatments for cancer and metabolic diseases, but does not currently market or sell any metastatic breast cancer treatments.

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(C) The Parties desire to collaborate in conducting development and related activities, marketing in certain territories, and selling of product(s) containing Pelareorep for certain indications in those territories all on the terms and subject to the conditions set forth herein, but it is not the intention of the Parties to undertake an employment, joint venture, partnership or other fiduciary relationship.

NOW THEREFORE, in consideration of the following mutual promises and obligations, and for other good and valuable consideration the adequacy and sufficiency of which are hereby acknowledged, the Parties agree as follows:

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1. DEFINITIONS

In this Agreement and in the Schedules to this Agreement the following capitalized terms, whether used in the singular or plural, shall have the meanings set forth below:

1.1 “Adverse Event” or “AE” means any untoward medical occurrence in a patient to whom a medicinal product has been administered and which does not necessarily have to have a causal relationship with the administration of such medicinal product and includes without limitation any unfavorable and unintended sign (for example, an abnormal laboratory finding), symptom, or disease temporally associated with the use of a medicinal product, whether or not considered related to this medicinal product together, in relation to pharmacovigilance standards, policies, and procedures, with all medical device events, (including incidents, near-incidents, serious injuries, malfunctions and failures) or untoward medical events and events such as suicide or aggressive behavior threats, overdose, abuse, misuse, medication errors and other events that may reasonably be related to biomedical research.

1.2 “Affiliate” means, with respect to a Party, any Person (other than an individual) that Controls, is Controlled by, or is under common Control with such Person.

1.3 “Agreement” means this agreement and all schedules, appendices and other addenda attached thereto as any of the foregoing may be amended in accordance with the provisions of this Agreement.

1.4 “Alliance Manager” shall have the meaning set forth in Clause 2.7.

1.5 “BLA” means a biologics license application, as described in 21 C.F.R. Section 601.2, submitted to the FDA to obtain permission to deliver or introduce a biologic product into interstate commerce in the United States, or the analogous application filed with any other Regulatory Authority outside the United States (including without limitation the EMA and CFDA), and all amendments and supplements thereto.

1.6 “Business Day” means a day other than a Saturday, Sunday or a day on which banks are not open for business in Canada, the PRC, Taiwan, Macau, the Republic of Singapore, South Korea, or Hong Kong.

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1.7 “CFDA” means the China Food and Drug Administration in the PRC.

1.8 “Claim” means any claim, action, demand, inquiry or investigation.

1.9 “Clinical Data” means any clinical Know How that is, or is intended to be, included in, or supports, a regulatory submission for approval of the testing of drugs in humans or the approval for the placing of medicinal products on the market (including without limitation submissions to the FDA, the CFDA, the EMA and other Regulatory Authorities).

1.10 “Clinical Study” shall have the meaning set out in Clause 4.5.

1.11 “Commercially Reasonable Efforts” means the degree of effort and resources used by international pharmaceutical businesses with respect to pharmaceutical products of similar commercial potential, maturity, market size and profitability, taking into account product safety and efficacy, development and commercialization costs and risks, market competition, the proprietary position of the product and other technical, legal, scientific, medical or commercial factors that have direct relevance to the relevant Licensed Product.

1.12 “Confidential Information” shall have the meaning set out in Clause 17.1.

1.13 “Control,” “Controls,” “Controlled” or “Controlling” shall mean;

(i) in respect of any Person, the direct or indirect ownership or control (whether through contract or otherwise) of more than fifty percent (50%) of the outstanding shares, equity interests or other voting rights of the subject Person having the power to vote for the election of directors (in the case of corporate entities) or to direct the management policies and affairs of the entity (in the case of non-corporate entities) (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction). Any other relationship which in fact results in actual control over the management, business and affairs of a Person shall also be deemed to constitute Control; and

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(ii) in respect of any Patent Rights, Know How or other Intellectual Property Rights whether owned by or licensed to a Person, the possession of the legal right and ability to grant the respective licenses or sublicenses as provided herein without violating the terms of any agreement or other arrangement with any Third Party.

1.14 “Cost of Goods” means, for Licensed Products, the cost paid by Oncolytics to a Third -Party manufacturer together, where not included in that payment to such manufacturer, with the fully allocated cost of manufacture, transportation, insurance and other costs incurred by Oncolytics.

1.15 “Development Budget” means the budget of prospective costs (including FTE Costs and Out-of-Pocket Expenses related to the Development Plan (including the cost of supply of Licensed Products for Clinical Studies conducted by the Licensee)) to be incurred by Licensee in connection with the Development Plan. The Development Budget shall include, without limitation: (i) a detailed itemized budget for the relevant calendar year; and (ii) an estimated budget of projected costs and expenses for the next three (3) calendar years.

1.16 “Development Plan” means the annual development plan for the development and Regulatory Approval of a Licensed Product for use in the Field in the Territory by Licensee, including without limitation, development activities to support any Marketing Authorizations for any Licensed Product. The Development Plan shall initially cover three (3) years from the Effective Date and shall be updated in accordance with Clause 4.6. The Development Plan shall include the Development Budget.

1.17 “Dollars”, “$” or “US$” means United States dollars, the lawful currency of the United States of America.

1.18 “Effective Date” shall have the meaning set forth above.

1.19 “EMA” means the European Medicines Agency in Europe.

1.20 “FDA” means the Food and Drug Administration in the United States of America.

1.21 “Field” means the treatment and prevention of human diseases.

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1.22 “Finished Product” shall have the meaning set forth in Clause 4.11.4.

1.23 “First Commercial Sale” shall mean, with respect to any Licensed Product, the first sale for end use or consumption of such Licensed Product in a country or regulatory jurisdiction in the Territory for value, excluding, however, any sale or other distribution for use in a clinical trial or prior to grant of a Marketing Authorization in that country.

1.24 “First Indication” shall mean the indication identified in the first filing of an NDA in the Territory or the first approval of an NDA in the Territory, as the case may be, related to Pelareorep.

1.25 “Force Majeure” shall have the meaning set forth in Clause 25.

1.26 “FTE” means the equivalent of one person working full time for one twelve (12) month period in a research, development, commercialization, regulatory or other relevant capacity, approximating 1,650 hours per year. For clarity, a single individual who works more than 1,650 hours in a single year shall be treated as one FTE regardless of the number of hours worked.

1.27 “FTE Cost” means the fully burdened annual internal cost of employing an FTE, including all employee-related compensation and benefits, such as salary, bonuses, profit sharing, taxes, insurances, training, travel, subsistence, professional dues, catering and employee-related overheads (including human relations, payroll, purchasing, supervisory costs, space allocation and computer and information systems). The FTE Cost shall be set and revised from time to time by the JSC. Thereafter, it shall be increased on January 1 of each year by the increase in the annual percentage change of the US Consumer Price Index published by the US Bureau of Labor Statistics.

1.28 “Generic Product” means, with respect to a Licensed Product in the Field in a particular country in the Territory, another pharmaceutical product that: (x) contains as an active ingredient Pelareorep; and (y) is approved for use in such country (pursuant to 21 U.S.C. 355(b)(2), an ANDA, a separate NDA, compendia listing, other drug approval application or otherwise, including foreign equivalents of the foregoing, as applicable) in the same Field.

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1.29 “Global Study” means a Phase III Study or other global study to support registration of an NDA with the FDA or a Marketing Authorization with the EMA related to Pelareorep.

1.30 “Good Clinical Practice” or “GCP” means the FDA regulations and applicable ICH guidelines for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials, as applicable to the development of the Licensed Product from time to time, including 21 C.F.R. Part 11, 50, 54, 56, 312, and 314 and Commission Directive 2005/28/EC as amended from time to time.

1.31 “HKIAC” means the Hong Kong International Arbitration Centre.

1.32 “Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

1.33 “IND” means an Investigational New Drug application, as described in 21 C.F.R. Section 312.23, filed for purposes of conducting Clinical Studies on a Licensed Product in the Field in accordance with the requirements of the Law and the regulations promulgated thereunder, including all supplements and amendments thereto, and any analogous application and process required by a Regulatory Authority in a country or regulatory jurisdiction elsewhere in the Territory in order to conduct clinical studies on a Licensed Product in the Field in such country or regulatory jurisdiction.

1.34 “Intellectual Property Rights” means any and all intellectual property and industrial design rights, whether protected, created or arising under the Laws of the United States or any other foreign jurisdiction, including the following: (i) patents, patent applications (along with all patents issuing thereon), statutory invention registrations, divisions, continuations, continuations-in-part, substitute applications of the foregoing and any extensions, reissues, restorations and reexaminations thereof, and all rights therein provided by international treaties or conventions; (ii) copyrights, mask work rights, database rights and design rights, whether or not registered, published or unpublished, and registrations and applications for registration thereof, and all rights therein whether provided by international treaties or conventions or otherwise; (iii) trade secrets; and (iv) all other applications and registrations related to any of the rights set forth in the foregoing clauses (i) – (iii) above and the right to apply for registrations, certificates, or

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renewals with respect thereto and the right to prosecute, enforce, obtain damages relating to, settle, or release any past, present, or future infringement thereof. As used in this Agreement, the term “Intellectual Property Rights” expressly excludes Trademarks.

1.35 “Indications” means the Oncolytics Indication, First Indication, Second Indication and any additional indications.

1.36 “Inventions” means all inventions or discoveries (whether patentable or not) which are generated by either or both Parties or their Affiliates in performance of its or their obligations under this Agreement. Inventions are more particularly identified as:

1.36.1 “Oncolytics Inventions”, meaning those Inventions that are conceived of, or reduced to practice by, Oncolytics, its Affiliates, or subcontractors in performance of its or their obligations under this Agreement;

1.36.2 “Licensee Inventions”, meaning those Inventions that are conceived of, or reduced to practice by, Licensee or its Affiliates, subcontractors or Sublicensees in performance of its or their obligations under this Agreement; and

1.36.3 “Joint Inventions”, meaning those Inventions that are conceived of or reduced to practice by one or more employees, agents or consultants of Oncolytics or its Affiliates or subcontractors, together with one or more employees, agents or consultants of Licensee or its Affiliates, Sublicensees or subcontractors in performance of its or their obligations under this Agreement.

It is acknowledged that any work undertaken by Licensee or its Affiliates, subcontractors or Sublicensees in relation to any Licensed Product shall be considered to be undertaken in performance of Licensee’s obligations under this Agreement.

1.37 “Joint Patents” means any Patent Rights filed by either Party in respect of any Joint Inventions.

1.38 “Joint Steering Committee” or “JSC” means the committee to be established by the Parties pursuant to Clause 2.1 to oversee and manage the relationship between the Parties.

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1.39 “Know How” means, individually and collectively, unpatented technical and other information of a Party that is not in the public domain, disclosed hereunder and concerns any Licensed Product, including, ideas, concepts, inventions, discoveries, data, formulae, specifications, information relating to materials, manufacturing and production processes and SOPs, models, assays, analytical processes and SOPs, materials relating to assays, analytical systems or processes, procedures for experiments and tests and results of experimentation and testing, results of research and development including laboratory records, data relating to the pharmacology of products (including data relating to toxicology, bioavailability, metabolism, metabolites and pharmacokinetics), clinical trial data, case report forms, data analyses, reports or summaries and information contained in submissions to and information from ethical committees and Regulatory Authorities. The fact that a part of a compilation of data is in the public domain shall not prevent the compilation of data as such, or any one or more of the other elements of the compilation from being Know How.

1.40 “Law”    means all applicable domestic or foreign federal, regional, national and supra national laws, regulations, rules, directives and regulatory guidance.

1.41 “Licensed Clinical Data” means the Clinical Data Controlled by Oncolytics during the term of this Agreement which directly relates to the use of any Licensed Product in humans.

1.42 “Licensed Patent Rights” means the Patent Rights licensed to Licensee pursuant to Clause 3.1.

1.43 “Licensed Know How” means the Know How Controlled by Oncolytics during the term of this Agreement which directly relates to the development and commercialization of the Licensed Product.

1.44 “Licensed Product” means any product containing or including Oncolytics’ proprietary variant of Pelareorep as further described in Schedule 1 for use in the Field.

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1.45 “Licensed Product Mark” means a product specific Trademark and its foreign language counterparts selected by the Parties in accordance with the terms of this Agreement and used by the Parties in connection with the Licensed Product marketed in the Territory.

1.46 “Licensee House Mark” means a Trademark and its foreign language counterparts that is used by Licensee in relation to the Licensed Product and which is not a Licensed Product Mark.

1.47 “Macau” means the Macau Special Administrative Region of the PRC.

1.48 “Marketing Authorization” means any approval required from the relevant Regulatory Authority or Authorities to distribute, promote, market and sell a Licensed Product in a country or region.

1.49 “Net Sales” means, with respect to a given period of time, the gross amounts invoiced by or on behalf of Licensee, its Affiliates or permitted Sublicensees to Third Parties on account of sales of Licensed Products in the Territory, less reasonable and customary discounts and deductions from such gross amounts which are actually incurred, allowed, paid, accrued or specifically allocated, [**].

The inter-company transfer of any Licensed Product by Licensee or one of its Affiliates to Licensee or another Affiliate of Licensee shall not be considered a sale. In such cases, Net Sales shall be determined based on the gross invoiced price of the Licensed Product sold by Licensee or its Affiliate to the first Third Party purchaser less the discounts and deductions allowed under this definition.

Licensee shall not be permitted to sell or otherwise dispose for value of Licensed Product other than in a bona fide arms-length transaction exclusively for money, [**]

Distribution of Licensed Products for, or use of Licensed Products in, clinical or pre-clinical trials, samples or compassionate use shall not give rise to any deemed sale under this definition.

1.50 “NDA” means a New Drug Application, as described in 21 C.F.R. Section 314, including all supplements and amendments thereto, and any analogous application and process

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required by a Regulatory Authority in a country or regulatory jurisdiction elsewhere in the Territory in order to market a Licensed Product in the Field in such country or regulatory jurisdiction.

1.51 “Oncolytics Biotech” has the meaning set forth in Recital (A).

1.52 “Oncolytics Group” means Oncolytics, its Affiliates and their respective employees, agents and Third Party independent contractors.

1.53 “Oncolytics Indication” means the indication identified in the first filing of an NDA outside the Territory or the first approval of an NDA outside the Territory, as the case may be, related to Pelareorep.

1.54 “Oncolytics Patent Rights” means the Patent Rights Controlled by Oncolytics during the term of this Agreement which relate to, or are necessary or useful for the development, testing, use, manufacturing, distribution or sale of a Licensed Product. Oncolytics Patent Rights are listed in Schedule 2 – Part B, which shall be updated from time to time.

1.55 “Ongoing Clinical Studies” means the clinical studies relating to Licensed Products further described in Schedule 4.

1.56 “Out-of-Pocket Costs” means, with respect to any Party or any of its Affiliates, direct costs and expenses paid or accrued as owing by such Party or any such Affiliate to Third Parties, other than employees or a contract sales force and specifically identifiable and incurred to develop or commercialize Licensed Products pursuant to a Development Plan or Sales and Marketing Plan approved hereunder.

1.57 “Patent Rights” means any patent applications, patents and any foreign counterparts thereof, including, without limitation, all provisional applications, divisions, renewals, continuations, continuations-in-part, extensions, reissues, re-examinations, substitutions, confirmations, registrations, revalidations and additions of or to them, as well as any supplementary protection certificates, patent term adjustment or patent term extension, or like form of protection, on file with the appropriate governmental agencies.

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1.58 “Pelareorep” means Oncolytics’ proprietary variant of a respiratory enteric orphan virus, as more fully described in Schedule 1 to this Agreement.

1.59 “Person” means an individual, partnership, corporation, joint stock company, estate, trust (including a business trust), limited liability company, unincorporated association, joint venture or other entity or a Regulatory Authority.

1.60 “Pharmacovigilance Agreement” means an Adverse Event collecting, exchanging and reporting agreement that addresses the issues and reflects the principles set out in Clause 9, and that the parties will enter into promptly after the Effective Date, substantially in the form attached at Schedule 3 hereto.

1.61 “Phase III Study” means one or more clinical trials on sufficient numbers of subjects, which trial(s) are designed to: (a) establish that a drug is safe and efficacious for its intended use; (b) define warnings, precautions and adverse reactions that are associated with the drug in the dosage range to be prescribed; and (c) support Regulatory Approvals for such drug.

1.62 “Phase IV Study” means, with respect to a Licensed Product study or data collection effort for such Licensed Product that is initiated in a country/countries after receipt of Marketing Authorization and is principally intended to support the commercialization of such Licensed Product in such country/countries and not to support or maintain a Marketing Authorization or otherwise obtain any labelling change approval from an applicable Regulatory Authority. Phase IV Studies shall include, without limitation, clinical experience trials, but shall exclude studies that are required by a Regulatory Authority as a condition to receiving Marketing Authorization for the Licensed Product.

1.63 “PRC” means the People’s Republic of China, but for the purpose of this Agreement only, excludes Hong Kong, Macau and Taiwan.

1.64 “Quarter” means each period of three consecutive calendar months commencing on 1 January, 1 April, 1 July and 1 October of the relevant calendar year.

1.65 “Regulatory Approval” means all registrations, approvals (including, without limitation, labeling, pricing or reimbursement approvals), licenses (including, without

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limitation, product and establishment licenses) and authorizations (including, without limitation, a Marketing Authorization) granted by a Regulatory Authority that are required for the marketing, importation, exportation, transport, storage, manufacture, commercial use and sale of a product in a country or jurisdiction.

1.66 “Regulatory Authority” means CFDA, EMA, FDA or any national, supranational, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity in a given country or jurisdiction in the Territory responsible for granting and administering any Regulatory Approvals.

1.67 “Regulatory Confidential Information” means any Confidential Information or Know How: (i) which is, or is intended, to be included in, or support an IND, NDA or Marketing Authorization for approval of the testing of drugs in humans or for obtaining or supporting Marketing Authorization for a pharmaceutical product, or any supplements thereto; or (ii) constitutes Clinical Data relating to a Licensed Product.

1.68 “Regulatory Exclusivity” means market exclusivity granted by a Regulatory Authority designed to prevent the entry of Generic Product(s) onto the market in the Field, including new chemical entity exclusivity, new use or indication exclusivity, new formulation exclusivity, orphan drug exclusivity, pediatric exclusivity and 180-day generic product exclusivity.

1.69 “Related Agreements” means:

(i)the Pharmacovigilance Agreement;

(ii)the Supply Agreement; and

(iii)the Warrant Purchase Agreement.

any other agreements entered into between the Parties or their respective Affiliates contemporaneously with, or during the term of, this Agreement in order to facilitate the development or commercialization of any Licensed Product in the Territory under this Agreement.

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1.70 “Research Material” has the meaning set forth in Clause 5.1.

1.71 “Sales and Marketing Plan” means each plan setting forth guidelines for the sales and marketing of Licensed Products in the Territory by or on behalf of Licensee all as described in Clause 7.2. The Sales and Marketing Plan shall cover a period of at least three (3) years and shall be broken down on a country-by-country basis.

1.72 “Second Indication” shall mean the indication identified in the second filing of an NDA in the Territory or the second approval of an NDA in the Territory, as the case may be, related to Pelareorep.

1.73 “South Korea” means the Republic of Korea.

1.74 “Study Plan” shall have the meaning designated in Clause 4.5.2.

1.75 “Sublicensee” means a Third Party to whom Licensee or its Affiliates will have granted a license or sublicense under its rights under this Agreement to sell or offer for sale Licensed Product in one or more countries in the Territory; provided, however, “Sublicensee” will not include any Third Party who receives a license to use a unit of Licensed Product arising by operation of law or otherwise, or as a consequence of the purchase of said unit of Licensed Product.

1.76 “Supply Agreement” means an agreement governing the supply of Licensed Product by Oncolytics to Licensee for sale in the Territory as agreed in accordance with Clause 4.10.

1.77 “Tax Withholding Amount” shall have the meaning set forth in Clause 11.3.

1.78 “Termination Date” means the effective date of expiration or earlier termination (as applicable) of this Agreement pursuant to Clause 15.

1.79 “Territory” means the countries listed in Schedule 5.

1.80 “Third Party” means any Person other than the Parties or their respective Affiliates.

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1.81 “Trademarks” means rights in trademarks, trade names, service marks, service names, design marks, logos, slogans, trade dress, or similar rights with respect to indicators of origin, whether registered or unregistered, as well as rights in internet domain names, uniform resource locators, e-mail addresses and similar rights.

1.82 “US GAAP” means the Generally Accepted Accounting Principles determined by the Financial Accounting Standards Board.

1.83 “Valid Claim” means either:

(a) a claim of an issued and unexpired patent (which include any patent term extension, patent term adjustment or supplementary protection certificate) in the relevant country in the Territory which covers a Licensed Product and that: (i) has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal; or (ii) has not been abandoned, disclaimed, or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise; or

(b) a claim of a pending patent application, which claim has been filed in good faith and has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application provided always that any claim that has been pending for greater than [**] from the filing date of the patent application shall cease being a Valid Claim until the patent issues.

1.84 “Warrant Purchase Agreement” means a warrant purchase agreement to be entered between Oncolytics Biotech and Licensee or its designated Affiliate simultaneously with this Agreement pursuant to which Licensee or its designated Affiliate shall purchase warrants to purchase shares of capital stock of Oncolytics Biotech on the terms and subject to the conditions set out therein, substantially in the form attached at Schedule 6 hereto.

1.85 “Wholly-Owned Subsidiary” of a Person a Person (other than an individual) 100% of the outstanding voting securities of which are owned, directly or indirectly, by such Person.

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In this Agreement:

1.85.1 all references to a particular clause or schedule shall be a reference to that clause or schedule in or to this Agreement as it may be amended from time to time pursuant to this Agreement;

1.85.2 the headings are inserted for convenience only and shall be ignored in construing this Agreement;

1.85.3 words importing the masculine gender shall include the feminine and vice versa and words in the singular include the plural and vice versa;

1.85.4 words denoting persons shall include any individual, partnership, company, corporation, joint venture, trust association, organization or other entity, in each case whether or not having separate legal personality;

1.85.5 the words “include”, “included” and “including” are to be construed without limitation to the generality of the preceding words; and

1.85.6 reference to any statute or regulation includes any modification or re-enactment of that statute or regulation.

1.86 In the event of any inconsistency or conflict between this Agreement and any of the Schedules, this Agreement shall prevail. In the event or any discrepancy or contradiction between this Agreement and any Related Agreement, save where expressly provided, this Agreement shall take precedence.

2. MANAGEMENT OF THE RELATIONSHIP

2.1 The Joint Steering Committee. Within thirty (30) days after the Effective Date, the Parties shall establish the Joint Steering Committee (“JSC”) to oversee and manage the relationship between the Parties. In particular, the JSC shall be responsible for:

2.1.1 providing a forum for addressing strategic issues and holding discussions between the Parties related to the development and commercialization of Licensed Products in the Field and in the Territory;

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2.1.2 review and approval of the Development Plan;

2.1.3 review, consideration and approval of any Clinical Study to be undertaken by Licensee in relation to any Licensed Product, together with the associated Study Plan, pursuant to Clause 4.5.2;

2.1.4 review and coordination of branding strategies and guidelines for each Licensed Product;

2.1.5 review and approval of any Licensed Product Mark to be used by Licensee in relation to a Licensed Product;

2.1.6 review of regulatory strategies for obtaining and maintaining Marketing Authorizations for each Licensed Product in the Territory, including review and approval of any deadline extension requests submitted by Licensee pursuant to Clauses 4.3 and 6.5.1 of this Agreement;

2.1.7 review and approval of the Sales and Marketing Plan;

2.1.8 [**];

2.1.9 review of annual reports provided by Licensee of its sales and marketing activities and otherwise monitoring if Licensee’s performance and compliance against the current Sales and Marketing Plan;

2.1.10 proposing any amendments to the Sales and Marketing Plan;

2.1.11 development of the core scientific and promotional messages and advertising strategies for Licensed Product in the Field and in the Territory, and planning and implementing educational and professional symposia and meetings in the Territory;

2.1.12 review issues concerning the manufacture, procurement, packaging, distribution and supply of Licensed Products in the Field and in the Territory;

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2.1.13 review the supply chain for Licensed Products to identify risks and appropriate actions to avoid or address those risks, including without limitation, identifying sources of supply and second sources of supply, reviewing quality assurance/quality control procedures, records and compliance with current good manufacturing practices (CGMP) and recommending changes or improvements to address issues or problems in those areas, and recommending inventory levels and methods of allocating of supplies in the event of shortfalls;

2.1.14 working with and advising the Parties in connection with the negotiation of agreements with Third Party contractors related to the manufacture and supply of Licensed Products;

2.1.15 developing contingency plans (including without limitation, consideration of whether to establish any second sources of supply) to be implemented in the event of projected or actual supply shortages or inability to supply;

2.1.16 facilitating the negotiation and implementation of the Supply Agreement and any other agreements needed to support the supply chain;

2.1.17 determining which documents, materials and information are to be translated to another language, who will be responsible and how costs will be shared and allocated between the Parties; and

2.1.18 addressing safety issues relating to Licensed Products.

For the avoidance of doubt, Oncolytics shall not be required to disclose or discuss at the JSC or with Licensee any information which does not relate to development and commercialization of Licensed Products for use in the Field and in the Territory.

2.2 Membership and Governance of the JSC. The JSC shall comprise six (6) members (the “Members”), with Oncolytics appointing three (3) Members and Licensee appointing three (3) Members as their respective representatives on the JSC. The initial Members of the JSC shall be Matt Coffey (CEO, Oncolytics Biotech), Kirk Look (CFO, Oncolytics Biotech) and Andrew de Guttadauro (President, Oncolytics Biotech (U.S.), Inc.) appointed by Oncolytics and Victor Yang (SVP), Dexter Fong (CFO) and Alex Ye (VP Business Development) appointed by

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Licensee. Each Party shall have the right to invite additional representatives to provide information and additional expertise to the JSC and to otherwise participate in JSC Meetings as non-voting representatives.

2.2.1 Each Party shall be entitled to remove any Member appointed by it and to appoint any person to fill the vacancy arising from the removal or retirement of such Member. Each Party shall give the other Party prior written notice of any changes in the identity of its Members. The Parties shall ensure that all of their appointed Members are of a suitable level of expertise, seniority and decision-making authority to deal with the issues that may arise in connection with matters to be considered by the JSC.

2.2.2 The JSC shall exercise this authority in good faith and in accordance with the terms of this Agreement. The JSC shall have no authority to bind the Parties unless the Parties expressly delegate matters to the JSC in writing or ratify the decision of the JSC in writing.

2.2.3 From time to time, the JSC may establish one or more subcommittees to oversee particular projects or activities related to this Agreement, and such subcommittees will be constituted as the JSC agrees. The Parties may replace their respective subcommittee representatives at any time, with prior written notice to the other Party. Any such sub-committee shall be run on the same basis as the JSC save that any issue within the purview of such a subcommittee that is not settled or determined by the applicable subcommittee shall be submitted to the JSC for resolution. The chair of each subcommittee shall report on subcommittee efforts at each JSC meeting, and either Party may invite its own representatives on such subcommittee to also report on such efforts.

2.3 JSC Meetings.

2.3.1 At least twenty-one (21) days prior to each regularly scheduled meeting of the JSC, written notice shall be given to each Member by the Party convening the meeting and at least fourteen (14) days prior each such meeting, each Party shall provide to the other all written information to be disclosed including any update

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to the Development Plan or the Sales and Marketing Plan. In addition, special meetings of the JSC may be called on not less than ten (10) days’ notice by any Member upon written request to the then current chairperson of the JSC.

2.3.2 Oncolytics shall designate a Oncolytics Member as the chairperson of the JSC. The chairperson of the JSC shall set meeting agendas for the JSC provided that the agenda shall include any matter that either Party requests to be included. Such agendas shall be circulated to all Members at least seven (7) Business Days prior to the date of the relevant meeting. The JSC chairperson shall be responsible for recording, preparing and within ten (10) Business Days issuing draft minutes of the JSC meetings, which draft minutes shall be reviewed, modified and approved in writing by the Members.

2.3.3 The JSC shall have its first meeting within forty-five (45) days after the Effective Date, and thereafter shall hold Quarterly meetings. The venue for the first meeting of the JSC shall be at Oncolytics’ facilities in Calgary, Alberta, Canada, unless otherwise agreed by the Members. Thereafter, the venue for each meeting of the JSC shall alternate between Licensee’s facilities in Hangzhou Economic and Technology Development Area, PRC and Oncolytics’ facilities in Calgary, Alberta, Canada, or such other locations as may be agreed upon by the Members. Except for the first meeting of the JSC which shall be a face-to-face meeting, meetings of the JSC may be held as a teleconference or video conference, provided that the JSC shall hold at least one face-to-face meeting during each calendar year. Each Party shall bear its own costs for its Members to attend JSC meetings and, as applicable, for its obligations to host such meetings.

2.3.4 The JSC shall review the Development Plan prior to the start of the relevant calendar year. The JSC shall also review the progress of each Licensed Product against the Development Plan.

2.4 JSC Decision Making. All decisions by the JSC shall be made by unanimous vote of a quorum of the Members, with each of Oncolytics and Licensee having one (1) vote. The presence of at least two (2) Members of the JSC representing each of Oncolytics and Licensee (i.e., a total of four (4) Members) shall constitute a quorum. The Members shall use their reasonable efforts to reach agreement on any and all matters to be determined or resolved by the JSC.

2.5 Dispute Resolution. In the event that agreement on a matter cannot be reached within thirty (30) days (or sooner, if required) after the submission of a written notice to the JSC by a Member of the existence of such a disagreement, the matter shall be referred to Licensee’s CEO and the CEO of Oncolytics for resolution. In the event that Licensee’s CEO and the CEO of Oncolytics cannot reach agreement within twenty (20) Business Days (or sooner, if required) after such referral, the matter shall be resolved as follows:

(a) [**];

(b) in accordance with Oncolytics’ position, where the matter concerns the development, promotion, sale and distribution of Licensed Products outside the Territory;

(c) in accordance with Oncolytics’ position where the matter concerns the Global Study or any of the Ongoing Clinical Studies;

(d) in accordance with Oncolytics’ position where the matter concerns the any Clinical Study proposed by a Party pursuant to Clause 4.5; and

(e) in the event that Oncolytics remains responsible for commercial manufacture of Licensed Products, Oncolytics shall have the final say in relation to manufacturing issues.

2.6 Approval of Sub-Committee Actions. Any recommendations prepared by any of the Sub-Committees which are identified herein as requiring JSC approval shall be submitted to the JSC for review and approval. The terms of any additional contractual agreements or relationships (including, without limitation, agreements with Third Parties) related to development or commercialization of Licensed Products discussed or negotiated by the JSC or a Sub-Committee shall not be binding on the Parties unless and until such terms have been formally reviewed by each Party and signed in accordance with each Party’s normal procedures.

2.7 Alliance Managers. Each Party shall appoint one (1) alliance manager (the “Alliance Manager”) to serve as the point person for communications between the Parties on matters arising under this Agreement. The Alliance Manager may also be a Member of the JSC. Each Alliance Manager shall be primarily responsible for facilitating the flow of information and otherwise promoting communications and collaboration between the Parties and internally within the Parties. Each Alliance Manager shall also be responsible for:

2.7.1 facilitating coordination among the various functional representatives of Oncolytics or Licensee, as appropriate; and

2.7.2 providing single-point communication for seeking consensus, including facilitating review of external corporate communications pursuant to Clause 28.1.

3. GRANT OF RIGHTS AND EXCLUSIVITY

3.1 License to Licensee. Subject to the terms of this Agreement, Oncolytics grants the following licenses to Licensee effective as of the earlier of the next date following the Effective Date or the date on which Licensee makes its first payment to Oncolytics under this Agreement:

3.1.1 an exclusive license under the Oncolytics Patent Rights and the Oncolytics Inventions (in each case, to the extent that Oncolytics has exclusive rights and does not infringe Licensee’s Intellectual Property Rights or any Third Party’s Intellectual Property Rights) and Oncolytics’ interest in the Joint Patents to [**] Licensed Products in the Field in the Territory; and

3.1.2 a license under the Licensed Know How and Licensed Clinical Data [**] Licensed Products in the Field in the Territory, such license being exclusive to the extent that Oncolytics or its Affiliates have exclusivity and in other cases non-exclusive.

3.2 Manufacturing Rights. Licensee shall have no rights to make or to have made Licensed Products anywhere in the world except as permitted pursuant to Clause 4.11.

3.3 Sublicense Rights. Licensee shall have no right to sublicense any of the licenses and other rights granted under Clause 3.1 to any Third Party, except that [**]

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3.4 Diversion. Licensee shall not sell, distribute or otherwise dispose of Licensed Product, including via the Internet or mail order, to any Third Party, address or IP address in the any country or jurisdiction outside of the Territory. [**]

3.5 [**]

4. DEVELOPMENT OF LICENSED PRODUCTS

4.1 Development of Licensed Products. The Licensee shall be responsible for developing the Licensed Product for use in the Field in the Territory in accordance with the terms of this Agreement.

4.2 Development Plan. As soon as reasonably practicable after the Effective Date, the Parties shall, acting through the JSC in accordance with the provisions of Clause 2, agree on and finalize the Development Plan, which shall focus on the development of Licensed Products, and Licensee’s filing for Regulatory Approval of the Licensed Product in the Territory for at least the First Indication. The Development Plan shall set out the steps necessary to obtain Regulatory Approval in at least the PRC in respect of the Licensed Product.

4.3 Development in respect of the PRC. Obtaining Marketing Authorization for the Licensed Product for use in the Field in the PRC is of the essence of this Agreement. On or before [**], Licensee shall produce strategy for the development and Regulatory Approval [**] in the PRC for at least the First Indication and this strategy shall be provided to the JSC for approval and incorporation into the Development Plan in respect of the Licensed Product. [**]. Within the same period, Licensee shall also commence work to generate or obtain any other data that may be necessary for Regulatory Approval in the PRC.

4.4 Ongoing Clinical Studies. Subject to Clause 4.8, Oncolytics shall be responsible for and shall use its Commercially Reasonable Efforts to undertake the Ongoing Clinical Studies in accordance with the relevant protocols.

4.5 Clinical Studies. Subject to the provision of this Clause 4.5, Licensee shall have the right to undertake Clinical Studies (whether alone or together with Oncolytics) in respect of Licensed Products in the Territory and Oncolytics shall have the right to undertake Clinical Studies (whether alone or together with the Licensee or another Person) in respect of Licensed Products anywhere in the world outside the Territory.

4.5.1 If Licensee intends to undertake a clinical study on humans or using material derived from humans (a “Clinical Study”), then prior to submitting any IND (or any other application) for approval to conduct the Clinical Study, Licensee shall notify Oncolytics and provide it with a near final draft protocol and details of the proposed clinical study together with any further information that Oncolytics may reasonably request. Oncolytics shall:

4.5.1.1 [**]

4.5.1.2 notify Licensee within [**] of receipt of the draft protocol (provided that all such other information reasonably requested has been provided) that it agrees to the Clinical Study being undertaken in which case the provisions of Clauses 4.5.2 through Clause 4.5.5 shall apply.

4.5.2 If it is agreed [**] that a Clinical Study should be conducted, then the JSC shall meet to discuss the plan for such Clinical Study (including the protocol) and to develop a study plan for the Clinical Study (a “Study Plan”). Prior to the submission of any IND or other application for approval, the Parties shall discuss and decide whether the Clinical Study should be conducted jointly or separately. Such clinical study shall be conducted in accordance with the Study Plan.

4.5.3 Clinical Studies Required by a Regulatory Authority. Licensee shall be responsible for and bear the cost of all Clinical Studies required by a Regulatory Authority in the Territory in respect of a Licensed Product and the rights set out in Clause 4.5.4 shall apply without payment.

4.5.4 Rights to use Clinical Data from Clinical Studies. The Clinical Data generated shall be subject to Clause 12.6.

4.5.5 Sublicensing Rights. Oncolytics may exercise the rights provided for in this Clause 4.5 on behalf and for the benefit of any Third Party to which it has granted a license to develop or commercialize Licensed Products outside the Territory if such Third Party has agreed to be bound by the obligations provided for in this Clause 4.5.

4.6 Development Plan. Subject to Clauses 4.1 and 4.3, the Development Plan shall set forth for at least a three (3) year period: (i) all of the remaining Clinical Studies (including the Ongoing Clinical Studies and any future Clinical Studies), any development of a production process and all other development activities to be performed by Licensee for each Licensed Product; (ii) the activities necessary to a long-term strategy for the development of each Licensed Product in the Territory; and (iii) the corresponding Development Budget. Development activities to be provided for in the Development Plan may include, without limitation, any studies (clinical or otherwise), formulation development, development/applications of relevant diagnostics analytical method development, and quality control and stability testing necessary or useful in connection with obtaining and maintaining Marketing Authorizations for each Licensed Product in the Territory and any new indications, labelling changes or product improvements (including changes in formulation or dosage, combinations with other active pharmaceutical ingredients and other life cycle management activities) for each Licensed Product.

4.7 Conduct of Development Plans. Each Party shall undertake the tasks allotted to it in the Development Plan with reasonable skill and care and in a timely manner. All such development activities shall be performed in compliance with all applicable Laws, including, without limitation, current good laboratory practices and Good Clinical Practice. The Development Plan shall be reviewed by the JSC at each meeting and at least once in each twelve (12) month period, Licensee shall provide an amended or up-dated Development Plan to the JSC to reflect progress in the development of Licensed Product. Licensee shall submit to the JSC for review any protocols (and any substantive changes thereto) for any Clinical Studies which it proposes to undertake pursuant to the Development Plan in relation to Licensed Product within the Territory (including without limitation, any Phase IV Study), and shall not commence any such study until the JSC has approved the final protocol. Either Party may, as far as is expressly set out in the Development Plan, fulfill its obligations under the Development Plan through sub-contractors, provided always that the subcontracting Party shall remain responsible for such obligations and further provided that the sub-contractor agrees in writing to adopt and implement suitable quality assurance policies and procedures to ensure such compliance.

4.8 Development Costs. Licensee shall be responsible for all of the costs (including Oncolytics’ costs incurred before or after the Effective Date as approved by the JSC or reasonably and necessarily incurred in the Development Plan) of carrying out the Development Plan, except for the costs of any development activities required solely by the Oncolytics Group. Oncolytics shall submit to Licensee an invoice in respect of the costs incurred by it pursuant to the Development Plan with no mark-up within thirty (30) days of the end of each Quarter and Licensee shall pay the amount invoiced by Oncolytics within thirty (30) days of receipt of such invoice.

4.9 Obligations.

4.9.1 Oncolytics agrees to have manufactured and supplied to Licensee all of Licensee’s requirements for the Licensed Product (i) for clinical development, and (ii) for commercial use, pursuant to the Supply Agreement.

4.9.2 Licensee shall be responsible for providing Oncolytics with all information relating to labeling requirements for the Finished Product, including English translations of all draft and final labels, product inserts and similar documents, to ensure compliance with all applicable Law at all times.

4.10 Supply Agreement.

4.10.1 Unless the Parties agree otherwise in writing, Oncolytics shall or shall procure the manufacture of Licensed Product for Licensee on the terms and conditions of a separate written supply agreement to be entered into between the Parties. Clinical batches and commercial supply will be covered by the supply agreement.

4.10.2 Subject to Clause 4.11, under the terms of the supply agreement to be negotiated in good faith by the Parties, Licensee shall be responsible for Oncolytics’ costs in manufacture and supply of Licensed Product, including any Cost of Goods necessary for the manufacture; provided, however, that Licensee shall be afforded the opportunity to provide input on the costs of manufacture to be agreed between Oncolytics and the Contract Manufacturer chosen by Oncolytics from time to time pursuant to Clause 4.11. In particular, the supply agreement shall include the following terms:

4.10.2.1 [**].

4.10.2.2 [**].

4.10.2.3 [**].

4.10.2.4 [**].

4.10.3 The Parties acknowledge that timely negotiation of a mutually-agreeable supply agreement will be critical to the ability to launch the Licensed Product. If at any time more than [**] after the commencement of negotiation of such agreement, either Party believes such negotiations have reached an impasse, such Party may refer the impasse to an expert (acting as an expert and not an arbitrator) of at least fifteen (15) years’ experience in the pharmaceutical industry, selected jointly by the Parties, or in the absence of agreement between the Parties within [**] of the proposing Party requesting that the matter is referred to expert determination, then the matter shall be referred to mediation administered the HKIAC, with one mediator appointed by the HKIAC, in accordance with the HKIAC Mediation Rules in force at the relevant time (the “Expert”). The Expert shall receive one written submission from each Party setting out that Party’s proposal for the terms of the supply agreement and shall provide his decision as to the terms of supply agreement that are to be implemented within [**] of his appointment. The Expert’s decision shall be final and binding on the Parties. The costs of the Expert shall be borne by the Parties in equal shares.

