Oncolytics Biotech(R) Inc. Announces Completion of Enrollment in Translational Clinical Trial Investigating REOLYSIN(R) in Patients With Metastatic Colorectal Cancer

CALGARY, Alberta, February 23, 2011 - Oncolytics Biotech Inc. ("Oncolytics") (TSX: ONC) (NASDAQ: ONCY)
announced today that enrollment has been completed in a U.K. translational
clinical trial investigating intravenous administration of REOLYSIN in
patients with metastatic colorectal cancer prior to surgical resection of
liver metastases (REO 013). The principal investigator is Professor Alan
Melcher of St. James's University Hospital and the trial is sponsored by the
University of Leeds, UK.

"The early results from this study reported in 2010 concluded that
reovirus can be successfully delivered specifically to colorectal liver
metastases following intravenous administration as a monotherapy," said Dr.
Brad Thompson, President and CEO of Oncolytics. "This is supportive of
observations that REOLYSIN was active against metastatic liver lesions in a
number of different combination therapy studies."

The trial was an open-label, non-randomized, single centre study of
REOLYSIN given intravenously to patients for five consecutive days in advance
of their scheduled operations to remove colorectal cancer deposits metastatic
to the liver. After surgery, the tumour and surrounding liver tissue were
assessed for viral status and anti-tumour effects.

The primary objectives of the trial are to assess the presence,
replication and anti-cancer effects of reovirus within liver metastases after
intravenous administration of REOLYSIN by examination of the resected tumour.
Secondary objectives include assessing the anti-tumour activity and safety
profile of REOLYSIN, and monitoring the humoral and cellular immune response
to REOLYSIN.

Eligible patients included those with histologically proven colorectal
cancer, planned for potentially curative surgical resection of liver
metastases. A total of 10 patients were treated in the study. The results are
expected to be fully reported in 2011.

About Oncolytics Biotech Inc.

Oncolytics is a Calgary-based biotechnology company focused on the
development of oncolytic viruses as potential cancer therapeutics.
Oncolytics' clinical program includes a variety of human trials including a
Phase III trial in head and neck cancers using REOLYSIN, its proprietary
formulation of the human reovirus. For further information about Oncolytics,
please visit: www.oncolyticsbiotech.com.

This press release contains forward-looking statements, within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements, including the Company's expectations related to
the U.K. translational study for patients with metastatic colorectal cancer
with liver metastases and the Company's belief as to the potential of
REOLYSIN as a cancer therapeutic, involve known and unknown risks and
uncertainties, which could cause the Company's actual results to differ
materially from those in the forward-looking statements. Such risks and
uncertainties include, among others, the availability of funds and resources
to pursue research and development projects, the efficacy of REOLYSIN as a
cancer treatment, the tolerability of REOLYSIN outside a controlled test, the
success and timely completion of clinical studies and trials, the Company's
ability to successfully commercialize REOLYSIN, uncertainties related to the
research and development of pharmaceuticals and uncertainties related to the
regulatory process. Investors should consult the Company's quarterly and
annual filings with the Canadian and U.S. securities commissions for
additional information on risks and uncertainties relating to the
forward-looking statements. Investors are cautioned against placing undue
reliance on forward-looking statements. The Company does not undertake to
update these forward-looking statements, except as required by applicable
laws.

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For further information:

    The Equicom Group
    Nick Hurst
    300 5th Ave. SW, 10th Floor
    Calgary, Alberta, T2P 3C4
    Tel: +1-403-218-2835
    Fax: +1-403-218-2830
    nhurst@equicomgroup.com

    The Investor Relations Group
    Erika Moran
    11 Stone St, 3rd Floor
    New York, NY 10004
    Tel: +1-212-825-3210
    Fax: +1-212-825-3229
    emoran@investorrelationsgroup.com

The Equicom Group, Nick Hurst, 300 5th Ave. SW, 10th Floor, Calgary, Alberta, T2P 3C4, Tel: +1-403-218-2835, Fax: +1-403-218-2830, nhurst at equicomgroup.com ; The Investor Relations Group, Erika Moran, 11 Stone St, 3rd Floor, New York, NY 10004, Tel: +1-212-825-3210, Fax: +1-212-825-3229, emoran at investorrelationsgroup.com