Oncolytics Biotech(R) Inc. Collaborators Present Positive Updated U.K. Phase I/II Trial Results in Advanced Solid Cancers With a Focus on the Head and Neck at the ASCO Annual Meeting

CALGARY, Canada, June 7, 2010 - Oncolytics Biotech Inc. ("Oncolytics") (TSX:ONC, NASDAQ:ONCY) announced
today that a poster presentation covering updated results of its Phase I/II
U.K. trial (REO 011) of REOLYSIN(R) combined with paclitaxel/carboplatin for
patients with advanced cancers was presented today at the ASCO 2010 Annual
Meeting in Chicago, IL.

The poster entitled "Phase I/II Study of Oncolytic Reovirus Plus
Carboplatin/Paclitaxel in Patients with Advanced Solid Cancers with Emphasis
on Squamous Cell Carcinoma of the Head and Neck," (SCCHN) covers previously
disclosed response data but includes new overall survival data.

"Although this data has been derived from a single arm study, we feel it
is both compelling and supportive of our decision to advance into a pivotal
trial in this indication. It also supports our approach to the design of that
study and the related statistical analysis," said Dr. Brad Thompson,
President and CEO of Oncolytics. "We are eager to see if we can duplicate
these results in a larger group of patients in our Phase III study which is
now open to enrolment."

The researchers reported that 31 patients were enrolled (24 males; median
age 59 years) with head and neck cancer (n(equal sign)24), melanoma (n(equal
sign)4), peritoneal/endometrial cancer (n(equal sign)2), or sarcoma (n(equal
sign)1). In the dose-escalation phase of the study, there were no
dose-limiting toxicities. Grade 3/4 toxicities included anaemia, leucopenia,
neutropenia, lymphopenia, thrombocytopenia, infection and hypotension. In the
Phase 1 study, partial responses (PR) were noted in two of five patients with
head and neck cancer. The Phase 2 study treated head and neck cancer patients
at the maximum dose level (3 x 10(10) TCID(50)) in order to further assess
tumour response. In total, 19 patients with head and neck cancer received at
least two cycles and were evaluable for response. Most were SCCHN patients
refractory to previous platinum-based chemotherapy for recurrent/metastatic
disease. Partial responses were seen in eight patients (42%) and stable
disease (SD) in six (32%). One additional PR and one SD were observed among
four patients with malignant melanoma.

The mean overall survival (OS) in 24 treated head and neck cancer
patients is more than eight months, with four patients currently still alive.
The mean OS of the patients experiencing PR and PR plus SD is statistically
significantly greater than the mean survival of those patients experiencing
progressive disease (PD) (hazard ratio 0.2, p(equal sign)0.0249 and hazard
ratio 0.27, p(equal sign)0.04, respectively, with a 95% confidence interval).

The researchers concluded that intravenous administration of reovirus in
combination with carboplatin/paclitaxel is a safe and well-tolerated
combination with promising anticancer activity in SCCHN. Further evaluation
of this combination in a randomized Phase III trial in SCCHN is underway.

Conference Call Details

Dr. Brad Thompson, President and CEO of Oncolytics, will host a
conference call and webcast today, June 7th, 2010 at 7:00 a.m. MT (9:00 a.m.
ET) to discuss in more depth the Phase II head and neck data being presented
today at ASCO. To access the conference call by telephone, dial
1-647-427-7450 or 1-888-231-8191. A live audio webcast will also be available
at the following link:
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3108600 or
through the Company's website at www.oncolyticsbiotech.com. Please
connect at least 15 minutes prior to the webcast to ensure adequate time for
any software download that may be needed. A replay of the webcast will be
available at www.oncolyticsbiotech.com and will also be available by
telephone through June 14th, 2010. To access the telephone replay, dial
1-416-849-0833 or 1-800-642-1687 and enter reservation number 80060184
followed by the number sign.

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 materials presented
at the ASCO meeting 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