4.11 Contract Manufacturer. Oncolytics may meet its obligations to supply the Licensed Product to Licensee hereunder or under the Supply Agreement through subcontracting with Third Parties jointly selected, qualified and validated by Licensee and Oncolytics (each, a “Contract Manufacturer”), subject to the following requirements and Clause 4.10:

4.11.1 [**]

4.11.2 [**]

4.11.3 [**]

4.11.4 [**]

4.11.5 [**]

4.11.6 [**]

4.11.7 [**]

4.11.8 [**]

4.11.9 [**]

5. AUTHORIZED USE OF MATERIALS

5.1 Research Materials. Oncolytics may from time to time during the term of this Agreement supply Licensee with proprietary research materials for use in connection with the development of Licensed Products hereunder (collectively “Research Materials”). All such Research Materials are and shall remain the property and Confidential Information of Oncolytics. Licensee covenants and agrees that it shall only use Oncolytics’ Research Materials for the specific research purposes contemplated by this Agreement, and shall not use the Research Materials for any other purpose or for administration to humans without the prior written consent of Oncolytics. In addition, Licensee shall not supply or transfer the Research Materials to any Third Party without Oncolytics’ prior written consent; provided, however, that Research Materials may be supplied to a Wholly-Owned Subsidiary solely for use in connection with the performance of activities under the Development Plan pursuant to a materials transfer agreement in a form no less protective of Oncolytics’ rights in the Research Materials as this Clause 5.1 signed by the Wholly-Owned Subsidiary and Oncolytics.

5.2 Limited Warranties. Oncolytics represents and warrants as follows:

5.2.1. Research Materials supplied by Oncolytics for Clinical Studies shall be manufactured and shipped in compliance with cGMP and all applicable Laws;

5.2.2. Research Materials supplied by Oncolytics for Clinical Studies shall conform to the quality agreement and specifications agreed to between Oncolytics and the manufacturer;

5.2.3. the facility at which Research Materials for Clinical Studies are manufactured has been validated to meet all applicable regulatory requirements; and

5.2.4. the manufacturer of Research Materials for Clinical Studies has all such approvals and permits as are required under applicable Law to operate the facility for the purposes of manufacturing Research Materials for Clinical Studies.

5.3 Exclusion of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN CLAUSE 5.2 OR FOR ANY LICENSED PRODUCT SUPPLIED AND PAID FOR UNDER A SEPARATE SUPPLY AGREEMENT, LICENSEE ACKNOWLEDGES AND ACCEPTS THAT ALL MATERIALS ARE PROVIDED “AS IS” FOR THE SPECIFIC PURPOSES AUTHORIZED HEREUNDER, ARE EXPERIMENTAL IN NATURE, AND ARE PROVIDED WITHOUT WARRANTY OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR ANY OTHER WARRANTY (EXPRESS OR IMPLIED). WITHOUT LIMITATION OF THE FOREGOING AND TO THE FULLEST EXTENT PERMITTED BY LAW, ONCOLYTICS SHALL HAVE NO LIABILITY WHATSOEVER TO LICENSEE OR ANY OTHER PERSON FOR OR ON ACCOUNT OF ANY LOSS OR DAMAGE, OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGE ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED ON LICENSEE OR ANY OTHER PERSON, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM (A) THE MANUFACTURE, USE, OFFER FOR SALE, SALE OR IMPORT OF A LICENSED PRODUCT, OR (B) ANY ADVERTISING OR OTHER PROMOTIONAL ACTIVITIES CONCERNING ANY OF THE FOREGOING.

5.4 Return of Materials. Upon the first to occur of either termination of this Agreement or the ceasing of development by Licensee of the relevant Licensed Product under this Agreement, Licensee shall promptly return, or, at Oncolytics’ request, Licensee shall destroy, and provide written confirmation certified by an authorized officer of Licensee, any of Oncolytics’ Research Materials in its possession or control received by it and all copies thereof, progeny, derivatives, variants, cellular material (such as proteins antibodies, nucleic acids, genes and the like, purified or unpurified) and fragments of the Research Materials (all of which are acknowledged to be the property of Oncolytics), for use in connection with the development of the relevant Licensed Product.

5.5 Unauthorized Use of Materials. Notwithstanding anything in this Agreement to the contrary, any patentable inventions or discoveries made, derivative works, progeny, derivatives, variants, cellular material (such as proteins antibodies, nucleic acids, genes and the like, purified or unpurified) and fragments of the Research Materials created through unauthorized use of Research Materials by Licensee or any Third Party receiving Research Materials from Licensee shall be the exclusive property of Oncolytics, and Licensee shall, and shall procure that its Affiliates and such Third Party shall, upon Oncolytics’ request, take all reasonable steps requested by Oncolytics to perfect Oncolytics’ rights, title and interest in and to such patentable inventions, discoveries, derivative works, progeny, derivatives, variants, cellular material (such as proteins antibodies, nucleic acids, genes and the like, purified or unpurified) and fragments of the Research Materials.

5.6 Restriction on Use of Materials. Licensee agrees that it will not incorporate Oncolytics’ Research Materials in any of its products or services and shall not utilize Oncolytics’ Research Materials in connection with the commercialization of any products in or outside the Territory other than the development and commercialization of the relevant Licensed Product in the Territory pursuant to this Agreement.

5.7 Compliance with Regulations. Licensee shall comply, and shall ensure and guarantee that any permitted assignees and all of its Affiliates comply, with all applicable Laws in connection with the use, storage and handling of any Research Materials provided pursuant to this Clause 5.6.

5.8 Exceptions. Notwithstanding any provision of this Clause 5, Licensee’s non-use obligations with respect to Research Materials under this Clause 5 are subject to the exceptions set forth in Clause 17.4.

6. REGULATORY AND CLINICAL DEVELOPMENT

6.1 Master File. [**]

6.2 Responsibility for Regulatory Applications in the Territory. Save in respect of the Ongoing Clinical Studies [**], Licensee shall be responsible, at its own cost, for filing and maintaining, in Licensee’s name, the INDs, BLAs and other regulatory applications necessary to obtain and maintain Marketing Authorization for each Licensed Product in all countries and jurisdictions in the Territory. Licensee shall allow Oncolytics to review and comment on all INDs, BLAs and other similar regulatory applications for each Licensed Product prior to submission to any Regulatory Authority in the Territory, as well as confer with Oncolytics regarding the preparation of such filings and communications and the registration process and any revisions to any filings or communications with the Regulatory Authorities. Licensee shall keep Oncolytics informed as to the status of its draft regulatory applications for each Licensed Product and shall provide copies of all communications with Regulatory Authorities on reasonable request by Oncolytics. If recording of this Agreement or any part of it by a Regulatory Authority is necessary for Licensee or Oncolytics to fully enjoy the rights, privileges and benefits of this Agreement, Licensee shall at its own expense record this Agreement or all such parts of this Agreement and information concerning the license granted hereunder with each such appropriate Regulatory Authority. Licensee shall (a) provide to Oncolytics for Oncolytics’ review and approval all documents or information it proposes to record complete at least ten (10) Business Days prior to the submission thereof, except submission required immediately, and (b) promptly notify Oncolytics with verification of Licensee’s recordation or any related agency decision. In making any such disclosures, Licensee shall maintain, to the fullest extent permitted by Law, the confidentiality of this Agreement, the terms and conditions of this Agreement and any other Confidential Information. Any specific disclosure made in accordance with this Clause6.2and not objected to by Oncolytics shall not constitute a breach of the Licensee’s obligations under Clause 17.

6.3 Dealings with Regulatory Authorities. Except as may be prohibited by Law, Licensee shall provide prior written notice to Oncolytics of any meetings between Licensee and a Regulatory Authority in the Territory relating to the development, commercialization or marketing of each Licensed Product, and allow a sufficient opportunity for representatives of Oncolytics to attend any such meetings as an observer. Licensee shall promptly provide Oncolytics with copies of material correspondence received by Licensee from Regulatory Authorities in the Territory that relates to each Licensed Product, and Licensee shall provide Oncolytics an opportunity to review and comment on material correspondence with Regulatory Authorities in the Territory at least fifteen (15) Business days prior to submission, and shall consider in good faith the comments of Oncolytics to such correspondence.

6.4 Oncolytics Regulatory Support. Subject to any obligation of confidentiality owed by Oncolytics to a Third Party, Oncolytics shall provide such technical data and support as is necessary to assist Licensee to prepare regulatory applications for Licensed Products in the Territory. Details of the obligations of the Parties including for associated costs shall be as determined by the JSC or set out in the Development Plan.

6.5 Performance Obligation.

6.5.1 Licensee shall file for Regulatory Approval for the Licensed Product for the First Indication in the Field in the PRC [**], provided, however, that the applicable Clinical Data is timely delivered to Licensee by Oncolytics; and, provided, further, that in the event that Licensee experiences delays in completing the Clinical Study in the PRC necessary for obtaining Regulatory Approval from the CFDA (or other relevant Regulatory Authority) for the Licensed Product for the First Indication in the Field despite having used its Commercially Reasonable Efforts to meet the [**] set out in this Clause 6.5.1, Licensee may seek the approval of the JSC to extend such deadline. If Licensee fails to meet the timing requirements of this Clause 6.5.1 (including any extension that may be approved by the JSC), then, upon Oncolytics’ written request, the Parties shall meet to discuss future activities relating to the Licensed Product for the First Indication in the Field in the PRC. If, following such discussions, Oncolytics determines in its opinion that Licensee is not pursuing development activities with diligence, Oncolytics may, at its option, terminate Licensee’s license as granted under this Agreement to Licensed Product in respect of the PRC (and reduce the Territory accordingly) or the entire Territory, and the Parties shall proceed as if there had been a termination by Oncolytics pursuant to Clause 15.3.

6.5.2 Licensee shall use Commercially Reasonable Efforts to:

6.5.2.1 [**];

6.5.2.2 [**];

6.5.2.3 [**].

6.5.1 If Licensee fails to meet the obligations set out in Clause 6.5.2, Oncolytics may terminate Licensee’s license to Licensed Product in the affected country or jurisdiction with written notice to Licensee within ninety (90) days of the applicable failure, and, in such cases, Licensee shall cooperate with Oncolytics in the transfer to Oncolytics or its designee of the Licensed Product rights in such territory(ies). Such transfer of product rights shall be effected by means of removing the relevant country or jurisdiction from the Territory.

7. MARKETING OF LICENSED PRODUCTS

7.1 Use of Trademarks. Licensee will market and label each Licensed Product in the Territory under a Licensed Product Mark approved by the JSC. Each packet shall bear on the outer packaging, the secondary packaging and any patient information leaflet or summary of product characteristics an Oncolytics Trademark designated by Oncolytics and an acknowledgement that the relevant Licensed Product is licensed to Licensee by Oncolytics, all subject to applicable Law and limitations imposed by CFDA.

7.2 Sales and Marketing Plan. Prior to filing an application for a BLA or an application for any Marketing Authorization for the relevant Licensed Product in the Territory, Licensee shall provide Oncolytics with a proposed Sales and Marketing Plan for the relevant Licensed Product for review and approval by the JSC. The Sales and Marketing Plan shall include, among other topics, the proposed Licensed Product Mark, positioning, the marketing and promotional investment, Phase IV Studies (if any) and publication plans, sales and marketing headcount, promotional tools/activities and the timing and budget for the foregoing. Any Trademark to be used in connection with a Licensed Product, shall require Oncolytics’ prior written consent and Licensee shall consider as part of its evaluation market research concerning any marks suggested by Oncolytics. Such evaluation and market activities shall consider any Third Party intellectual property rights position affecting the Trademarks in question. Licensee shall be solely responsible for, and bear the costs of, the generation (including any English translation) of all promotional materials to be used by Licensee or its Affiliates in connection with the marketing, promotion and sale of the Licensed Product in the Territory. Licensee shall provide an updated Sales and Marketing Plan for the Licensed Product on or before 30 September in each year.

7.3 Post-marketing and observational Studies. Subject to Clause 4.6, Licensee shall undertake any pharmacovigilance and observational studies set out in the Pharmacovigilance Agreement and any Phase IV Studies that may be required or it deems desirable for any Licensed Product. Licensee shall design and control such studies and bear their expenses and provide Oncolytics with a copy of such study protocols within thirty (30) days of internal protocol approval.

7.4 Promotional Materials. All promotional materials used by Licensee for Licensed Products shall comply with applicable Laws in the Territory, and shall be consistent with the positioning statements in the Sales and Marketing Plan. A physical as well as an electronic sample of each item of promotional material for use by the Licensee shall be provided to Oncolytics within thirty (30) days of approval by Licensee along with the applicable promotional regulations for the country where the promotional material is to be used.

7.5 Promotional Activities. All promotional activities enacted by Licensee for Licensed Products shall comply with applicable Laws in the Territory, and shall be consistent with the positioning statements in the Sales and Marketing Plan. A description of each planned promotional activity shall be provided to Oncolytics within thirty (30) days of approval by Licensee along with the applicable promotional regulations for the country where the activity is to take place.

8. DILIGENCE

8.1 General. Licensee shall use its Commercially Reasonable Efforts to perform its responsibilities and obligations under this Agreement with regard to the development and commercialization of the Licensed Product in each country and jurisdiction in the Territory.

8.2 Development and Regulatory Diligence. Licensee shall use Commercially Reasonable Efforts to develop, and to achieve Marketing Authorization for, the Licensed Product in each country and jurisdiction in the Territory. In performing such efforts, Licensee shall also observe GCP, safety standards and any other applicable Law relevant to the development of the Licensed Product in the Territory.

8.3 Compliance with Sales and Marketing Plans. Once Licensee receives Marketing Authorization for a Licensed Product, Licensee shall use Commercially Reasonable Efforts to market and sell the Licensed Product in each country in the Territory where it is approved consistent with the relevant Sales and Marketing Plan. By January 31 of each year after the First Commercial Sale of a Licensed Product in the Territory, Licensee shall inform Oncolytics of the results of its sales and marketing performance relating to the Licensed Product in the Territory for the prior year.

8.4 Satisfying Diligence. Licensee will be deemed to have failed to have met its diligence obligations under Clauses 8.2 and 8.3 in respect of Licensed Products in a particular calendar year if it fails to meet the targets for development activity and for promotional activity established in accordance with this Clause 8.4. [**]. The development activity target for the Licensed Product in the first full calendar year following Effective Date shall be based on the Development Plan. Licensee’s promotional activity target for Licensed Products during the first year after launch shall be based on the Sales and Marketing Budget approved by the JSC from time to time.

8.5 Sales Data. Within fifteen (15) Business Days after the end of each Quarter, Licensee shall provide to Oncolytics a report of all sales of each Licensed Product occurring in the Territory. In addition, within two (2) weeks after the end of each calendar month, Licensee shall provide to Oncolytics on a country-by-country basis IMS recorded sales of each Licensed Product by volume and value and market share percentage by volume and value.

8.6 Recordkeeping and Inspection. Licensee shall, and shall ensure that its respective Affiliates and permitted Sublicensees (if any) shall, maintain complete and accurate books and records in English to document the work done by it and its Affiliates and Sublicensees in connection with the development and commercialization of each Licensed Product under this Agreement. Such books and records shall be maintained and retained in accordance with all applicable Law. Such books and records shall be kept for at least six (6) years following the end of the calendar year to which such records relate. For the sole purpose of verifying compliance with the diligence

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*** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT.  CONFIDENTIAL PORTIONS OF THIS EXHIBIT ARE DESIGNATED BY [**].  A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

obligations set out in this Clause 8, Oncolytics shall be entitled, not more than once per calendar year, to have such books and records inspected by an internationally recognized independent accounting firm identified by Oncolytics and reasonably acceptable to Licensee. Oncolytics shall provide Licensee with thirty (30) days notice of such inspection, which shall be conducted during normal business hours at a single location, being Licensee’s principal place of business or such other place as may be agreed, where Licensee shall make available such records. Licensee shall make available to the independent accountant those books and records required for the purpose of that inspection. The results of such inspection shall be made available to Oncolytics, and the records and results of such audits shall be deemed Licensee’s Confidential Information except that Oncolytics shall be entitled to use the results of the inspection in any proceedings initiated pursuant to Clause 33 in the event that Oncolytics concludes that Licensee has failed to comply with the diligence obligations set out in this Clause 8. Oncolytics shall be responsible for the cost of the independent accountants’ services in connection with such audit; provided that Licensee shall reimburse Oncolytics for such costs if the results of the audit conclude (i) that it has understated the monies payable to Oncolytics by more than [**] or (ii) that there are material deviations from the diligence obligations. Any outstanding under-payments or over-payments which are identified as a result of carrying out the audit and certification shall be paid to or by Licensee within thirty (30) days after Oncolytics receives the audit results. No inspection shall take place more than [**] after the expiration of the term or termination of this Agreement.

8.7 Material Terms. Licensee’s obligations in this Clause 8 regarding Licensed Products in the Territory are material terms of this Agreement.

9. ADVERSE EVENTS AND PHARMACOVIGILANCE

9.1 Pharmacovigilance. Licensee and Oncolytics shall ensure that an appropriate system for pharmacovigilance activities is in place to assume responsibility and liability for Licensed Product in accordance with all relevant Law. It is the intention of the Parties that Licensee shall be responsible for and manage the collection, investigation and reporting of Adverse Events from the Territory to Oncolytics and the relevant Regulatory Authority and Oncolytics shall be responsible for the creation, maintenance and updating of a global safety database for each Licensed Product. Oncolytics may subcontract this responsibility in its discretion. The Parties shall comply with the provisions of the Pharmacovigilance Agreement in relation to the collection, investigation, reporting and exchange of safety data.

9.2 Responsibilities of the Qualified Person. Each Party shall designate a suitably-qualified person responsible for compliance with its pharmacovigilance obligations. The qualified person shall be responsible for: (i) the collection of Adverse Event reports for the Product reported to Licensee or Oncolytics (as the case may be) and their Affiliates; (ii) notification to Licensee and Oncolytics of such reports in accordance with the terms of the Pharmacovigilance Agreement; (iii) the timely submission of individual written reports to the relevant Regulatory Authority in compliance with applicable Law; (iv) the timely submission of Periodic Safety Update Reports; (v) answering pharmacovigilance related questions; and (vi) all notifications and communications with any Regulatory Authority related to pharmacovigilance, as appropriate or required by Licensee or Oncolytics.

10. FINANCIAL TERMS

10.1 Upfront Payment Obligations. In consideration of the research and clinical work conducted by Oncolytics regarding Licensed Products and the benefit Licensee will gain from using this as supporting material when filing for Marketing Authorizations in the Territory and in partial consideration of the grant of the rights to Licensee by Oncolytics, Licensee shall, in accordance with the provisions of Clause 11, pay to Oncolytics the sum of US$5,277,778 as follows:

10.1.1 within ten (10) business days after execution and delivery of this Agreement, US$1,055,556; and

10.1.2 within ninety (90) days after the Effective Date, US$4,222,222.

Under no circumstances shall this amount be refundable, creditable or returnable against any future monies payable under this Agreement.

10.2 Purchase of Warrants. By no later than the Effective Date, Oncolytics Biotech and Licensee shall enter into the Warrant Purchase Agreement.

10.3 Development and Regulatory Milestone Payments. Licensee shall, in accordance with the provisions of Clause 11, pay to Oncolytics the milestone payments set forth in this Clause 10.3 in respect of each Licensed Product within forty-five (45) days after the completion of certain development milestones, as set forth below:

i. [**];

ii. [**];

iii. [**];

iv. [**];

v. [**];

vi. [**]:

A. [**], or

B. [**];

vii. [**]:

A. [**], or

B. [**].

Under no circumstances shall any of the payments referred to in this Clause 10.3 be refundable, creditable or returnable against any future monies payable under this Agreement.

10.4 Sales Milestone Payments. Licensee shall, in accordance with the provisions of Clause 11, pay to Oncolytics the milestone payments set forth in this Clause 10.4 within thirty (30) days after the following milestones have been met:

(i) a one-time payment of [**] for the first time in which total Net Sales of Licensed Product across all jurisdictions in the Territory in any calendar year [**]; and

(ii) one-time payment of [**] for the first time in which total Net Sales of Licensed Product across all jurisdictions in the Territory in any calendar year reaches [**].

Under no circumstances shall any of the payments referred to in this Clause 10.4 be refundable, creditable or returnable against any future monies payable under this Agreement.

10.5 Running Royalties Payable by Licensee. Licensee shall, in accordance with the provisions of Clause 11, pay to Oncolytics as earned royalties on sales of all Licensed Product in each calendar year in the Territory, the following royalty payments:

10.5.1 for the first [**] of total Net Sales earned for Licensed Product sold in all jurisdictions in the Territory in a calendar year, Licensee shall pay Oncolytics a royalty at the rate of [**] of all such Net Sales; and

10.5.2 for any additional Net Sales earned for Licensed Product in the Territory in the same calendar year, Licensee shall pay Oncolytics a royalty at the rate of [**] of all such Net Sales.

10.6 Duration of Royalty Obligations. The royalties payable by Licensee to Oncolytics under Clause 10.5 in respect of a given Licensed Product shall be allocated [**] to the Oncolytics Patent Rights and [**] to the combined Licensed Clinical Data and Licensed Know How. For the convenience of the Licensee, the royalties payable by Licensee to Oncolytics under Clause 10.5 in respect of Licensed Product shall be reduced by [**] of the amounts payable under Clause 10.5 on a country-by-country basis on the later of: (i) the last to expire of any Oncolytics Patent Rights having at least one Valid Claim covering the manufacture, use, importation, or sale of Licensed Product in such country; or (ii) [**] after the date of the First Commercial Sale of Licensed Product in such country. The reduced royalty shall be payable in respect of the continued use of the Licensed Know How and the Licensed Clinical Data and as a reasonable manufacturing margin. The obligation to pay any royalty whatsoever in respect of a particular Licensed Product shall cease on a country-by-country basis on the later of:

10.6.1 [**] years after the relevant Licensed Product was placed on the market in that country; and

10.6.2 the expiration of all Regulatory Exclusivity covering such Licensed Product in the Field in such country.

10.7 Failure to Pay. Any breach by Licensee of its obligations to make payments under the terms of this Clause 10.7 when properly due and which is not cured within the time permitted in Clause 15.3 shall be a material breach of this Agreement.

10.8 Third Party Licenses. If the use, sale, offer for sale or import by Licensee of the Licensed Product in South Korea is determined by a court of competent jurisdiction to infringe Intellectual Property Rights owned by a Third Party, or if Licensee and Oncolytics agree that the use, sale, offer for sale or import by Licensee of the Licensed Product in South Korea would infringe Intellectual Property Rights owned by a Third Party, Licensee and Oncolytics shall attempt to obtain a license under such Third Party Intellectual Property Rights. If Licensee obtains a license under such Third Party Intellectual Property Rights, [**] of any payments made by Licensee to such Third Party shall be deductible from royalty payments due from Licensee to Oncolytics pursuant to Clause 10.5; provided, however, that in no event shall royalties payable to Oncolytics for Net Sales in South Korea be reduced by more than [**] as a result of all such deductions.

11. PAYMENT

11.1 Currency and Timing of Payments. All payments due to Oncolytics under this Agreement shall be made in US Dollars within the relevant period, or if no period is stipulated, within thirty (30) days of receipt of the relevant invoice. Each payment shall be accompanied by a written report that shall provide such information as is reasonably required by Oncolytics to permit an accurate determination of the amount payable. In the event that Licensee receives payment in respect of Net Sales in a currency other than US Dollars, the relevant royalties payable shall be calculated in US Dollars at the rate of exchange based on the average daily exchange rate calculated by averaging the closing daily rate between the country in which the Licensed Product was sold and the United States, as obtained from the Federal Reserve Bank of New York as set forth in the H.10 weekly statistical release of the Federal Reserve Board or equivalent successor, on the last day of the Quarter in which the royalties accrue. Payments shall be made by electronic wire transfer of immediately available funds directly to the account of Oncolytics designated below or to any other account which Oncolytics may specify by written notice.

Written confirmation of such transfer shall be sent by Licensee at the time of the transfer to the Chief Financial Officer of Oncolytics at the address provided below, or to such other individual/address as may be designated by written notice.

Address of Oncolytics: 210, 1167 Kensington Crescent NW

Calgary, AB, Canada T2N 1X7

11.2 Manner of Payment. For the first two (2) years following First Commercial Sale, the royalties provided for in Clauses 10.5 shall be paid semi-annually in respect of all Licensed Products sold within the relevant period and thereafter the royalties provided for in Clauses 10.5 shall be paid quarterly in respect of all Licensed Products sold within the relevant Quarter. The royalties shall be paid to Oncolytics within thirty (30) days of the end of the relevant period in which the relevant sale is made. Each such payment shall be accompanied by a self-invoicing statement setting out the Net Sales of Licensed Products during the relevant period and a written report that shall provide such information as is reasonably required by Oncolytics to permit an accurate determination of the amount payable.

11.3 Taxes. Licensee shall use its best efforts to obtain a waiver from the relevant taxing governmental authority in the PRC of any obligation to withhold or pay any withholding or other taxes (including without limitation any value-added taxes) on behalf of Oncolytics in relation to amounts payable to Oncolytics under this Agreement. Each Party shall furnish the other Party with appropriate documents to secure application of the most favorable rate of withholding or other tax under applicable Law. In the event that Licensee is required by Law to withhold or pay any taxes (including without limitation any value-added taxes) on behalf of Oncolytics (such amount, the “Tax Withholding Amount”) with respect to any payments to Oncolytics hereunder and is unable to obtain any waiver therefrom (in whole or in part), [**]

11.4 Interest. Where Oncolytics does not receive payment of any sums properly due and payable to it hereunder within the relevant period, interest shall accrue on the sum due and owing at the rate equivalent to an annual rate of eight percent (8%) over the then current base rate of LIBOR, calculated on a daily basis, without prejudice to Oncolytics’ right to receive payment within the relevant period.

11.5 Record Keeping and Audit. Licensee shall, and shall ensure that its respective Affiliates and permitted licensees (if any) shall, keep true and accurate records and books of account in accordance with US GAAP and containing all data necessary for the calculation of the amounts payable to Oncolytics pursuant to this Agreement. Such records and books of account shall be kept for at least three (3) years following the end of the term of this Agreement. For the sole purpose of verifying amounts due under this Agreement, during the term of this Agreement and for three (3) years thereafter, Oncolytics shall have access to and the right to examine such relevant records and accounts that Licensee is required to maintain pursuant to this Clause 11.5 at Licensee’s premises and the right to have any statement that it receives from Licensee audited by an internationally-recognized independent accounting firm identified by Oncolytics and reasonably acceptable to Licensee. Oncolytics shall provide Licensee with at least fifteen (15) business days notice of such audit, which shall be conducted during normal business hours at the location(s) where Licensee maintains such records. All audits shall be conducted in accordance with U.S. Generally Accepted Auditing Standards. Licensee shall make available to the independent accountant those books and records required for the purpose of that audit and certification, and the statements so certified shall be final and binding between the Parties. Full details, including the results, of such audit shall be made available to Licensee, and the records and results of such audits shall be deemed Licensee’s Confidential Information. Oncolytics shall be responsible for the cost of the independent accountants’ services in connection with such audit; provided that Licensee shall reimburse Oncolytics for such costs if the results of the audit conclude that it has understated the monies payable to Oncolytics by more than five percent (5%). Any outstanding under-payments or over-payments which are identified as a result of carrying out the audit and certification shall be paid to or by Oncolytics within thirty (30) days after Licensee receives the audit results. No inspection shall take place more than six (6) years after the submission of the annual statement to which it relates.

12. OWNERSHIP OF INTELLECTUAL PROPERTY

12.1 Excluded IP. Except for those rights expressly granted under this Agreement, nothing herein shall be construed as creating, granting or conveying to one Party any license, rights, title or other interest in or to any intellectual property rights and Know How owned or controlled by the other Party or its Affiliates: (i) existing prior to the Effective Date; or (ii) independently discovered and developed during the term of this Agreement by such other Party or its Affiliates other than in performance of its obligations under this Agreement and without use of such other Party’s intellectual property rights, Research Materials, Know How or other Confidential Information.

12.2 Inventions. Ownership of all rights, title and interest in and to any Inventions shall be as follows:

12.2.1 Oncolytics or its Affiliates shall have exclusive ownership of all Oncolytics Inventions;

12.2.2 Licensee shall have exclusive ownership of all Licensee Inventions; and

12.2.3 [**].

Inventorship of Inventions shall be determined for the purposes of this Clause 12.2 in accordance with the applicable patent Laws of the United States of America. [**].

12.3 [**].

12.4 Licensee and Cooperation with Respect to Inventions. Each Party shall promptly inform the other of all Inventions arising during the term of this Agreement. Each Party shall have the right to file for patent protection on any Invention that it owns pursuant to Clause 12.2 and each of the Parties agrees to undertake such acts as may be reasonably necessary to perfect the Parties respective rights, title and interests in and to Inventions as provided for in Clause 12.2 (including, without limitation, any patent applications or patents filed during or after the term of this Agreement to protect such Inventions in or outside the Territory), which shall include ensuring that the filing Party has reasonable and timely access to any employees or consultants of the other Party who were involved in the research leading to such Inventions to, amongst other things, establish inventorship and determine the scope and patentability of the relevant inventions and causing the execution of any assignments or other documents necessary to perfect each Party’s interests in such Inventions. The Party filing patent applications for Joint Inventions shall do so in the name of and on behalf of both Licensee and Oncolytics or their respective designees. Each of Licensee and Oncolytics shall hold all information it presently knows or acquires under this Clause 12.4 that is related to all such patents and patent applications as confidential, subject to the provisions of this Agreement.

12.5 Patent Term Extension. Oncolytics shall have the right to obtain patent term extensions in or outside the Territory including supplementary protection certificates relating to Licensed Products that are solely invented by Oncolytics in the Territory and to select which patent or basic patents and in which jurisdiction are used for such extensions. Licensee agrees to cooperate with Oncolytics in the filing for such applications and to do all such acts, provide and sign all documents or copies thereof which may be reasonably necessary or desirable for the filing of any application for patent term extension relating to Licensed Products in the Territory.

12.6 Ownership of Clinical Data. [**]

13. MANAGEMENT OF PATENT RIGHTS

13.1 Prosecution, Maintenance and Defense of Patent Rights. Oncolytics shall be responsible for, and undertake (whether itself, through Affiliates or Third Parties), the filing, prosecution, defense and maintenance of any patent applications relating to the Oncolytics Patent Rights.

13.2 Abandonment of Patent Rights by Oncolytics. If Oncolytics, during the term of this Agreement, determines in its sole discretion to abandon or not maintain any Oncolytics Patent Rights applicable to a Licensed Product in the Territory, then Oncolytics shall, subject to any Third Party rights existing at the relevant time, provide Licensee with prior written notice in advance of any abandonment to enable Licensee, at Licensee’s expense, to prosecute and maintain such Patent Rights in the Territory on behalf of Oncolytics and in Oncolytics’ name and assume the prosecution or maintenance on behalf of Oncolytics.

13.3 Inventions: Licensee Patent Filing. Licensee shall have the first right, at its cost, to prepare, file, prosecute, maintain and extend patent applications and patents concerning all Licensee Inventions throughout the world. Licensee shall solicit Oncolytics’ advice and review of the nature and text of any such patent applications to the extent such are related to Licensed Products and important prosecution matters related thereto in reasonably sufficient time prior to filing thereof, and Licensee shall take into account Oncolytics’ reasonable comments related thereto. If Licensee, prior or subsequent to filing patent applications on any Licensee Inventions anywhere in the world elects not to file, prosecute or maintain any patent application relating to a Licensed Product or any subject-matter of an Oncolytics Invention or ensuing patents or subject matters encompassed by such patent applications or ensuing patents in any country of the world or Territory, as the case may be, Licensee shall give Oncolytics notice thereof within a reasonable period prior to allowing such patent applications or patents or such subject matters encompassed by such patent applications or patents to lapse or become abandoned or unenforceable, and Oncolytics shall thereafter have the right, at its sole expense, to prepare, file, prosecute and maintain patent applications and patents or divisional, provisional, continuation, continuation-in-part, re-examination, reissue applications or similar applications related to such subject matters encompassed by such patent applications or patents concerning all such Inventions in such country in Licensee’s name.

13.4 Inventions: Oncolytics Patent Filing. Oncolytics shall have the first right, at its cost, to prepare, file, prosecute, maintain and extend patent applications and patents concerning all Oncolytics Inventions and Joint Inventions throughout the world. Oncolytics may solicit Licensee’s advice and review of the nature and text of any such patent applications to the extent such are related to a Licensed Product and important prosecution matters related thereto in reasonably sufficient time prior to filing thereof, and Oncolytics shall take into account Licensee’s reasonable comments related thereto. If Oncolytics, prior or subsequent to filing patent applications on any Oncolytics Inventions relating to a Licensed Product anywhere in the Territory or a Joint Invention relating to Licensed Product anywhere in the Territory elects not to file, prosecute or maintain such patent applications or ensuing patents or subject matters encompassed by such patent applications or ensuing patents in any country of the world or outside the Territory, as the case may be, Oncolytics shall, subject to any Third Party rights existing at the Effective Date, give Licensee notice thereof within a reasonable period prior to allowing such patent applications or patents or such subject matters encompassed by such patent applications or patents to lapse or become abandoned or unenforceable, and Licensee shall thereafter have the right, at its sole expense, to prepare, file, prosecute and maintain patent applications and patents or divisional applications related to such subject matters encompassed by such patent applications or patents concerning all such Inventions in such country in Oncolytics’ name for Oncolytics Inventions and in Oncolytics and Licensee’s joint names for Joint Inventions.

13.5 Notification of Infringement. Each Party shall promptly notify the other Party of any actual or potential infringement of any Licensed Patent Rights by a Third Party in the Territory which comes to that Party’s attention during the term of this Agreement. Each Party shall promptly notify the other Party upon receiving notification that any Licensed Patent Right in the Territory is subject to a declaratory judgment action alleging non-infringement, invalidity or unenforceability.

13.6 Infringement in Territory. In the Territory, Oncolytics shall have the initial right, but not the obligation, using counsel of its choice at its own cost to enforce the Licensed Patent Rights in the Field or defend any declaratory action with respect thereto. Oncolytics shall have sole control of any decisions or other aspects of the action, subject to Clause 13.7, and Licensee shall, upon request, give Oncolytics such reasonable assistance as Oncolytics may reasonably request, including by signing or executing any necessary documents and consenting to its name being used in the proceedings; provided that Oncolytics shall reimburse Licensee for any reasonable out-of-pocket expenses incurred while providing such assistance and provide an indemnity in respect of any costs order made against Licensee by reason of lending its name to the proceedings. In this circumstance, Oncolytics shall reimburse Licensee for any reasonable out-of-pocket expenses incurred while providing such assistance, provided that Licensee provides written evidence to support such expenses. Oncolytics shall keep Licensee reasonably informed of the progress of the action and shall consider the comments and observations of Licensee in prosecuting the action. If Oncolytics does not institute any such action within ninety (90) days of a notice from Licensee requiring such action, then Licensee shall have the right, but not the obligation, at its own cost, to commence proceedings in the Territory regarding the infringement or declaratory judgment action, Licensee shall, subject to Clause 13.7, have sole control of any decisions or other aspects of the action and Oncolytics shall, upon request, give to Licensee such reasonable assistance as Licensee may reasonably request provided that Licensee shall reimburse Oncolytics for any reasonable out-of-pocket expenses incurred while providing such assistance and that nothing in this Clause 13.6 shall oblige Oncolytics to lend its name to, or be joined in, any proceedings commenced by Licensee pursuant to the foregoing, save for cases involving Joint Patents. In the event that Oncolytics determines not to exercise its rights under this Clause 13.6, Licensee shall have the right, but not the obligation, at its own cost, to commence proceedings in the Territory to enforce the Licensed Patent Rights in the Field or defend any declaratory judgment action with respect thereto, provided that Licensee shall notify Oncolytics in writing of its exercise of such rights as soon as commercially practicable and shall keep Oncolytics promptly informed of any material updates regarding such action. Licensee also have the right, but not the obligation, at its own cost, to commence proceedings in the Territory regarding the infringement or declaratory judgment action without informing Oncolytics in advance where the infringement may cause Licensee irreparable damage or there is an emergency. If it is reasonably necessary for Licensee to add Oncolytics as a party plaintiff in any action or proceeding commenced by Licensee, Licensee shall indemnify Oncolytics against any and all costs and expenses incurred as a result.

13.7 Settlement. In no case shall Licensee, without the prior written consent of Oncolytics, make any admission or enter into a settlement, consent to judgment or other voluntary final disposition in connection with any such proceedings under this Clause 13 that: (i) extends, or purports to exercise, Licensee’s rights under any Licensed Patent Rights or Know How beyond the rights granted pursuant to this Agreement; (ii) makes any admission regarding wrongdoing by Oncolytics, an Affiliate or any licensee, or the invalidity, unenforceability or absence of infringement of any Licensed Patent Rights; (iii) subjects Oncolytics to an injunction or other equitable relief; or (iv) obligates Oncolytics to make a monetary payment; in all cases without the prior written consent of Oncolytics, which consent shall not be unreasonably withheld or delayed. Similarly, in no case may Oncolytics enter into any settlement or consent judgment or other voluntary final disposition that: (a) limits Licensee’s rights under this Agreement other than as expressly stated herein; (b) makes any admission regarding wrongdoing on the part of Licensee, an Affiliate or Sublicensee; (c) subjects Licensee to an injunction or other equitable relief; or (d) obligates Licensee to make a monetary payment; in all cases without the prior written consent of Licensee, which consent shall not be unreasonably withheld or delayed.

13.8 Recovery. Any damages or award (including any award of costs) made in any proceedings referred to in this Clause 13 shall be used first to reimburse each Party for any costs or expenses that it may have incurred in connection with the infringement proceedings (including without limitation, any amounts paid by the Party bringing the action to the other Party as reimbursement for expenses related to assisting in the proceedings) and any remaining amounts shall be retained by the Party to which they were awarded, save that any award paid to Licensee with respect to the Territory shall, following reimbursement of costs and expenses in accordance with the foregoing, be treated as Net Sales and royalties shall be paid on it to Oncolytics accordingly.

13.9 Interferences and Other Proceedings. In the event that any Third Party interference, invalidation, infringement or opposition proceedings are commenced in the Territory against one of the Parties with respect to Licensed Patent Rights, or that a Party considers it desirable to contest interference proceedings with a Third Party in respect to such Patent Rights or to seek a declaration of non-infringement with regard to Licensed Product under any Third Party patent rights, the Parties shall consult with each other with a view to agreeing the strategy to be adopted. To the extent that the validity, existence, inventorship or ownership of any of the Licensed Patent Rights is in issue in such proceedings, Oncolytics shall have the sole control of decisions and proceedings directly relating to those issues and Licensee, at its own cost, shall give Oncolytics such reasonable assistance as Oncolytics may reasonably request in the defense of such claims. The cost of any such proceedings shall be borne by Oncolytics.

13.10 Notice or Infringement Claims. If during the term of this Agreement any Party receives any notice of a Claim from any Third Party alleging infringement of that Third Party’s intellectual property by reason of manufacture, promotion, use or sale of Licensed Product, the Party receiving that notice shall, subject to any obligation of confidentiality that it may owe to a Third Party, forthwith notify the other Party of the Claim.

13.11 Product Marking. The Parties agree that, except where expressly prohibited by applicable Law or to the extent not commercially reasonable, Licensed Product, its packaging or both where appropriate shall bear the words “Patent Pending” together with the numbers of relevant patents granted in the country where Licensed Product is to be sold having one or more Valid Claims of any Licensed Patent Rights.

14. TRADEMARKS

14.1 Ownership of Marks. Nothing in this Agreement shall operate to grant to Oncolytics any rights, title or interest in and to any Licensee House Mark nor authorize Oncolytics to affix any Licensee House Mark to any product except as expressly authorized by Licensee in writing. Nothing in this Agreement shall operate to grant to Licensee any rights, title or interest in any Trademark belonging to Oncolytics nor to affix any Trademark belonging to Oncolytics to any product except as expressly authorized by Oncolytics in writing or as provided in Clauses 14.3 and 14.4.

14.2 Ownership of Licensed Product Marks. The Parties acknowledge and agree that each Licensed Product Mark shall be applied for, and registered in the name of, Oncolytics and shall be owned by Oncolytics. Upon request by Oncolytics and at Oncolytics’ expense, Licensee shall undertake such acts as may be reasonably necessary to assign to Oncolytics or to otherwise perfect Oncolytics’ rights, title and interests in and to any Licensed Product Marks. Licensee agrees that any goodwill arising through the use of any Licensed Product Mark by Licensee in the Territory shall inure solely to the benefit of, and vest exclusively in, Oncolytics.

