Oncolytics Biotech(R) Inc. Receives Approval From Belgium FAMHP to Conduct Phase 3 Trial for REOLYSIN(R) in Head and Neck Cancers

CALGARY, Canada, June 1, 2010 - Oncolytics Biotech Inc. ("Oncolytics") (TSX:ONC, NASDAQ:ONCY) today
announced that it has received approval from the Belgian Federal Agency for
Medicines and Health Products (FAMHP) to conduct its Phase 3 trial examining
REOLYSIN in combination with paclitaxel and carboplatin in patients with
platinum-refractory head and neck cancers. This is the same trial that was
agreed to by U.S. Food and Drug Administration (FDA) under the Special
Protocol Assessment (SPA) process and the U.K. Medicines and Healthcare
products Regulatory Agency (MHRA).

"Obtaining approval to conduct this trial in Belgium will allow us to
expand European enrollment in the study and to access leading head and neck
specialists," said Dr. Brad Thompson, President and CEO of Oncolytics. "We
expect to add Belgian centres over the next quarter as they become available
for inclusion in the study."

As previously disclosed, the randomized, two-arm, double-blind,
multicentre, two-stage, adaptive Phase 3 trial will assess the intravenous
administration of REOLYSIN with the chemotherapy combination of paclitaxel
and carboplatin versus the chemotherapy alone in patients with metastatic or
recurrent squamous cell carcinoma of the head and neck, or squamous cell
cancer of the nasopharynx, who have progressed on or after prior
platinum-based chemotherapy. All patients will receive treatment every three
weeks (21 day cycles) with paclitaxel and carboplatin and will also receive,
on a blinded basis, either intravenous placebo or intravenous REOLYSIN. All
dosing takes place in the first five days of each cycle with all patients
receiving standard intravenous doses of paclitaxel and carboplatin on day one
only, and on days one through five, either intravenous placebo or intravenous
REOLYSIN at a dose of 3×10(10) TCID(50). Patients may continue to receive the
trial combination therapy for up to eight, 21-day cycles and, thereafter,
blinded placebo or blinded REOLYSIN until the patient has progressive disease
or meets other criteria for removal from the trial. Oncolytics intends to
conduct the first stage of the trial at approximately 25 centres in the U.S.,
U.K., and Belgium.

The primary endpoint for the trial is overall survival (OS); secondary
endpoints include progression free survival (PFS), objective response rate
(complete response (CR) + partial response (PR)) and duration of response,
and safety and tolerability of REOLYSIN when administered in combination with
paclitaxel and carboplatin. The first stage of the trial is designed to
enroll 80 patients. The second stage is adaptive, and is designed to enroll
between 100 and 400 patients with the most probable statistical enrolment
being 195 patients in this stage. This adaptive trial design allows frequent
data evaluation to determine if the probability of reaching a statistically
significant endpoint has been achieved.

The decision to pursue a Phase 3 trial in head and neck cancers was
predicated on positive results seen in the Company's U.K. Phase 1 and Phase 2
combination REOLYSIN and paclitaxel/carboplatin clinical trials, as well as
significant preclinical work demonstrating synergy in combination with taxane
or platinum-based drugs. Updated results from the U.K. Phase 1/2 trial
reported in November 2009 demonstrated an overall response rate (PR and CR)
of 42% and a total clinical benefit rate (PR + CR + stable disease) of 74%.
The Company is currently conducting a confirmatory Phase 2 trial in the U.S.
in patients with advanced head and neck cancers.

About REOLYSIN

REOLYSIN is a proprietary formulation of the human reovirus that acts
primarily as a direct cytotoxic agent. Reovirus is naturally occurring (not
genetically engineered) and has been demonstrated to replicate specifically
in tumour cells bearing an activated Ras pathway, leaving healthy normal
cells intact. At least two thirds of carcinomas and more than 90% of
metastatic disease has Ras involvement.

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 FAMHP approval of a Phase 3 combination REOLYSIN and
paclitaxel/carboplatin trial for patients with platinum-refractory head and
neck cancers, the planned timing and implementation of the Phase 3 trial, 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