Oncolytics Biotech Inc. Commences Patient Enrolment in U.S. Phase II Sarcoma Clinical Trial

CALGARY, June 27 /PRNewswire-FirstCall/ - Oncolytics Biotech Inc. ("Oncolytics") announced today that patient enrolment has commenced in its U.S. Phase II trial to evaluate the intravenous administration of REOLYSIN(R) in patients with various sarcomas that have metastasized to the lung. Patients are being enrolled at the Montefiore Medical Center/Albert Einstein College of Medicine in the Bronx, New York, the University of Michigan Comprehensive Cancer Center in Ann Arbor, and the Cancer Therapy and Research Center, Institute for Drug Development in San Antonio, Texas.

"The initiation of this trial represents an important milestone for the Company," said Dr. Brad Thompson, President and CEO of Oncolytics. "We are now treating patients with advanced cancers in Phase II clinical trials in the U.S. and the U.K., with additional Phase II trials expected to begin before the end of the year. These trials are expected to yield information that will guide the late stage clinical development program for REOLYSIN(R)."

The trial (REO 014) is a Phase II, open-label, single agent study whose primary objective is to measure tumour responses and duration of response, and to describe any evidence of antitumour activity of intravenous, multiple dose REOLYSIN(R) in patients with bone and soft tissue sarcomas metastatic to the lung. REOLYSIN(R) will be given intravenously to patients at a dose of 3x10(10) TCID(50) for five consecutive days. Patients may receive additional five-day cycles of therapy every four weeks for a maximum of eight cycles. Up to 52 patients will be enrolled in the study.

Eligible patients must have a bone or soft tissue sarcoma metastatic to the lung deemed by their physician to be unresponsive to or untreatable by standard therapies. These include patients with osteosarcoma, Ewing sarcoma family tumours, malignant fibrous histiocytoma, synovial sarcoma, fibrosarcoma and leiomyosarcoma.

"There are very few treatment options for patients with bone or soft tissue sarcomas," said Dr. Matt Coffey, Oncolytics' Chief Scientific Officer. "Our decision to choose this indication is based on the observed activity of REOLYSIN(R) against sarcomas in both preclinical and clinical studies."

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 Phase I and Phase II human trials using REOLYSIN(R), its proprietary formulation of the human reovirus, alone and in combination with radiation or chemotherapy. 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.S. Phase II sarcoma clinical trial and the Company's belief as to the potential of REOLYSIN(R) 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(R) as a cancer treatment, the tolerability of REOLYSIN(R) outside a controlled test, the success and timely completion of clinical studies and trials, the Company's ability to successfully commercialize REOLYSIN(R), 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.

CONTACT: Oncolytics Biotech Inc., Cathy Ward, 210, 1167 Kensington Cr NW,Calgary, Alberta, T2N 1X7, Tel: (403) 670-7377, Fax: (403) 283-0858,cathy.ward@oncolytics.ca; The Equicom Group, Nick Hurst, 325, 300 5th Ave.SW, Calgary, AB, T2P 3C4, Tel: (403) 538-4845, Fax: (403) 237-6916,nhurst@equicomgroup.com; The Investor Relations Group, Erika Moran, 11Stone St, 3rd Floor, New York, NY, 10004, Tel: (212) 825-3210, Fax: (212)825-3229, emoran@investorrelationsgroup.com