14.3 Use of Licensed Product Marks. Licensee may use such Licensed Product Marks as are agreed by the Parties in writing in connection with the sale, use, marketing and promotion of Licensed Products in the Territory; provided that:

14.3.1 any Licensed Product Mark may be used only on the relevant Licensed Product and on no other products whatsoever; and

14.3.2 whenever a Licensed Product Mark is affixed to a Licensed Product it shall be accompanied by wording or clear marking by the use of the ® symbol to show where appropriate that the Licensed Product Mark in question has been registered as a trademark and in other cases by the suffix TM, however, the foregoing does not apply to regulatory filings or correspondence with Regulatory Authorities.

14.4 Registration of Licensed Product Marks. Oncolytics shall take all reasonable steps to register in Oncolytics’ name the Licensed Product Marks at the relevant national trade mark offices and to maintain any such registration, including but not limited to paying all renewal fees, to keep its registration particulars up-to-update, to file for any necessary application for recording any trademark license for use of the Licensed Product Mark granted under this Agreement, in the Territory at its own expense to maintain the validity of the Licensed Product Marks. The Parties agree to consider any difficulties or issues that arise in the registration of any Licensed Product Mark in the Territory and to give the other all reasonable assistance in filing, prosecuting and maintaining a Licensed Product Mark, including in the provision of evidence for the validity and registrability of the Licensed Product Mark. Oncolytics hereby grants to Licensee the right to place the relevant Licensed Product on the market under the relevant Licensed Product Mark in the Territory.

14.5 Infringement of Licensed Product Marks. In the event that either Party becomes aware of any actual or threatened infringement or misappropriation of any Licensed Product Mark by a Third Party in the Territory, that Party shall promptly inform the other of such infringement, and the Parties shall consult with each other in good faith to determine jointly the best way to prevent the infringement, including, without limitation, by instituting a legal proceeding against such Third Party. Licensee shall have the sole right, at its own cost, to defend and enforce the Licensed Product Mark in the Territory and shall take such steps as it considers appropriate in the enforcement of the Licensed Product Mark, or in respect of any actual or threatened infringement of any Licensed Product Mark in the country in question. If Licensee elects not to take any action which Oncolytics considers appropriate within thirty (30) days of being requested to do so by Oncolytics, Oncolytics shall have the right, at its own cost, to bring proceedings in its own and Licensee’s name in respect of such infringement. The Party bringing proceedings in accordance with the foregoing shall have sole control of any decisions or other aspects of the action, subject to Clause 14.7, and the other Party shall, upon request, give to the prosecuting Party such reasonable assurances as the prosecuting Party may reasonably request, including by signing or executing any necessary documents and consenting to its name being used in the proceedings; provided that the prosecuting Party shall reimburse the other Party for any reasonable out-of-pocket expenses incurred while providing such assistance. The prosecuting Party shall keep the other Party reasonably informed of the progress of the action and shall consider the comments and observations of the other Party in prosecuting the action.

14.6 Recovery in respect of Infringement of Licensed Product Marks. Any and all amounts recovered with respect to infringement, unfair competition, passing off or misappropriation action brought by Oncolytics or Licensee under Clause 14.5 shall be applied first to reimburse the Parties for their out-of-pocket expenses (including attorneys’ fees) in prosecuting such action, or pro rata portions thereof if such expenses exceed the amount recovered. The remainder shall be divided between the Parties as follows: if the action concerns an Licensed Product Mark, with [**] going to the Party that funded the action and [**] going to the other Party.

14.7 Settlements. In the event that any action or suit shall be brought against Oncolytics or Licensee in connection with the Licensed Product Marks for alleged infringement, unfair competition, passing off or misappropriation of a Third Party’s Trademark, neither Oncolytics nor Licensee shall, without the prior written consent of the other Party, enter into a settlement agreement that will restrict or limit the rights to the Licensed Product Mark granted to Licensee hereunder.

15. TERMINATION

15.1 Term of Agreement. This Agreement shall come into effect on the Effective Date and terminate and be terminable only in accordance with this Clause 15.

15.2 Termination by Oncolytics for Patent Challenge. To the extent permitted by applicable Law, Oncolytics may terminate this Agreement on thirty (30) days notice if Licensee, directly or indirectly, challenges or contests or assists a Third Party to challenge or contest the validity of any of the Licensed Patent Rights, except for a challenge or contest by Licensee if Oncolytics has infringed the Patent Rights and Know-How of Licensee.

15.3 Termination for Breach. Either Oncolytics on the one hand or Licensee on the other hand (the “Terminating Party”) shall have the right to terminate this Agreement in accordance with the following provisions of this Clause 15.3 in the event that Licensee or Oncolytics, respectively, commits a material breach of this Agreement, including material breach of a Development Plan, or any Related Agreement. The non-breaching Party shall provide written notice to the Party that committed the breach (the “Defaulting Party”), which notice shall clearly describe the nature of the breach. The Defaulting Party shall have ninety (90) days to cure the breach. If the Defaulting Party fails to cure the breach within such ninety (90) day period, then the Agreement shall terminate effective on the expiry of the relevant cure period. The foregoing notwithstanding, the cure period for breach by the Defaulting Party of an obligation to make a payment when properly due pursuant to Clause 11.1 shall be thirty (30) days; provided, however, [**].

15.4 Insolvency. Either Party shall have the right to terminate this Agreement forthwith upon giving written notice of termination to the other Party (the “Insolvent Party”) upon the occurrence of any of the following events:

15.4.1 the Insolvent Party suspends or threatens to suspend payment of its debts as they fall due in circumstances where the Insolvent Party is unable to pay its debts within the meaning of the relevant bankruptcy or insolvency laws;

15.4.2 the failure to discharge or dismiss a petition for the winding-up of the Insolvent Party within sixty (60) days after the filing thereof;

15.4.3 a proposal is made or a nominee or supervisor is appointed for a composition in satisfaction of the debts of the Insolvent Party or a scheme or voluntary arrangement of its affairs within the meaning of the relevant bankruptcy or insolvency laws, or the Insolvent Party enters into any composition or voluntary arrangement for the benefit of its creditors, or proceedings are commenced in relation to the Insolvent Party under any Law relating to the re-construction, deferment or re-adjustment of all or substantially all of the Insolvent Party’s debts;

15.4.4 the Insolvent Party takes any action, or any legal proceedings are started whether by a Third Party or not, for the purpose of the winding up or dissolution of the Insolvent Party, other than for a solvent reconstruction or amalgamation;

15.4.5 the appointment of a liquidator, trustee, receiver, administrative receiver, receiver and manager, interim receiver custodian, sequestrator or similar officer, in respect of all or a substantial part of the assets of the Insolvent Party;

15.4.6 an effective resolution being passed for the winding-up of the Insolvent Party;

15.4.7 a distress, execution or other legal process being levied against all or substantially all of the assets of the Insolvent Party, and not being discharged or paid out in full within ten (10) Business Days;

15.4.8 the occurrence in respect of the Insolvent Party of any event in any jurisdiction to which it is subject having an effect similar to that of any of the events referred to in Clauses 15.4.1-15.4.7 above; or

15.4.9 the Insolvent Party ceases or threatens to cease to carry on all or a substantial part of its business or operations necessary for the completion of its obligations under this Agreement.

15.5 Competing Product Divestment. In the event Licensee or an Affiliate of Licensee consummates a corporate transaction (whether by way of asset acquisition or share acquisition) that results in Licensee or an Affiliate of Licensee acquiring rights (whether by way of corporate transaction, ownership or license) from a Third Party to develop, import, market, manufacture, promote, distribute, offer for sale or sell any therapy based on oncolytic viruses selectively replicating in cancer cells in the Field in any country in the Territory (an “Acquired Competing Product”), [**].

16. CONSEQUENCES OF TERMINATION

16.1 Upon a termination of this Agreement:

16.1.1 Termination of Rights. All of the rights of Licensee under this Agreement shall terminate upon the Termination Date.

16.1.2 Intellectual Property After Termination. If this Agreement has been terminated by Oncolytics pursuant to Clause 15.3 (breach of this Agreement by Licensee), Clause 15.4 (insolvency of Licensee) or Clause 15.2 (patent challenge by Licensee), Licensee shall grant Oncolytics a non-exclusive, fully-paid-up license with the right to grant sublicenses in and to any Patent Rights or Know-How controlled by it which are necessary for the development, manufacturing or commercialization of Licensed Products for the purpose of the further development and exploitation of Licensed Products. The Parties shall continue to be obliged to continue providing the support and assistance in relation to any litigation concerning infringement of Patent Rights or infringement of Licensed Product Marks in the relevant country in the Territory that had been initiated pursuant to Clauses 13 and 14 prior to the Termination Date and not settled as of the Termination Date. Licensee shall have no further obligation to pay for, or support, filing, prosecutions, maintenance or defense of Patent Rights or Licensed Product Marks in the relevant country in the Territory as set out in Clauses 13 and 14.

16.1.3 Licensed Product Marks After Termination. To the extent not already done under the terms of Clause 14.2, Licensee shall assign to Oncolytics, free of all encumbrances all of its, and its Affiliates, distributors and sub-licensees (if any) interest in and to any Licensed Product Marks in the relevant country in the Territory within thirty (30) days of termination of this Agreement.

16.1.4 Supplies of Products After Termination. Licensee and its Affiliates and permitted Sublicensees shall have the right, for a period of up to [**] following such termination, to sell (in the Field and in the relevant country in the Territory) stocks of Licensed Product in its possession at the time of such termination (for which a Marketing Authorization in the Field in the relevant country in the Territory has been approved prior to such termination), subject to all applicable payment and other related obligations in this Agreement. Upon expiration of such [**] period, Licensee shall deliver up to Oncolytics or its designee in the Territory, at the breaching Party’s cost, any and all remaining quantities of any Licensed Product in its possession or control.

16.1.5 Clinical Studies After Termination. Licensee has the right, but not the obligation, to decide whether to complete (in accordance with the established protocols) any Clinical Studies on Licensed Product that were commenced prior to the termination of this Agreement. Commencement shall mean the point at which the first study subject has been dosed with Licensed Product. Should Licensee decide to terminate or cease to proceed with a Clinical Study that has already commenced, Licensee shall comply with all applicable Laws, including, without limitation, current good laboratory practices, Good Clinical Practice and safety standards in connection with such termination or cessation.

16.1.6 Transfer of Regulatory Approvals After Termination. If this Agreement has been terminated by Oncolytics pursuant to Clause 15.3 (breach of this Agreement by Licensee), Clause 15.4 (insolvency of Licensee) or Clause 15.2 (patent challenge by Licensee), Licensee shall, to the extent permitted by applicable Law, promptly transfer, to Oncolytics or to its designee, all Regulatory Approvals relating to each Licensed Product in the relevant country in the Territory, together with any applications for Regulatory Approvals (including BLAs or other such applications, as well as all existing and planned INDs, approvals to develop, market and sell Licensed Products, pricing approvals and other similar regulatory filings in the relevant country in the Territory with respect to any Licensed Product) together with all documents relating thereto and all Regulatory Confidential Information. All such transfers shall be completed in accordance with applicable Laws. In the event that such a transfer is not possible, Licensee shall use reasonable endeavors to ensure that Oncolytics or its designee has the benefit of the existing Regulatory Approvals and applications for the same for Licensed Products in the Territory, including, without limitation, granting Oncolytics or its designees rights to cross-reference the data and information on file with Regulatory Authorities in the relevant country in the Territory as may be necessary to facilitate the granting of separate Regulatory Approvals to Oncolytics. If this Agreement has been terminated by Licensee pursuant to Clause 15.3 (breach of this Agreement by Oncolytics) or Clause 15.4 (insolvency of Oncolytics), Licensee has the right to maintain all the aforesaid approvals and Oncolytics shall compensate all the cost of applying for the aforesaid approvals and damages.

16.1.7 Return of Confidential Information After Termination. Upon termination for any reason, Licensee shall, at Oncolytics’ option, either return to Oncolytics all tangible Confidential Information disclosed to Licensee by or on behalf of Oncolytics (including all copies thereof) or destroy under oath such Confidential Information; provided that Licensee shall have the right to retain one (1) copy of the Confidential Information in a secure location solely for purposes of identifying its confidentiality obligations under Clause 17. Upon termination by Licensee pursuant to Clause 15.3 or 15.4, Licensee shall use reasonable endeavors to delete all electronic copies of such Confidential Information from its systems. Upon termination, Oncolytics shall, at Licensee’s option, either return to Licensee all tangible Confidential Information disclosed to Oncolytics by or on behalf of Licensee (including all copies thereof) or destroy such Confidential Information; provided that Oncolytics shall have the right to retain one (1) copy of the Confidential Information in a secure location solely for purposes of identifying its confidentiality obligations under Clause 17. Oncolytics shall use reasonable endeavors to delete all electronic copies of such Confidential Information from its systems.

16.1.8 Return of Virus Seed Banks. Upon termination for any reason, Licensee shall, at Oncolytics’ option, either destroy or return to Oncolytics all master and working virus seed banks provided to Licensee by or on behalf of Oncolytics.

16.1.9 Provision of Promotional and Marketing Materials, Information and Records After Termination. Licensee shall provide to Oncolytics a copy of all promotional and marketing materials used in the promotion of Licensed Products (including the Licensed Product) together and hereby grants a license to Oncolytics in the Territory, effective as of the date of termination, to use and create any such materials, copies or derivative works thereof in Oncolytics’ promotion of Licensed Products; provided that such license does not extend to use of any tradename, Trademark or service mark of Licensee. Oncolytics shall be entitled to sublicense such rights to any Third Party it grants the right to market Licensed Products in the Territory.

16.1.10 Distribution Services After Termination. Licensee shall, at Oncolytics’ request provide distribution services to Oncolytics in relation to Licensed Products for such period as Oncolytics determines (but in any event to be no more than six (6) months). Licensee shall provide the distribution services through the same channels as it distributed Licensed Products prior to the termination of this Agreement and to the same standard as it applied prior to the termination of this Agreement. Oncolytics shall pay Licensee an amount equal to [**] of its net sales of such Licensed Product in the relevant country in the Territory (calculated on the same basis as set out in the Net Sales definition set out above) in consideration of the provision of these services.

16.2 Accrued Rights. The expiration or earlier termination of this Agreement for whatever reason shall not affect any rights or obligations of the Parties arising in any way out of this Agreement which are accrued prior to the Termination Date, including, without limitation, the right to recover damages against the other Party for any breach of this Agreement occurring prior to such termination.

16.3 Surviving Clauses. In the event of expiry or termination of this Agreement for any reason the provisions of Clauses 1, 8.6, 9, 11.3, 11.4, 11.5, 12.1-12.4, 12.6, 15, 17, and 19-33 shall remain in full force and effect.

16.4 Related Agreements. The Supply Agreement shall terminate on the same date as termination of this Agreement subject to the provisions of the Supply Agreement dealing with the consequences of termination. The Pharmacovigilence Agreement shall survive pursuant to its own terms after termination of this Agreement.

17. CONFIDENTIALITY

17.1 Confidential Information. Prior to the Effective Date and during the term of this Agreement, each Party (the “Disclosing Party”) may disclose or make available to the other Party (the “Receiving Party”) confidential materials and information, either orally or in writing, related to its products, technology, research plans, testing protocols, formulations, business methods and practices, information about the expertise of employees and consultants, other technical, business, financial, customer and product development plans, training materials and methods of training, identity and location of existing and prospective customers, supplier information, forecasts, strategies and similar information, financial information, inventions, processes, Know How, methods, products, patent applications, specifications, drawings, sketches, models, samples, designs, ideas, technical information, and all other confidential business information and trade secrets, including without limitation the Research Materials defined in Clause 5.1 of this Agreement (the “Confidential Information”). This Agreement shall supersede the confidentiality agreement entered into by the Parties on July 4, 2017, and any and all confidential information that was disclosed by a Party to the other Party thereunder shall be deemed to be Confidential Information of the Disclosing Party under this Agreement. All Clinical Data shall be treated as the Confidential Information of and disclosed by Oncolytics notwithstanding that it may have been generated and disclosed by Licensee. Any and all Confidential Information is and shall remain the property of the Disclosing Party.

17.2 Confidentiality Obligations. Each Party undertakes and agrees that except as otherwise expressly permitted pursuant to this Agreement it shall not, and shall ensure that its Affiliates do not, disclose or permit to be disclosed to any Third Party (other than Agents of the Receiving Party or its Affiliates), or use or permit the use for any purpose other than in performance of its obligations under this Agreement, any of the other Party’s Confidential Information. The obligations of confidentiality and non-use set forth in this Clause 17.2 are subject to the exceptions set forth in Clause 17.4 and shall otherwise remain in effect during the term of this Agreement and for a period of fifteen (15) years after the expiration or earlier termination of this Agreement.

17.3 Internal Disclosure of Confidential Information. The Receiving Party shall ensure that the Disclosing Party’s Confidential Information is only disclosed or made available to those of its and its Affiliates’ officers, directors, employees, agents and consultants (collectively “Agents”) who are directly concerned with the performance or exercise of one or more of such Party’s rights or obligations under this Agreement and who have a genuine operational need to know. The Receiving Party shall inform its Agents, prior to any such disclosure, of the confidential nature of the Disclosing Party’s Confidential Information, and shall be responsible for any breach of these confidentiality provisions by its Agents.

17.4 Exceptions. The Receiving Party’s confidentiality and non-use obligations under this Clause 17.4 shall not extend to any of the Disclosing Party’s Confidential Information which:

17.4.1 is at the time of disclosure, or thereafter becomes, generally available to the public other than by reason of a breach by the Receiving Party of the provisions of this Clause 17.4.1; or

17.4.2 is known to the Receiving Party prior to its receipt from the Disclosing Party, as can be shown by written record; or

17.4.3 is lawfully disclosed to the Receiving Party by an independent Third Party without obligations of confidence to the Disclosing Party; or

17.4.4 is independently developed by the Receiving Party or its Affiliates without the application, aid or use of the Disclosing Party’s Confidential Information, as demonstrated by the Receiving Party’s written records.

17.5 Disclosure Required by Law. If the Receiving Party is compelled by a court, government regulatory agency or requirement of a stock exchange to disclose any Confidential Information, the Receiving Party will provide the Disclosing Party with prompt written notice in order to permit the Disclosing Party to seek a protective order, or other appropriate remedy, or to waive compliance with the provisions of this Agreement. If such a protective order or other remedy is not obtained or compliance is not waived, the Receiving Party will furnish only that portion of the Confidential Information required by the court, government regulatory agency or stock exchange requirement.

17.6 Permitted Use and Disclosures. The Receiving Party may disclose the Disclosing Party’s Confidential Information to Regulatory Authorities to the extent that such disclosure is reasonably necessary to exercise any rights under this Agreement to develop, manufacture or commercialize Licensed Products in the Field in the Territory. Further, a Party may disclose (a) the existence and terms of this Agreement to existing or potential investors or acquirers or merger partners, or to professional advisors (e.g., attorneys, accountants and prospective investment bankers) involved in such activities, for the limited purpose of evaluating such investment or transaction and under appropriate conditions of confidentiality, only to the extent reasonably necessary and (b) the existence and terms (other than financial terms) of this Agreement to actual or bone fide potential Sub-licensees (in the case of disclosure by Licensee) or actual or bone fide potential licensees in the case of Oncolytics, in each of cases (a) and (b) above with the agreement by these permitted persons to maintain such Confidential Information in strict confidence.

18. WARRANTIES

18.1 Warranties. Each Party hereby represents and warrants to the other Party that, as of the Effective Date:

(i) it is duly organized and validly existing under the Laws of its place of incorporation;

(ii) it has legal power, authority and right to enter into this Agreement;

(iii) the execution and performance by it of its obligations hereunder will not constitute a breach of, or conflict with, its organizational documents nor any other material agreement or arrangement, whether written or oral, by which it is bound;

(iv) it has full corporate power and authority and has taken all corporate action necessary to enter into and perform this Agreement, and that this Agreement has been duly authorized, executed, and delivered by that Party; and

(v) that this Agreement is a valid, binding, and legally enforceable obligation of that Party (subject to applicable laws of bankruptcy and moratorium).

18.2 Warranties by Oncolytics.    Oncolytics represents and warrants to Licensee:

(i) Oncolytics is the owner of the Licensed Patents;

(ii) the Licensed Patents are in good standing and all maintenance fees in respect of the Licensed Patents have been paid;

(iii) Oncolytics has not received any written claim alleging that the development, manufacture, use or sale of Licensed Products would infringe any Third Party Intellectual Property Rights; and

(iv) Oncolytics has the authority to grant the licenses set out in Clause 3.1.

18.3 Undertaking by Licensee. Additionally, Licensee hereby undertakes to Oncolytics that (i) it will not use in any capacity, in connection with any activities to be performed under this Agreement, any individual who has been debarred pursuant to the U.S. Federal Food, Drug and Cosmetic Act, or excluded from a federal healthcare program in the U.S., and (ii) it will at all times comply with all applicable Laws relating or pertaining to its obligations under this Agreement.

18.4 No Implied Warranties. The representations and warranties provided in this Clause 18.4 are in lieu of any other representations or warranties, express or implied, and to the fullest extent permitted by the applicable Law, nothing herein shall be construed as a representation or warranty by either Party of any kind, including without limitation, any implied warranty of fitness for a specific purpose or merchantable quality, all of which are expressly and specifically excluded.

18.5 No Warranties of Patent Rights. To the fullest extent permitted by the applicable Law, nothing in this Agreement shall be construed as a representation made or warranty given by any Party (i) that any patent will issue after the Effective Date based upon any pending patent application included in the Licensed Patent Rights, or (ii) that any granted patent which issues from such pending patent applications will be valid and enforceable, or (iii) that after the Effective Date the manufacture, use or sale of Licensed Product or the use of any Oncolytics’ intellectual property will not infringe the patent or proprietary rights of any Third Party.

18.6 No Further Representations or Warranties

No director, officer, employee or agent of any Party or its Affiliates is authorized to make any further representation or warranty to the other Party which is not contained in this Agreement, and each Party acknowledges that it has not relied on any such oral or written representations or warranties.

19. LIABILITY AND INDEMNITIES

19.1 No Consequential Damages. Subject to Clause 19.7, but otherwise notwithstanding any other provision of this Agreement, neither Party shall be liable to the other Party or to any Affiliate of the other Party for any lost profits, business opportunities, special, indirect, consequential, exemplary, or punitive damages of any nature arising under or in relation to this Agreement even if that Party was advised in advance of the possibility of such loss or damage.

19.2 Indemnification by Licensee. Licensee shall, subject to Clause 19.1, indemnify, defend and hold harmless Oncolytics, its Affiliates, and its and their respective directors, officers, employees and agents (collectively the “Oncolytics Indemnified Parties”) against any and all Claims, causes of action, demands, liabilities, losses, damages, costs or expenses, including reasonable attorneys’ fees asserted by a Third Party (each a “Loss”) to the extent such Loss arose out of or was caused by: (a) the development, distribution, marketing, promotion or sale of Licensed Products by or on behalf of Licensee or its Affiliates or Sublicensees; (b) any breach or alleged breach of a warranty made by Licensee in this Agreement or any Related Agreement; (c) any breach or alleged breach of any covenant or obligation required to be performed by Licensee contained in this Agreement or any Related Agreement; (d) a negligent act or omission or willful misconduct by Licensee, its Affiliates or Sublicensees in the performance of its obligations under this Agreement or any Related Agreement; or (e) the violation by Licensee of any Regulatory Approval involving the Licensed Product; except, in all cases, to the extent that such Loss arises out of the negligence or willful misconduct of Oncolytics.

19.3 Indemnification by Oncolytics. Oncolytics shall, subject to Clause 19.1, indemnify, defend and hold harmless Licensee, its Affiliates, and its and their respective, directors, officers, employees and agents (collectively the “Licensee Indemnified Parties”) against any and all Losses incurred or suffered by the Licensee Indemnified Parties to the extent such Loss was caused by (a) any breach or alleged breach of a warranty made by Oncolytics in this Agreement or any Related Agreement; (b) any breach or alleged breach of any covenant or obligation required to be performed by Oncolytics contained in this Agreement or any Related Agreement; or (c) a negligent act or omission or willful misconduct by Oncolytics or its Affiliates in the performance of its obligations under this Agreement or any Related Agreement; except, in all cases, to the extent that such Loss arises out of the negligence or willful misconduct of Licensee.

19.4 Notification of Liabilities/Losses. A person or entity entitled to indemnification under this Clause 19.4 (an “Indemnified Party”) shall give prompt written notification (within twenty (20) days) to the Party from whom indemnification is sought (the “Indemnifying Party”) of the commencement or notice of Loss for which indemnification may be sought or, if earlier, upon the assertion of any such Loss (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a Loss as provided in this Clause 19.4 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except, and only, to the extent that such Indemnifying Party is materially prejudiced as a result of such failure to give notice). The Indemnifying Party shall be liable for any reasonable legal fees and expenses subsequently incurred in connection with the defence of such Loss after receiving such notice. The Parties shall thereafter keep the other Party informed of any Losses or threatened Losses (as described in Clauses 19.2 and 19.3).

19.4.1 In the case of a Loss for which Oncolytics seeks indemnification under Clause 19.2, Oncolytics shall permit Licensee to direct and control the defense of the Loss and shall provide such reasonable assistance as is reasonably requested by Licensee (at Licensee’s cost) in the defense of the Loss; provided that nothing in this Clause 19.4.1 shall permit Licensee to make any admission on behalf of Oncolytics, or to settle any Claim or litigation which would impose any financial obligations on Oncolytics or would result in any loss or diminution of the scope, validity or enforceability of the Licensed Patent Rights or a Joint Invention without the prior written consent of Oncolytics, such consent not to be unreasonably withheld or delayed.

19.4.2 In the case of a Loss for which Licensee seeks indemnification under Clause 19.3, Licensee shall permit Oncolytics to direct and control the defense of the Loss and shall provide such reasonable assistance as is reasonably requested by Oncolytics (at Oncolytics’ cost) in the defense of the Loss, provided always that nothing in this Clause 19.4.2 shall permit Oncolytics to make any admission on behalf of Licensee, to settle any Claim or litigation which would impose any financial obligations on Licensee or would result in any loss or diminution of the scope, validity or enforceability of a Joint Patent without the prior written consent of Licensee, such consent not to be unreasonably withheld or delayed.

19.5 Supply. The indemnities in this Agreement shall not apply to the supply of Licensed Products which shall be governed by the Supply Agreement which will provide for the manufacturer of Licensed Products to bear certain liabilities on terms to be agreed for Losses for product liability Claims arising out of the negligent manufacture or supply of those Licensed Products.

19.6 Mitigation. Any Party making a Claim under this Clause 19.6 shall take all reasonable steps to mitigate and minimize the Losses suffered and shall not do anything nor fail to do some thing which would have the effect of increasing the Losses.

19.7 Restriction on Limitation of Liability. Neither Party limits or excludes its liability for fraud, fraudulent concealment or fraudulent misrepresentation, nor for death or personal injury arising from its negligence, nor for losses to the property of the other Party arising from its willful misconduct or gross negligence.

19.8 Insurance. During the term of this Agreement and thereafter for a period of five (5) years, each Party shall maintain comprehensive general liability insurance, and product liability coverage, in such amount as is required by applicable Law or as may be consistent with market practice in the relevant jurisdiction for biopharmaceutical businesses of similar size and capabilities. Oncolytics may, upon the approval of the JSC, require that the Licensee maintain a higher amount of insurance coverage. Upon request, the insured Party shall provide the other Party with a certificate of insurance as evidence of the requested coverage and shall notify the other Party within thirty (30) days of any cancellation or termination of such insurance.

20. WAIVER

20.1 Neither Party shall be deemed to have waived any of its rights or remedies under this Agreement unless the waiver is expressly made in writing and signed by a duly authorized representative of that Party. In particular, no delay or failure of any Party in exercising or enforcing any of its rights or remedies under this Agreement shall operate as a waiver of those rights or remedies or so as to preclude or impair the exercise or enforcement of those rights or remedies nor shall any partial exercise or enforcement of any right or remedy by any Party preclude or impair any other exercise or enforcement of that right or remedy by that Party.

21. ENTIRE AGREEMENT/VARIATIONS

21.1 This Agreement, together with the Related Agreements, and any Schedules or other attachments hereto or thereto, constitutes the entire agreement and understanding between the Parties relating to the subject matter hereof, and together they supersede and replace all prior drafts, previous understandings, arrangements, representations or agreements, whether in writing or oral, between the Parties relating to the subject matter of this Agreement. For the avoidance of doubt, the confidentiality agreement entered into between the Parties made on July 4, 2017 as amended by the Parties has been superseded by the provisions of Clause 17.

21.2 No variation, amendments, modification or supplement to this Agreement shall be valid unless and until it is made in writing in the English language and signed by a duly authorized representative of each Party.

22. NOTICES

22.1 Any notice to be given pursuant to this Agreement shall be in writing in the English language and shall be delivered by overnight courier, by registered, recorded delivery or certified mail (postage prepaid) or by facsimile confirmed by registered, recorded delivery or certified mail (postage prepaid) to the address or facsimile number of the recipient Party set out below or such other address or facsimile number as a Party may from time to time designate by written notice to the other Party.

Address of Oncolytics

Oncolytics Biotech (Barbados) Inc.

1^st Floor, Hastings House,

Balmoral Gap, Hastings,

Christ Church, Barbados WI, BB14034

Attention: Managing Director

and a copy to

Oncolytics Biotech Inc.

210, 1167 Kensington Crescent NW

Calgary, AB, Canada T2N 1X7

Attention: President and Chief Executive Officer

Address of Licensee

ADLAI NORTYE BIOPHARMA CO., LTD. 

21 Floor, Building 2, No.452, 6th St.

Hangzhou Eco. & Tech. Development Area

310018, PRC

Attention: Vice President, Business Development

22.2 Any notice given pursuant to this Clause 22 shall be deemed to have been received:

22.2.1 in the case of delivery by courier or sending by mail on the day of receipt provided receipt occurs on a Business Day of the recipient Party or otherwise on the next following Business Day of the recipient; or

22.2.2 in the case of facsimile, on acknowledgement by the recipient facsimile receiving equipment on a Business Day if the acknowledgement occurs before 5.00 pm local time of the recipient and in any other case on the next following Business Day.

22.3 Any notice that is required in this Agreement to be given in writing may be given by personal delivery, fax or post but shall not be effective if given by e-mail.

23. AFFILIATES, ETC.

23.1 Each Party may have one or more Affiliates perform or otherwise act on its behalf under this Agreement. Each Party shall be responsible for the compliance by its Affiliates performing or otherwise acting under this Agreement on its behalf with the terms and conditions of this Agreement.

24. ASSIGNMENT

24.1 Neither Party shall, without the prior written consent of the other Party, assign, novate, transfer or convey this Agreement (in whole or in part) or any of its rights and obligations hereunder to any Third Party; provided always that either Party may assign or novate this Agreement (in whole or in part) to any Affiliate or to a successor to substantially all of the business of the assigning Party relating to Licensed Products whether in a merger, sale of stock, sale of assets or otherwise, without such consent; subject only to the assigning or novating Party giving written notice to the non-assigning Party and the party to which this Agreement is assigned or novated entering into a direct undertaking with the non-assigning or novating Party to be bound by the terms of this Agreement. Any assignment, novation, transfer or conveyance of this Agreement or any part of it in breach of this Clause 24.1 shall be ineffective and void from the beginning.

25. FORCE MAJEURE

25.1 If a Party (the “Non-Performing Party”) is unable to carry out one or more of its obligations under this Agreement due to an event constituting Force Majeure, then this Agreement shall remain in effect, but the Non-Performing Party’s relevant obligations under this Agreement and the relevant obligations of the other Party (the “Other Party”) under this Agreement shall be suspended for the duration of the circumstance of Force Majeure; provided that:

25.1.1 the Non-Performing Party gives the Other Party prompt notice describing the circumstance of Force Majeure, including the nature of the occurrence and its expected duration, and continues to furnish regular reports during the period of Force Majeure;

25.1.2 the Non-Performing Party uses diligent efforts to remedy its inability to perform and to mitigate the effects of the circumstance of Force Majeure; and

25.1.3 in the event of a delay of more than thirty (30) days, the Parties shall promptly meet to discuss how best to continue their operations as far as possible in accordance with this Agreement.

25.2 For purposes of this Agreement, the term “Force Majeure” shall mean any cause or causes beyond the reasonable control of the Non-Performing Party, including without limitation, acts of God, fire, explosion, flood, drought, war, riot, sabotage, terrorism, embargo, strikes or other labor trouble, failure in whole or in part of suppliers to deliver on schedule materials, equipment or machinery, interruption of or delay in transportation, a national health emergency or compliance with any order or regulation of any government that cannot be complied with using Commercially Reasonable Efforts.

25.3 Nothing herein shall be deemed to require the Non-Performing Party to settle on terms unsatisfactory to such Party any strike, lock-out or other labor difficulty, any investigation or proceeding by any public authority, or any litigation by any Third Party.

25.4 In the event that a Force Majeure event continues for more than ninety (90) days the other Party shall be entitled to terminate this Agreement on ninety (90) days notice.

26. SEVERANCE OF TERMS

26.1 If the whole or any part of this Agreement is or becomes or is declared illegal, invalid or unenforceable in any jurisdiction for any reason (including both by reason of the provisions of any Law and also by reason of any court or competent authority which either has jurisdiction over this Agreement or has jurisdiction over any of the Parties):

26.1.1 in the case of the illegality, invalidity or un-enforceability of the whole of this Agreement it shall terminate only in relation to the jurisdiction in question; or

26.1.2 in the case of the illegality, invalidity or un-enforceability of part of this Agreement that part shall be severed from this Agreement only in the jurisdiction in question and that illegality, invalidity or un-enforceability shall not in any way whatsoever prejudice or affect the remaining parts of this Agreement which shall continue in full force and effect.

26.2 If, in the reasonable opinion of any Party, any severance under this Clause 26.2 materially affects the commercial basis of this Agreement, then the Parties shall discuss, in good faith, ways to eliminate the material effect.

27. NATURE OF THIS AGREEMENT

27.1 The Parties are independent contractors and none of the provisions of this Agreement shall be deemed to constitute a partnership or joint venture between the Parties. Neither Party shall have any authority to bind the other in any way.

28. PUBLIC STATEMENTS

28.1 Other than as expressly permitted in this Agreement, a Party may not use the name of the other Party or its Affiliates in any publicity, advertising or in any other public way. Further, neither Party may issue any press releases or otherwise publicize or disclose any information related to the existence of this Agreement, the terms or conditions of this Agreement, or any information relating to the subject matter hereof, without the prior written consent of the other Party, other than in confidential communications to a Party’s lawyers, commercial and investment bankers, investors, potential investors and the advisers of any of the foregoing. The Parties shall agree in writing upon an initial press release to be made by both Parties or upon the initial press releases to be made by each Party to announce the execution of this Agreement, together with a corresponding Q&A outline for use in responding to inquiries about the Agreement. Each Party shall provide the other Party with a copy of the proposed press release for review and comment not less than 48 hours prior to the press release being made public. Following such initial press release, either Party may use the specific information contained therein, or in any subsequent public announcements or publications made by the Parties, in such Party’s investor relations and public relations activities. Nothing in the foregoing, however, shall prohibit a Party from making disclosures as it determines, based on the advice of counsel, required to comply with Law of any nationally recognized securities exchange (such exchange to include the Canadian Stock Exchange and the New York Stock Exchange), provided the same is accurate. In such event, however, the disclosing Party shall consult with the other Party prior to such disclosure and, where applicable, shall request confidential treatment to the fullest extent available.

29. NO THIRD PARTY RIGHTS

29.1 Except where expressly stated in this Agreement to the contrary, no person who is not a party to this Agreement (or his/her successors or permitted assignees under this Agreement) has any rights under any relevant Law to enforce or enjoy the benefit of any term of this Agreement.

30. COSTS

30.1 Each Party shall bear its own legal costs, legal fees and other expenses incurred in the preparation and execution of this Agreement.

31. EXECUTION AND COUNTERPARTS

31.1 This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, have been executed on behalf of each of the Parties hereto. This Agreement may be executed in any number of counterparts, each of which shall be an original as against any Party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. Execution of this Agreement shall require signatures of authorized officers of the respective Parties and affixing of the corporate seal of each Party.

32. CONSTRUCTION

32.1 This Agreement has been prepared jointly and shall not be strictly construed against either Party. The captions used herein are inserted for convenience of reference only and shall not be construed to create obligations, benefits, or limitations.

33. DISPUTE RESOLUTION

33.1 Governing Law; Arbitration. The validity, construction and performance of this Agreement shall be governed by the laws of Hong Kong, without regard to conflicts of law principles and without regard to the United Nations Convention on Contracts for the International Sale of Goods. Any Claim, dispute or controversy between the Parties arising out of or related to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by international arbitration administered by the HKIAC under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be one. The Parties shall jointly select the arbitrator within thirty (30) days of commencement of arbitration proceedings in accordance with the HKIAC Administered Arbitration Rules. In the absence of an agreement between the Parties within such 30-day period, the HKIAC shall appoint the arbitrator. The arbitration proceedings shall be conducted in English.

33.2 Informal Resolution. In the event of any controversy or Claim arising out of or relating to this Agreement, or the rights or obligations of the Parties hereunder, the Parties shall prior to commencing any form of proceedings try to settle their differences amicably between themselves. Either Party may initiate such informal dispute resolution by sending written notice of the dispute to the other Party, and within thirty (30) days after such notice, appropriate representatives of the Parties shall meet for attempted resolution by good faith negotiations. If such representatives are unable to promptly resolve such disputed matter within the said thirty (30) days, either Party may refer the matter by written notice to the other to the Chief Executive Officer of Licensee, or his/her designee, and the Chief Executive Officer of Oncolytics, or his/her designee, for discussion and resolution. If such individuals or their designees are unable to resolve such dispute within thirty (30) days of such written notice, either Party may initiate proceedings in accordance with the provisions of Clause 33.1.

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34. IMPORT & EXPORT CONTROL

34.1 This Agreement is made subject to any restrictions or prohibitions concerning the export / import of products or technical information from the United States of America into the Territory which may be imposed upon or related to Oncolytics or Licensee from time to time by the governments of the United States of America and the Territory. Furthermore, Licensee agrees that it will not export, directly or indirectly, nor re-export any technical information acquired from Oncolytics under this Agreement or any products using such technical information acquired from Oncolytics under this Agreement or any products using such technical information to any country for which the governments of the United States and the Territory or any agency thereof at the time of export / import requires an export / import license or other governmental approval, without first obtaining the written consent to do so from the Department of Commerce or other agency of the United States government or the Territory when required by an applicable Law.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

Signed by Matt Coffey

State position: Director

By and on behalf of ONCOLYTICS BIOTECH (BARBADOS) INC.

Date:    

Signed by Andres Gutierrez

State position: Director

By and on behalf of ONCOLYTICS BIOTECH (BARBADOS) INC.

Date:    

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Signed by Carsten Lu

State position: Chairman and Chief Executive Officer    

By and on behalf of ADLAI NORTYE BIOPHARMA CO. LTD.

Date:    

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SCHEDULE 1
LICENSED PRODUCT

Products containing Pelareorep, a proprietary form of the Dearing type III strain of the human wild-type Reovirus (Respiratory Enteric Orphan virus) as an active ingredient.

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SCHEDULE 2
PATENT RIGHTS

OncolyticsIssuedPatents October 2017

[**]

Oncolytics Pending Patent Applications October 2017

[**]

SCHEDULE 3

FORM OF

PHARMACOVIGILANCE AGREEMENT

THIS PHARMACOVIGILANCE AGREEMENT, DATED THE __________ (the “Effective Date”)

IS MADE BETWEEN:

(a) ONCOLYTICS BIOTECH (BARBADOS) INC., a corporation organized under the laws of Barbados, having its principal offices at 1^st Floor, Hastings House, Balmoral Gap, Hastings, Christ Church, Barbados WI BB14034 (“Oncolytics”); and

(b) ADLAI NORTYE BIOPHARMA CO. LTD., a limited company organized under the laws of the Peoples Republic of China, which has principal offices at 21 Floor, Building 2, No. 452, 6^th Street, Hangzhou Eco. & Tech. Development Area, 31008, PRC (“Licensee”);

Oncolytics and Licensee are referred to from time to time herein individually as a “Party” or collectively as the “Parties”.

RECITALS

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(A) Oncolytics is a wholly-owned subsidiary of Oncolytics Biotech Inc., which is a biotechnology company headquartered in Calgary, Alberta, Canada (“Oncolytics Biotech”). The Oncolytics Group has considerable expertise in developing and producing novel viral products for the treatment and prevention of various forms of cancer.

(B) The Oncolytics Group has developed and owns the exclusive rights to a certain strain of reovirus (Serotype-3 Dearing Strain) identified by Oncolytics as Pelareorep.

