Oncolytics Biotech(R) Inc. Announces Publication of Phase I Clinical Trial Results in Clinical Cancer Research

CALGARY, Canada, May 18, 2010 - Oncolytics Biotech Inc. ("Oncolytics") (TSX:ONC, NASDAQ:ONCY) announced
today that a paper entitled "Two-Stage Phase I Dose-Escalation Study of
Intratumoural Reovirus Type 3 Dearing and Palliative Radiotherapy in Patients
with Advanced Cancers," has been published in the online version of the
journal Clinical Cancer Research.

The paper covers final results from a Phase Ia/Ib U.K. clinical trial
(REO 006) investigating the intratumoural delivery of REOLYSIN(R) in
combination with radiation to treat patients with advanced cancers. A total
of 23 patients received a range of two to six intratumoural doses of REOLYSIN
at escalating dosages up to a maximum of 1×10(10) TCID(50) with a constant
localized radiation dose of either 20 Gy or 36 Gy. The principal investigator
for the study is Dr. Kevin Harrington from The Institute of Cancer Research
and The Royal Marsden Hospital, London, U.K.

Of the seven evaluable patients in the low-dose (20Gy) radiation group,
two patients had a partial response (PR) (esophageal adenocarcinoma and
squamous cell carcinoma (SCC) of the skin) and five had stable disease (SD)
including patients with malignant melanoma, pancreatic adenocarcinoma, SCC of
the larynx and SCC of the skin (2). In the high-dose (36Gy) radiation group,
five of seven evaluable patients had PRs (malignant melanoma (2), lung
adenocarcinoma, colorectal adenocarcinoma, and ovarian adenocarcinoma) and
two had SD (malignant melanoma).

"All 14 patients considered evaluable for treatment response in this
study had SD or better for a clinical benefit rate of 100%," said Dr. Brad
Thompson, President and CEO of Oncolytics. "We believe that this study
clearly demonstrates that the combination of low dose radiation and REOLYSIN
is well tolerated and that the very high response rate warrants further
investigation."

The primary objective of the trial was to determine the maximum tolerated
dose (MTD), dose limiting toxicity (DLT), and safety profile of REOLYSIN when
administered intratumourally to patients receiving radiation treatment. A
secondary objective was to examine any evidence of anti-tumour activity. The
treatment was well tolerated in all cohorts, with no DLTs, and no MTD was
reached.

"This is an early study but the absence of any significant side-effects
is extremely reassuring for future trials in patients receiving radiotherapy
with the aim of curing their cancer," said Dr. Harrington.

    About The Institute of Cancer Research (ICR)

    - The ICR is Europe's leading cancer research centre
    - The ICR has been ranked the UK's top academic research centre, based
      on the results of the Higher Education Funding Council's Research
      Assessment Exercise
    - The ICR works closely with partner The Royal Marsden NHS Foundation
      Trust to ensure patients immediately benefit from new research.
      Together the two organisations form the largest comprehensive cancer
      centre in Europe
    - The ICR has charitable status and relies on voluntary income,
      spending 95 pence in every pound of total income directly on research
    - As a college of the University of London, the ICR also provides
      postgraduate higher education of international distinction
    - Over its 100-year history, the ICR's achievements include identifying
      the potential link between smoking and lung cancer which was
      subsequently confirmed, discovering that DNA damage is the basic
      cause of cancer and isolating more cancer-related genes than any
      other organisation in the world

For more information visit www.icr.ac.uk

The Royal Marsden Hospital

The Royal Marsden opened its doors in 1851 as the world's first hospital
dedicated to cancer treatment, research and education. Today, together with
its academic partner, The Institute of Cancer Research, it is the largest and
most comprehensive cancer centre in Europe treating over 40,000 patients
every year. It is a centre of excellence, and the only NHS Trust to achieve
the highest possible ranking in the Healthcare Commission's Annual Health
Check for the fourth year in a row. Since 2004, the hospital's charity, The
Royal Marsden Cancer Campaign, has helped raise over (pnds stlg)50 million to
build theatres, diagnostic centres, and drug development units. Prince
William became President of The Royal Marsden in 2007, following a long royal
connection with the hospital. For more information, visit
www.royalmarsden.nhs.uk

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 implication of the materials
presented in "Clinical Cancer Research" with respect to REOLYSIN, 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.

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

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 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