(C) Licensee is a biopharmaceutical business dedicated to developing and commercializing new drugs, with a focus on new treatments for cancer and metabolic diseases, but does not currently market or sell any metastatic breast cancer treatments.

(D) Oncolytics and Licensee entered into a License, Development, Supply and Distribution Agreement with an effective date of November __, 2017 and agreed to enter into this Pharmacovigilance Agreement

NOW THEREFORE, in consideration of the following mutual promises and obligations, and for other good and valuable consideration the adequacy and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

In this Pharmacovigilance Agreement and in the Appendices to this Pharmacovigilance Agreement the following capitalized terms, whether used in the singular or plural, shall have the meanings set forth below:

1.1 “Adverse Event” or “AE” means, subject to any amendment pursuant to the ICH from time to time, any untoward medical occurrence in a patient to whom a medicinal product has been administered and which does not necessarily have to have a causal relationship with the administration of such medicinal product and includes without limitation any unfavorable and unintended sign (for example, an abnormal laboratory finding), symptom, or disease temporally associated with the use of a medicinal product, whether or not considered related to this medicinal product together, in relation to pharmacovigilance

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standards, policies, and procedures, with all medical device events, (including incidents, near-incidents, serious injuries, malfunctions and failures) or untoward medical events and events such as suicide or aggressive behavior threats, overdose, abuse, misuse, medication errors and other events that may reasonably be related to biomedical research.

1.2 “Adverse Drug Reaction” or “ADR” means any noxious and unintended response to a medicinal product occurring at any dose where there is at least a possibility of causal link between the administration of the medicinal product and the noxious and unintended response.

1.3 “Business Day” means a day other than a Saturday, Sunday or a day on which banks are not open for business in Canada, the PRC, Taiwan, Macau, the Republic of Singapore, the Republic of Korea, or Hong Kong.

1.4 “CFDA” means the China Food and Drug Administration in the PRC.

1.5 “Clinical Study” means studies required by a Regulatory Authority in respect of Licensed Product, including those studies required to obtain Marketing Authorization, and includes all studies described in the Development Plan.

1.6 “Effective Date” shall have the meaning set forth above.

1.7 “EMA” means the European Medicines Agency in Europe.

1.8 “FDA” means the Food and Drug Administration in the United States of America.

1.9 “Field” means the treatment and prevention of human diseases.

1.10 “ICH” means International Conference on Harmonisation guidelines including (but not limited to) E2A, E2B, E2C, and E2D as amended and any replacement thereof from time to time.

1.11 “Individual Case Safety Report” or “ICSR” means a report that contains information describing a suspected AE, ADR, SAE or SUSAR related to the administration of one or more medicinal products to an individual patient and, subject to any amendment pursuant to the ICH from time to time, contains the minimum information required for expedited reporting, including: an identifiable patient, a suspected medicinal product, an identifiable reporter, and an AE, ADR, SAE or SUSAR.

1.12 “License Agreement” means the License, Development, Supply and Distribution Agreement entered into by the Parties with an effective date of November __, 2017.

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1.13 “Licensed Product” means any product intended for use in the Field containing or including Pelareorep.

1.14 “Marketing Authorization” or “MA” means any approval required from the relevant Regulatory Authority or authorities to distribute, promote, market and sell Licensed Product in the Field, in a country or region within the Territory.

1.15 “Oncolytics Group” means Oncolytics, its Affiliates and their respective employees, agents and Third Party independent contractors.

1.16 “Pelareorep” means Oncolytics’ proprietary variant of a respiratory enteric orphan virus, as more fully described in Schedule 1 to the License Agreement.

1.17 “Periodic Safety Update Report” or “PSUR” means a pharmacovigilance document intended to provide an evaluation of the risk-benefit balance of a medicinal product at defined time points post-market authorization.

1.18 “Person” means an individual, partnership, corporation, joint stock company, estate, trust (including a business trust), limited liability company, unincorporated association, joint venture or other entity or a Regulatory Authority.

1.19 “PRC” means the People’s Republic of China, but for the purpose of this Agreement only, excludes Hong Kong, Macau and Taiwan.

1.20 “Regulatory Authority” means the CFDA, EMA, FDA or any national, supranational, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity in a given country or jurisdiction in the Territory responsible for granting and administering any Regulatory Approvals.

1.21 “Report” means a report of an AE, ADR, SAE or SUSAR.

1.22 “Safety Issue” means any significant issues related to the Licensed Product, including those originating from: requests from regulatory authorities, potential changes in the risk/benefit of a Licensed Product, Licensed Product quality issues which may have a clinical impact (e.g. Licensed Product contamination, deterioration or defects); external influences (media, literature), and ongoing safety surveillance.

1.23 “Serious Adverse Event” or “SAE” means, subject to any amendment pursuant to the ICH from time to time, any Adverse Event that at any dose:

(a) results in death;

(b) is life-threatening;

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(c) requires hospitalization or prolongation of existing hospitalization;

(d) results in persistent or significant disability or incapacity;

(e) is a congenital anomaly or birth defect; or

(f) requires intervention to prevent permanent impairment or damage.

1.24 “Signal” means, an observation of possible unexpected hazards or changes in the severity, characteristics or frequency of expected Adverse Events that emerge, the relevant information for which needs to be brought together for effective evaluation over a timescale appropriate to the importance and likely impact of the signal.

1.25 “SOP” means a standard operating procedure of Licensee or Oncolytics, as the case may be.

1.26 “Spontaneous Sources” means sources other than a Clinical Study or any organized data collection scheme, including health care professionals, caretakers, pharmacists and consumers.

1.27 “Spontaneous Report” means, subject to any amendment pursuant to the ICH from time to time, any unsolicited communication to a Party, Regulatory Authority or other Person that describes an Adverse Event or an Adverse Drug Reaction in a patient administered the Product, whether alone or together with one or more other medicinal products, and which does not derive from a Clinical Study or any organized data collection scheme. Spontaneous reports include reports from health care professionals (medically confirmed reports) and non-health care professionals or consumers (medically unconfirmed reports). All spontaneous reports received from consumers or health care professionals are considered as suspected Adverse Drug Reactions.

1.28 “SUSAR” means a suspected unexpected serious adverse reaction.

1.29 “Territory” means those countries listed in Schedule 5 of the Licensee Agreement.

1.30 “Third Party” means any entity or person other than the Parties or their respective Affiliates.

1.31 In this Pharmacovigilance Agreement capitalized terms that are not defined in this Section 1 shall have the meaning set out in the License Agreement.

2. PURPOSE

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2.1 The purpose of this Pharmacovigilance Agreement is to describe the procedures relating to the exchange of safety and pharmacovigilance information and to define the responsibilities to ensure compliance with good pharmacovigilance practice and maintain compliance with the world-wide reporting requirements for the relevant Regulatory Authorities for the Licensed Product.

3. SCOPE

This Agreement covers:

(a) all Spontaneous Reports and Solicited Reports of AEs, ADRs, SAEs and SUSARs in relation to the Licensed Product;

(b) all SAEs and SUSARs arising from Clinical Studies and post-marketing surveillance (PMS) with the Licensed Product;

(c) suspected ADRs in association with off label use of the Licensed Product;

(d) all information required for periodic reporting in relation to the Licensed Product;

(e) Safety Issues and Signals; and

(f) the reporting of all other information as required by Regulatory Authorities for the Licensed Product.

4. LANGUAGE OF ALL INFORMATION EXCHANGE

The language of all information exchanged pursuant to this Agreement, including reports to Regulatory Authorities, shall be in English, or if any other language, accompanied by a translation into English. In the event of any conflict between the English text and the text in any other language, the English text shall prevail.

5. ROLES OF ONCOLYTICS AND LICENSEE

5.1 Licensee or any Third Party that holds Marketing Authorization for Licensed Product shall be involved in the pharmacovigilance of Licensed Product in the Territory, and be responsible in fulfilling the obligations defined in Appendix 2 of this Pharmacovigilance Agreement.

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5.2 Licensee shall be responsible for the safety database of Licensed Product in the Territory according to Section 7.1.

5.3 Oncolytics or its designate shall be responsible for the complete global safety database according to Section 7.2.

5.4 Licensee shall make all Reports, including all ICSRs and Spontaneous Reports, and other relevant information available to Oncolytics according to Section 8, in order to allow Oncolytics to fulfill its obligations and responsibilities.

6. QUALIFIED PERSON

Each Party shall designate a suitably qualified person responsible for Adverse Event monitoring (the “Qualified Person”) for the Licensed Product. The Qualified Person for each Party is identified in Appendix 1 of this Pharmacovigilance Agreement. Each Party may change its Qualified Person and shall notify the other Party thereof in writing.

7. SAFETY DATABASES

7.1 Territory safety database

Licensee shall be responsible for the creation, maintenance and update of a safety database related to the use of Licensed Product in the Territory. This database shall be comprised of information from all Reports from Territory. Licensee shall share with Oncolytics an updated version of the safety database not less than quarterly or more frequently as required by Regulatory Authorities.

7.2 Complete global safety database

Oncolytics or its designate shall be responsible for the creation, maintenance and update of a complete global safety database of the Licensed Product. Oncolytics shall share with Licensee an updated version of the complete global safety database not less than quarterly or more frequently as required by Regulatory Authorities.

8. INDIVIDUAL CASE SAFETY REPORTS AND SPONTANEOUS REPORTS

8.1 Individual Case Safety Reports

8.1.1 Licensee shall be responsible for its own medical assessment of the reported ADRs when entering the report into Licensee’s safety database according to local

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requirements and its internal SOPs. In general, the principle of the implied positive causality (meaning that the report is considered to be related with regard to further Licensee and regulatory submission) shall be applied to all Spontaneous Reports of ADRs. Licensee shall assess the expectedness, seriousness and causality according to local requirements and their internal SOPs. Licensee will provide information about reported ADRs to Oncolytics and solicit comment from Oncolytics for reports to be entered into Licensee’s safety database. Oncolytics will respond promptly to any request for comment received from Licensee.

8.1.2 ICSRs shall be sent to the Qualified Person of Oncolytics. The reports shall be distributed in Oncolytics safety networks according to Oncolytics’ SOP.

8.1.3 ICSRs in Licensee’s safety database shall be crosschecked at regular intervals to ensure that all the applicable ICSRs are appropriate according to this Agreement.

8.2 Spontaneous Report

Licensee shall provide to Oncolytics information of Spontaneous Reports in the Territory in writing, using any mutually agreed format within the timeframes defined in Section 8.3. The reporting form shall include all the information provided by the Spontaneous Source. All Spontaneous Reports received from consumers or health care professionals are considered as suspected Adverse Drug Reactions. Cases originating from the internet where the website is under management or responsibility of Licensee or any Third Party which holds Marketing Authorization for Licensed Product, should be screened for potential Adverse Events by the appropriate Party.

8.3 Reporting Timing and Content

8.3.1 All ICSRs and Spontaneous Reports related to SAEs arising from within the Territory shall be sent to Oncolytics no later than two (2) calendar days after the receipt of the Reports by Licensee.

8.3.2 All ICSRs and Spontaneous Reports related to non-serious AE Reports arising from within the Territory shall be sent to Oncolytics no later than five (5) calendar Days after the receipt of the Reports by Licensee.

8.3.3 Each Party shall use every effort to ensure that all Reports of AEs and SAEs meet the minimum criteria for an ICSR. If the minimum information cannot be obtained within the required timeframes, each Party shall still send the Report to the other

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Party within such timeframes. Every effort should then be made to obtain and send the missing minimum information required for an ICSR as soon as reasonably possible.

8.4 Follow up information

Licensee is responsible for obtaining follow up information in order to allow proper assessment of all ADRs. This information shall be reported to Oncolytics as described in Section 8.

9. SAFETY ISSUES OR SIGNALS AND REGULATORY INQUIRIES INVOLVING SAFETY ISSUES

9.1 Reporting Safety Issues and Signals

Licensee shall as soon as reasonably possible notify Oncolytics of any Safety Issues or Signals in relation to the Licensed Product by telephone and in writing. Oncolytics and Licensee shall co-operate with the reasonable requests of the other Party in relation to such issues. Safety Issues or Signals relating to the Licensed Product may occur as a result of: a request from a Regulatory Authority; potential changes to the risk/benefit of the Licensed Product; Licensed Product quality issues that may have a clinical impact such as a Licensed Product contamination or deterioration; external influences such as media or literature; and ongoing safety surveillance.

9.2 Regulatory Inquiries

Licensee shall as soon as reasonably possible and in any event within two (2) calendar days inform Oncolytics of any inquiries from any Regulatory Authority involving Safety Issues or Signals in relation to the Licensed Product.

10. PERIODIC SAFETY UPDATE REPORT

Licensee and Oncolytics shall prepare PSURs and submit them at intervals required by Regulatory Authorities. All relevant ADR information shall be included in the PSURs. Licensee shall share the PSURs with Oncolytics and vice versa upon written request.

11. SUBMISSION TO REGULATORY AUTHORITY

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Licensee shall submit AE Reports, ICSRs and PSURs to Regulatory Authorities in the Territory according to format, timing and guidelines of the Regulatory Authority.

12. REQUESTS FOR ADDITIONAL SAFETY INFORMATION

11.1 Licensee shall respond to all requests from Regulatory Authorities regarding additional safety information related to pharmacovigilance of the Licensed Product. Licensee shall provide Oncolytics with copies of such requests and documentations pertaining to the requests, within ten (10) Business Days upon receipt.

11.2 Licensee shall also provide Oncolytics with copies of its responses to the requests within ten (10) Business Days upon provision of such response to the Regulatory Authority.

13. REPORTING RELATED TO CLINICAL STUDY

Licensee shall be responsible for submission of Reports related to Clinical Studies to the Regulatory Authority according to the applicable study protocol. Licensee shall promptly inform Oncolytics of any ADR arising from a Clinical Study.

14. SAFETY INFORMATION OF LABEL

Based on the ADR identified in a Clinical Study and Spontaneous Report, Licensee shall promptly notify Oncolytics in writing if the need to modify the safety information on the label arises. Oncolytics will be responsible for maintaining the safety labeling text for the Licensed Product in accordance with the laws, rules, regulations and guidances applicable to the Marketing Authorization(s) for the Licensed Product.

15. PHARMACOVIGILANCE TRAINING

Licensee shall be responsible for providing adequate training to Licensee’s Qualified Person in order to carry out the pharmacovigilance responsibility as described in this Pharmacovigilance Agreement.

16. MEETING

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The Parties shall meet either face-to-face or through web/ telephone conference to discuss pharmacovigilance issues or changes to this Pharmacovigilance Agreement upon the reasonable request of either Party.

This PharmacovigilanceAgreement has been agreed upon by the Parties and will be in force immediately upon the commencement of the License Agreement.

Signed by [Director or Officer]…………………………………………………..

State position:    …………………………………………………..

By and on behalf of ONCOLYTICS BIOTECH BARBADOS INC.

Date:…………………………………………………………….

Signed by [Director or Officer]…………………………………………………..

State position:    …………………………………………………..

By and on behalf of ONCOLYTICS BIOTECH BARBADOS INC.

Date:…………………………………………………………….

Signed by [Director or Officer]…………………………………………………..

State position:    …………………………………………………..

By and on behalf of NIPPON ZENYAKU KOGYO CO., LTD.

Date:…………………………………………………………….

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Appendix 1

List of the Qualified Person

ONCOLYTICS:

Name:

Division:

Phone:

Fax:

Email:

Address:

LICENSEE:

Name:

Division:

Phone:

Fax:

Email:

Address:

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Appendix 2

Obligations of the Marketing Authorization Holder in Pharmacovigilance Operations

Management of adverse events:

• Reception

• Registration

• Review and data management

• Quality control and duplicate detection

• Investigation and monitoring

• Coding, evaluation et classification

• Expedited reporting to Competent Authorities

Ongoing evaluation of the benefit-risk ratio of the veterinary drug:

• Preparation, development, verification and transmission of PSURs

• Signal detection and evaluation

• Management of information from literature

• Reporting and communication on the change of the benefit-risk ratio of the veterinary drug

Management of exchanges with Competent Authorities:

• Request by authorities

• Management of restrictions and variations

• Compliance with commitments in connection with the granting of the marketing authorization

Quality Management related to pharmacovigilance activities:

• Training

• Documentation and contracts of subcontracting

• Quality management and control of corrective and preventive actions (CAPA)

• Maintenance of the pharmacovigilance system

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SCHEDULE 4
ONGOING CLINICAL STUDIES

USC / Norris Comprehensive Cancer Center (REO-019)

Wild-Type Reovirus, Bortezomib, and Dexamethasone in Treating Patients With Relapsed or Refractory Multiple Myeloma

Oncolytics’ sponsored study (REO-022)

Study of REOLYSIN® in Combination With FOLFIRI and Bevacizumab in FOLFIRI Naive Patients With KRAS Mutant Metastatic Colorectal Cancer

Oncolytics’ sponsored study (REO-024)

A Phase Ib study of pembrolizumab (KEYTRUDA®) in combination with REOLYSIN® (pelareorep) and chemotherapy in patients with advanced pancreatic adenocarcinoma

Ohio State University NCI

Pilot Trial Evaluating Viral Protein Production from the Combination of Reolysin and Carfilzomib in Multiple Myeloma

MUK, OBI & Celgene’s Sponsorship

VIRel: Viral immunotherapy in Relapsed/Refractory Multiple Myeloma - A Phase I Study to Assess the Safety and Tolerability of REOLYSIN® (pelareorep) in Combination with Lenalidomide or Pomalidomide

ReoGlio University of Leeds

A dose-finding study of the safety and tolerability of intravenous reovirus (REOLYSIN®) (pelareorep) plus granulocyte-macrophage colony-stimulating factor (GM-CSF) in combination with standard of care chemoradiotherapy /adjuvant chemotherapy (temozolomide) for Glioblastoma Multiforme (GBM)

MC1472 Mayo Clinic Rochester, MN

Phase 1 Study of Replication Competent Reovirus (REOLYSIN^®) in Combination with GM-CSF in Pediatric Patients with Relapsed or Refractory Brain Tumors

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SCHEDULE 5
THE TERRITORY

The Territory shall include the following countries and jurisdictions:

• PRC

• Hong Kong

• Macau

• Republic of Singapore

• South Korea

• Taiwan

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SCHEDULE 6
FORM OF WARRANT PURCHASE AGREEMENT

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EX-4.45

AMENDING AGREEMENT #5

THIS AMENDING AGREEMENT made effective as of the 8^th day of March, 2018.

BETWEEN:

ONCOYLYTICS BIOTECH INC.,

("ONCOLYTICS")

- and -

MATTHEW C. COFFEY,

(the "Employee")

WHEREAS the Employee is an officer of Oncolytics whose terms of employment are set forth in the Executive Employment Agreement ("Employment Agreement") dated effective January 1, 2013 as amended by an Amending Agreement #1 dated March 12, 2014, Amending Agreement #2 dated March 12, 2015, Amending Agreement #3 dated March 8, 2016, and Amending Agreement #4 dated February 23, 2017 (together the "Employment Agreement");

AND WHEREAS Oncolytics and the Employee wish to amend the Employment Agreement;

NOW THEREFORE in consideration of the mutual covenants contained in this Amending Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:

1 Interpretation

This Amending Agreement is supplemental to and shall form one agreement with the Employment Agreement, and the Employment Agreement and this Amending Agreement shall be read together and have effect so far as practicable as though all the provisions thereof and hereof were contained in one instrument. In this Amending Agreement, including the recitals hereto, unless there is something within the subject matter or context inconsistent therewith, expressions herein, unless otherwise defined herein, have the same meanings as the corresponding expressions defined in the Employment Agreement.

2 Amendment to the Employment Agreement

The Employment Agreement Section 3 – Remuneration is amended as follows:

(1)Commencing January 1, 2018, Oncolytics shall pay to the Employee a salary of four hundred seventy-five thousand ($475,000) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of nineteen thousand seven hundred ninety-one CANADIAN DOLLARS and sixty-seven cents ($19,791.67) on the 15^th and last day of each month.

3 Confirmation

The parties hereto hereby acknowledge and confirm that, except as specifically amended by the provisions of this Amending Agreement, all of the terms and conditions contained in the Employment Agreement are and shall remain in full force and effect, unamended, in accordance with the provisions thereof.

4 Miscellaneous

(a) This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Alberta. The parties hereby submit to the jurisdiction of the Courts of Alberta.

(b) The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.

IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.

ONCOLYTICS BIOTECH INC.
Per:	/s/ Wayne Pisano
Per:	/s/ Kirk Look

/S/ Floriane Riouall                    /S/ Matthew Coffey

___________________________        ________________________________

Witness                        MATTHEW COFFEY

EX-4.46

AMENDING AGREEMENT #5

THIS AMENDING AGREEMENT made effective as of the 8 day of March, 2018.

BETWEEN:

ONCOYLYTICS BIOTECH INC.,

("ONCOLYTICS")

- and -

KIRK LOOK,

(the "Employee")

WHEREAS the Employee is an officer of Oncolytics whose terms of employment are set forth in the Executive Employment Agreement dated effective January 1, 2013, as amended by an Amending Agreement #1 dated March 12, 2014, Amending Agreement #2 dated March 12, 2015, Amending Agreement #3 dated March 8, 2016, and Amending Agreement #4 dated February 23, 2017 (together the "Employment Agreement");

AND WHEREAS Oncolytics and the Employee wish to amend the Employment Agreement;

NOW THEREFORE in consideration of the mutual covenants contained in this Amending Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:

1 Interpretation

This Amending Agreement is supplemental to and shall form one agreement with the Employment Agreement, and the Employment Agreement and this Amending Agreement shall be read together and have effect so far as practicable as though all the provisions thereof and hereof were contained in one instrument. In this Amending Agreement, including the recitals hereto, unless there is something within the subject matter or context inconsistent therewith, expressions herein, unless otherwise defined herein, have the same meanings as the corresponding expressions defined in the Employment Agreement.

2 Amendment to the Employment Agreement

The Employment Agreement Section 3 – Remuneration is amended as follows:

(1)Commencing January 1, 2018, Oncolytics shall pay to the Employee a salary of three hundred sixty-five thousand ($365,000) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of fifteen thousand two hundred eight CANADIAN DOLLARS and thirty-three cents ($15,208.34) on the 15^th and last day of each month.

3 Confirmation

The parties hereto hereby acknowledge and confirm that, except as specifically amended by the provisions of this Amending Agreement, all of the terms and conditions contained in the Employment Agreement are and shall remain in full force and effect, unamended, in accordance with the provisions thereof.

4 Miscellaneous

(a) This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Alberta. The parties hereby submit to the jurisdiction of the Courts of Alberta.

(b) The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.

IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.

ONCOLYTICS BIOTECH INC.
Per:	/s/ Wayne Pisano
Per:	/s/ Matt Coffey

/S/ Floriane Riouall                    /S/ Kirk Look

___________________________        ________________________________

Witness                        KIRK LOOK

EX-4.47

AMENDING AGREEMENT #1

THIS AMENDING AGREEMENT made effective as of the 8^th day of March, 2018.

BETWEEN:

ONCOYLYTICS BIOTECH (U.S.), INC.,

("OBUS")

- and -

ANDREW DE GUTTADAURO

(the "Employee")

WHEREAS the Employee is an officer of OBUS whose terms of employment are set forth in the Employment Agreement ("Employment Agreement") dated effective June 29, 2017;

AND WHEREAS OBUS and the Employee wish to amend the Employment Agreement;

NOW THEREFORE in consideration of the mutual covenants contained in this Amending Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:

1 Interpretation

This Amending Agreement is supplemental to and shall form one agreement with the Employment Agreement, and the Employment Agreement and this Amending Agreement shall be read together and have effect so far as practicable as though all the provisions thereof and hereof were contained in one instrument. In this Amending Agreement, including the recitals hereto, unless there is something within the subject matter or context inconsistent therewith, expressions herein, unless otherwise defined herein, have the same meanings as the corresponding expressions defined in the Employment Agreement.

2 Amendment to the Employment Agreement

The Employment Agreement Section 3 – Remuneration is amended as follows:

(1)    Commencing January 1, 2018, OBUS shall pay to the Employee a salary of two hundred fifty-three thousand ($253,000) UNITED STATES DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of ten thousand five hundred forty-one UNITED STATES DOLLARS and sixty-seven cents ($10,541.67) on the 15th and last day of each month

3 Confirmation

(1)    The parties confirm that the increase in Base Salary is a result of an assessment of increases in cost-of-living indices and salary benchmarking.

(2)    The parties hereto hereby acknowledge and confirm that, except as specifically amended by the provisions of this Amending Agreement, all of the terms and conditions contained in the Employment Agreement are and shall remain in full force and effect, unamended, in accordance with the provisions thereof.

4 Miscellaneous

(a) This Agreement shall be governed by and construed in accordance with the laws of California.

(b) The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.

IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.

ONCOLYTICS BIOTECH (U.S.), INC.
Per:	/S/ Matt Coffey
	Matt Coffey Director
Per:	/S/ Gilles Gosselin
	Gilles Gosselin Director

/S/ Kirk Look                        /S/ Andrew de Guttadauro

___________________________        ________________________________

Witness                        ANDREW DE GUTTADAURO

EX-4.48

AMENDING AGREEMENT #1

THIS AMENDING AGREEMENT made effective as of the 8^th day of March, 2018.

BETWEEN:

ONCOYLYTICS BIOTECH (U.S.), INC.,

("OBUS")

- and -

ANDRES GUTIERREZ

(the "Employee")

WHEREAS the Employee is an officer of OBUS whose terms of employment are set forth in the Employment Agreement ("Employment Agreement") dated effective October 27, 2016;

AND WHEREAS OBUS and the Employee wish to amend the Employment Agreement;

NOW THEREFORE in consideration of the mutual covenants contained in this Amending Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:

1 Interpretation

This Amending Agreement is supplemental to and shall form one agreement with the Employment Agreement, and the Employment Agreement and this Amending Agreement shall be read together and have effect so far as practicable as though all the provisions thereof and hereof were contained in one instrument. In this Amending Agreement, including the recitals hereto, unless there is something within the subject matter or context inconsistent therewith, expressions herein, unless otherwise defined herein, have the same meanings as the corresponding expressions defined in the Employment Agreement.

2 Amendment to the Employment Agreement

The Employment Agreement Section 3 – Remuneration is amended as follows:

(1)    Commencing January 1, 2018, OBUS shall pay to the Employee a salary of three hundred thirty thousand ($330,000) UNITED STATES DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of thirteen thousand seven hundred fifty ($13,750) UNITED STATES DOLLARS on the 15th and last day of each month.

3 Confirmation

(1)    The parties confirm that the increase in Base Salary is a result of an assessment of increases in cost-of-living indices and salary benchmarking.

(2)    The parties hereto hereby acknowledge and confirm that, except as specifically amended by the provisions of this Amending Agreement, all of the terms and conditions contained in the Employment Agreement are and shall remain in full force and effect, unamended, in accordance with the provisions thereof.

4 Miscellaneous

(a) This Agreement shall be governed by and construed in accordance with the laws of California.

(b) The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.

IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.

ONCOLYTICS BIOTECH (U.S.), INC.
Per:	/S/ Matt Coffey
	Matt Coffey Director
Per:	/S/ Gilles Gosselin
	Gilles Gosselin Director

/S/ Kirk Look                         /S/ Andres Gutierrez

___________________________        ________________________________

Witness                        ANDRES GUTIERREZ

EX-8.0

LIST OF SUBSIDIARIES

2017

Name	Jurisdiction
Oncolytics Biotech (Barbados) Inc.	Barbados
Oncolytics Biotech (US) Inc.	Delaware

EX-12.1

EXHIBIT 12.1

CERTIFICATION

I, Matthew Coffey, certify that:

1. I have reviewed this annual report on Form 20-F of Oncolytics Biotech Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date:	March 19, 2018	/s/ Matthew Coffey
		Matthew Coffey, PhD Chief Executive Officer Principal Executive Officer

EX-12.2

EXHIBIT 12.2

CERTIFICATION

I, Kirk Look, certify that:

1.           I have reviewed this annual report on Form 20-F of Oncolytics Biotech Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.           The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date:	March 19, 2018	/s/ Kirk Look
		Kirk Look, CA Chief Financial Officer Principal Accounting and Financial Officer

EX-13.1

EXHIBIT 13.1

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Oncolytics Biotech Inc. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date here of (the “Report”), I, Matthew Coffey, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)          The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Matthew Coffey

_________________________________

Matthew Coffey, PhD

Chief Executive Officer

Principal Executive Officer

March 19, 2018

A signed original of this written statement required by Section 906 has been provided to Oncolytics Biotech Inc. and will be retained by Oncolytics Biotech Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-13.2

EXHIBIT 13.2

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Oncolytics Biotech Inc. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date here of (the “Report”), I, Kirk Look, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)          The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kirk Look

__________________________________

Kirk Look, CA

Chief Financial Officer

Principal Accounting and Financial Officer

March 19, 2018

A signed original of this written statement required by Section 906 has been provided to Oncolytics Biotech Inc. and will be retained by Oncolytics Biotech Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-15.1

MANAGEMENT DISCUSSION & ANALYSIS

2017

ONCOLYTICS BIOTECH INC.

MANAGEMENT DISCUSSION & ANALYSIS

2017

TABLE OF CONTENTS

Basis of Presentation	1
Forward-Looking Statements	1
REOLYSIN® Development For 2017	1
Clinical Trial Program	2
Manufacturing and Process Development	3
Intellectual Property	4
Business Development	4
Financing Activity	4
Financial Impact	4
Cash Resources	4
REOLYSIN® Development For 2018	5
Accounting Policies	5
Critical Accounting Policies	5
Adoption of New Accounting Standards	6
Accounting Standards and Interpretations Issued but not yet Effective	7
Significant Estimates	7
Selected Annual Information	8
Results of Operations	9
Summary of Quarterly Results	13
Fourth Quarter	13
Fourth Quarter - Review of Operations	14
Liquidity and Capital Resources	16
Off-Balance Sheet Arrangements	17
Transactions with Related Parties	17
Financial Instruments and Other Instruments	18
Risk Factors Affecting Future Performance	19
Other MD&A Requirements	22

i

March 8, 2018

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BASIS OF PRESENTATION

Our Management Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our 2017 audited consolidated financial statements and notes thereto, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). This MD&A along with our consolidated financial statements for the year ended December 31, 2017, were authorized for issue in accordance with a resolution of the Board of Directors (the "Board") on March 8, 2018.

FORWARD-LOOKING STATEMENTS

The following discussion contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended and under applicable Canadian provincial securities legislation. Forward-looking statements, including our belief as to the potential of REOLYSIN^® (pelareorep), an intravenously delivered immuno-oncolytic virus, as a cancer therapeutic and our expectations as to the success of our research and development and manufacturing programs in 2018 and beyond, future financial position, business strategy and plans for future operations, and statements that are not historical facts, involve known and unknown risks and uncertainties, which could cause our actual results to differ materially from those in the forward-looking statements.

Such risks and uncertainties include, among others, the need for and availability of funds and resources to pursue research and development projects, the efficacy of pelareorep as a cancer treatment, the success and timely completion of clinical studies and trials, our ability to successfully commercialize pelareorep, uncertainties related to the research, development and manufacturing of pelareorep, uncertainties related to competition, changes in technology, the regulatory process and general changes to the economic environment.

With respect to the forward-looking statements made within this MD&A, we have made numerous assumptions regarding among other things: our ability to obtain financing to fund our clinical development plan, our ability to receive regulatory approval to commence enrollment in the clinical studies which are part of our clinical development plan, our ability to maintain our supply of pelareorep and future expense levels being within our current expectations.

Investors should consult our quarterly and annual filings with the Canadian and US securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Forward-looking statements are based on assumptions, projections, estimates and expectations of management at the time such forward-looking statements are made, and such assumptions, projections, estimates and/or expectations could change or prove to be incorrect or inaccurate. Investors are cautioned against placing undue reliance on forward-looking statements. We do not undertake to update these forward-looking statements except as required by applicable law.

REOLYSIN Development Update For 2017

Oncolytics Biotech Inc. is a Development Stage Company

Since our inception in April of 1998, Oncolytics Biotech^® Inc. has been a development stage company and we have focused our research and development efforts on the development of REOLYSIN, also known as pelareorep, an intravenously delivered immuno-oncolytic virus with the potential to treat a variety of cancers. We have not been profitable since our inception and expect to continue to incur substantial losses as we continue research and development efforts. We do not expect to generate significant revenues until, and unless, pelareorep becomes commercially viable.

Our goal each year is to advance pelareorep through the various steps and stages of development required for potential pharmaceutical products. In order to achieve this goal, we believe that we have to actively manage the development of our clinical trial program, our pre-clinical and collaborative programs, our manufacturing process and pelareorepsupply, and our intellectual property.

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Clinical Trial Program

We are directing a three-part clinical development program with the objective of developing pelareorep as a human cancer therapeutic. Our clinical development plan has two main objectives. The primary objective is to obtain regulatory approval for pelareorep as quickly as possible and is based on the compelling metastatic breast cancer survival data presented at the 2017 American Association for Cancer Research (AACR) Annual Meeting, in Washington, D.C. The second objective is to expand pelareorep into commercially valuable new treatment areas that include immuno-therapy along with immuno-modulatory (IMiD) and other targeted agents in collaboration with pharmaceutical partners. Our clinical development program focuses on the three components of pelareorep's mechanism of action (MOA) and includes the following:

Program 1 - Chemo combinations

To date, our primary focus has been on the investigation of chemotherapy combination clinical trials investigating the use of different chemotherapy agents in various cancer indications.

Program 2 - Combination with IMiDs/targeted therapy

Our second program focuses on the potential of pelareorep to stimulate a patient's innate immunity and the potential for an infection to cause a cascade of chemokines/cytokines activating natural killer (NK) cells to attack cancer cells.

Program 3 - Immunotherapy combinations

Our third program focuses on the potential for pelareorep to cause a specific adaptive immune response triggered by tumor- and viral-associated antigens displayed by antigen-presenting cells (APCs), infected tumor cells and/or dendritic cells to T cells.

2017 Developments:

Program 1 - Chemo combinations

Metastatic Breast Cancer

Statistically significant phase 2 overall survival (OS) data

At the AACR annual meeting in April 2017, clinical data from an open-label, randomized, phase 2 study assessing the therapeutic combination of intravenously-administered REOLYSIN given in combination with the chemotherapy agent paclitaxel versus paclitaxel alone, in patients with advanced or metastatic breast cancer (IND 213) was presented. This clinical study was conducted by the Canadian Cancer Trials Group and the combined treatment demonstrated a statistically significant increase in median overall survival in the intention-to-treat patient population from 10.4 months on the control arm to 17.4 months on the test arm (n=74, hazard ratio 0.65, 80% CI 0.47 - 0.91, p-0.1).

Fast track designation

In May 2017, we announced that the United States Food and Drug Administration (FDA) granted Fast Track Designation (FTD) for REOLYSIN for the treatment of metastatic breast cancer. Receiving the FTD represented an important step for our clinical development plan as the FDA's Fast Track process is designed to facilitate the development, and expedite the review of drugs that treat serious conditions and fill an unmet medical need. The FTD supports more frequent dialogue with the FDA on our drug development plan, data requirements and clinical trial design. It also, in certain situations, enables the FDA to take action on a new drug or biologics license application more rapidly than under the standard review process.

Productive End-of-Phase 2 meeting

In September 2017, we announced a productive End-of-Phase 2 meeting with the FDA for REOLYSIN in combination with paclitaxel, for the treatment of hormone receptor positive, HER2 receptor negative (HR+/HER2-) metastatic breast cancer (mBC) patients. The purpose of the meeting was to discuss the preclinical and clinical programs, including the design of the phase 3 registration study to support a future Biologics License Application (BLA) submission in the U.S. The FDA's feedback and the End-of-Phase 2 meeting outcome support our proposed target patient population of HR positive/HER2 negative metastatic breast cancer patients for our registration study. Importantly, the FDA provided guidance that if the study achieves its primary endpoint, then it will be the only study required for BLA approval which would allow us to commercialize and sell REOLYSIN.

Updated overall survival data

In addition, at the European Society for Medical Oncology (ESMO) 2017 Congress, we announced updated overall survival data from IND 213. The updated survival data demonstrated that median overall survival more than doubled from 10.8 months on the

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control arm (paclitaxel alone) to 21.8 months in Hormone Receptor Positive (ER+PR+) / HER2 receptor negative patients (n="47"). The hazard ratio was 0.36 and p-value was 0.003. 

Favorable Final Advice Letter

In December 2017, we received a favorable Final Advice Letter from the European Medicines Agency (EMA). The Letter refers to the proposed use of pelareorep in combination with paclitaxel, for the treatment of hormone receptor positive, HER2 receptor negative (HR+/HER2-) metastatic breast cancer patients in a pivotal phase 3 registration study and suggests that a single 400-450 patient study may be acceptable to form the basis of a Marketing Authorization Application (MAA) in Europe.

Program 2 - Combination with IMiDs/targeted therapy

The initial activity supporting the innate immunity component of REOLYSIN's MOA, is in collaboration with Celgene Corporation (Celgene) and Myeloma UK, a cancer charity. MUK eleven was launched in March of 2017: a first of its kind immuno-therapy trial that aims to modulate the immune system to target myeloma. The Phase 1b trial will study REOLYSIN in combination with Celgene's Imnovid^® (pomalidomide) or Revlimid^® (lenalidomide) as a rescue treatment in relapsing myeloma patients. The dose escalation trial will look at the safety and tolerability of these combinations, and will investigate whether the addition of REOLYSIN extends disease control in this patient group.

The trial, which commenced enrollment in September 2017, will recruit approximately 44 patients across up to six Myeloma UK Clinical Trial Network centres in the UK. MUK eleven is part of the Myeloma UK Clinical Trial Network, a portfolio of early-stage trials coordinated by the Clinical Trials Research Unit at the University of Leeds, which aims to test and speed up access to promising new treatments for patients. Oncolytics and Celgene UK & Ireland are providing their respective products for MUK eleven: Oncolytics is providing REOLYSIN and Celgene UK & Ireland is providing Imnovid^® and Revlimid^®.

Program 3 - Immunotherapy combinations

In support of the adaptive immunity component of the MOA, we continued with our first checkpoint inhibitor study an open label design to assess the safety and dose-limiting toxicity of REOLYSIN in combination with pembrolizumab (KEYTRUDA^®) and chemotherapy in patients with histologically confirmed, advanced or metastatic adenocarcinoma of the pancreas (MAP) who have failed, or did not tolerate, first-line treatment (REO 024).

In June 2017, at the American Society of Clinical Oncology (ASCO) Annual Meeting, we presented safety data from REO 024 expanding our library of clinical data and established REOLYSIN as safe in combination with KEYTRUDA^®. The study enrolled 11 patients who were given REOLYSIN plus pembrolizumab, along with one of gemcitabine, 5-fluouracil or irinotecan. Grade 1 and 2 treatment emergent adverse events (TEAE) occurred in all patients and Grade 3 and 4 TEAE occurred in eight patients. Of the five efficacy evaluable patients, one had a partial response (six-month duration) and two had stable disease (lasting 126 and 221 days). Investigators noted that on-treatment biopsies revealed reovirus infection in cancer cells and immune infiltrates and concluded that the combination therapy showed manageable safety profiles and anti-tumour activity in previously treated MAP patients.

Immuno-Oncolytic Virus Safety Database

At the ESMO 2017 Congress, we announced pooled data analysis of the safety and tolerability of intravenous pelareorep in combination with chemotherapy in 500+ cancer patients. The analysis demonstrates a strong safety profile in support of our clinical development plan. Highlights of the pooled safety data study include:

• Adverse events reported most frequently by REOLYSIN-treated patients were reversible Grade 1 and 2 events, including fever, chills, fatigue and the gastrointestinal-related AEs of nausea, vomiting, diarrhea.

• REOLYSIN did not modify or increase chemotherapy-induced Grade 3 or 4 treatment-emergent adverse events (TEAEs).

• Certain serious TEAEs were more common in the REOLYSIN-treated arms, however the incidence of serious AEs due to febrile neutropenia and/or infection was similar in each group.

Manufacturing and Process Development

Throughout 2017, we supplied our clinical development program with previously filled product from our existing supply of REOLYSIN, labeled for the applicable usage. As well, we continued our activities to source and develop commercial production capabilities to fill REOLYSIN into vials, the next step in the process validation master plan. Process validation is required to ensure

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that the resulting product meets required specifications and quality standards and will form part of the Company’s submission to regulators, including the FDA, for product approval.

Intellectual Property

At the end of 2017, we had been issued over 411 patents including 47 US and 21 Canadian patents as well as issuances in other jurisdictions. We have an extensive patent portfolio covering the oncolytic reovirus that we use in our clinical trial program including a composition of matter patent that expires in 2028. Our patent portfolio also includes methods for treating proliferative disorders using modified adenovirus, HSV, parapoxvirus and vaccinia virus.

Business Development

In November 2017, we entered into a regional licensing agreement (the "Agreement") with Adlai Nortye Biopharma Co., Ltd. ("Adlai"). Under the terms of the Agreement, Adlai will have exclusive development and commercialization rights to REOLYSIN in China, Hong Kong, Macau, Singapore, South Korea and Taiwan. We are entitled to receive upfront license fees and milestone payments to support our phase 3 registration study of US$21.2 million and we are eligible to receive up to an additional US$65.4 million upon achievement of clinical, regulatory and commercialization milestones. We are also eligible to receive double digit royalty payments associated with the commercialization of REOLYSIN for all indications, subject to regulatory approval.

Financing Activity

"At-the-Market" equity distribution agreement

On February 25, 2016, we entered into an "at-the-market" equity distribution agreement with Canaccord Genuity Inc. acting as sole agent in Canada (our "Canadian ATM"). Under the terms of our Canadian ATM, we may, from time to time, sell shares of our common stock having an aggregate offering value of up to $4.6 million through Canaccord Genuity Inc. Sales of common shares, if any, pursuant to the Canadian ATM, will be made in transactions that are deemed to be "at-the-market distributions", through the facilities of the Toronto Stock Exchange or other "marketplace" (as defined in National Instrument 21-101 Marketplace Operation) in Canada. We will determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. During the year ending December 31, 2017, we sold 3,301,500 common shares for gross proceeds of $2,348,821. We incurred share issue costs of $245,655.

Public offering

On June 1, 2017, pursuant to an underwritten public offering, we sold 16,445,000 units at a purchase price of $0.70 per unit for gross proceeds of $11,511,500. Each unit included one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one common share at an exercise price of $0.95 expiring on June 1, 2022. The common share purchase warrants will be subject to acceleration if the volume weighted average price of the Company's common shares equals or exceeds $2.50 for 15 consecutive trading dates. We incurred share issue costs of $1,145,402.

Options

During the year ending December 31, 2017, we received cash proceeds of $343,440 with respect to the exercise of 801,000 options by former employees.

Financial Impact

We estimated that our cash requirements for 2017 to fund our operations for the year would be between $14 and $16 million. Our cash usage for the year was $14,891,318 for operating activities and $105,765 for the acquisition of property and equipment. Our net loss for the year was $15,616,851.

Cash Resources

We exited 2017 with cash and cash equivalents totaling $11,836,119 (see “Liquidity and Capital Resources”).

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Expected REOLYSIN Development For 2018

Our planned 2018 development activity for REOLYSIN focuses on our three-part clinical development program, manufacturing program and intellectual property program. Our primary objective in 2018 is to finalize the development of our registration strategy in an effort to commence a phase 3 clinical study in mBC. Our focus will be on the adaptive study design that will include approximately four hundred patients with a pre-determined interim analysis. Our proposed target population for the phase 3 study of pelareorep is patients with HR+/HER2- mBC, which represents approximately 73 percent of metastatic breast cancer cases that have limited treatment options that offer survival benefit. Our planned activity also includes expanding our research collaborations with large pharma in an effort support further development around the innate and adaptive immunity components of REOLYSIN's MOA. We expect these potential collaborations to include combinations with immunotherapies and IMiDs.

Our 2018 manufacturing program includes continued production of 100-litre cGMP production runs along with the related fill, labeling, packaging and shipping of REOLYSIN to our various clinical sites. We also plan to continue progressing through our process validation master plan and related conformity testing in 2018. Finally, our intellectual property program includes filings for additional patents along with monitoring activities required to protect our patent portfolio.

We currently estimate the cash requirements to fund our operations for 2018 will be approximately $16 million, but will depend on our ultimate clinical program. (see “Liquidity and Capital Resources”).

Our Accounting Policies

In preparing our financial statements we use IFRS as issued by the International Accounting Standards Board. IFRS requires that we make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available in selecting our accounting policies. Our selection of accounting policies, along with our estimates and assumptions affect the reported amounts of our assets and liabilities at the date of the financial statements and the reported amounts of expenses during the periods presented.

Critical Accounting Policies

In preparing our financial statements, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets at the date of the financial statements and the reported amounts of expenses during the periods presented. Significant estimates are used for, but not limited to, the treatment of our research and development expenditures, revenue recognition and the calculation of stock based compensation (see Note 4 " Significant Judgments, Estimates and Assumptions") of our audited consolidated financial statements.

The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

Research and Development

Research costs are expensed as incurred, net of recoveries. We record accruals for the estimated costs of our clinical trial activities performed by third parties. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of certain clinical trial activities. We generally accrue costs associated with the treatment phase of clinical trials based on the total estimated cost of the treatment phase on a per patient basis and we expense the per patient cost ratably over the estimated patient treatment period based on patient enrollment in the trials. Advance payments for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses and recognized as expense as the related goods are delivered or the related services are performed. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified.

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Development costs that meet specific criteria related to technical, market and financial feasibility will be capitalized. To date, all development costs have been expensed.

Revenue recognition

Revenue relates to a long-term contract associated with a regional licensing agreement (the "Agreement") with Adlai Nortye Biopharma Co., Ltd. ("Adlai"). The pricing for the contract was based on the specific negotiations with Adlai and includes non-refundable upfront license fees, development and regulatory milestone payments, royalties and sales-based milestone payments.

We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

Under the Agreement, we have granted a regional license to our intellectual property. The granting of this license is accounted for as one performance obligation. We have determined that we provide Adlai with a right to access our intellectual property, and therefore recognize revenue related to the upfront license fee over time. Revenue is recognized based on the extent of progress towards completion of the performance obligation using the input method. Under the input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. We use this method because Adlai receives and consumes the benefit of our intellectual property as we undertake activities that impact the intellectual property. Management must use judgment in making assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables.

The contract also provides for development and regulatory milestone payments, royalties and sales-based milestone payments. These amounts are contingent on the occurrence of a future event and therefore give rise to variable consideration. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price when it becomes highly probable that the amount will not be subject to significant reversal when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. Based on this information and related analysis, any quarterly adjustments to revenue are recognized as necessary in the period they become known.

The upfront license fee is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect us from the other party failing to adequately complete some or all of its obligations under the contract.

Revenue from sales-based royalties and the achievement of annual sales volumes will be recognized when the subsequent sale occurs, as the license of the intellectual property is the predominant item to which the royalty relates. We consider payments associated with the achievement of annual sales volumes to be, in substance, royalty payments and we will recognize such sales-based payments upon achievement of such sales volumes, provided that collection is reasonably assured.

Contract receivable - Contract receivable includes amounts billed and currently due from customers. When appropriate, we provide for an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. We perform a review of our customer’s credit risk and payment histories, including payments made subsequent to year-end.

Contract liability - Our contract liability includes upfront license fees and billings in excess of revenue recognized. Contract liabilities are recognized as revenue as or when we perform under the contract. We classify our contract liability as current or noncurrent based on the timing of when we expect to recognize revenue.

Adoption of New Accounting Standards

IFRS 15 - Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers. The new standard will replace IAS 18 Revenue and IAS 11 Construction Contracts. IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised, and also contains new requirements related to presentation. The core principle in that framework is that revenue should be recognised dependent on the transfer of promised goods or services to the customer for an amount that reflects the consideration which should be received in exchange for those goods or services. The objective of the standard is to provide a five-step approach to revenue recognition that includes identifying contracts with customers, identifying performance obligations, determining transaction prices, allocating transaction prices to performance obligations, and recognising revenue when or as performance obligations are satisfied. Judgment will need to be applied, including making estimates and assumptions, for multiple-element contracts in identifying performance obligations, in constraining estimates of variable consideration and in allocating the transaction price to each performance obligation. This new standard is effective for annual periods beginning on or

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after January 1, 2018, with early adoption permitted. We early adopted this standard effective for our year ended December 31, 2017 using the full retrospective method. There were no adjustments to our consolidated financial statements resulting from this early adoption.

Accounting Standards and Interpretations Issued but Not Yet Effective

IFRS 9 - Financial Instruments

In July 2014, on completion of the impairment phase of the project to reform accounting for financial instruments and replace IAS 39 Financial Instruments: Recognition and Measurement, the IASB issued the final version of IFRS 9 Financial Instruments. IFRS 9 includes guidance on the classification and measurement of financial assets and financial liabilities and impairment of financial assets (i.e. recognition of credit losses).

Under the classification and measurement requirements for financial assets, financial assets must be classified and measured at either amortized cost or at fair value through profit or loss or through other comprehensive income, depending on the basis of the entity’s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset.

The classification requirements for financial liabilities are unchanged from IAS 39. IFRS 9 requirements address the problem of volatility in net earnings arising from an issuer choosing to measure certain liabilities at fair value and require that the portion of the change in fair value due to changes in the entity’s own credit risk be presented in other comprehensive income, rather than within net earnings.

The new requirements for impairment of financial assets introduce an expected loss impairment model that requires more timely recognition of expected credit losses. IAS 39 impairment requirements are based on an incurred loss model where credit losses are not recognized until there is evidence of a trigger event. IFRS 9 is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted. We are assessing the impact of adopting this standard on our consolidated financial statements.

IFRS 16 - Leases

In January 2016, the IASB issued IFRS 16 - Leases (“IFRS 16”), which replaces IAS 17 - Leases (“IAS 17”) and related interpretations. IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease term is 12-months or less or the underlying asset has a low value. IFRS 16 substantially carries forward the lessor accounting in IAS 17 with the distinction between operating leases and finance leases being retained. IFRS 16 will be applied retrospectively for annual periods beginning on or after January 1, 2019. Early adoption is permitted under certain circumstances. We are assessing the potential impact of adopting this standard on our consolidated financial statements.

Significant Estimates

Revenue recognition

We entered into an Agreement which provides, among other payments, for upfront license fees in exchange for a regional license to our intellectual property. Management uses its judgment in applying the input method when determining the extent of progress towards completion of the performance obligation. Revenue recognition requires assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables.

Share Based Payments

As required by IFRS, share based payments are to be recorded at their fair value at the date of grant. We have chosen to use the Black Scholes Option Pricing Model (“Black Scholes” or the “Model”) to calculate the fair value of our stock options and warrants. Though there are other models available to calculate the option values (for example, the binomial model), Black Scholes is currently widely used and accepted by other publicly traded companies. Therefore, we have concluded that Black Scholes is the appropriate option pricing model to use for our stock options at this time.

Black Scholes uses inputs in its calculation of fair value that require us to make certain estimates and assumptions. For 2017, we used the following weighted average assumptions for the calculation of the fair value of the stock options granted during the year:

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	2017
Risk-free interest rate	1.18%
Expected hold period to exercise	3.0 years
Volatility in the price of the Company's shares	90.73%
Rate of forfeiture	3.67%
Dividend yield	Nil
Weighted average fair value of options	$0.28

A change in these estimates and assumptions will impact the value calculated by the model. For instance, the volatility in the price of our shares is based on the quoted trading price. We assume that weekly trading prices best reflect our trading price volatility. However, an entity can choose between daily, weekly, or monthly trading prices in the volatility calculation.

The Model also uses an expected hold period to exercise in its calculation of fair value. When we are estimating the expected hold period to exercise we take into consideration past history, the current trading price, the volatility of our common shares and the progress in our clinical program. Our conclusions resulted in an expected hold period for the stock options issued in 2017 to be 3.0 years and we believe this is an appropriate estimate. However, our options have a 10-year life and given the fluctuations in our stock price the expected hold period could be different.

Consequently, in complying with IFRS and selecting what we believe are the most appropriate assumptions under the circumstances, we have recorded non-cash share based payment expense for the year of $578,703. However, given the above discussion, this expense could have been different and still be in accordance with IFRS.

Selected Annual Information

	2017 $		2016 $		2015 $
Revenue	—		—		—
Consolidated net loss(1)	(15,616,851	)	(15,139,979	)	(13,722,995	)
Basic and diluted loss per share(1), (2)	(0.12	)	(0.13	)	(0.12	)
Total assets (2)	18,150,449		14,758,284		27,383,798
Cash dividends declared per share(3)	Nil		Nil		Nil
Notes:
(1) Included in consolidated net loss and loss per common share for 2017, 2016, and 2015 are share based payment expenses of $578,703, $406,078 and $429,537, respectively.
(2) We issued 20,547,500 common shares for net cash proceeds of $12.8 million in 2017 (2016 - 3,106,600 common shares for net cash proceeds of $1.0 million; 2015 - 24,639,128 common shares for net cash proceeds of $23.7 million).
(3) We have not declared or paid any dividends since incorporation.

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Results of Operations

Net loss for the year was $15,616,851 compared to $15,139,979 and $13,722,995 for the years ending December 31, 2016 and December 31, 2015, respectively.

Research and Development Expenses (“R&D”)

	2017 $		2016 $		2015 $
Clinical trial expenses	2,475,918		1,806,335		1,553,037
Manufacturing and related process development expenses	1,726,432		1,725,835		2,306,024
Intellectual property expenditures	847,650		1,096,097		1,032,227
Research collaboration expenses	252,482		369,469		698,909
Other R&D expenses	3,926,197		4,367,595		3,868,753
Scientific research and development refund	(941	)	(1,203	)	(62,144	)
Foreign exchange loss (gain)	(65,256	)	171,960		(1,051,958	)
Share based payments	230,141		233,919		257,016
Research and development expenses	9,392,623		9,770,007		8,601,864

Clinical Trial Program

Clinical trial expenses include those costs associated with our clinical trial program which primarily included our randomized phase 2 studies investigating chemotherapy combinations (Program 1) and immunotherapy combinations (Program 3). Included in clinical trial expenses are direct patient enrollment costs, contract research organization (“CRO”) expenses, clinical trial site selection and initiation costs, data management expenses and other costs associated with our clinical trial program.

	2017 $	2016 $	2015 $
Clinical trial expenses	2,475,918	1,806,335	1,553,037

During 2017, our clinical trial expenses were $2,475,918 compared to $1,806,335 and $1,553,037 for the years ended December 31, 2016 and December 31, 2015, respectively. In 2017, our clinical trial program focused mainly on the preparation and development of our breast cancer registration study. These activities included costs to complete our supporting regulatory documents, regulatory filing fees, planning for and attending scientific advisory meetings with the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA), and key opinion leader activities. In addition, with the signing of our Regional Licensing Agreement that included upfront licensing fees in November 2017, we triggered payments of $640,579 as detailed in our Assumption Agreement (see Notes 10 and 12 of our audited consolidated financial statements). Costs associated with these activities were partially offset as we continued to close out legacy clinical trial sites truing up our cost estimates with the actual costs incurred. In 2017 and 2016, our clinical activities included patient enrollment in our checkpoint inhibitor pancreatic cancer study investigating pembrolizumab (KEYTRUDA^®) in combination with REOLYSIN. In 2016, our clinical trial expenses also included costs associated with the completion of enrollment in our randomized Phase 2 studies.

The change in clinical trial expenses in 2016 compared to 2015 was due to completion of enrollment in our Randomized Studies and close out of fully enrolled clinical trials in 2015.

We expect our clinical trial expenses to increase in 2018 compared to 2017. During 2018, we expect to finalize the development of our registration strategy and possibly commence enrollment in a registration study as part of Program 1 of our clinical development plan. As well, we expect to expand Program 2 and Program 3 of our clinical development plan to include both checkpoint inhibitors and immune modulators (IMiDs).

Manufacturing & Related Process Development (“M&P”)

M&P expenses include product manufacturing and process development activities. Product manufacturing expenses include third party direct manufacturing costs, quality control testing, fill, label, packaging and storage costs and are net of any recoveries that

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are received from any R&D collaborators. Process development expenses include costs associated with studies that examine components of our manufacturing process looking for improvements and costs associated with the creation of our process validation master plan and related conformity testing.

	2017 $	2016 $	2015 $
Product manufacturing expenses	1,054,903	1,162,446	1,618,165
Process development expenses	671,529	563,389	687,859
Manufacturing and related process development expenses	1,726,432	1,725,835	2,306,024

Our M&P expenses for 2017 were $1,726,432 compared to $1,725,835 and $2,306,024 for the years ending December 31, 2016 and December 31, 2015. During 2017 and 2016, our product manufacturing activities mainly related to shipping and storage costs of our bulk and vialed product. In 2016, these costs were partly offset by recoveries from a development collaboration. During 2015, our production manufacturing activities mainly related to supplying our clinical programs with sufficient REOLYSIN, including the fill, labeling and lot release testing of product and the shipping and storage of our bulk and vialed product.

Our process development expenses for 2017 were $671,529 compared to $563,389 and $687,859 for the years ending December 31, 2016 and December 31, 2015, respectively. During 2017, our process development activities focused on stability, process optimization studies, assay development and biodistribution studies. In 2016 and 2015, our process development activities focused on our validation master plan, which included included stability, scale up and process optimization studies. In 2015 these activities also included assay development and validation studies.

We expect our M&P expenses for 2018 to increase compared to 2017. In 2018, we expect to fill, label and store sufficient product as we attempt to commence a registration study. We also expect to continue to perform stability testing and analytical development related to our process validation master plan and stability program.

Intellectual Property Expenses

Intellectual property expenses include legal and filing fees associated with our patent portfolio.

	2017 $	2016 $	2015 $
Intellectual property expenses	847,650	1,096,097	1,032,227

Our intellectual property expenses for 2017 were $847,650 compared to $1,096,097 and $1,032,227 for the years ending December 31, 2016 and December 31, 2015, respectively. The change in intellectual property expenditures reflects the timing of filing costs and expiration and lapsing of patents in certain jurisdictions in 2017. The decline in 2017 is also a result of the maturation of our patent portfolio, which incurs less fees. At the end of 2017, we had been issued over 411 patents including 47 US and 21 Canadian patents, as well as issuances in other jurisdictions.

We expect that our intellectual property expenses will remain consistent in 2018 compared to 2017.

Research Collaborations

Research collaborations are intended to expand our intellectual property related to REOLYSIN and identify potential licensing opportunities arising from our technology base.

	2017 $	2016 $	2015 $
Research collaborations	252,482	369,469	698,909

During 2017, our research collaboration expenses were $252,482 compared to $369,469 and $698,909 for the years ending December 31, 2016 and December 31, 2015, respectively. In 2017 and 2016, our research collaborations included studies investigating the interaction of the immune system and REOLYSIN along with biomarker studies. In 2015, our research collaborations also included the use of the reovirus as a co-therapy with existing chemotherapeutics and radiation.

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We expect that our research collaborations in 2018 will increase compared to 2017. We expect to complete our ongoing collaborative program carried over from 2017 and will continue to be selective in the types of new collaborations we enter into in 2018.

Other Research and Development Expenses

Other research and development expenses include compensation expenses for employees (excluding share based payments), travel and other miscellaneous R&D expenses.

	2017 $	2016 $	2015 $
R&D salaries and benefits	3,662,638	4,138,235	3,388,272
Other R&D expenses	263,559	229,360	480,481
Other research and development expenses	3,926,197	4,367,595	3,868,753

In 2017, our Other Research and Development expenses were $3,926,197 compared to $4,367,595 and $3,868,753 for the years ending December 31, 2016 and December 31, 2015, respectively. Our Other Research and Development activities focused on supporting our clinical development program along with other third party trials and clinical trials sponsored by Oncolytics. R&D salaries and benefits in 2017 included severance payments of $779,666 to certain officers of the Company and in 2016 included a retirement allowance of $1,330,828 paid to the previous Chief Executive Officer. Normalizing for these payments, our R&D salaries and benefits increased compared to 2016 primarily due to an increase in bonuses paid to officers and employees in 2017. R&D salaries and benefits was also impacted by the change in officers in 2017 and 2016.

The change in Other R&D expenses in 2017 compared to 2016 was due to an increase in conference attendance and related travel expenses. The change in Other R&D expenses in 2016 compared to 2015 was due to the completion of enrollment in our CCTG trials and the close out of completed Company sponsored studies in 2015.

We expect our Other R&D expenses to increase in 2018 compared to 2017 due to an increase in headcount to support our registration study.

Scientific Research and Development Refund

	2017 $		2016 $		2015 $
Scientific research and development refund	(941	)	(1,203	)	(62,144	)

In 2017, 2016, and 2015, we received Alberta and Quebec scientific research and development refunds totaling $941, $1,203, and $62,144, respectively. During the three year period 2015-2017, our qualified expenditures for scientific research and development refunds in Canada have declined.

Foreign Exchange (Gain) Loss

	2017 $		2016 $	2015 $
Foreign exchange (gain) loss	(65,256	)	171,960	(1,051,958	)

For the year ending December 31, 2017, our foreign exchange (gain) loss was $(65,256) compared to $171,960 for the year ending December 31, 2016 and $(1,051,958) for the year ending December 31, 2015. The foreign exchange (gain) losses incurred in 2017 and 2016 were primarily a result of the fluctuations in the US dollar, Euro and Pound Sterling exchange rates. In 2015, our foreign exchange gain was primarily a result of the strengthening of the US dollar and that the proceeds from our financing activities were in US dollars.

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Share Based Payments

	2017 $	2016 $	2015 $
Share based payments	230,141	233,919	257,016

Non-cash share based payments for the year ending December 31, 2017 were $230,141 compared to $233,919 and $257,016 for the years ending December 31, 2016 and December 31, 2015, respectively. We incurred share based payment expenses associated with the granting of options and restricted share units to employees associated with our research and development activities and the vesting of previously granted share awards.

Operating Expenses

	2017 $	2016 $	2015 $
Public company related expenses	2,970,707	3,172,676	2,932,436
Office expenses	2,802,794	2,017,432	2,030,469
Amortization of property and equipment	90,768	162,233	180,411
Share based payments	348,562	172,159	172,521
Operating expenses	6,212,831	5,524,500	5,315,837

Public company related expenses include costs associated with investor relations and business development activities, legal and accounting fees, corporate insurance, director fees and transfer agent and other fees relating to our U.S. and Canadian stock listings. In 2017, we incurred public company related expenses of $2,970,707 compared to $3,172,676 and $2,932,436 for the years ending December 31, 2016 and December 31, 2015, respectively. The change in these costs in 2017 compared to 2016 was a result of our change in philosophy regarding investor relations (IR) activities, where we eliminated certain IR services and brought elements in-house and rationalized IR related travel activity which was partly offset by an increase in business development activities in 2017. The increase in public company related expenses in 2016 compared to 2015 was due to an increase in investor relations activities.

Office expenses include compensation costs (excluding share based payments), office rent and other office related costs. In 2017, we incurred office expenses of $2,802,794 compared to $2,017,432 and $2,030,469 for the years ending December 31, 2016 and December 31, 2015, respectively. The change in office expenses in 2017 compared to 2016 was due to an increase in headcount and a change in salary levels during the first half of 2017. In 2016 and 2015, our office expenses remained relatively consistent.

In 2017, our non-cash share based payment expenses were $348,562 compared to $172,159 and $172,521 for the years ending December 31, 2016 and December 31, 2015, respectively. In 2017, 2016 and 2015, we incurred share based payment expenses associated with the granting of options, restricted share units and performance share units to officers, employees and independent board members along with the vesting of previously granted share awards.

We expect our operating expenses in 2018 to increase compared to 2017.

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Summary of Quarterly Results

	2017								2016
	Dec.		Sept.		June		March		Dec.		Sept.		June		March
Revenue	—		—		—		—		—		—		—		—
Net loss(2)	4,746		3,004		4,349		3,518		5,210		3,332		2,581		4,017
Basic and diluted loss per common share(2)	$	0.03	$	0.02	$	0.03	$	0.03	$	0.04	$	0.03	$	0.02	$	0.03
Total assets(3)	18,150		14,848		17,579		10,623		14,758		18,437		21,368		23,023
Total cash(1), (3)	11,836		14,034		16,676		10,102		14,123		17,702		20,410		22,322
Total long-term debt	—		—		—		—		—		—		—		—
Cash dividends declared(4)	Nil		Nil		Nil		Nil		Nil		Nil		Nil		Nil

(1) Included in total cash are cash and cash equivalents plus short-term investments.

(2) Included in net loss and loss per common share between December 2017 and January 2016 are quarterly share based payment expenses of $140,659, $148,447, $155,708, $133,889, $106,443, $98,369, $119,626 and $81,640, respectively.

(3) We issued 20,547,500 common shares for net cash proceeds of $12.8 million in 2017 (2016 - 3,106,600 common shares for net cash proceeds of $1.0 million).

(4) We have not declared or paid any dividends since incorporation.

Fourth Quarter

Statement of loss for the three month period ended December 31, 2017 and 2016:

For the three month periods ending December 31,	2017 $		2016 $
Expenses
Research and development	2,479,153		3,411,185
Operating	2,158,381		1,816,183
Loss before the following	(4,637,534	)	(5,227,368	)
Interest	33,464		27,053
Loss before income taxes	(4,604,070	)	(5,200,315	)
Income taxes	(141,514	)	(9,707	)
Net loss	(4,745,584	)	(5,210,022	)
Other comprehensive gain - translation adjustment	12,004		61,423
Net comprehensive loss	(4,733,580	)	(5,148,599	)
Basic and diluted loss per common share	(0.03	)	(0.04	)
Weighted average number of shares (basic and diluted)	141,162,287		121,145,249

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Fourth Quarter Review of Operations

For the three month period ended December 31, 2017 our net loss was $4,745,584 compared to $5,210,022 for the three month period ended December 31, 2016.

Research and Development Expenses (“R&D”)

	2017 $	2016 $
Clinical trial expenses	459,884	229,945
Manufacturing and related process development expenses	483,887	450,149
Intellectual property expenses	105,192	269,025
Research collaboration expenses	73,966	177,794
Other R&D expenses	1,198,164	2,300,862
Foreign exchange loss (gain)	110,779	(60,097	)
Share based payments	47,281	43,507
Research and development expenses	2,479,153	3,411,185

Clinical Trial Expenses

	2017 $	2016 $
Clinical trial expenses	459,884	229,945

During the fourth quarter of 2017, our clinical trial expenses were $459,884 compared to $229,945 for the fourth quarter of 2016. In the fourth quarter of 2017, our clinical trial program activities related primarily to the preparation and development of our breast cancer registration study, which included costs to complete our supporting regulatory documents, regulatory filing fees and attending an End of Phase 2 meeting with the EMA. Our clinical trial program activities also included patient enrollment in our checkpoint inhibitor pancreatic cancer study investigating pembrolizumab (KEYTRUDA^®) in combination with REOLYSIN. In addition, with the signing of a regional licensing agreement with upfront licensing fees in November 2017, we triggered payments to former shareholders of $640,579 as detailed in the Assumption Agreement (see Notes 10 and 12 of our audited consolidated financial statements). Costs associated with these activities were offset as we continued to close out legacy clinical trial sites truing up our cost estimates with the actual costs incurred. In the fourth quarter of 2016, our clinical trial program activities related primarily to the patient enrollment in our checkpoint inhibitor pancreatic cancer study investigating pembrolizumab (KEYTRUDA^®) in combination with REOLYSIN.

Manufacturing & Related Process Development Expenses (“M&P”)

	2017 $	2016 $
Product manufacturing expenses	226,553	353,605
Process development expenses	257,334	96,544
Manufacturing and related process development expenses	483,887	450,149

During the fourth quarter of 2017, our M&P expenses were $483,887 compared to $450,149 for the fourth quarter of 2016. During the fourth quarters of 2017 and 2016, our product manufacturing costs mainly related to shipping and storage costs of our bulk and vialed product.

Our process development activity for the fourth quarter of 2017 related to stability studies and a biodistribution study compared to stability studies for the fourth quarter of 2016.

Intellectual Property Expenses

	2017 $	2016 $
Intellectual property expenses	105,192	269,025

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Our intellectual property expenses for the fourth quarter of 2017 were $105,192 compared to $269,025 for the fourth quarter of 2016. The change in intellectual property expenditures reflects the timing of filing costs and expiration and lapsing of patents in certain jurisdictions in 2017. The decline in 2017 is also a result of the maturation of our patent portfolio, which incurs less fees. At the end of the fourth quarter of 2017, we had been issued over 411 patents including 47 US and 21 Canadian patents, as well as issuances in other jurisdictions.

Research Collaboration Expenses

	2017 $	2016 $
Research collaboration expenses	73,966	177,794

Our research collaboration expenses were $73,966 in the fourth quarter of 2017 compared to $177,794 for the fourth quarter of 2016. During the fourth quarter of 2017, our research collaborations were primarily focused on studies investigating the interaction of the immune system and REOLYSIN. During the fourth quarter of 2016, our research collaborations were primarily focused on biomarker studies.

Other Research and Development Expenses

	2017 $	2016 $
R&D salaries and benefits	1,120,534	2,225,080
Other R&D expenses	77,630	75,782
Other research and development expenses	1,198,164	2,300,862

Our other research and development expenses were $1,198,164 in the fourth quarter of 2017 compared to $2,300,862 in the fourth quarter of 2016. In the fourth quarter of 2016, our salaries and benefits costs included a retirement allowance of $1,330,828 paid to the previous chief executive officer. Normalizing for the retirement allowance, our R&D salaries and benefits increased in the fourth quarter of 2017 compared to 2016 primarily due to an increase in bonuses paid to officers and employees. Our Other R&D expenses in the fourth quarter of 2017 were consistent with 2016.

Share Based Payments

	2017 $	2016 $
Share based payments	47,281	43,507

During the fourth quarters of 2017 and 2016, we incurred share based payment expenses associated with the granting of options and restricted share units to employees associated with our research and development activities and the vesting of previously granted share awards.

Operating Expenses

	2017 $	2016 $
Public company related expenses	969,018	911,811
Office expenses	1,075,532	813,834
Amortization of property and equipment	20,453	27,602
Share based payments	93,378	62,936
Operating expenses	2,158,381	1,816,183

Our operating expenses in the fourth quarter of 2017 were $2,158,381 compared to $1,816,183 for the fourth quarter of 2016. Public company related expenses include costs associated with investor relations, business development and financial advisory activities, legal and accounting fees, corporate insurance, director fees and transfer agent and other fees relating to our Canadian and U.S. stock listings. During the fourth quarter of 2017, our public company related expenses were $969,018 compared to $911,811 for the fourth quarter of 2016. The increase was due to an increase in business development activities in the fourth quarter

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of 2017 partly offset by a decrease in IR activities as a result of our change in philosophy, where we eliminated certain IR services and brought elements in-house.

Office expenses include compensation costs (excluding share based payments), office rent and other office related costs. During the fourth quarter of 2017, our office expenses were $1,075,532 compared to $813,834 for the fourth quarter of 2016. The change was due to an increase in headcount and an increase in bonuses paid to officers and employees in 2017.

Our non-cash share based payment expenses in the fourth quarter of 2017 were $93,378 compared to $62,936 for the fourth quarter of 2016. We incurred share based payment expenses associated with the granting of options and restricted share units to officers, employees and independent board members along with the vesting of previously granted share awards.

Liquidity and Capital Resources

2017 Financing Activities

Canadian "At the Market" Equity Distribution Agreement

During 2017, we issued 3,301,500 common shares for net proceeds of $2,103,166.

Public offering

On June 1, 2017 we closed a public offering whereby we sold 16,445,000 units at a purchase price of $0.70 per unit for gross proceeds of $11,511,500. Each unit included one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one common share at an exercise price of $0.95 expiring on June 1, 2022. The common share purchase warrants will be subject to acceleration if the volume weighted average price of the Company's common shares equals or exceeds $2.50 for 15 consecutive trading dates. We incurred share issue costs of $1,145,402.

Options

During 2017, we received cash proceeds of $343,440 with respect to the exercise of 801,000 options by former employees.

2016 Financing Activities

Canadian "At the Market" Equity Distribution Agreement

During 2016, we issued 3,006,600 common shares for net proceeds of $956,133.

Liquidity

As at December 31, 2017 and 2016, we had cash and cash equivalents, short-term investments and working capital positions as follows:

	2017 $	2016 $
Cash and cash equivalents	11,836,119	12,034,282
Short-term investments	—	2,088,800
Working capital position	12,587,340	10,369,665

The decrease in our cash and cash equivalent and short term investment positions reflects the cash usage from our operating activities of $14.9 million along with the cash provided by our financing activities of $12.8 million for the year ending December 31, 2017.

We desire to maintain adequate cash and short-term investment reserves to support our planned activities which include our clinical trial program, product manufacturing, administrative costs, and our intellectual property expansion and protection. To date, we have funded our operations mainly through the issue of additional capital via public and private offerings and through the exercise of warrants and stock options. In February 2016, we were able to raise funds through our Canadian ATM (our "Financing Arrangement").

We have no assurances that we will be able to raise additional funds through the sale of our common shares, consequently, we will continue to evaluate all types of financing arrangements. In an effort to be able to evaluate all types of financing arrangements,

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we maintain a current short form base shelf prospectus (the “Base Shelf”) that qualifies for distribution of up to $150,000,000 of common shares, subscription receipts, warrants, or units (the “Securities”). We renewed our Base Shelf on February 16, 2016 which allows us to sell Securities to or through underwriters, dealers, placement agents or other intermediaries and also allows us to sell Securities directly to purchasers or through agents, subject to obtaining any applicable exemption from registration requirements. The distribution of Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, or at prices related to such prevailing market prices to be negotiated with purchasers and as set forth in an accompanying Prospectus Supplement. Our Base Shelf expires on March 16, 2018.

Maintaining our Base Shelf provides us with additional flexibility when managing our cash resources as, under certain circumstances, it shortens the time period required to close a financing and is expected to increase the number of potential investors that may be prepared to invest in our company. By utilizing our Base Shelf, we were able to enter into our Financing Arrangement.

Our Financing Arrangement provides us with access to, subject to the respective terms and conditions, $4.6 million of which we have raised gross proceeds of approximately $3.8 million at December 31, 2017. We expect to continue to access our Financing Arrangement to help support our current clinical trial, manufacturing, intellectual property and collaboration programs.

We anticipate that the expected cash usage from our operations in 2018 will be approximately $16 million. We continue to manage our research and development plan with the objective of ensuring optimal use of our existing resources. Additional activities continue to be subject to adequate resources and we believe we will have sufficient cash resources and access to additional cash resources through our Financing Arrangements to fund our presently planned operations into 2018. Factors that will affect our anticipated cash usage in 2018, and for which additional funding might be required include, but are not limited to, expansion of our clinical trial program, the timing of patient enrollment in our approved clinical trials, the actual costs incurred to support each clinical trial, the number of treatments each patient will receive, the timing of R&D activity with our clinical trial research collaborations, the number, timing and costs of manufacturing runs required to conclude the validation process and supply product to our clinical trial program, and the level of collaborative activity undertaken.

We are not subject to externally imposed capital requirements and there have been no changes in how we define or manage our capital in 2017.

Contractual Obligations

We have the following contractual obligations as at December 31, 2017:

Contractual Obligations	Payments Due by Period
	Total $	Less than 1 year $	2 -3 years $	4 - 5 years $	More than 5 years $
Capital lease obligations	Nil	—	—	—	—
Operating lease (1)	740,850	285,987	411,733	43,130	—
Purchase obligations	5,980,454	5,980,454	—	—	—
Other long term obligations	Nil	—	—	—	—
Total contractual obligations	6,721,304	6,266,441	411,733	43,130	—

Note:

1. Our operating leases are comprised of our office leases and exclude our portion of operating costs.

We expect to fund our capital expenditure requirements and commitments with existing working capital.

Off-Balance Sheet Arrangements

As at December 31, 2017, we had not entered into any off-balance sheet arrangements.

Transactions with Related Parties

In 2017, with the signing of our Regional Licensing Agreement with upfront license fees (see Note 10 of our audited consolidated financial statements), we triggered a liability of US$178,125 to an officer as detailed in the Assumption Agreement (see Note 12 of our audited consolidated financial statements). As at December 31, 2017, US$178,125 was included in accounts payable and

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accrued liabilities. US$35,625 was paid in January 2018 and the balance will be paid after receipt of the contract receivable from Adlai Nortye Biopharma Co., Ltd.

In 2017, 2016 and 2015, we did not enter into any other related party transactions other than compensation paid to Key Management Personnel disclosed in Note 20 of our audited consolidated financial statements.

Financial Instruments and Other Instruments

Our financial instruments consist of cash and cash equivalents, contract receivable, other receivables and accounts payable. As at December 31, 2017, there are no significant differences between the carrying values of these amounts and their estimated market values. These financial instruments expose us to the following risks:

Credit risk

Credit risk is the risk of financial loss if a counter-party to a financial instrument fails to meet its contractual obligations. We are exposed to credit risk on our cash and cash equivalents and contract receivable in the event of non-performance by counterparties, but we do not anticipate such non-performance. Our maximum exposure to credit risk at the end of the period is the carrying value of our cash and cash equivalents and contract receivable.

We mitigate our exposure to credit risk by maintaining our primary operating and investment bank accounts with Schedule I banks in Canada. For our foreign domiciled bank accounts, we use referrals or recommendations from our Canadian banks to open foreign bank accounts and these accounts are used solely for the purpose of settling accounts payable or payroll.

We mitigate our exposure to credit risk connected to our contract receivable by performing a review of our customer's credit risk and payment histories, including payments made subsequent to year-end.

Interest rate risk

Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We are exposed to interest rate risk through our cash and cash equivalents and our portfolio of short-term investments. We mitigate this risk through our investment policy that only allows investment of excess cash resources in investment grade vehicles while matching maturities with our operational requirements.

Fluctuations in market rates of interest do not have a significant impact on our results of operations due to the short term to maturity of the investments held.

Currency risk

Currency risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. In the normal course of our operations, we are exposed to currency risk from the purchase of goods and services primarily in the U.S., the U.K. and the European Union. In addition, we are exposed to currency risk to the extent cash is held in foreign currencies from either the purchase of foreign currencies or when we receive foreign currency proceeds from operating and financing activities. As well, we are exposed to currency risk related to our regional licensing agreement. The impact of a $0.01 increase in the value of the U.S. dollar against the Canadian dollar would have decreased our net loss in 2017 by approximately $5,056. The impact of a $0.10 increase in the value of the British pound against the Canadian dollar would have increased our net loss in 2017 by approximately $21,492. The impact of a $0.10 increase in the value of the Euro against the Canadian dollar would have increased our net loss in 2017 by approximately $11,736.

We mitigate our foreign exchange risk by maintaining sufficient foreign currencies, through the purchase of foreign currencies or receiving foreign currencies from financing activities, to settle our foreign accounts payable.

Balances in foreign currencies at December 31, 2017 are as follows:

	US dollars $		British pounds £		Euro €
Cash and cash equivalents	1,948,573		21,755		19,372
Contract receivable	3,800,000		—		—
Accounts payable	(777,271	)	(13,949	)	(1,100	)
	4,971,302		7,806		18,272

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Liquidity risk

Liquidity risk is the risk that we will encounter difficulty in meeting obligations associated with financial liabilities. We manage liquidity risk through the management of our capital structure as outlined in the notes to our audited financial statements. Accounts payable are all due within the current operating period.

Risk Factors Affecting Future Performance

General Risk Factors

Prospects for biotechnology companies in the research and development stage should generally be regarded as speculative. It is not possible to predict, based upon studies in animals, or early studies in humans, whether a new therapeutic will ultimately prove to be safe and effective in humans, or whether necessary and sufficient data can be developed through the clinical trial process to support a successful product application and approval.

If a product is approved for sale, product manufacturing at a commercial scale and significant sales to end users at a commercially reasonable price may not be successful. There can be no assurance that we will generate adequate funds to continue development, or will ever achieve significant revenues or profitable operations. Many factors (e.g. competition, patent protection, appropriate regulatory approvals) can influence the revenue and product profitability potential.

In developing a pharmaceutical product, we rely upon our employees, contractors, consultants and collaborators and other third party relationships, including the ability to obtain appropriate product liability insurance. There can be no assurance that this reliance and these relationships will continue as required.

In addition to developmental and operational considerations, market prices for securities of biotechnology companies generally are volatile, and may or may not move in a manner consistent with the progress we have made or are making.

Our product REOLYSIN is in the research and development stage and will require further development and testing before it can be marketed commercially.

Prospects for companies in the biotechnology industry generally may be regarded as uncertain given the nature of the industry and, accordingly, investments in biotechnology companies should be regarded as speculative. We are currently in the research and development stage on one product, REOLYSIN, for human application, the riskiest stage for a company in the biotechnology industry. It is not possible to predict, based upon studies in animals, or early studies in humans, whether REOLYSIN will prove to be safe and effective in humans. REOLYSIN will require additional research and development, including extensive clinical testing, before we will be able to obtain the approval of the United States Food and Drug Administration (the “FDA”) or from similar regulatory authorities in other countries to market REOLYSIN commercially. There can be no assurance that the research and development programs conducted by us will result in REOLYSIN or any other products becoming commercially viable products, and in the event that any product or products result from the research and development program, it is unlikely they will be commercially available for a number of years.

To achieve profitable operations, we, alone or with others, must successfully develop, introduce and market our products. To obtain regulatory approvals for products being developed for human use, and to achieve commercial success, human clinical trials must demonstrate that the product is safe for human use and that the product shows efficacy. Unsatisfactory results obtained from a particular study relating to a program may cause us to abandon our commitment to that program or the product being tested. No assurances can be provided that any current or future animal or human test, if undertaken, will yield favorable results. If we are unable to establish that REOLYSIN is a safe, effective treatment for cancer, we may be required to abandon further development of the product and develop a new business strategy.

There are inherent risks in pharmaceutical research and development.

Pharmaceutical research and development is highly speculative and involves a high and significant degree of risk. The marketability of any product developed by us will be affected by numerous factors beyond our control, including:

• the discovery of unexpected toxicities or lack of sufficient efficacy of products which make them unattractive or unsuitable for human use;

• preliminary results as seen in animal and/or limited human testing may not be substantiated in larger controlled clinical trials;

• manufacturing costs or other factors may make manufacturing of products impractical and non-competitive;

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• proprietary rights of third parties or competing products or technologies may preclude commercialization;

• requisite regulatory approvals for the commercial distribution of products may not be obtained; and

• other factors may become apparent during the course of research, up-scaling or manufacturing which may result in the discontinuation of research and other critical projects.

Our product under development has never been manufactured on a commercial scale, and there can be no assurance that such products can be manufactured at a cost or in a quantity to render such products commercially viable. Production and utilization of our products may require the development of new manufacturing technologies and expertise. The impact on our business in the event that new manufacturing technologies and expertise are required to be developed is uncertain. There can be no assurance that we will successfully meet any of these technological challenges, or others that may arise in the course of development.

Pharmaceutical products are subject to intense regulatory approval processes.

The regulatory process for pharmaceuticals, which includes preclinical studies and clinical trials of each compound to establish its safety and efficacy, takes many years and requires the expenditure of substantial resources. Moreover, if regulatory approval of a drug is granted, such approval may entail limitations on the indicated uses for which it may be marketed. Failure to comply with applicable regulatory requirements can, among other things, result in suspension of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. Further, government policy may change, and additional government regulations may be established that could prevent or delay regulatory approvals for our products. In addition, a marketed drug and its manufacturer are subject to continual review. Later discovery of previously unknown problems with the product or manufacturer may result in restrictions on such product or manufacturer, including withdrawal of the product from the market.

The FDA in the United States and other relevant regulatory authorities may deny approval of a new drug application (“NDA”) or its equivalent in the relevant jurisdiction if required regulatory criteria are not satisfied, or may require additional testing. Product approvals may be withdrawn if compliance with regulatory standards are not maintained or if problems occur after the product reaches the market. The FDA may require further testing and surveillance programs to monitor the pharmaceutical product that has been commercialized. Non-compliance with applicable requirements can result in fines and other judicially imposed sanctions, including product withdrawals, product seizures, injunction actions and criminal prosecutions.

In addition to our own pharmaceuticals, we may supply active pharmaceutical ingredients and advanced pharmaceutical intermediates for use in or with our customers' other drug products. The final drug products in which the pharmaceutical ingredients and advanced pharmaceutical intermediates are used, however, are subject to regulation for safety and efficacy by the FDA and other jurisdictions, as the case may be. Such products must be approved by such agencies before they can be commercially marketed. The process of obtaining regulatory clearance for marketing is uncertain, costly and time consuming. We cannot predict how long the necessary regulatory approvals will take or whether our customers will ever obtain such approval for their products. To the extent that our customers do not obtain the necessary regulatory approvals for marketing new products, our product sales could be adversely affected.

The FDA and other governmental regulators have increased requirements for drug purity and have increased environmental burdens upon the pharmaceutical industry. Because pharmaceutical drug manufacturing is a highly regulated industry, requiring significant documentation and validation of manufacturing processes and quality control assurance prior to approval of the facility to manufacture a specific drug, there can be considerable transition time between the initiation of a contract to manufacture a product and the actual initiation of manufacture of that product. Any lag time in the initiation of a contract to manufacture product and the actual initiation of manufacture could cause us to lose profits or incur liabilities.

The pharmaceutical regulatory regime in Europe and other countries is, by and large, generally similar to that of Canada and the United States. We could face similar risks in these other jurisdictions, as the risks described above.

Our operations and products may be subject to other government manufacturing and testing regulations.

Securing regulatory approval for the marketing of therapeutics by the FDA in the United States and similar regulatory agencies in other countries is a long and expensive process, which can delay or prevent product development and marketing. Approval to market products may be for limited applications or may not be received at all.

The products anticipated to be manufactured by us will have to comply with the FDA's cGMP and other FDA and local government guidelines and regulations, including other international regulatory requirements and guidelines. Additionally, certain of our customers may require the manufacturing facilities contracted by us to adhere to additional manufacturing standards, even if not required by the FDA. Compliance with cGMP regulations requires manufacturers to expend time, money and effort in production,

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and to maintain precise records and quality control to ensure that the product meets applicable specifications and other requirements. The FDA and other regulatory bodies periodically inspect drug-manufacturing facilities to ensure compliance with applicable cGMP requirements. If the manufacturing facilities contracted by us fail to comply with the cGMP requirements, the facilities may become subject to possible FDA or other regulatory action and manufacturing at the facility could consequently be suspended. We may not be able to contract suitable alternative or back-up manufacturing facilities on terms acceptable to us or at all.

The FDA or other regulatory agencies may also require the submission of any lot of a particular product for inspection. If the lot product fails to meet the FDA requirements, then the FDA could take any of the following actions: (i) restrict the release of the product; (ii) suspend manufacturing of the specific lot of the product; (iii) order a recall of the lot of the product; or (iv) order a seizure of the lot of the product.

We are subject to regulation by governments in many jurisdictions and, if we do not comply with healthcare, drug, manufacturing and environmental regulations, among others, our existing and future operations may be curtailed, and we could be subject to liability.

In addition to the regulatory approval process, we may be subject to regulations under local, provincial, state, federal and foreign law, including requirements regarding occupational health, safety, laboratory practices, environmental protection and hazardous substance control, and may be subject to other present and future local, provincial, state, federal and foreign regulations.

Our products may fail or cause harm, subjecting us to product liability claims, which are uninsured.

The sale and use of our products entail risk of product liability. We currently do not have any product liability insurance. There can be no assurance that we will be able to obtain appropriate levels of product liability insurance prior to any sale of our pharmaceutical products. An inability to obtain insurance on economically feasible terms or to otherwise protect against potential product liability claims could inhibit or prevent the commercialization of products developed by us. The obligation to pay any product liability claim or a recall of a product could have a material adverse effect on our business, financial condition and future prospects.

Our technologies may become obsolete.

The pharmaceutical industry is characterized by rapidly changing markets, technology, emerging industry standards and frequent introduction of new products. The introduction of new products embodying new technologies, including new manufacturing processes, and the emergence of new industry standards may render our products obsolete, less competitive or less marketable. The process of developing our products is extremely complex and requires significant continuing development efforts and third party commitments. Our failure to develop new technologies and products and the obsolescence of existing technologies could adversely affect our business.

We may be unable to anticipate changes in our potential customer requirements that could make our existing technology obsolete. Our success will depend, in part, on our ability to continue to enhance our existing technologies, develop new technology that addresses the increasing sophistication and varied needs of the market, and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. The development of our proprietary technology entails significant technical and business risks. We may not be successful in using our new technologies or exploiting the respective niche markets effectively or adapting our businesses to evolving customer or medical requirements or preferences or emerging industry standards.

We have no operating revenues and a history of losses.

To date, we have not generated sufficient revenues to offset our research and development costs and accordingly have not generated positive cash flow or made an operating profit. As of December 31, 2017, we had an accumulated deficit of $294.4 million and we incurred net losses of $15.6 million, $15.1 million and $13.7 million, for the years ended December 31, 2017, 2016 and 2015, respectively. We anticipate that we will continue to incur significant losses during 2018 and in the foreseeable future. We do not expect to reach profitability at least until after successful and profitable commercialization of one or more of our products. Even if one or more of our products are profitably commercialized, the initial losses incurred by us may never be recovered.

We may need additional financing in the future to fund the research and development of our products and to meet our ongoing capital requirements.

We anticipate that we may need additional financing in the future to fund research and development and to meet our ongoing capital requirements. The amount of future capital requirements will depend on many factors, including continued scientific

21

progress in our drug discovery and development programs, progress in our pre-clinical and clinical evaluation of drug candidates, time and expense associated with filing, prosecuting and enforcing our patent claims and costs associated with obtaining regulatory approvals. In order to meet such capital requirements, we will consider contract fees, collaborative research and development arrangements, and additional public or private financings (including the incurrence of debt and the issuance of additional equity securities) to fund all or a part of particular programs as well as potential partnering or licensing opportunities. There can be no assurance that additional funding will be available or, if available, that it will be available on acceptable terms. If adequate funds are not available on terms favorable to us, we may have to reduce substantially or eliminate expenditures for research and development, testing, production and marketing of our proposed product, or obtain funds through arrangements with corporate partners that require us to relinquish rights to certain of our technologies or product. There can be no assurance that we will be able to raise additional capital if our current capital resources are exhausted.

The cost of director and officer liability insurance may continue to increase substantially or may not be available to us and may affect our ability to retain quality directors and officers.

We carry liability insurance on behalf of our directors and officers. Given a number of large director and officer liability insurance claims in the US equity markets, director and officer liability insurance had until recently become increasingly more expensive with increased restrictions. Consequently, there is no assurance that we will continue to be offered this insurance or be able to obtain adequate coverage. The inability to acquire the appropriate insurance coverage will limit our ability to attract and maintain directors and officers as required to conduct our business.

We incur some of our expenses in foreign currencies and therefore are exposed to foreign currency exchange rate fluctuations.

We incur some of our manufacturing, clinical, collaborative and consulting expenses in foreign currencies, primarily the US dollar, the Pound Sterling and the Euro. We are therefore exposed to foreign currency rate fluctuations. Also, as we expand to other foreign jurisdictions there may be an increase in our foreign exchange exposure.

We earn interest income on our excess cash reserves and are exposed to changes in interest rates.

We invest our excess cash reserves in investment vehicles that provide a rate of return with little risk to principle. As interest rates change the amount of interest income we earn will be directly impacted.

Other MD&A Requirements

We have 142,325,222 common shares outstanding at March 8, 2018. If all of our options, restricted share units and performance share units (8,857,734) and common share purchase warrants (16,445,000) were exercised or were to vest, we would have 167,627,956 common shares outstanding.

Our 2017 annual report on Form 20-F will be available on www.sedar.com.

Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures:

Our chief executive and financial officers reviewed and evaluated our disclosure controls and procedures. Based on that evaluation, they have concluded that our disclosure controls and procedures are effective in providing them with timely material information relating to the Company.

Management's Annual Report on Internal Control Over Financial Reporting:

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, and has designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with International Financial Reporting Standards.

Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls and procedures over financial reporting will prevent all error and all fraud. A control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns

22

can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has evaluated the design and operation of our internal control over financial reporting as of December 31, 2017, and has concluded that such internal control over financial reporting is effective as of December 31, 2017. There are no material weaknesses that have been identified by management in this regard. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

23

EX-15.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent the use of our report dated March 8, 2018 with respect to the consolidated financial statements of Oncolytics Biotech Inc. (Oncolytics) as at December 31, 2017 and 2016 and for each of the years in the three year period ended December 31, 2017, included in the Annual Report on Form 20-F of Oncolytics for the year ended December 31, 2017, as filed with the United States Securities Exchange Commission (SEC).

We also consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333- 171625 and 333-205708) of our report dated March 8, 2018 with respect to the consolidated financial statements of Oncolytics as at December 31, 2017 and 2016 and for each of the years in the three year period ended December 31, 2017, included in the Annual Report on Form 20-F of Oncolytics for the year ended December 31, 2017, as filed with the SEC.

Calgary, Canada
March 19, 2018

XML

Document and Entity Information Document	12 Months Ended
	Dec. 31, 2017 shares
Document And Entity Information [Abstract]
Entity Registrant Name	ONCOLYTICS BIOTECH INC
Entity Central Index Key	0001129928
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	20-F
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding	141,805,722
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

XML

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 CAD ($)
Current assets
Cash and cash equivalents	$ 11,836,119	$ 12,034,282
Short-term investments	0	2,088,800
Contract receivable	4,767,100	0
Other receivables	37,726	54,406
Prepaid expenses	1,176,063	260,841
Total current assets	17,817,008	14,438,329
Non-current assets
Property and equipment	333,441	319,955
Total non-current assets	333,441	319,955
Total assets	18,150,449	14,758,284
Current Liabilities
Accounts payable and accrued liabilities	3,684,023	4,068,664
Contract liability	1,545,645	0
Total current liabilities	5,229,668	4,068,664
Non-current liabilities
Contract liability	4,636,935	0
Total non-current liabilities	4,636,935	0
Total liabilities	9,866,603	4,068,664
Commitments and contingencies
Shareholders’ equity
Share capital Authorized: unlimited Issued: December 31, 2017 – 141,805,722 December 31, 2016 – 121,258,222	271,710,138	262,321,825
Warrants	3,617,900	0
Contributed surplus	27,028,238	26,643,044
Accumulated other comprehensive income	373,730	554,060
Accumulated deficit	(294,446,160)	(278,829,309)
Total shareholders’ equity	8,283,846	10,689,620
Total liabilities and equity	$ 18,150,449	$ 14,758,284

XML

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - shares	Dec. 31, 2017	Dec. 31, 2016
Statement of financial position [abstract]
Share capital issued (shares)	141,805,722	121,258,222

XML

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Expenses
Research and development	$ 9,392,623	$ 9,770,007	$ 8,601,864
Operating	6,212,831	5,524,500	5,315,837
Loss before the following	(15,605,454)	(15,294,507)	(13,917,701)
Interest	130,101	163,902	197,859
Loss before income taxes	(15,475,353)	(15,130,605)	(13,719,842)
Income tax expense	(141,498)	(9,374)	(3,153)
Net loss	(15,616,851)	(15,139,979)	(13,722,995)
Other comprehensive (loss) income items that may be reclassified to net loss
Translation adjustment	(180,330)	(206,918)	480,935
Net comprehensive loss	$ (15,797,181)	$ (15,346,897)	$ (13,242,060)
Basic and diluted loss per common share (cad per share)	$ (0.12)	$ (0.13)	$ (0.12)
Weighted average number of shares (basic)	132,395,752	119,880,200	112,613,845
Weighted average number of shares (diluted)	132,395,752	119,880,200	112,613,845

XML

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CAD ($)	Total	Share Purchase Agreement	At-the-market agreement	Public Offering	Share Capital $	Share Capital $ Share Purchase Agreement	Share Capital $ At-the-market agreement	Share Capital $ Public Offering	Warrants $	Warrants $ Public Offering	Contributed Surplus $	Accumulated Other Comprehensive Income $	Accumulated Deficit $
Equity at Dec. 31, 2014	$ 13,819,193				$ 237,657,056				$ 0		$ 25,848,429	$ 280,043	$ (249,966,335)
Net loss and other comprehensive income	(13,242,060)											480,935	(13,722,995)
Issue pursuant to At the Market Agreement		$ 4,371,687	$ 20,049,693			$ 4,371,687	$ 20,049,693
Share based compensation	429,537										429,537
Share issue costs	(753,744)				(753,744)
Equity at Dec. 31, 2015	24,674,306				261,324,692				0		26,277,966	760,978	(263,689,330)
Net loss and other comprehensive income	(15,346,897)											(206,918)	(15,139,979)
Issue pursuant to At the Market Agreement			1,456,296				1,456,296
Issued pursuant to stock option plan		0				41,000					(41,000)
Share based compensation	406,078										406,078
Share issue costs	(500,163)		(500,163)		(500,163)
Equity at Dec. 31, 2016	10,689,620				262,321,825				0		26,643,044	554,060	(278,829,309)
Net loss and other comprehensive income	(15,797,181)											(180,330)	(15,616,851)
Issue pursuant to At the Market Agreement			2,348,821	$ 11,511,500			$ 2,348,821	$ 7,893,600		$ 3,617,900
Issued pursuant to stock option plan		$ 343,440				$ 536,949					(193,509)
Share based compensation	578,703										578,703
Share issue costs	(1,391,057)		$ (245,655)		(1,391,057)
Equity at Dec. 31, 2017	$ 8,283,846				$ 271,710,138				$ 3,617,900		$ 27,028,238	$ 373,730	$ (294,446,160)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating Activities
Net loss for the year	$ (15,616,851)	$ (15,139,979)	$ (13,722,995)
Amortization - property and equipment	90,768	162,233	180,411
Share based compensation	578,703	406,078	429,537
Unrealized foreign exchange gain	(124,793)	(139,810)	(816,319)
Net change in non-cash working capital	180,855	2,233,865	(1,105,464)
Cash used in operating activities	(14,891,318)	(12,477,613)	(15,034,830)
Investing Activities
Acquisition of property and equipment	(105,765)	(23,527)	(108,268)
Redemption (purchase) of short-term investments	2,088,800	(27,823)	(29,292)
Cash provided by (used in) investing activities	1,983,035	(51,350)	(137,560)
Financing Activities
Proceeds from Share Purchase Agreement	0	0	4,305,396
Proceeds from exercise of stock options	343,440	0	0
Cash provided by financing activities	12,812,704	956,133	23,667,636
(Decrease) increase in cash	(95,579)	(11,572,830)	8,495,246
Cash and cash equivalents, beginning of year	12,034,282	24,016,275	14,152,825
Impact of foreign exchange on cash and cash equivalents	(102,584)	(409,163)	1,368,204
Cash and cash equivalents, end of year	11,836,119	12,034,282	24,016,275
At-the-market agreement
Financing Activities
Proceeds from share issuance	2,103,166	956,133	19,362,240
Public Offering
Financing Activities
Proceeds from share issuance	$ 10,366,098	$ 0	$ 0

XML

Incorporation and Nature of Operations

12 Months Ended

Dec. 31, 2017

Disclosure Of Notes And Other Explanatory Information [Abstract]

Incorporation and Nature of Operations

Incorporation and Nature of Operations

Oncolytics Biotech Inc. was incorporated on April 2, 1998 under the Business Corporations Act (Alberta) as 779738 Alberta Ltd. On April 8, 1998, we changed our name to Oncolytics Biotech Inc.

Our consolidated financial statements for the year ended December 31, 2017, were authorized for issue in accordance with a resolution of the Board of Directors (the "Board") on March 8, 2018. We are a limited company incorporated and domiciled in Canada. Our shares are publicly traded and our registered office is located at 210, 1167 Kensington Crescent NW, Calgary, Alberta, Canada.

We are a development stage biopharmaceutical company that focuses on the discovery and development of pharmaceutical products for the treatment of cancers that have not been successfully treated with conventional therapeutics. Our lead product, REOLYSIN^®, is a potential immuno-oncology viral-agent that may be a novel treatment for certain types of cancer and may be an alternative to existing cytotoxic or cytostatic therapies. Our clinical development program for REOLYSIN emphasizes three programs: chemotherapy combinations to trigger selective tumor lysis; immune modulator (IMiD) combinations to facilitate innate immune responses; and immuno-therapy combinations to produce adaptive immune responses.

XML

Basis of Financial Statement Presentation

12 Months Ended

Dec. 31, 2017

Corporate Information And Statement Of IFRS Compliance [Abstract]

Basis of Financial Statement Presentation

Basis of Financial Statement Presentation

Our consolidated financial statements include our financial statements and the financial statements of our subsidiaries Oncolytics Biotech (Barbados) Inc., Oncolytics Biotech (US) Inc., and Oncolytics Biotech (UK) Inc. and are presented in Canadian dollars, our functional currency.

The accounts are prepared on the historical cost basis, except for certain assets and liabilities which are measured at fair value as explained in the notes to these financial statements.

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

Basis of consolidation

Our accounts include the accounts of Oncolytics Biotech Inc. and our subsidiaries. Subsidiaries are entities over which we have control which is achieved when we are exposed, or have the rights, to variable returns from our involvement with the investee and has the ability to affect those returns through our power to govern. Accounting policies of subsidiaries are consistent with our accounting policies and all intra-group transactions, balances, income and expenses are eliminated on consolidation.

A change in ownership interest of a subsidiary, without a change in control, is accounted for as an equity transaction.

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Summary Of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The consolidated financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below.

Deferred income taxes

We follow the liability method of accounting for income taxes. Under the liability method, deferred income taxes are recognized for the difference between financial statement carrying values and the respective income tax basis of assets and liabilities (temporary differences). Deferred income tax assets and liabilities are measured using substantively enacted income tax rates and laws expected to apply in the years in which temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is charged or credited to income, except when it is related to items charged or credited to either other comprehensive income or directly to equity.

Financial instruments

Financial assets

Financial assets are comprised of cash and cash equivalents, contract receivable, other receivables and short-term investments. Financial assets are initially recorded at fair market value and are classified as follows:

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and interest bearing deposits with our bank and have been designated as held for trading.

Contract receivable and other receivables

Contract receivable and other receivables have been classified as loans and receivables.

Short-term investments

We determine the appropriate classification of our short-term investments at the time of purchase and re-evaluate such classification as of each reporting date. We classify our short-term investments as held-to-maturity as we have the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at original cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest rate method. Such amortization and interest on securities classified as held-to-maturity are included in interest income.

Impairment of financial assets

We assess at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

Financial liabilities

Trade accounts payable

Trade accounts payable are non interest-bearing and recorded at fair market value. They are classified as other financial liabilities and are subsequently measured at amortized cost using the effective interest rate method.

Fair Value Measurement

Fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. In determining the fair value measurement of our financial instruments we prioritize the related inputs used in measuring fair value into the following hierarchy:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;

Level 3 - Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

Transaction Costs

Transaction costs are expensed as incurred for financial instruments designated as held for trading. Transaction costs for other financial instruments are recognized as part of the financial instrument's carrying value.

Foreign currency translation

The financial statements for each of our subsidiaries are prepared using their functional currency. Our presentation currency is the Canadian dollar which is also Oncolytics Biotech Inc.'s functional currency. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Exchange differences resulting from the settlement of such transactions and from the translation at exchange rates ruling at the statement of financial position date of monetary assets and liabilities denominated in currencies other than the functional currency are recognized directly in the consolidated statement of loss and comprehensive loss.

Exceptions to this are where the monetary items form part of the net investment in a foreign operation and the foreign operation's functional currency is the local currency. These exchange differences are initially recognized in equity. The statement of financial position of foreign operations is translated into Canadian dollars using the exchange rate at the statement of financial position date and the income statements are translated into Canadian dollars using the average exchange rate for the period. Where this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, the exchange rate on the transaction date is used. Exchange differences on translation into Canadian dollars are recognized as a separate component of equity. On disposal of a foreign operation, any cumulative exchange differences held in equity are transferred to the consolidated statement of loss and comprehensive loss.

Investment tax credits

Investment tax credits ("ITCs") relating to qualifying scientific research and experimental development expenditures that are refundable are accounted for as a reduction in research and development expenditures. ITCs that are non-refundable, but are recoverable against future taxes payable, are accrued only when there is reasonable assurance that the credits will be realized.

ITCs are subject to technical and financial review by the Canadian tax authorities on a project-by-project basis. Therefore, amounts ultimately received may vary significantly from the amounts recorded. Any such differences are recorded as an adjustment to the recognized amount in the year the review by the Canadian tax authority is completed and the results are made known to us.

Loss per common share

Basic loss per common share is determined using the weighted average number of common shares outstanding during the period.

We use the treasury stock method to calculate diluted loss per common share. Under this method, diluted loss per common share is computed in a manner consistent with basic loss per common share except that the weighted average common shares outstanding are increased to include additional common shares from the assumed exercise of options and warrants, if dilutive. The number of additional common shares is calculated by assuming that any outstanding “in the money” options, restricted share units, performance share units and warrants were exercised at the later of the beginning of the period or the date of issue and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reporting period.

Property and equipment

Property and equipment are recorded at cost. Depreciation is provided on bases and at rates designed to amortize the cost of the assets over their estimated useful lives. Depreciation is recorded using the declining balance method at the following annual rates:

Office equipment and furniture	20%
Medical equipment	20%
Computer equipment	30%
Leasehold improvements	Straight-line over the term of the lease

Research and development costs

Research costs are expensed as incurred, net of recoveries. We record accruals for the estimated costs of our clinical trial activities performed by third parties. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of certain clinical trial activities. We generally accrue costs associated with the treatment phase of clinical trials based on the total estimated cost of the treatment phase on a per patient basis and we expense the per patient cost ratably over the estimated patient treatment period based on patient enrollment in the trials. Advance payments for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses and recognized as expense as the related goods are delivered or the related services are performed. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified.

Development costs that meet specific criteria related to technical, market and financial feasibility will be capitalized. To date, all development costs have been expensed.

Revenue recognition

Revenue relates to a long-term contract associated with a regional licensing agreement (the "Agreement") with Adlai Nortye Biopharma Co., Ltd. ("Adlai"). The pricing for the contract was based on the specific negotiations with Adlai and includes non-refundable upfront license fees, development and regulatory milestone payments, royalties and sales-based milestone payments.

We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

Under the Agreement, we have granted a regional license to our intellectual property. The granting of this license is accounted for as one performance obligation. We have determined that we provide Adlai with a right to access our intellectual property, and therefore recognize revenue related to the upfront license fee over time. Revenue is recognized based on the extent of progress towards completion of the performance obligation using the input method. Under the input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. We use this method because Adlai receives and consumes the benefit of our intellectual property as we undertake activities that impact the intellectual property. Management must use judgment in making assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables.

The contract also provides for development and regulatory milestone payments, royalties and sales-based milestone payments. These amounts are contingent on the occurrence of a future event and therefore give rise to variable consideration. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price when it becomes highly probable that the amount will not be subject to significant reversal when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. Based on this information and related analysis, any quarterly adjustments to revenue are recognized as necessary in the period they become known.

The upfront license fee is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect us from the other party failing to adequately complete some or all of its obligations under the contract.

Revenue from sales-based royalties and the achievement of annual sales volumes will be recognized when the subsequent sale occurs, as the license of the intellectual property is the predominant item to which the royalty relates. We consider payments associated with the achievement of annual sales volumes to be, in substance, royalty payments and we will recognize such sales-based payments upon achievement of such sales volumes, provided that collection is reasonably assured.

Contract receivable - Contract receivable includes amounts billed and currently due from customers. When appropriate, we provide for an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. We perform a review of our customer’s credit risk and payment histories, including payments made subsequent to year-end.

Contract liability - Our contract liability includes upfront license fees and billings in excess of revenue recognized. Contract liabilities are recognized as revenue as or when we perform under the contract. We classify our contract liability as current or noncurrent based on the timing of when we expect to recognize revenue.

Share based payments

Stock option plan

We have one stock option plan (the “Option Plan”) available to officers, directors, employees, consultants and suppliers with grants under the Option Plan approved from time to time by our Board of Directors (the “Board”). Under the Option Plan, the exercise price of each option is set at equal to or higher than the trading price of our stock on the date of grant in accordance with Toronto Stock Exchange guidelines. Vesting is provided for at the discretion of the Board and the expiration of options is to be no greater than 10 years from the date of grant. Exercised stock options are settled with common shares issued from treasury.

We use the fair value based method of accounting for stock option awards granted under the Option Plan. We recognize compensation expense and a corresponding adjustment to contributed surplus equal to the fair value of the stock options granted using the Black Scholes Option Pricing Model. The fair value of stock options with a graded vesting schedule is determined based on different expected lives for the options that vest each year, as it would be if the award were viewed as several separate awards, each with a different vesting date, and it is accounted for over the respective vesting period taking into consideration forfeiture estimates. Compensation expense is adjusted for subsequent changes in management’s estimate of the number of options that are expected to vest.

Share based payments to non-employees are measured at the date we obtain the goods or the date the counterparty renders the service.

Incentive share award plan

Our incentive share award plan (the "Share Plan") is available to directors, officers and employees. Under our Share Plan, performance share units and restricted share units may be approved from time to time by the Board. Performance share units ("PSUs") are an award to certain officers and employees to which common shares shall be issued based upon achieving the applicable performance criteria. Restricted share units ("RSUs") are an award to certain officers and employees and to non-employee directors to which common shares shall be issued in accordance with the Share Plan.

We recognize compensation expense and a corresponding adjustment to contributed surplus equal to the market value of our common shares at the date of grant based on the number of PSUs/RSUs expected to vest, recognized over the term of the vesting period. Compensation expense is adjusted for subsequent changes in management’s estimate of the number of PSUs/RSUs that are expected to vest. The effect of these changes is recognized in the period of the change.

Adoption of New Accounting Standards

IFRS 15 - Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers. The new standard will replace IAS 18 Revenue and IAS 11 Construction Contracts. IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised, and also contains new requirements related to presentation. The core principle in that framework is that revenue should be recognised dependent on the transfer of promised goods or services to the customer for an amount that reflects the consideration which should be received in exchange for those goods or services. The objective of the standard is to provide a five-step approach to revenue recognition that includes identifying contracts with customers, identifying performance obligations, determining transaction prices, allocating transaction prices to performance obligations, and recognising revenue when or as performance obligations are satisfied. Judgment will need to be applied, including making estimates and assumptions, for multiple-element contracts in identifying performance obligations, in constraining estimates of variable consideration and in allocating the transaction price to each performance obligation. This new standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. We early adopted this standard effective for our year ended December 31, 2017 using the full retrospective method. There were no adjustments to our consolidated financial statements resulting from this early adoption.

Accounting Standards and Interpretations Issued but Not Yet Effective

IFRS 9 - Financial Instruments

In July 2014, on completion of the impairment phase of the project to reform accounting for financial instruments and replace IAS 39 Financial Instruments: Recognition and Measurement, the IASB issued the final version of IFRS 9 Financial Instruments. IFRS 9 includes guidance on the classification and measurement of financial assets and financial liabilities and impairment of financial assets (i.e. recognition of credit losses).

Under the classification and measurement requirements for financial assets, financial assets must be classified and measured at either amortized cost or at fair value through profit or loss or through other comprehensive income, depending on the basis of the entity’s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset.

The classification requirements for financial liabilities are unchanged from IAS 39. IFRS 9 requirements address the problem of volatility in net earnings arising from an issuer choosing to measure certain liabilities at fair value and require that the portion of the change in fair value due to changes in the entity’s own credit risk be presented in other comprehensive income, rather than within net earnings.

The new requirements for impairment of financial assets introduce an expected loss impairment model that requires more timely recognition of expected credit losses. IAS 39 impairment requirements are based on an incurred loss model where credit losses are not recognized until there is evidence of a trigger event. IFRS 9 is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted. We are assessing the impact of adopting this standard on our consolidated financial statements.

IFRS 16 - Leases

In January 2016, the IASB issued IFRS 16 - Leases (“IFRS 16”), which replaces IAS 17 - Leases (“IAS 17”) and related interpretations. IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease term is 12-months or less or the underlying asset has a low value. IFRS 16 substantially carries forward the lessor accounting in IAS 17 with the distinction between operating leases and finance leases being retained. IFRS 16 will be applied retrospectively for annual periods beginning on or after January 1, 2019. Early adoption is permitted under certain circumstances. We are assessing the potential impact of adopting this standard on our consolidated financial statements.

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Significant Judgments, Estimates and Assumptions

12 Months Ended

Dec. 31, 2017

Significant Judgments, Estimates And Assumptions [Abstract]

Significant Judgments, Estimates and Assumptions

Significant Judgments, Estimates and Assumptions

Judgments

The preparation of our consolidated financial statements requires us to make judgments, estimates and assumptions that affect the reported amount of expenses, assets, liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and assumptions

Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates and such differences could be significant. Significant estimates made by management affecting our consolidated financial statements include:

Revenue recognition

We entered into an Agreement which provides, among other payments, for upfront license fees in exchange for a regional license to our intellectual property. Management uses its judgment in applying the input method when determining the extent of progress towards completion of the performance obligation. Revenue recognition requires assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables.

Share based payments

Part of our share based payment expense is measured by reference to the fair value of our stock options at the date at which they are granted. Estimating fair value for granted stock options requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility, dividend yield, and rate of forfeitures and making assumptions about them. The value of the share based payment expense for the year along with the assumptions and model used for estimating fair value for share based compensation transactions are disclosed in Note 8.

Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Currently, we are accumulating tax loss carry forward balances in various tax jurisdictions creating a deferred tax asset. Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

To date we have determined that none of our deferred tax assets should be recognized. Our deferred tax assets are mainly comprised of our net operating losses from prior years, prior year research and development expenses, and non-refundable investment tax credits. These tax pools relate to entities that have a history of losses, have varying expiry dates, and may not be used to offset taxable income within our other subsidiaries. As well, there are no taxable temporary differences or any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets.

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Cash Equivalents and Short Term Investments

12 Months Ended

Dec. 31, 2017

Cash Equivalents And Short Term Investments [Abstract]

Cash Equivalents and Short Term Investments

Cash Equivalents and Short Term Investments

Cash Equivalents

Cash equivalents consist of interest bearing deposits with our bank totaling $9,204,919 (December 31, 2016 – $10,679,992).  The current annual interest rate earned on these deposits is 1.38% (December 31, 2016 – 0.96%).

Short-Term Investments

Short-term investments consisted of guaranteed investment certificates which are liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.  The objectives for holding short-term investments were to invest our excess cash resources in investment vehicles that provided a better rate of return compared to our interest bearing bank account with limited risk to the principal invested.  We intended to match the maturities of these short-term investments with the cash requirements of the Company’s activities and treat these as held-to-maturity short-term investments.

	Face Value $	Original Cost $	Accrued Interest $	Carrying Value $	Fair Value $	Effective Interest Rate %
December 31, 2017
Short-term investments	—	—	—	—	—	—%
December 31, 2016
Short-term investments	2,088,800	2,088,800	—	2,088,800	2,088,800	1.41%

Fair value is determined by using published market prices provided by our investment advisor.

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Property and Equipment

12 Months Ended

Dec. 31, 2017

Disclosure of detailed information about property, plant and equipment [abstract]

Property and Equipment

Property and Equipment

	Medical Equipment	Computer Equipment		Office Furniture	Office Equipment	Leasehold Improvements	Total
Cost
As at December 31, 2015	197,870	685,277		214,085	87,964	465,865	1,651,061
Additions, net of foreign exchange impact	—	20,098		—	1,502	770	22,370
As at December 31, 2016	197,870	705,375		214,085	89,466	466,635	1,673,431
Additions, net of foreign exchange impact	—	24,778		11,811	—	67,665	104,254
Disposals	—	(48,168	)	—	—	—	(48,168	)
As at December 31, 2017	197,870	681,985		225,896	89,466	534,300	1,729,517
Amortization
As at December 31, 2015	133,477	505,245		127,383	58,759	366,379	1,191,243
Amortization for the year	11,492	48,929		10,241	5,408	86,163	162,233
As at December 31, 2016	144,969	554,174		137,624	64,167	452,542	1,353,476
Amortization for the year	9,365	43,558		9,710	4,620	23,515	90,768
Disposals	—	(48,168	)	—	—	—	(48,168	)
As at December 31, 2017	154,334	549,564		147,334	68,787	476,057	1,396,076
Net book value
As at December 31, 2017	43,536	132,421		78,562	20,679	58,243	333,441
As at December 31, 2016	52,901	151,201		76,461	25,299	14,093	319,955

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Share Capital

12 Months Ended

Dec. 31, 2017

Disclosure of Share Capital, Reserves And Other Equity Interest [Abstract]

Share Capital

Share Capital

Authorized:

Unlimited number of no par value common shares

Issued:	Shares			Warrants
	Number	Amount $		Number	Amount $
Balance, December 31, 2014	93,512,494	237,657,056		—	—
Issued pursuant to Share Purchase Agreement(a)	5,778,674	4,371,687		—	—
Issued pursuant to "At the Market" sales agreement(b)	18,860,454	20,049,693		—	—
Share issue costs	—	(753,744	)	—	—
Balance, December 31, 2015	118,151,622	261,324,692		—	—
Issued pursuant to incentive share award plan	100,000	41,000		—	—
Issued pursuant to "At the Market" equity distribution agreement(c)	3,006,600	1,456,296		—	—
Share issue costs	—	(500,163	)	—	—
Balance, December 31, 2016	121,258,222	262,321,825		—	—
Issued pursuant to stock option plan	801,000	536,949		—	—
Issued pursuant to "At the Market" equity distribution agreement(c)	3,301,500	2,348,821		—	—
Issued pursuant to public offering(d)	16,445,000	7,893,600		16,445,000	3,617,900
Share issue costs	—	(1,391,057	)	—	—
Balance, December 31, 2017	141,805,722	271,710,138		16,445,000	3,617,900

(a) In 2014, we entered into a share purchase agreement (the "Share Purchase Agreement") with Lincoln Park Capital Fund, LLC ("LPC") to sell up to US$26,000,000 of common stock. Subject to the terms and conditions of the Share Purchase Agreement and at our sole discretion, we may sell up to US$26.0 million worth of common shares to LPC over the 30-month term. The purchase price of the common shares was based on prevailing market prices of our common shares immediately preceding the notice of a sale without any fixed discount. Subject to the Share Purchase Agreement, we controlled the timing and amount of each investment and LPC was obligated to make such purchases, if and when elected. The Share Purchase Agreement did not impose any upper price limit restrictions, negative covenants or restrictions on our future financing activities, but required that we maintained our NASDAQ listing. Under the Share Purchase Agreement, we issued an initial commitment fee of 292,793 common shares to LPC valued at fair value of US$455,000. An additional 292,793 common shares was to be issued on a pro rata basis under the terms of the Share Purchase Agreement as an additional commitment fee.

On October 20, 2014, we reached an agreement to amend the Share Purchase Agreement. The specific amendments included allowing the Company to sell shares to LPC at the Company's sole option independent of the closing price of the Common Stock, increasing the number of shares that may have been sold to LPC at certain price levels and changed the way the number of Commitment Shares issuable was to be calculated. In consideration of the amendments to the Agreement, the Company issued 146,397 shares of Common Stock to LPC.

In 2015, under the terms of the amended Share Purchase Agreement, we issued 5,778,674 common shares for net proceeds of approximately US$3.5 million. As part of the shares issued, we issued 78,674 commitment shares. The commitment shares have been valued at fair value of US$50,024 and have been recorded as additional share issue costs. On November 5, 2015, we were delisted from the NASDAQ Capital Market and as a result we were unable to sell common shares under the Share Purchase Agreement.

(b) On October 24, 2014, we entered into an "at-the-market" ("ATM") equity distribution agreement with Canaccord Genuity Inc. acting as sole agent. Under the terms of the distribution agreement, we were able to, from time to time, sell shares of our common stock having an aggregate offering value of up to US$20 million through Canaccord Genuity Inc. directly to investors in the US through our NASDAQ listing. We were able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. During 2015, we issued 18,860,454 common shares for net proceeds of approximately US$15.5 million. On November 5, 2015, we were delisted from the NASDAQ Capital Market and as a result we were unable to sell common shares under our existing ATM.

(c) On February 25, 2016, we entered into an ATM equity distribution agreement with Canaccord Genuity Inc. acting as our sole agent with an aggregate offering value of up to $4.6 million which allows us to sell our common shares through the facilities of the Toronto Stock Exchange or other "marketplace” (as defined in National Instrument 21-101 Marketplace Operation) in Canada (our "Canadian ATM"). Subject to the terms of our Canadian ATM, we are able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. During 2017, we sold 3,301,500 (2016 - 3,006,600) common shares for gross proceeds of $2,348,821 (2016 - $1,456,296). We incurred share issue costs of $245,655 (2016 - $500,163).

(d) On June 1, 2017, pursuant to an underwritten public offering, 16,445,000 units were sold at a purchase price of $0.70 per unit for gross proceeds of $11,511,500. Each unit included one common share (ascribed value of $0.48) and one common share purchase warrant (ascribed value of $0.22). The ascribed value was determined using the relative fair value method. The ascribed value of the common share purchase warrants was determined using the Black Scholes option pricing model. Each common share purchase warrant entitles the holder to purchase one common share in the capital of the Company until June 1, 2022, at an exercise price of $0.95. The common share purchase warrants will be subject to acceleration if the volume weighted average price of the Company's common shares equals or exceeds $2.50 for 15 consecutive trading dates. We incurred share issue costs of $1,145,402.

Warrants

The following table summarizes the assumptions used in the Black Scholes Option Pricing Model with respect to the valuation of warrants issued:

	2017
Risk-free interest rate	0.70%
Expected hold period to exercise	2.0 years
Volatility in the price of the Company's shares	89.30%
Dividend yield	Nil

We use historical data to estimate the expected dividend yield and expected volatility of our stock in determining the fair value of the warrants. The risk-free interest rate is based on the Government of Canada benchmark bond yield rates in effect at the time of grant and the expected life of the warrants represents the estimated length of time the warrants are expected to remain outstanding.

The following table summarizes our outstanding warrants at December 31, 2017:

Exercise Price		Outstanding, Beginning of the Year	Granted During the Year	Outstanding, End of the Year	Weighted Average Remaining Contractual Life (years)
$	0.95	—	16,445,000	16,445,000	4.42

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Share Based Payments

12 Months Ended

Dec. 31, 2017

Disclosure Of Share-based Payment Arrangements [Abstract]

Share Based Payments

Share Based Payments

Stock Option Plan

We have issued stock options to acquire common stock through our stock option plan of which the following are outstanding at December 31:

	2017			2016			2015
	Stock Options		Weighted Average Exercise Price $	Stock Options		Weighted Average Exercise Price $	Stock Options		Weighted Average Exercise Price $
Outstanding, beginning of the year	8,674,227		1.83	8,561,394		2.17	5,446,394		3.19
Granted during the year	405,000		0.48	1,572,000		0.28	3,280,000		0.43
Forfeited during the year	(2,012,660	)	3.45	(737,500	)	0.65	(100,000	)	1.69
Expired during the year	(116,900	)	2.22	(721,667	)	3.61	(65,000	)	1.49
Exercised during the year	(801,000	)	0.43	—		—	—		—
Outstanding, end of the   year	6,148,667		1.39	8,674,227		1.83	8,561,394		2.17
Options exercisable, end of the year	5,453,501		1.51	6,729,643		2.27	6,476,394		2.73

The following table summarizes information about the stock options outstanding and exercisable at December 31, 2017:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price $	Number Exercisable	Weighted Average Exercise Price $
$0.26 - $0.42	3,437,000	8.46	0.35	2,921,834	0.35
$0.51 - $0.80	538,000	8.22	0.64	358,000	0.70
$1.45 - $2.00	1,002,667	5.62	1.77	1,002,667	1.77
$2.13 - $3.89	545,500	3.74	3.42	545,500	3.42
$4.01 - $6.72	625,500	3.94	5.34	625,500	5.34
	6,148,667	7.09	1.39	5,453,501	1.51

Non-exercisable options vest either annually over periods ranging from one to three years or upon satisfaction of certain performance criteria.

The estimated fair value of stock options issued during the year was determined using the Black Scholes Option Pricing Model using the following weighted average assumptions and fair value of options:

	2017	2016	2015
Risk-free interest rate	1.18%	0.82%	0.63%
Expected hold period to exercise	3.0 years	3.0 years	3.0 years
Volatility in the price of the Company's shares	90.73%	94.84%	90%
Rate of forfeiture	3.67%	3.67%	3.67%
Dividend yield	Nil	Nil	Nil
Weighted average fair value of options	$0.28	$0.17	$0.24

We use historical data to estimate the expected dividend yield and expected volatility of our stock in determining the fair value of the stock options. The risk-free interest rate is based on the Government of Canada benchmark bond yield rates in effect at the time of grant and the expected life of the options represents the estimated length of time the options are expected to remain outstanding.

Incentive Share Award Plan

Restricted Share Units

We have issued restricted share units ("RSUs") to non-employee directors through our incentive share award plan. Grants of RSUs to non-employee directors vest either on the third anniversary date from the grant date or when the director ceases to be a member of the board. We have also issued RSUs to certain officers and employees of the Company. Grants of RSUs to certain officers and employees of the Company vest over a three year period. The following RSUs are outstanding at December 31:

	2017	2016		2015
Outstanding, beginning of the year	1,322,829	368,831		—
Granted during the year	486,238	1,053,998		368,831
Forfeited during the year	—	—		—
Vested during the year	—	(100,000	)	—
Outstanding, end of the year	1,809,067	1,322,829		368,831

(1)The weighted average fair value of the RSUs granted was $0.63 in 2017 (2016 - $0.31).

Performance Share Units

We have also issued performance share units ("PSUs") to certain officers and employees of the Company. Grants of PSUs require completion of certain performance criteria and cliff vest after 3 years or vest over a three year period, depending on the grant. PSU grants to certain officers will vest immediately upon a change of control of the Company. If certain officers cease employment with the Company, vesting occurs on a pro rata basis prior to the third anniversary of the grant but after the first anniversary. The following PSUs are outstanding at December 31:

	2017	2016		2015
Outstanding, beginning of the year	840,000	—		—
Granted during the year	60,000	1,500,000		—
Forfeited during the year	—	(660,000	)	—
Outstanding, end of the year	900,000	840,000		—

(1)     The weighted average fair value of the PSUs granted was $0.35 in 2017 (2016 - $0.36).

We have reserved 14,180,572 common shares for issuance relating to our outstanding equity compensation plans. Compensation expense related to stock options, RSUs and PSUs for the year ended December 31, 2017 was $578,703 (2016 - $406,078; 2015 - $429,537).

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Loss Per Common Share

12 Months Ended

Dec. 31, 2017

Earnings per share [abstract]

Loss Per Common Share

Loss Per Common Share

Loss per common share is calculated using net loss for the year and the weighted average number of common shares outstanding for the year ended December 31, 2017 of 132,395,752 (2016 - 119,880,200; 2015 - 112,613,845). The effect of any potential exercise of our stock options and warrants outstanding during the year has been excluded from the calculation of diluted loss per common share, as it would be anti-dilutive.

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Contract Liability and Receivable

12 Months Ended

Dec. 31, 2017

Disclosure of revenue from contracts with customers [Abstract]

Contract liability and receivable

Contract liability and receivable

Regional licensing agreement

We entered into a regional licensing agreement (the "Agreement") with Adlai Nortye Biopharma Co., Ltd. ("Adlai") in November 2017. Under the terms of the Agreement, Adlai will have exclusive development and commercialization rights to REOLYSIN in China, Hong Kong, Macau, Singapore, South Korea and Taiwan. We are entitled to receive upfront license fees, development and regulatory milestone payments, royalties and sales-based milestone payments.

Warrant purchase agreement

We also entered into a warrant purchase agreement with Adlai. Under the terms of the warrant purchase agreement, we are entitled to receive two milestone payments totaling US$8 million made of of two common share purchase warrants:

• One common share purchase warrant of US$2 million whereby, upon exercise, Adlai may purchase our common shares priced at a 20% premium to the five-day weighted average closing price immediately preceding the exercise date. We have the right to call this warrant when the first patient is enrolled in the phase 3 metastatic breast cancer study or six months after execution of the Agreement, whichever is later.

• One common share purchase warrant of US$6 million whereby, upon exercise, Adlai may purchase our common shares priced at a 20% premium to the five-day weighted average closing price immediately preceding the exercise date. We have the right to call this warrant upon the enrollment of the 50th patient in the phase 3 metastatic breast cancer study.

Contract liability

Our contract liability balance at December 31, which we expect to record in revenue over the next five years, is as follows:

	2017	2016
Balance, beginning of the year	—	—
Regional licensing agreement	6,182,580	—
Revenue recognized in the year	—	—
Balance, end of the year	6,182,580	—
Contract liability - current	1,545,645	—
Contract liability - non-current	4,636,935	—
	6,182,580	—

Contract receivable

Our contract receivable due from Adlai at December 31, 2017 is $4,767,100.

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Commitments

12 Months Ended

Dec. 31, 2017

Commitments [Abstract]

Commitments

Commitments

We are committed to payments totaling $5,980,454 during 2018 for activities related to our clinical trial, manufacturing and collaboration programs.

We are committed to rental payments (excluding our portion of operating costs and rental taxes) under the terms of our office leases. Annual payments under the terms of these leases are as follows:

	Amount $
2018	285,987
2019	251,743
2020	159,990
2021	43,130
	740,850

Under a clinical trial agreement entered into with the Alberta Cancer Board (“ACB”), we have agreed to repay the amount funded under the agreement together with a royalty, to a combined maximum amount of $400,000 plus an overhead repayment of $100,000, upon sales of a specified product.  We agreed to repay the ACB in annual installments in an amount equal to the lesser of: (a) 5% of gross sales of a specified product; or (b) $100,000 per annum once sales of a specified product commence.

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Contingencies

12 Months Ended

Dec. 31, 2017

Contingencies [Abstract]

Contingencies

Contingencies

Assumption Agreement

In 1999, we entered into an agreement that assumed certain obligations (the “Assumption Agreement”) in connection with a Share Purchase Agreement (the “Agreement”) between SYNSORB and our former shareholders to make milestone payments and royalty payments.

As of December 31, 2017, a milestone payment was still outstanding for $1.0 million, due within 90 days of the first receipt from an Appropriate Regulatory Authority, for marketing approval to sell REOLYSIN^® to the public or the approval of a new drug application for REOLYSIN.

This milestone payment, when payable, will be accounted for as research and development expense and will not be deductible for income tax purposes.

In addition to the milestone payment, payments may become due and payable in accordance with the Agreement upon realization of sales of REOLYSIN.  If we receive royalty payments or other payments as a result of entering into partnerships or other arrangements for the development of the reovirus technology, we are obligated to pay to the founding shareholders 10.75% (2016 - 11.75%) of the royalty payments and other payments received.  Alternatively, if we develop the reovirus treatment to the point where it may be marketed at a commercial level, the payments referred to in the foregoing sentence will be amended to a royalty payment of 2.15% (2016 - 2.35%) of Net Sales received for such products.

BRI “Work in Kind” Contribution

We entered into an engineering and process development agreement with the Biotechnology Research Institute of the National Research Council of Canada (“BRI”).  The terms of this Agreement include a “work in kind” contribution from BRI.  In exchange for this “work in kind” contribution, we agreed to provide a royalty, contingent upon receiving Sales Revenue, at the lesser of 0.5% of Sales Revenue or $20,000 per year.  The total royalty under this Agreement is equal to two times the “work in kind” contribution.  As of December 31, 2017, we estimate that the accumulated work in kind totals approximately $301,000.

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Income Taxes

12 Months Ended

Dec. 31, 2017

Disclosure of income tax [Abstract]

Income Taxes

Income Taxes

The provision for income taxes recorded in the consolidated financial statements differs from the amount which would be obtained by applying the statutory income tax rate to the loss before income taxes as follows:

	2017		2016		2015
Loss before income taxes	(15,475,353	)	(15,130,605	)	(13,719,842	)
Statutory Canadian corporate tax rate	27.00	%	27.00	%	26.00	%
Anticipated tax recovery	(4,178,345	)	(4,085,263	)	(3,567,159	)
Foreign jurisdiction tax rate difference	2,899,190		2,184,796		2,659,145
Employee stock based compensation	156,250		109,641		111,680
Change in tax rate	—		—		(1,336,941	)
Adjustment to opening tax pools	162,162		(39,569	)	(1,339,467	)
Other permanent differences	53,039		100,525		23,620
Change in deferred tax benefits deemed not probable to be recovered	1,051,725		1,739,557		3,455,622
Current income taxes	144,021		9,687		6,500
Adjustment in respect to prior periods	(2,523	)	(313	)	(3,347	)
Net current tax expense	141,498		9,374		3,153

As at December 31, 2017, we have the following non-capital losses for income tax purposes in Canada:

Expiry	$
2026	9,809,000
2027	12,170,000
2029	4,009,000
2030	4,774,000
2031	4,343,000
2032	2,873,000
2033	2,457,000
2034	2,472,000
2035	3,125,000
2036	6,430,000
2037	4,846,000
	57,308,000

As at December 31, 2017, we have the following non-refundable federal investment tax credits for income tax purposes in Canada:

Expiry	$
2020	189,000
2021	471,000
2022	465,000
2023	361,000
2024	228,000
2025	271,000
2026	520,000
2027	596,000
2028	622,000
2029	173,000
2030	91,000
2031	114,000
2032	381,000
2033	487,000
2034	270,000
2035	183,000
2036	41,000
2037	600
	5,463,600

As well, we have unclaimed scientific research and experimental development expenditures available to reduce future years’ taxable income of approximately $27,400,000.  We have not recorded the potential benefits of these tax pools in these consolidated financial statements.

Deferred tax assets are recognized, to the extent that it is probable that taxable income will be available, against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized. The components of our unrecognized deferred tax asset are as follows:

	2017 $	2016 $	2015 $
Net operating losses carried forward	19,160,218	17,821,631	15,950,044
Scientific research and experimental development	7,406,099	7,394,707	7,278,284
Investment tax credits	3,988,325	3,990,664	3,987,214
Undepreciated capital costs in excess of book value of property and equipment and intellectual property	1,927,640	1,908,654	1,839,107
Share issue costs	493,343	432,659	619,066
Net capital losses carried forward	7,598	7,598	7,598
Unrecognized deferred tax asset	32,983,223	31,555,913	29,681,313

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Capital Disclosures

12 Months Ended

Dec. 31, 2017

Statement of changes in equity [abstract]

Capital Disclosures

Capital Disclosures

Our objective when managing capital is to maintain a strong statement of financial position. We achieve our objective by obtaining adequate cash resources to support planned activities which include the clinical trial program, product manufacturing, administrative costs and intellectual property expansion and protection.  We include shareholders’ equity, cash and cash equivalents and short-term investments in the definition of capital.

	2017 $	2016 $
Cash and cash equivalents	11,836,119	12,034,282
Short-term investments	—	2,088,800
Shareholders’ equity	8,283,846	10,689,620

We do not have any debt other than trade accounts payable and we have potential contingent obligations relating to the completion of our research and development of REOLYSIN.

In managing our capital, we estimate our future cash requirements by preparing a budget and a multi-year plan annually for review and approval by our Board. The budget establishes the approved activities for the upcoming year and estimates the costs associated with these activities. The multi-year plan estimates future activity along with the potential cash requirements and is based on our assessment of our current clinical trial progress along with the expected results from the coming year’s activity.  Budget to actual variances are prepared and reviewed by management and are presented quarterly to the Board.

Historically, funding for our plan is primarily managed through the issuance of additional common shares and common share purchase warrants that upon exercise are converted to common shares.  Management regularly monitors the capital markets attempting to balance the timing of issuing additional equity with our progress through our clinical trial program, general market conditions, and the availability of capital.  There are no assurances that funds will be made available to us when required.

On February 16, 2016, we renewed our short form base shelf prospectus (the “Base Shelf”) that qualifies for distribution of up to $150,000,000 of common shares, subscription receipts, warrants, or units (the “Securities”) in Canada. Under our Base Shelf, we may sell Securities to or through underwriters, dealers, placement agents or other intermediaries and also may sell Securities directly to purchasers or through agents, subject to obtaining any applicable exemption from registration requirements. The distribution of Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, or at prices related to such prevailing market prices to be negotiated with purchasers and as set forth in an accompanying Prospectus Supplement.

Renewing our Base Shelf provides us with additional flexibility when managing our cash resources as, under certain circumstances, it shortens the time period required to close a financing and is expected to increase the number of potential investors that may be prepared to invest in our company. Funds received from a Prospectus Supplement will be used in line with our Board approved budget and multi-year plan. Our renewed Base Shelf expires on March 16, 2018 and allowed us to enter into our Canadian ATM equity distribution agreement (see Note 7). We use this equity arrangement to assist us in achieving our capital objective.

We are not subject to externally imposed capital requirements and there have been no changes in how we define or manage our capital in 2017.

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Financial Instruments

12 Months Ended

Dec. 31, 2017

Disclosure of detailed information about financial instruments [abstract]

Financial Instruments

Financial Instruments

Our financial instruments consist of cash and cash equivalents, short-term investments, contract receivable, other receivables and accounts payable.  As at December 31, 2017, there are no significant differences between the carrying values of these amounts and their estimated market values.

Credit risk

Credit risk is the risk of financial loss if a counterparty to a financial instrument fails to meet its contractual obligations.  We are exposed to credit risk on our cash and cash equivalents, short-term investments and contract receivable in the event of non-performance by counterparties, but we do not anticipate such non-performance. Our maximum exposure to credit risk at the end of the period is the carrying value of our cash and cash equivalents, short-term investments and contract receivable.

We mitigate our exposure to credit risk by maintaining our primary operating and investment bank accounts with Schedule I banks in Canada. For our foreign domiciled bank accounts, we use referrals or recommendations from our Canadian banks to open foreign bank accounts and these accounts are used solely for the purpose of settling accounts payable or payroll.

We also mitigate our exposure to credit risk by restricting our portfolio to investment grade securities with short-term maturities and by monitoring the credit risk and credit standing of counterparties. As at December 31, 2016, 100% of our short-term investments were in guaranteed investment certificates.

We mitigate our exposure to credit risk connected to our contract receivable by performing a review of our customer's credit risk and payment histories, including payments made subsequent to year-end.

Interest rate risk

Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We are exposed to interest rate risk through our cash and cash equivalents and our portfolio of short-term investments.  We mitigate this risk through our investment policy that only allows investment of excess cash resources in investment grade vehicles while matching maturities with our operational requirements.

Fluctuations in market rates of interest do not have a significant impact on our results of operations due to the short term to maturity of the investments held.

Currency risk

Currency risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. In the normal course of our operations, we are exposed to currency risk from the purchase of goods and services primarily in the U.S., the U.K. and the European Union. In addition, we are exposed to currency risk to the extent cash is held in foreign currencies from either the purchase of foreign currencies or when we receive foreign currency proceeds from operating and financing activities. As well, we are exposed to currency risk related to our regional licensing agreement. The impact of a $0.01 increase in the value of the U.S. dollar against the Canadian dollar would have increased our net loss in 2017 by approximately $5,056.  The impact of a $0.10 increase in the value of the British pound against the Canadian dollar would have increased our net loss in 2017 by approximately $21,492. The impact of a $0.10 increase in the value of the Euro against the Canadian dollar would have increased our net loss in 2017 by approximately $11,736.

We mitigate our foreign exchange risk by maintaining sufficient foreign currencies, through the purchase of foreign currencies or receiving foreign currencies from financing activities, to settle our foreign accounts payable.

Balances in foreign currencies at December 31, 2017 are as follows:

	US dollars $		British pounds £		Euro €
Cash and cash equivalents	1,948,573		21,755		19,372
Contract receivable	3,800,000		—		—
Accounts payable	(777,271	)	(13,949	)	(1,100	)
	4,971,302		7,806		18,272

Liquidity risk

Liquidity risk is the risk that we will encounter difficulty in meeting obligations associated with financial liabilities. We manage liquidity risk through the management of our capital structure as outlined in Note 14. Accounts payable are all due within the current operating period.

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Additional Cash Flow Disclosures

12 Months Ended

Dec. 31, 2017

Statement of cash flows [abstract]

Additional Cash Flow Disclosures

Additional Cash Flow Disclosures

Net Change In Non-Cash Working Capital

	2017 $		2016 $	2015 $
Change in:
Contract receivable	(4,767,100	)	—	—
Other receivables	16,680		285,653	(148,308	)
Prepaid expenses	(915,222	)	245,828	(215,116	)
Accounts payable and accrued liabilities	(384,641	)	1,359,172	(664,505	)
Contract liability	6,182,580		—	—
Non-cash impact of foreign exchange	48,558		343,212	(77,535	)
Change in non-cash working capital related to operating activities	180,855		2,233,865	(1,105,464	)

Other Cash Flow Disclosures

	2017 $	2016 $	2015 $
Cash interest received	130,101	163,902	197,859
Cash taxes paid	136,163	4,468	3,421

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Indemnification of Officers and Directors

12 Months Ended

Dec. 31, 2017

Disclosure Of Indemnification Of Officers and Directors [Abstract]

Indemnification of Officers and Directors

Indemnification of Officers and Directors

Our corporate by-laws require that, except to the extent expressly prohibited by law, we will indemnify our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment reasonably incurred in respect of any civil, criminal or administrative action or proceeding as it relates to their services to the Company.  The by-laws provide no limit to the amount of the indemnification.  We have purchased directors’ and officers’ insurance coverage to cover claims made against the directors and officers during the applicable policy periods.  The amounts and types of coverage have varied from period to period as dictated by market conditions.  We believe that we have adequate insurance coverage; however, there is no guarantee that all indemnification payments will be covered under our existing insurance policies.

There is no pending litigation or proceeding involving any of our officers or directors as to which indemnification is being sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

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Economic Dependence

12 Months Ended

Dec. 31, 2017

Disclosure Of Economic Dependence [Abstract]

Economic Dependence

Economic Dependence

We are economically dependent on our toll manufacturers. We primarily use one toll manufacturer in the US to produce the clinical grade REOLYSIN required for our clinical trial program. Any significant disruption of the services provided by our primary toll manufacturer has the potential to delay the progress of our clinical trial program. We have used another toll manufacturer in the U.K. that has also produced clinical grade REOLYSIN at a smaller scale. We have attempted to mitigate this risk by producing sufficient REOLYSIN in advance of patient enrollment in a particular clinical trial.

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Other Expenses and Adjustments

12 Months Ended

Dec. 31, 2017

Analysis of income and expense [abstract]

Other Expenses and Adjustments

Other Expenses and Adjustments

We present our expenses based on the function of each expense and therefore include realized foreign exchange gains and losses, unrealized non-cash foreign exchange gains and losses and non-cash stock based compensation associated with research and development activity as a component of research and development expenses and amortization of property and equipment and stock based compensation associated with operating activities as a component of operating expenses.

	2017 $		2016 $	2015 $
Included in research and development expenses:
Realized foreign exchange (gain) loss	(120,794	)	104,851	238,709
Unrealized non-cash foreign exchange loss (gain)	55,538		67,109	(816,319	)
Non-cash share based compensation	230,141		233,919	257,016
Included in operating expenses
Amortization of property and equipment	90,768		162,233	180,411
Non-cash share based compensation	348,562		172,159	172,521
Office minimum lease payments	231,509		148,600	196,601

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Related Party Transactions

12 Months Ended

Dec. 31, 2017

Disclosure of related party [Abstract]

Related Party Transactions

Related Party Transactions

Compensation of Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling our activities as a whole. We have determined that key management personnel consists of the members of the Board of Directors along with certain officers of the Company.

	2017 $	2016 $	2015 $
Short-term employee compensation and benefits	2,596,082	2,753,553	2,941,342
Termination benefits	779,666	1,330,828	—
Share-based payments	459,298	372,008	353,419
	3,835,046	4,456,389	3,294,761

Assumption Agreement

In November 2017, with the signing of a regional licensing agreement with upfront license fees (see Note 10), the Company triggered a liability of US$178,125 to an officer as detailed in the Assumption Agreement (see Note 12). As at December 31, 2017, US$178,125 was included in accounts payable and accrued liabilities. US$35,625 was paid in January 2018 and the balance will be paid after receipt of the contract receivable from Adlai.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Summary Of Significant Accounting Policie [Abstract]

Deferred income taxes

We follow the liability method of accounting for income taxes. Under the liability method, deferred income taxes are recognized for the difference between financial statement carrying values and the respective income tax basis of assets and liabilities (temporary differences). Deferred income tax assets and liabilities are measured using substantively enacted income tax rates and laws expected to apply in the years in which temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is charged or credited to income, except when it is related to items charged or credited to either other comprehensive income or directly to equity.

Financial assets

Financial assets are comprised of cash and cash equivalents, contract receivable, other receivables and short-term investments. Financial assets are initially recorded at fair market value and are classified as follows:

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and interest bearing deposits with our bank and have been designated as held for trading.

Contract receivable and other receivables

Contract receivable and other receivables have been classified as loans and receivables.

Short-term investments

We determine the appropriate classification of our short-term investments at the time of purchase and re-evaluate such classification as of each reporting date. We classify our short-term investments as held-to-maturity as we have the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at original cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest rate method. Such amortization and interest on securities classified as held-to-maturity are included in interest income.

Impairment of financial assets

We assess at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

Financial liabilities

Trade accounts payable

Trade accounts payable are non interest-bearing and recorded at fair market value. They are classified as other financial liabilities and are subsequently measured at amortized cost using the effective interest rate method.

Fair value measurement

Fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. In determining the fair value measurement of our financial instruments we prioritize the related inputs used in measuring fair value into the following hierarchy:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;

Level 3 - Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

Transaction costs

Transaction costs are expensed as incurred for financial instruments designated as held for trading. Transaction costs for other financial instruments are recognized as part of the financial instrument's carrying value.

Foreign currency translation

The financial statements for each of our subsidiaries are prepared using their functional currency. Our presentation currency is the Canadian dollar which is also Oncolytics Biotech Inc.'s functional currency. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Exchange differences resulting from the settlement of such transactions and from the translation at exchange rates ruling at the statement of financial position date of monetary assets and liabilities denominated in currencies other than the functional currency are recognized directly in the consolidated statement of loss and comprehensive loss.

Exceptions to this are where the monetary items form part of the net investment in a foreign operation and the foreign operation's functional currency is the local currency. These exchange differences are initially recognized in equity. The statement of financial position of foreign operations is translated into Canadian dollars using the exchange rate at the statement of financial position date and the income statements are translated into Canadian dollars using the average exchange rate for the period. Where this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, the exchange rate on the transaction date is used. Exchange differences on translation into Canadian dollars are recognized as a separate component of equity. On disposal of a foreign operation, any cumulative exchange differences held in equity are transferred to the consolidated statement of loss and comprehensive loss.

Investment tax credits

Investment tax credits ("ITCs") relating to qualifying scientific research and experimental development expenditures that are refundable are accounted for as a reduction in research and development expenditures. ITCs that are non-refundable, but are recoverable against future taxes payable, are accrued only when there is reasonable assurance that the credits will be realized.

ITCs are subject to technical and financial review by the Canadian tax authorities on a project-by-project basis. Therefore, amounts ultimately received may vary significantly from the amounts recorded. Any such differences are recorded as an adjustment to the recognized amount in the year the review by the Canadian tax authority is completed and the results are made known to us.

Loss per common share

Basic loss per common share is determined using the weighted average number of common shares outstanding during the period.

We use the treasury stock method to calculate diluted loss per common share. Under this method, diluted loss per common share is computed in a manner consistent with basic loss per common share except that the weighted average common shares outstanding are increased to include additional common shares from the assumed exercise of options and warrants, if dilutive. The number of additional common shares is calculated by assuming that any outstanding “in the money” options, restricted share units, performance share units and warrants were exercised at the later of the beginning of the period or the date of issue and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reporting period.

Property and equipment

Property and equipment are recorded at cost. Depreciation is provided on bases and at rates designed to amortize the cost of the assets over their estimated useful lives. Depreciation is recorded using the declining balance method at the following annual rates:

Office equipment and furniture	20%
Medical equipment	20%
Computer equipment	30%
Leasehold improvements	Straight-line over the term of the lease

Research and development costs

Research costs are expensed as incurred, net of recoveries. We record accruals for the estimated costs of our clinical trial activities performed by third parties. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of certain clinical trial activities. We generally accrue costs associated with the treatment phase of clinical trials based on the total estimated cost of the treatment phase on a per patient basis and we expense the per patient cost ratably over the estimated patient treatment period based on patient enrollment in the trials. Advance payments for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses and recognized as expense as the related goods are delivered or the related services are performed. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified.

Development costs that meet specific criteria related to technical, market and financial feasibility will be capitalized. To date, all development costs have been expensed.

Revenue recognition

Revenue relates to a long-term contract associated with a regional licensing agreement (the "Agreement") with Adlai Nortye Biopharma Co., Ltd. ("Adlai"). The pricing for the contract was based on the specific negotiations with Adlai and includes non-refundable upfront license fees, development and regulatory milestone payments, royalties and sales-based milestone payments.

We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

Under the Agreement, we have granted a regional license to our intellectual property. The granting of this license is accounted for as one performance obligation. We have determined that we provide Adlai with a right to access our intellectual property, and therefore recognize revenue related to the upfront license fee over time. Revenue is recognized based on the extent of progress towards completion of the performance obligation using the input method. Under the input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. We use this method because Adlai receives and consumes the benefit of our intellectual property as we undertake activities that impact the intellectual property. Management must use judgment in making assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables.

The contract also provides for development and regulatory milestone payments, royalties and sales-based milestone payments. These amounts are contingent on the occurrence of a future event and therefore give rise to variable consideration. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price when it becomes highly probable that the amount will not be subject to significant reversal when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. Based on this information and related analysis, any quarterly adjustments to revenue are recognized as necessary in the period they become known.

The upfront license fee is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect us from the other party failing to adequately complete some or all of its obligations under the contract.

Revenue from sales-based royalties and the achievement of annual sales volumes will be recognized when the subsequent sale occurs, as the license of the intellectual property is the predominant item to which the royalty relates. We consider payments associated with the achievement of annual sales volumes to be, in substance, royalty payments and we will recognize such sales-based payments upon achievement of such sales volumes, provided that collection is reasonably assured.

Contract receivable - Contract receivable includes amounts billed and currently due from customers. When appropriate, we provide for an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. We perform a review of our customer’s credit risk and payment histories, including payments made subsequent to year-end.

Contract liability - Our contract liability includes upfront license fees and billings in excess of revenue recognized. Contract liabilities are recognized as revenue as or when we perform under the contract. We classify our contract liability as current or noncurrent based on the timing of when we expect to recognize revenue.

Share based payments

Stock option plan

We have one stock option plan (the “Option Plan”) available to officers, directors, employees, consultants and suppliers with grants under the Option Plan approved from time to time by our Board of Directors (the “Board”). Under the Option Plan, the exercise price of each option is set at equal to or higher than the trading price of our stock on the date of grant in accordance with Toronto Stock Exchange guidelines. Vesting is provided for at the discretion of the Board and the expiration of options is to be no greater than 10 years from the date of grant. Exercised stock options are settled with common shares issued from treasury.

We use the fair value based method of accounting for stock option awards granted under the Option Plan. We recognize compensation expense and a corresponding adjustment to contributed surplus equal to the fair value of the stock options granted using the Black Scholes Option Pricing Model. The fair value of stock options with a graded vesting schedule is determined based on different expected lives for the options that vest each year, as it would be if the award were viewed as several separate awards, each with a different vesting date, and it is accounted for over the respective vesting period taking into consideration forfeiture estimates. Compensation expense is adjusted for subsequent changes in management’s estimate of the number of options that are expected to vest.

Share based payments to non-employees are measured at the date we obtain the goods or the date the counterparty renders the service.

Incentive share award plan

Our incentive share award plan (the "Share Plan") is available to directors, officers and employees. Under our Share Plan, performance share units and restricted share units may be approved from time to time by the Board. Performance share units ("PSUs") are an award to certain officers and employees to which common shares shall be issued based upon achieving the applicable performance criteria. Restricted share units ("RSUs") are an award to certain officers and employees and to non-employee directors to which common shares shall be issued in accordance with the Share Plan.

We recognize compensation expense and a corresponding adjustment to contributed surplus equal to the market value of our common shares at the date of grant based on the number of PSUs/RSUs expected to vest, recognized over the term of the vesting period. Compensation expense is adjusted for subsequent changes in management’s estimate of the number of PSUs/RSUs that are expected to vest. The effect of these changes is recognized in the period of the change.

Adoption of new accounting standards

IFRS 15 - Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers. The new standard will replace IAS 18 Revenue and IAS 11 Construction Contracts. IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised, and also contains new requirements related to presentation. The core principle in that framework is that revenue should be recognised dependent on the transfer of promised goods or services to the customer for an amount that reflects the consideration which should be received in exchange for those goods or services. The objective of the standard is to provide a five-step approach to revenue recognition that includes identifying contracts with customers, identifying performance obligations, determining transaction prices, allocating transaction prices to performance obligations, and recognising revenue when or as performance obligations are satisfied. Judgment will need to be applied, including making estimates and assumptions, for multiple-element contracts in identifying performance obligations, in constraining estimates of variable consideration and in allocating the transaction price to each performance obligation. This new standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. We early adopted this standard effective for our year ended December 31, 2017 using the full retrospective method. There were no adjustments to our consolidated financial statements resulting from this early adoption.

Accounting standards and interpretations issued but not yet effective

IFRS 9 - Financial Instruments

In July 2014, on completion of the impairment phase of the project to reform accounting for financial instruments and replace IAS 39 Financial Instruments: Recognition and Measurement, the IASB issued the final version of IFRS 9 Financial Instruments. IFRS 9 includes guidance on the classification and measurement of financial assets and financial liabilities and impairment of financial assets (i.e. recognition of credit losses).

Under the classification and measurement requirements for financial assets, financial assets must be classified and measured at either amortized cost or at fair value through profit or loss or through other comprehensive income, depending on the basis of the entity’s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset.

The classification requirements for financial liabilities are unchanged from IAS 39. IFRS 9 requirements address the problem of volatility in net earnings arising from an issuer choosing to measure certain liabilities at fair value and require that the portion of the change in fair value due to changes in the entity’s own credit risk be presented in other comprehensive income, rather than within net earnings.

The new requirements for impairment of financial assets introduce an expected loss impairment model that requires more timely recognition of expected credit losses. IAS 39 impairment requirements are based on an incurred loss model where credit losses are not recognized until there is evidence of a trigger event. IFRS 9 is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted. We are assessing the impact of adopting this standard on our consolidated financial statements.

IFRS 16 - Leases

In January 2016, the IASB issued IFRS 16 - Leases (“IFRS 16”), which replaces IAS 17 - Leases (“IAS 17”) and related interpretations. IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease term is 12-months or less or the underlying asset has a low value. IFRS 16 substantially carries forward the lessor accounting in IAS 17 with the distinction between operating leases and finance leases being retained. IFRS 16 will be applied retrospectively for annual periods beginning on or after January 1, 2019. Early adoption is permitted under certain circumstances. We are assessing the potential impact of adopting this standard on our consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Summary Of Significant Accounting Policies [Abstract]

Schedule of depreciation rates

Depreciation is recorded using the declining balance method at the following annual rates:

Office equipment and furniture	20%
Medical equipment	20%
Computer equipment	30%
Leasehold improvements	Straight-line over the term of the lease

	Medical Equipment	Computer Equipment		Office Furniture	Office Equipment	Leasehold Improvements	Total
Cost
As at December 31, 2015	197,870	685,277		214,085	87,964	465,865	1,651,061
Additions, net of foreign exchange impact	—	20,098		—	1,502	770	22,370
As at December 31, 2016	197,870	705,375		214,085	89,466	466,635	1,673,431
Additions, net of foreign exchange impact	—	24,778		11,811	—	67,665	104,254
Disposals	—	(48,168	)	—	—	—	(48,168	)
As at December 31, 2017	197,870	681,985		225,896	89,466	534,300	1,729,517
Amortization
As at December 31, 2015	133,477	505,245		127,383	58,759	366,379	1,191,243
Amortization for the year	11,492	48,929		10,241	5,408	86,163	162,233
As at December 31, 2016	144,969	554,174		137,624	64,167	452,542	1,353,476
Amortization for the year	9,365	43,558		9,710	4,620	23,515	90,768
Disposals	—	(48,168	)	—	—	—	(48,168	)
As at December 31, 2017	154,334	549,564		147,334	68,787	476,057	1,396,076
Net book value
As at December 31, 2017	43,536	132,421		78,562	20,679	58,243	333,441
As at December 31, 2016	52,901	151,201		76,461	25,299	14,093	319,955

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Cash Equivalents and Short Term Investments (Tables)

12 Months Ended

Dec. 31, 2017

Cash Equivalents And Short Term Investments [Abstract]

Schedule of short-term investments

	Face Value $	Original Cost $	Accrued Interest $	Carrying Value $	Fair Value $	Effective Interest Rate %
December 31, 2017
Short-term investments	—	—	—	—	—	—%
December 31, 2016
Short-term investments	2,088,800	2,088,800	—	2,088,800	2,088,800	1.41%

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of detailed information about property, plant and equipment [abstract]

Schedule of property and equipment

Depreciation is recorded using the declining balance method at the following annual rates:

Office equipment and furniture	20%
Medical equipment	20%
Computer equipment	30%
Leasehold improvements	Straight-line over the term of the lease

	Medical Equipment	Computer Equipment		Office Furniture	Office Equipment	Leasehold Improvements	Total
Cost
As at December 31, 2015	197,870	685,277		214,085	87,964	465,865	1,651,061
Additions, net of foreign exchange impact	—	20,098		—	1,502	770	22,370
As at December 31, 2016	197,870	705,375		214,085	89,466	466,635	1,673,431
Additions, net of foreign exchange impact	—	24,778		11,811	—	67,665	104,254
Disposals	—	(48,168	)	—	—	—	(48,168	)
As at December 31, 2017	197,870	681,985		225,896	89,466	534,300	1,729,517
Amortization
As at December 31, 2015	133,477	505,245		127,383	58,759	366,379	1,191,243
Amortization for the year	11,492	48,929		10,241	5,408	86,163	162,233
As at December 31, 2016	144,969	554,174		137,624	64,167	452,542	1,353,476
Amortization for the year	9,365	43,558		9,710	4,620	23,515	90,768
Disposals	—	(48,168	)	—	—	—	(48,168	)
As at December 31, 2017	154,334	549,564		147,334	68,787	476,057	1,396,076
Net book value
As at December 31, 2017	43,536	132,421		78,562	20,679	58,243	333,441
As at December 31, 2016	52,901	151,201		76,461	25,299	14,093	319,955

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Share Capital (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Share Capital, Reserves And Other Equity Interest [Abstract]

Schedule of share capital

Authorized:

Unlimited number of no par value common shares

Issued:	Shares			Warrants
	Number	Amount $		Number	Amount $
Balance, December 31, 2014	93,512,494	237,657,056		—	—
Issued pursuant to Share Purchase Agreement(a)	5,778,674	4,371,687		—	—
Issued pursuant to "At the Market" sales agreement(b)	18,860,454	20,049,693		—	—
Share issue costs	—	(753,744	)	—	—
Balance, December 31, 2015	118,151,622	261,324,692		—	—
Issued pursuant to incentive share award plan	100,000	41,000		—	—
Issued pursuant to "At the Market" equity distribution agreement(c)	3,006,600	1,456,296		—	—
Share issue costs	—	(500,163	)	—	—
Balance, December 31, 2016	121,258,222	262,321,825		—	—
Issued pursuant to stock option plan	801,000	536,949		—	—
Issued pursuant to "At the Market" equity distribution agreement(c)	3,301,500	2,348,821		—	—
Issued pursuant to public offering(d)	16,445,000	7,893,600		16,445,000	3,617,900
Share issue costs	—	(1,391,057	)	—	—
Balance, December 31, 2017	141,805,722	271,710,138		16,445,000	3,617,900

(a) In 2014, we entered into a share purchase agreement (the "Share Purchase Agreement") with Lincoln Park Capital Fund, LLC ("LPC") to sell up to US$26,000,000 of common stock. Subject to the terms and conditions of the Share Purchase Agreement and at our sole discretion, we may sell up to US$26.0 million worth of common shares to LPC over the 30-month term. The purchase price of the common shares was based on prevailing market prices of our common shares immediately preceding the notice of a sale without any fixed discount. Subject to the Share Purchase Agreement, we controlled the timing and amount of each investment and LPC was obligated to make such purchases, if and when elected. The Share Purchase Agreement did not impose any upper price limit restrictions, negative covenants or restrictions on our future financing activities, but required that we maintained our NASDAQ listing. Under the Share Purchase Agreement, we issued an initial commitment fee of 292,793 common shares to LPC valued at fair value of US$455,000. An additional 292,793 common shares was to be issued on a pro rata basis under the terms of the Share Purchase Agreement as an additional commitment fee.

On October 20, 2014, we reached an agreement to amend the Share Purchase Agreement. The specific amendments included allowing the Company to sell shares to LPC at the Company's sole option independent of the closing price of the Common Stock, increasing the number of shares that may have been sold to LPC at certain price levels and changed the way the number of Commitment Shares issuable was to be calculated. In consideration of the amendments to the Agreement, the Company issued 146,397 shares of Common Stock to LPC.

In 2015, under the terms of the amended Share Purchase Agreement, we issued 5,778,674 common shares for net proceeds of approximately US$3.5 million. As part of the shares issued, we issued 78,674 commitment shares. The commitment shares have been valued at fair value of US$50,024 and have been recorded as additional share issue costs. On November 5, 2015, we were delisted from the NASDAQ Capital Market and as a result we were unable to sell common shares under the Share Purchase Agreement.

(b) On October 24, 2014, we entered into an "at-the-market" ("ATM") equity distribution agreement with Canaccord Genuity Inc. acting as sole agent. Under the terms of the distribution agreement, we were able to, from time to time, sell shares of our common stock having an aggregate offering value of up to US$20 million through Canaccord Genuity Inc. directly to investors in the US through our NASDAQ listing. We were able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. During 2015, we issued 18,860,454 common shares for net proceeds of approximately US$15.5 million. On November 5, 2015, we were delisted from the NASDAQ Capital Market and as a result we were unable to sell common shares under our existing ATM.

(c) On February 25, 2016, we entered into an ATM equity distribution agreement with Canaccord Genuity Inc. acting as our sole agent with an aggregate offering value of up to $4.6 million which allows us to sell our common shares through the facilities of the Toronto Stock Exchange or other "marketplace” (as defined in National Instrument 21-101 Marketplace Operation) in Canada (our "Canadian ATM"). Subject to the terms of our Canadian ATM, we are able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. During 2017, we sold 3,301,500 (2016 - 3,006,600) common shares for gross proceeds of $2,348,821 (2016 - $1,456,296). We incurred share issue costs of $245,655 (2016 - $500,163).

(d) On June 1, 2017, pursuant to an underwritten public offering, 16,445,000 units were sold at a purchase price of $0.70 per unit for gross proceeds of $11,511,500. Each unit included one common share (ascribed value of $0.48) and one common share purchase warrant (ascribed value of $0.22). The ascribed value was determined using the relative fair value method. The ascribed value of the common share purchase warrants was determined using the Black Scholes option pricing model. Each common share purchase warrant entitles the holder to purchase one common share in the capital of the Company until June 1, 2022, at an exercise price of $0.95. The common share purchase warrants will be subject to acceleration if the volume weighted average price of the Company's common shares equals or exceeds $2.50 for 15 consecutive trading dates. We incurred share issue costs of $1,145,402.

Summary of assumptions used in the Black Scholes Option Pricing Model for Warrants

The following table summarizes the assumptions used in the Black Scholes Option Pricing Model with respect to the valuation of warrants issued:

	2017
Risk-free interest rate	0.70%
Expected hold period to exercise	2.0 years
Volatility in the price of the Company's shares	89.30%
Dividend yield	Nil

Summary of Outstanding Warrants

The following table summarizes our outstanding warrants at December 31, 2017:

Exercise Price		Outstanding, Beginning of the Year	Granted During the Year	Outstanding, End of the Year	Weighted Average Remaining Contractual Life (years)
$	0.95	—	16,445,000	16,445,000	4.42

The following table summarizes information about the stock options outstanding and exercisable at December 31, 2017:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price $	Number Exercisable	Weighted Average Exercise Price $
$0.26 - $0.42	3,437,000	8.46	0.35	2,921,834	0.35
$0.51 - $0.80	538,000	8.22	0.64	358,000	0.70
$1.45 - $2.00	1,002,667	5.62	1.77	1,002,667	1.77
$2.13 - $3.89	545,500	3.74	3.42	545,500	3.42
$4.01 - $6.72	625,500	3.94	5.34	625,500	5.34
	6,148,667	7.09	1.39	5,453,501	1.51

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Share Based Payments (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of share-based payment arrangement [Abstract]

Schedule of stock options and weighted average exercise prices of share options

We have issued stock options to acquire common stock through our stock option plan of which the following are outstanding at December 31:

	2017			2016			2015
	Stock Options		Weighted Average Exercise Price $	Stock Options		Weighted Average Exercise Price $	Stock Options		Weighted Average Exercise Price $
Outstanding, beginning of the year	8,674,227		1.83	8,561,394		2.17	5,446,394		3.19
Granted during the year	405,000		0.48	1,572,000		0.28	3,280,000		0.43
Forfeited during the year	(2,012,660	)	3.45	(737,500	)	0.65	(100,000	)	1.69
Expired during the year	(116,900	)	2.22	(721,667	)	3.61	(65,000	)	1.49
Exercised during the year	(801,000	)	0.43	—		—	—		—
Outstanding, end of the   year	6,148,667		1.39	8,674,227		1.83	8,561,394		2.17
Options exercisable, end of the year	5,453,501		1.51	6,729,643		2.27	6,476,394		2.73

Schedule of stock options outstanding and exercisable by range of exercise price

The following table summarizes information about the stock options outstanding and exercisable at December 31, 2017:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price $	Number Exercisable	Weighted Average Exercise Price $
$0.26 - $0.42	3,437,000	8.46	0.35	2,921,834	0.35
$0.51 - $0.80	538,000	8.22	0.64	358,000	0.70
$1.45 - $2.00	1,002,667	5.62	1.77	1,002,667	1.77
$2.13 - $3.89	545,500	3.74	3.42	545,500	3.42
$4.01 - $6.72	625,500	3.94	5.34	625,500	5.34
	6,148,667	7.09	1.39	5,453,501	1.51

Schedule of weighted average remaining contractual life and outstanding stock options by exercise price

The following table summarizes our outstanding warrants at December 31, 2017:

Exercise Price		Outstanding, Beginning of the Year	Granted During the Year	Outstanding, End of the Year	Weighted Average Remaining Contractual Life (years)
$	0.95	—	16,445,000	16,445,000	4.42

The following table summarizes information about the stock options outstanding and exercisable at December 31, 2017:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price $	Number Exercisable	Weighted Average Exercise Price $
$0.26 - $0.42	3,437,000	8.46	0.35	2,921,834	0.35
$0.51 - $0.80	538,000	8.22	0.64	358,000	0.70
$1.45 - $2.00	1,002,667	5.62	1.77	1,002,667	1.77
$2.13 - $3.89	545,500	3.74	3.42	545,500	3.42
$4.01 - $6.72	625,500	3.94	5.34	625,500	5.34
	6,148,667	7.09	1.39	5,453,501	1.51

Disclosure weighted average assumptions and fair value of options

The estimated fair value of stock options issued during the year was determined using the Black Scholes Option Pricing Model using the following weighted average assumptions and fair value of options:

	2017	2016	2015
Risk-free interest rate	1.18%	0.82%	0.63%
Expected hold period to exercise	3.0 years	3.0 years	3.0 years
Volatility in the price of the Company's shares	90.73%	94.84%	90%
Rate of forfeiture	3.67%	3.67%	3.67%
Dividend yield	Nil	Nil	Nil
Weighted average fair value of options	$0.28	$0.17	$0.24

Schedule of number of other equity instruments

The following RSUs are outstanding at December 31:

	2017	2016		2015
Outstanding, beginning of the year	1,322,829	368,831		—
Granted during the year	486,238	1,053,998		368,831
Forfeited during the year	—	—		—
Vested during the year	—	(100,000	)	—
Outstanding, end of the year	1,809,067	1,322,829		368,831

(1)The weighted average fair value of the RSUs granted was $0.63 in 2017 (2016 - $0.31).

The following PSUs are outstanding at December 31:

	2017	2016		2015
Outstanding, beginning of the year	840,000	—		—
Granted during the year	60,000	1,500,000		—
Forfeited during the year	—	(660,000	)	—
Outstanding, end of the year	900,000	840,000		—

(1)     The weighted average fair value of the PSUs granted was $0.35 in 2017 (2016 - $0.36).

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Contract Liability and Receivable (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of revenue from contracts with customers [Abstract]

Explanation of significant changes in contract assets and contract liabilities [text block]

Our contract liability balance at December 31, which we expect to record in revenue over the next five years, is as follows:

	2017	2016
Balance, beginning of the year	—	—
Regional licensing agreement	6,182,580	—
Revenue recognized in the year	—	—
Balance, end of the year	6,182,580	—
Contract liability - current	1,545,645	—
Contract liability - non-current	4,636,935	—
	6,182,580	—

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Commitments (Tables)

12 Months Ended

Dec. 31, 2017

Commitments [Abstract]

Disclosure of rental payments

We are committed to rental payments (excluding our portion of operating costs and rental taxes) under the terms of our office leases. Annual payments under the terms of these leases are as follows:

	Amount $
2018	285,987
2019	251,743
2020	159,990
2021	43,130
	740,850

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of income tax [Abstract]

Provision for income taxes

The provision for income taxes recorded in the consolidated financial statements differs from the amount which would be obtained by applying the statutory income tax rate to the loss before income taxes as follows:

	2017		2016		2015
Loss before income taxes	(15,475,353	)	(15,130,605	)	(13,719,842	)
Statutory Canadian corporate tax rate	27.00	%	27.00	%	26.00	%
Anticipated tax recovery	(4,178,345	)	(4,085,263	)	(3,567,159	)
Foreign jurisdiction tax rate difference	2,899,190		2,184,796		2,659,145
Employee stock based compensation	156,250		109,641		111,680
Change in tax rate	—		—		(1,336,941	)
Adjustment to opening tax pools	162,162		(39,569	)	(1,339,467	)
Other permanent differences	53,039		100,525		23,620
Change in deferred tax benefits deemed not probable to be recovered	1,051,725		1,739,557		3,455,622
Current income taxes	144,021		9,687		6,500
Adjustment in respect to prior periods	(2,523	)	(313	)	(3,347	)
Net current tax expense	141,498		9,374		3,153

Schedule of unrecognized non-capital losses, non-refundable credits and deferred tax assets

As at December 31, 2017, we have the following non-capital losses for income tax purposes in Canada:

Expiry	$
2026	9,809,000
2027	12,170,000
2029	4,009,000
2030	4,774,000
2031	4,343,000
2032	2,873,000
2033	2,457,000
2034	2,472,000
2035	3,125,000
2036	6,430,000
2037	4,846,000
	57,308,000

As at December 31, 2017, we have the following non-refundable federal investment tax credits for income tax purposes in Canada:

Expiry	$
2020	189,000
2021	471,000
2022	465,000
2023	361,000
2024	228,000
2025	271,000
2026	520,000
2027	596,000
2028	622,000
2029	173,000
2030	91,000
2031	114,000
2032	381,000
2033	487,000
2034	270,000
2035	183,000
2036	41,000
2037	600
	5,463,600

Deferred tax assets are recognized, to the extent that it is probable that taxable income will be available, against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized. The components of our unrecognized deferred tax asset are as follows:

	2017 $	2016 $	2015 $
Net operating losses carried forward	19,160,218	17,821,631	15,950,044
Scientific research and experimental development	7,406,099	7,394,707	7,278,284
Investment tax credits	3,988,325	3,990,664	3,987,214
Undepreciated capital costs in excess of book value of property and equipment and intellectual property	1,927,640	1,908,654	1,839,107
Share issue costs	493,343	432,659	619,066
Net capital losses carried forward	7,598	7,598	7,598
Unrecognized deferred tax asset	32,983,223	31,555,913	29,681,313

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Capital Disclosures (Tables)

12 Months Ended

Dec. 31, 2017

Statement of changes in equity [abstract]

Schedule of capital components

	2017 $	2016 $
Cash and cash equivalents	11,836,119	12,034,282
Short-term investments	—	2,088,800
Shareholders’ equity	8,283,846	10,689,620

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of detailed information about financial instruments [abstract]

Schedule of balances in foreign currencies

Balances in foreign currencies at December 31, 2017 are as follows:

	US dollars $		British pounds £		Euro €
Cash and cash equivalents	1,948,573		21,755		19,372
Contract receivable	3,800,000		—		—
Accounts payable	(777,271	)	(13,949	)	(1,100	)
	4,971,302		7,806		18,272

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Additional Cash Flow Disclosures (Tables)

12 Months Ended

Dec. 31, 2017

Statement of cash flows [abstract]

Net change in non-cash working capital

Net Change In Non-Cash Working Capital

	2017 $		2016 $	2015 $
Change in:
Contract receivable	(4,767,100	)	—	—
Other receivables	16,680		285,653	(148,308	)
Prepaid expenses	(915,222	)	245,828	(215,116	)
Accounts payable and accrued liabilities	(384,641	)	1,359,172	(664,505	)
Contract liability	6,182,580		—	—
Non-cash impact of foreign exchange	48,558		343,212	(77,535	)
Change in non-cash working capital related to operating activities	180,855		2,233,865	(1,105,464	)

Other cash flow disclosures

Other Cash Flow Disclosures

	2017 $	2016 $	2015 $
Cash interest received	130,101	163,902	197,859
Cash taxes paid	136,163	4,468	3,421

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Other Expenses and Adjustments (Tables)

12 Months Ended

Dec. 31, 2017

Analysis of income and expense [abstract]

Other expenses and adjustments

	2017 $		2016 $	2015 $
Included in research and development expenses:
Realized foreign exchange (gain) loss	(120,794	)	104,851	238,709
Unrealized non-cash foreign exchange loss (gain)	55,538		67,109	(816,319	)
Non-cash share based compensation	230,141		233,919	257,016
Included in operating expenses
Amortization of property and equipment	90,768		162,233	180,411
Non-cash share based compensation	348,562		172,159	172,521
Office minimum lease payments	231,509		148,600	196,601

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of related party [Abstract]

Schedule of related party transactions

	2017 $	2016 $	2015 $
Short-term employee compensation and benefits	2,596,082	2,753,553	2,941,342
Termination benefits	779,666	1,330,828	—
Share-based payments	459,298	372,008	353,419
	3,835,046	4,456,389	3,294,761

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Summary of Significant Accounting Policies - Schedule of Depreciation Rates (Details)	12 Months Ended
	Dec. 31, 2017
Office equipment and furniture
Disclosure of detailed information about property, plant and equipment [line items]
Annual depreciation rate	20.00%
Medical equipment
Disclosure of detailed information about property, plant and equipment [line items]
Annual depreciation rate	20.00%
Computer equipment
Disclosure of detailed information about property, plant and equipment [line items]
Annual depreciation rate	30.00%

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Summary of Significant Accounting Policies - Narrative (Details)	12 Months Ended
	Dec. 31, 2017 plan
Summary Of Significant Accounting Policie [Abstract]
Number of plans	1
Maximum option expiration term	10 years

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Cash Equivalents and Short Term Investments - Narrative (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cash Equivalents And Short Term Investments [Abstract]
Cash equivalents	$ 9,204,919	$ 10,679,992
Current annual interest rate	1.38%	0.96%

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Cash Equivalents and Short Term Investments - Schedule Of Short-term Investments (Details) - Held-to-maturity short-term investments - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of financial assets [line items]
Effective Interest Rate %	0.00%	1.41%
Carrying Value
Disclosure of financial assets [line items]
Short-term investments	$ 0	$ 2,088,800
Original Cost
Disclosure of financial assets [line items]
Short-term investments	0	2,088,800
Fair Value | Face Value
Disclosure of financial assets [line items]
Short-term investments	0	2,088,800
Fair Value | Fair Value
Disclosure of financial assets [line items]
Short-term investments	$ 0	$ 2,088,800

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Property and Equipment (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	$ 319,955
Property and equipment	333,441	$ 319,955
Cost
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	1,673,431	1,651,061
Additions	104,254	22,370
Disposals	(48,168)
Property and equipment	1,729,517	1,673,431
Amortization
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	1,353,476	1,191,243
Additions	90,768	162,233
Property and equipment	1,396,076	1,353,476
Medical equipment
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	52,901
Property and equipment	43,536	52,901
Medical equipment | Cost
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	197,870	197,870
Additions	0	0
Disposals	0
Property and equipment	197,870	197,870
Medical equipment | Amortization
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	144,969	133,477
Additions	9,365	11,492
Property and equipment	154,334	144,969
Computer equipment
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	151,201
Property and equipment	132,421	151,201
Computer equipment | Cost
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	705,375	685,277
Additions	24,778	20,098
Disposals	(48,168)
Property and equipment	681,985	705,375
Computer equipment | Amortization
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	554,174	505,245
Additions	43,558	48,929
Property and equipment	549,564	554,174
Office Furniture
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	76,461
Property and equipment	78,562	76,461
Office Furniture | Cost
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	214,085	214,085
Additions	11,811	0
Disposals	0
Property and equipment	225,896	214,085
Office Furniture | Amortization
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	137,624	127,383
Additions	9,710	10,241
Property and equipment	147,334	137,624
Office Equipment
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	25,299
Property and equipment	20,679	25,299
Office Equipment | Cost
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	89,466	87,964
Additions	0	1,502
Disposals	0
Property and equipment	89,466	89,466
Office Equipment | Amortization
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	64,167	58,759
Additions	4,620	5,408
Property and equipment	68,787	64,167
Leasehold Improvements
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	14,093
Property and equipment	58,243	14,093
Leasehold Improvements | Cost
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	466,635	465,865
Additions	67,665	770
Disposals	0
Property and equipment	534,300	466,635
Leasehold Improvements | Amortization
Reconciliation of changes in property, plant and equipment [abstract]
Property and equipment	452,542	366,379
Additions	23,515	86,163
Property and equipment	$ 476,057	$ 452,542

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Share Capital - Schedule of Share Capital (Details) - CAD ($)			12 Months Ended
	Jun. 01, 2017	Oct. 20, 2014	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of classes of share capital [line items]
Equity			$ 10,689,620	$ 24,674,306	$ 13,819,193
Share capital issued, beginning (shares)			121,258,222
Share issue costs			$ (1,391,057)	(500,163)	(753,744)
Equity			$ 8,283,846	$ 10,689,620	24,674,306
Share capital issued ending (shares)			141,805,722	121,258,222
Share Purchase Agreement
Disclosure of classes of share capital [line items]
Issued shares					4,371,687
At-the-market agreement
Disclosure of classes of share capital [line items]
Issued shares			$ 2,348,821	$ 1,456,296	$ 20,049,693
Issued (shares)			3,301,500	3,006,600	18,860,454
Gross proceeds from common shares			$ 2,348,821	$ 1,456,296
Share issue costs			(245,655)	(500,163)
Public Offering
Disclosure of classes of share capital [line items]
Issued shares			11,511,500
Issued (shares)	16,445,000
Gross proceeds from common shares	$ 11,511,500
Share issue costs	$ (1,145,402)
Shares
Disclosure of classes of share capital [line items]
Equity			$ 262,321,825	$ 261,324,692	$ 237,657,056
Share capital issued, beginning (shares)			121,258,222	118,151,622	93,512,494
Issued shares			$ 536,949	$ 41,000
Issued (shares)		146,397	801,000	100,000
Share issue costs			$ (1,391,057)	$ (500,163)	$ (753,744)
Equity			$ 271,710,138	$ 262,321,825	$ 261,324,692
Share capital issued ending (shares)			141,805,722	121,258,222	118,151,622
Shares | Share Purchase Agreement
Disclosure of classes of share capital [line items]
Issued shares					$ 4,371,687
Issued (shares)					5,778,674
Shares | At-the-market agreement
Disclosure of classes of share capital [line items]
Issued shares			$ 2,348,821		$ 20,049,693
Issued (shares)			3,301,500		18,860,454
Shares | Public Offering
Disclosure of classes of share capital [line items]
Issued shares			$ 7,893,600
Issued (shares)			16,445,000
Warrants
Disclosure of classes of share capital [line items]
Equity			$ 0	$ 0	$ 0
Share capital issued, beginning (shares)			0	0	0
Issued (shares)			16,445,000
Equity			$ 3,617,900	$ 0	$ 0
Share capital issued ending (shares)			16,445,000	0	0
Warrants | Public Offering
Disclosure of classes of share capital [line items]
Issued shares			$ 3,617,900
Issued (shares)			16,445,000

XML

Share Capital - Schedule of Share Capital Footnotes (Details)			12 Months Ended
	Jun. 01, 2017 CAD ($) $ / shares shares	Oct. 20, 2014 shares	Dec. 31, 2017 CAD ($) shares	Dec. 31, 2016 CAD ($) shares	Dec. 31, 2015 CAD ($) shares	Dec. 31, 2015 USD ($) shares	Dec. 31, 2014 CAD ($) shares	Jun. 01, 2017 $ / shares shares	Feb. 25, 2016 CAD ($)	Dec. 31, 2014 USD ($)	Oct. 24, 2014 USD ($)
Disclosure of classes of share capital [line items]
Equity			$ 8,283,846	$ 10,689,620	$ 24,674,306		$ 13,819,193
Share issue related cost			$ 1,391,057	$ 500,163	$ 753,744
Number of common shares issuable per warrant | shares	1							1
Share Purchase Agreement
Disclosure of classes of share capital [line items]
Share Purchase Agreement										$ 26,000,000
Share Purchase Agreement term							30 months
At-the-market agreement
Disclosure of classes of share capital [line items]
Share Purchase Agreement											$ 20,000,000
Issued (shares) | shares			3,301,500	3,006,600	18,860,454	18,860,454
Proceeds from shares issued under Share Purchase Agreement						$ 15,500,000
Equity									$ 4,600,000
Gross proceeds from common shares			$ 2,348,821	$ 1,456,296
Share issue related cost			$ 245,655	$ 500,163
Public Offering
Disclosure of classes of share capital [line items]
Issued (shares) | shares	16,445,000
Gross proceeds from common shares	$ 11,511,500
Share issue related cost	$ 1,145,402
Purchase price (cad per share) | $ / shares	$ 0.70
Shares
Disclosure of classes of share capital [line items]
Issued (shares) | shares		146,397	801,000	100,000
Future issuance pursuant to Share Purchase Agreement (shares) | shares							292,793
Equity			$ 271,710,138	$ 262,321,825	$ 261,324,692		$ 237,657,056
Share issue related cost			$ 1,391,057	500,163	$ 753,744
Shares | Share Purchase Agreement
Disclosure of classes of share capital [line items]
Issued (shares) | shares					5,778,674	5,778,674
Shares | Initial commitment fee
Disclosure of classes of share capital [line items]
Issued (shares) | shares							292,793
Proceeds from shares issued under Share Purchase Agreement						$ 455,000
Shares | Amended Share Purchase Agreement
Disclosure of classes of share capital [line items]
Issued (shares) | shares					5,778,674	5,778,674
Proceeds from shares issued under Share Purchase Agreement						$ 3,500,000
Shares | Amended initial commitment fee
Disclosure of classes of share capital [line items]
Issued (shares) | shares					78,674	78,674
Proceeds from shares issued under Share Purchase Agreement						$ 50,024
Shares | At-the-market agreement
Disclosure of classes of share capital [line items]
Issued (shares) | shares			3,301,500		18,860,454	18,860,454
Shares | Public Offering
Disclosure of classes of share capital [line items]
Issued (shares) | shares			16,445,000
Warrants
Disclosure of classes of share capital [line items]
Issued (shares) | shares			16,445,000
Equity			$ 3,617,900	$ 0	$ 0		$ 0
Warrants | Public Offering
Disclosure of classes of share capital [line items]
Issued (shares) | shares			16,445,000
Purchase price (cad per share) | $ / shares	0.48
Common shares per unit | $ / shares								$ 1
Common share purchase warrant per unit | $ / shares								$ 1
Purchase price (cad per share) | $ / shares	0.22
Exercise Price			$ 0.95
Acceleration threshold weighted average price (cad per share) | $ / shares	$ 2.50
Acceleration threshold weighted average price, trading days	15							15

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Share Capital - Summary of Assumptions Used in the Black Scholes Option Pricing Model for Warrants (Details) - year	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of classes of share capital [line items]
Risk-free interest rate	1.18%	0.82%	0.63%
Expected hold period to exercise	3.0	3.0	3.0
Volatility in the price of the Company's shares	90.73%	94.84%	90.00%
Warrants
Disclosure of classes of share capital [line items]
Risk-free interest rate	0.70%
Expected hold period to exercise	2
Volatility in the price of the Company's shares	89.30%
Dividend yield	0.00%

XML

Share Capital - Summary of Outstanding Warrants (Details)	12 Months Ended
	Dec. 31, 2017 CAD ($) year shares	Dec. 31, 2016 shares	Dec. 31, 2015 shares
Disclosure of classes of share capital [line items]
Share capital issued, beginning (shares)	121,258,222
Share capital issued ending (shares)	141,805,722	121,258,222
Weighted average remaining contractual life of outstanding share options | year	7.09
Warrants
Disclosure of classes of share capital [line items]
Exercise Price | $	$ 0.95
Share capital issued, beginning (shares)	0	0	0
Issued (shares)	16,445,000
Share capital issued ending (shares)	16,445,000	0	0
Weighted average remaining contractual life of outstanding share options	4.42

XML

Share Based Payments - Schedule of Stock Options and Weighted Average Exercise Prices (Details)	12 Months Ended
	Dec. 31, 2017 CAD ($) shares	Dec. 31, 2016 CAD ($) shares	Dec. 31, 2015 CAD ($) shares	Dec. 31, 2017 CAD ($)	Dec. 31, 2017
Disclosure Of Share-based Payment Arrangements [Abstract]
Outstanding, beginning of the year (shares) | shares	8,674,227	8,561,394	5,446,394
Granted during the year (shares) | shares	405,000	1,572,000	3,280,000
Forfeited during the year (shares) | shares	(2,012,660)	(737,500)	(100,000)
Expired during the year (shares) | shares	(116,900)	(721,667)	(65,000)
Exercised during the year (shares) | shares	(801,000)	0	0
Outstanding, end of the year (shares) | shares	6,148,667	8,674,227	8,561,394
Options exercisable, end of the year (shares)	5,453,501	6,729,643	6,476,394		5,453,501
Outstanding, beginning of the year (cad per share)	$ 1.83	$ 2.17	$ 3.19
Granted during the year (cad per share)	0.48	0.28	0.43
Forfeited during the year (cad per share)	3.45	0.65	1.69
Expired during the year (cad per share)	2.22	3.61	1.49
Exercised during the year (cad per share)	0.43	0.00	0
Outstanding, end of the year (cad per share)	$ 1.39	1.83	2.17
Options exercisable, end of the year (cad per share)		$ 2.27	$ 2.73	$ 1.51

XML

Share Based Payments - Narrative (Details)	12 Months Ended
	Dec. 31, 2017 CAD ($) shares	Dec. 31, 2016 CAD ($)	Dec. 31, 2015 CAD ($)
Disclosure of terms and conditions of share-based payment arrangement [line items]
Non-cash share based compensation | $	$ 578,703	$ 406,078	$ 429,537
Restricted share units
Disclosure of terms and conditions of share-based payment arrangement [line items]
Vesting period	3
Performance share units
Disclosure of terms and conditions of share-based payment arrangement [line items]
Vesting period	3
Reserve of share-based payments
Disclosure of terms and conditions of share-based payment arrangement [line items]
Common shares reserved for issuance | shares	14,180,572
Minimum
Disclosure of terms and conditions of share-based payment arrangement [line items]
Vesting period	1.0
Maximum
Disclosure of terms and conditions of share-based payment arrangement [line items]
Vesting period	3.0

XML

Share Based Payments - Schedule of Stock Options Outstanding and Exercisable by Range of Exercise Price (Details)	Dec. 31, 2017 year	Dec. 31, 2017 shares	Dec. 31, 2017 CAD ($)	Dec. 31, 2017	Dec. 31, 2016 CAD ($) shares	Dec. 31, 2015 CAD ($) shares	Dec. 31, 2014 CAD ($) shares
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items]
Number Outstanding (options) | shares		6,148,667			8,674,227	8,561,394	5,446,394
Weighted Average Remaining Contractual Life (years) | year	7.09
Weighted Average Exercise Price (cad per share)			$ 1.39		$ 1.83	$ 2.17	$ 3.19
Number Exercisable (options)		5,453,501		5,453,501	6,729,643	6,476,394
Weighted Average Exercise Price (cad per share)			1.51		$ 2.27	$ 2.73
$0.26 - $0.42
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items]
Number Outstanding (options) | shares		3,437,000
Weighted Average Remaining Contractual Life (years) | year	8.46
Weighted Average Exercise Price (cad per share)			0.35
Number Exercisable (options)				2,921,834
Weighted Average Exercise Price (cad per share)			0.35
$0.26 - $0.42 | Minimum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			0.26
$0.26 - $0.42 | Maximum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			0.42
$0.51 - $0.80
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items]
Number Outstanding (options) | shares		538,000
Weighted Average Remaining Contractual Life (years) | year	8.22
Weighted Average Exercise Price (cad per share)			0.64
Number Exercisable (options)				358,000
Weighted Average Exercise Price (cad per share)			0.70
$0.51 - $0.80 | Minimum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			0.51
$0.51 - $0.80 | Maximum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			0.8
$1.45 - $2.00
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items]
Number Outstanding (options) | shares		1,002,667
Weighted Average Remaining Contractual Life (years) | year	5.62
Weighted Average Exercise Price (cad per share)			1.77
Number Exercisable (options)				1,002,667
Weighted Average Exercise Price (cad per share)			1.77
$1.45 - $2.00 | Minimum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			1.45
$1.45 - $2.00 | Maximum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			2.00
$2.13 - $3.89
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items]
Number Outstanding (options) | shares		545,500
Weighted Average Remaining Contractual Life (years) | year	3.74
Weighted Average Exercise Price (cad per share)			3.42
Number Exercisable (options)				545,500
Weighted Average Exercise Price (cad per share)			3.42
$2.13 - $3.89 | Minimum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			2.13
$2.13 - $3.89 | Maximum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			3.89
$4.01 - $6.72
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items]
Number Outstanding (options) | shares		625,500
Weighted Average Remaining Contractual Life (years) | year	3.94
Weighted Average Exercise Price (cad per share)			5.34
Number Exercisable (options)				625,500
Weighted Average Exercise Price (cad per share)			5.34
$4.01 - $6.72 | Minimum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			4.01
$4.01 - $6.72 | Maximum
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise Price			$ 6.72

XML

Share Based Payments - Disclosure Weighted Average Assumptions and Fair Value of Options (Details)	12 Months Ended
	Dec. 31, 2017 CAD ($) year	Dec. 31, 2016 CAD ($) year	Dec. 31, 2015 CAD ($) year
Disclosure Of Share-based Payment Arrangements [Abstract]
Risk-free interest rate	1.18%	0.82%	0.63%
Option life, share options granted | year	3.0	3.0	3.0
Volatility in the price of the Company's shares	90.73%	94.84%	90.00%
Rate of forfeiture	3.67%	3.67%	3.67%
Dividend yield	0.00%	0.00%	0.00%
Weighted average fair value of options (cad per share) | $	$ 0.28	$ 0.17	$ 0.24

XML

Share Based Payments - Schedule of Number of Other Equity Instruments (Details)	12 Months Ended
	Dec. 31, 2017 CAD ($) shares	Dec. 31, 2016 CAD ($) shares	Dec. 31, 2015 shares
Restricted share units
Disclosure of terms and conditions of share-based payment arrangement [line items]
Outstanding, beginning of the year (shares)	1,322,829	368,831	0
Granted during the year (shares)	486,238	1,053,998	368,831
Forfeited during the year (shares)	0	0	0
Vested during the year (shares)	0	(100,000)	0
Outstanding, end of the year (shares)	1,809,067	1,322,829	368,831
Weighted average fair value at measurement date, other equity instruments granted | $	$ 0.63	$ 0.31
Performance share units
Disclosure of terms and conditions of share-based payment arrangement [line items]
Outstanding, beginning of the year (shares)	840,000	0	0
Granted during the year (shares)	60,000	1,500,000	0
Forfeited during the year (shares)	0	(660,000)	0
Outstanding, end of the year (shares)	900,000	840,000	0
Weighted average fair value at measurement date, other equity instruments granted | $	$ 0.35	$ 0.36

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Loss Per Common Share (Details) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings per share [abstract]
Weighted average number of common shares outstanding	132,395,752	119,880,200	112,613,845

XML

Contract Liability and Receivable - Narrative (Details) $ in Millions	1 Months Ended
	Nov. 30, 2017 USD ($) patient	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 CAD ($)
Class of Warrant or Right1 [Line Items]
Warrant purchase agreement	$ 8
Expected recognition period	5
Contract receivable		$ 4,767,100	$ 0
Milestone 1
Class of Warrant or Right1 [Line Items]
Warrant purchase agreement	$ 2
Common share premium	20.00%
Weighted average closing price term	5
Patients | patient	1
Right to call warrant from time of agreement, term	6
Milestone 2
Class of Warrant or Right1 [Line Items]
Warrant purchase agreement	$ 6
Common share premium	20.00%
Weighted average closing price term	5
Patients | patient	50

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Contract Liability and Receivable - Schedule of Contract Revenues and Liabilities (Details)	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 CAD ($)	Dec. 31, 2016 USD ($)
Disclosure of revenue from contracts with customers [Abstract]
Balance, beginning of the year	$ 0	$ 0
Regional licensing agreement	6,182,580	0
Revenue recognized in the year	0	0
Balance, end of the year	6,182,580	0
Contract liability - current			$ 1,545,645	$ 1,545,645	$ 0	$ 0
Contract liability - non-current			$ 4,636,935	4,636,935	$ 0	0
Contract liabilities	$ 0	$ 0		$ 6,182,580		$ 0

XML

Commitments (Details)	Dec. 31, 2017 CAD ($)
Commitments [Abstract]
Commitment for payment	$ 5,980,454
Disclosure of maturity analysis of operating lease payments [line items]
Rental payments	740,850
Repayment, maximum	400,000
Overhead repayment	$ 100,000
Annual installment of gross sales of product, percent	5.00%
Annual installment of annual product sales	$ 100,000
2018
Disclosure of maturity analysis of operating lease payments [line items]
Rental payments	285,987
2019
Disclosure of maturity analysis of operating lease payments [line items]
Rental payments	251,743
2020
Disclosure of maturity analysis of operating lease payments [line items]
Rental payments	159,990
2021
Disclosure of maturity analysis of operating lease payments [line items]
Rental payments	$ 43,130

XML

Contingencies (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of contingent liabilities [line items]
Royalty payment on sales revenue, percent	0.50%
Royalty payment maximum	$ 20,000
Contingent Royalty Payment, Contribution Rate	2
Estimated accumulated work in kind total	$ 301,000
SYNSORB
Disclosure of contingent liabilities [line items]
Milestone payment in connection with Share Purchase Agreement	$ 1,000,000
Payment due period	90 days
Royalty payment due to founding shareholders, percent	10.75%	11.75%
Royalty payment on net sales due to founding shareholders, percent	2.15%	2.35%

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Income Taxes - Provision for Income Taxes (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of income tax [Abstract]
Loss before income taxes	$ (15,475,353)	$ (15,130,605)	$ (13,719,842)
Statutory Canadian corporate tax rate	27.00%	27.00%	26.00%
Anticipated tax recovery	$ (4,178,345)	$ (4,085,263)	$ (3,567,159)
Foreign jurisdiction tax rate difference	2,899,190	2,184,796	2,659,145
Employee stock based compensation	156,250	109,641	111,680
Change in tax rate	0	0	(1,336,941)
Adjustment to opening tax pools	162,162	(39,569)	(1,339,467)
Other permanent differences	53,039	100,525	23,620
Change in deferred tax benefits deemed not probable to be recovered	1,051,725	1,739,557	3,455,622
Current income taxes	144,021	9,687	6,500
Adjustment in respect to prior periods	(2,523)	(313)	(3,347)
Net current tax expense	$ 141,498	$ 9,374	$ 3,153

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Income Taxes - Summary of Non-capital Losses (Details) - Non-capital losses $ in Thousands	Dec. 31, 2017 CAD ($)
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	$ 57,308
2026
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	9,809
2027
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	12,170
2029
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	4,009
2030
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	4,774
2031
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	4,343
2032
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	2,873
2033
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	2,457
2034
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	2,472
2035
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	3,125
2036
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	6,430
2037
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	$ 4,846

XML

Income Taxes - Summary of Non-refundable Federal Investment Tax Credits (Details)	Dec. 31, 2017 CAD ($)
Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	$ 5,463,600
Unclaimed scientific research and experimental development expenditures
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	27,400,000
2020 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	189,000
2021 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	471,000
2022 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	465,000
2023 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	361,000
2024 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	228,000
2025 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	271,000
2026 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	520,000
2027 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	596,000
2028 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	622,000
2029 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	173,000
2030 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	91,000
2031 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	114,000
2032 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	381,000
2033 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	487,000
2034 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	270,000
2035 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	183,000
2036 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	41,000
2037 | Non-refundable federal investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax credits	$ 600

XML

Income Taxes - Schedule of Unrecognized Deferred Tax Assets (Details) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized deferred tax asset	$ 32,983,223	$ 31,555,913	$ 29,681,313
Net operating losses carried forward
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized deferred tax asset	19,160,218	17,821,631	15,950,044
Scientific research and experimental development
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized deferred tax asset	7,406,099	7,394,707	7,278,284
Investment tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized deferred tax asset	3,988,325	3,990,664	3,987,214
Undepreciated capital costs in excess of book value of property and equipment and intellectual property
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized deferred tax asset	1,927,640	1,908,654	1,839,107
Share issue costs
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized deferred tax asset	493,343	432,659	619,066
Net capital losses carried forward
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized deferred tax asset	$ 7,598	$ 7,598	$ 7,598

XML

Capital Disclosures (Details) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016	Feb. 16, 2016	Dec. 31, 2015	Dec. 31, 2014
Statement of changes in equity [abstract]
Cash and cash equivalents	$ 11,836,119	$ 12,034,282		$ 24,016,275	$ 14,152,825
Short-term investments	0	2,088,800
Shareholders’ equity	$ 8,283,846	$ 10,689,620		$ 24,674,306	$ 13,819,193
Base Shelf securities authorized			$ 150,000,000

XML

Financial Instruments - Narrative (Details)	12 Months Ended
	Dec. 31, 2017 CAD ($)
Disclosure of detailed information about financial instruments [abstract]
Short-Term Investment Held In Guaranteed Investment Certificates, Percent	100.00%
Currency risk | US dollars $
Disclosure of nature and extent of risks arising from financial instruments [line items]
Impact of increase in value of currency, amount	$ 0.01
(Increase) decrease in net loss due to change in currency value	(5,056)
Currency risk | British pounds £
Disclosure of nature and extent of risks arising from financial instruments [line items]
Impact of increase in value of currency, amount	0.10
(Increase) decrease in net loss due to change in currency value	21,492
Currency risk | Euro €
Disclosure of nature and extent of risks arising from financial instruments [line items]
Impact of increase in value of currency, amount	0.10
(Increase) decrease in net loss due to change in currency value	$ 11,736

XML

Financial Instruments - Schedule of Balances in Foreign Currencies (Details)	Dec. 31, 2017 EUR (€)	Dec. 31, 2017 GBP (£)	Dec. 31, 2017 CAD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 CAD ($)	Dec. 31, 2015 CAD ($)	Dec. 31, 2014 CAD ($)
Currency1 [Line Items]
Cash and cash equivalents			$ 11,836,119		$ 12,034,282	$ 24,016,275	$ 14,152,825
Contract receivable			$ 4,767,100		$ 0
US dollars $
Currency1 [Line Items]
Cash and cash equivalents				$ 1,948,573
Contract receivable				3,800,000
Accounts payable				(777,271)
Balances in foreign currencies				$ 4,971,302
British pounds £
Currency1 [Line Items]
Cash and cash equivalents | £		£ 21,755
Contract receivable | £		0
Accounts payable | £		(13,949)
Balances in foreign currencies | £		£ 7,806
Euro €
Currency1 [Line Items]
Cash and cash equivalents | €	€ 19,372
Contract receivable | €	0
Accounts payable | €	(1,100)
Balances in foreign currencies | €	€ 18,272

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Additional Cash Flow Disclosures - Net Change In Non-Cash Working Capital (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of cash flows [abstract]
Contract receivable	$ (4,767,100)	$ 0	$ 0
Other receivables	16,680	285,653	(148,308)
Prepaid expenses	(915,222)	245,828	(215,116)
Accounts payable and accrued liabilities	(384,641)	1,359,172	(664,505)
Contract liability	6,182,580	0	0
Non-cash impact of foreign exchange	48,558	343,212	(77,535)
Change in non-cash working capital related to operating activities	$ 180,855	$ 2,233,865	$ (1,105,464)

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Additional Cash Flow Disclosures - Other Cash Flow Disclosures (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of cash flows [abstract]
Cash interest received	$ 130,101	$ 163,902	$ 197,859
Cash taxes paid	$ 136,163	$ 4,468	$ 3,421

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Economic Dependence (Details)	12 Months Ended
	Dec. 31, 2017 manufacturer
Toll manufacturer
Concentration Risk Type1 [Line Items]
Concentration, number	1

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Other Expenses and Adjustments (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Other Expenses And Adjustments [Line Items]
Unrealized non-cash foreign exchange loss (gain)	$ (124,793)	$ (139,810)	$ (816,319)
Non-cash share based compensation	578,703	406,078	429,537
Included in research and development expenses:
Other Expenses And Adjustments [Line Items]
Realized foreign exchange (gain) loss	(120,794)	104,851	238,709
Unrealized non-cash foreign exchange loss (gain)	55,538	67,109	(816,319)
Non-cash share based compensation	230,141	233,919	257,016
Included in operating expenses
Other Expenses And Adjustments [Line Items]
Non-cash share based compensation	348,562	172,159	172,521
Amortization of property and equipment	90,768	162,233	180,411
Office minimum lease payments	$ 231,509	$ 148,600	$ 196,601

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Related Party Transactions (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2018 USD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 CAD ($)	Dec. 31, 2015 CAD ($)	Dec. 31, 2017 USD ($)	Nov. 30, 2017 USD ($)
Disclosure of related party [Abstract]
Short-term employee compensation and benefits		$ 2,596,082	$ 2,753,553	$ 2,941,342
Termination benefits		779,666	1,330,828	0
Share-based payments		459,298	372,008	353,419
Compensation of key management personnel		$ 3,835,046	$ 4,456,389	$ 3,294,761
Liability to officer					$ 178,125	$ 178,125
Officer liability paid	$ 35,625