CALGARY, Oct 11, 2001  -- Oncolytics Biotech Inc. ('Oncolytics') (TSE: ONC); (NASDAQ: ONCY) announced today that it has received approval from Health Canada to initiate a clinical study to evaluate the efficacy of REOLYSIN(R) for the treatment of T2 prostate cancer. 

'We are very excited to be given approval to enter our first clinical study with efficacy as a primary endpoint,' said Dr. Brad Thompson. 'We expect this to be the first of a number of studies to be initiated in the near future that will build upon the results of a Phase I clinical study.' 

REOLYSIN(R) is the formulation of the reovirus that is a potential therapeutic for a broad range of cancers in humans. Oncolytics is in the process of completing enrolment in its Phase I clinical trial for REOLYSIN(R) and filed an application for the prostate clinical study on the basis of the early results from the Phase I trial. The Phase I trial is designed to determine the safety and tolerance of REOLYSIN(R) when administered to late stage cancer patients. As a secondary endpoint, the Company is measuring tumor response at both the treated lesion as well as remote metastatic sites. Oncolytics expects to release a complete review of these results after completion of the study. Following discussions with clinical experts, the Company broadened the protocol of its initial application for T2A prostatic disease to T2, which will improve the ability of the Company to enrol patients. 

This T2 prostate cancer trial is intended to evaluate the efficacy of intra-tumoral administration of REOLYSIN(R) for the treatment of cancer that is restricted to the prostate gland. Patients will receive a single injection of REOLYSIN(R) and will be monitored for approximately three weeks, at which time the prostate may be surgically removed. The primary efficacy endpoint will be the response rate as measured by PSA levels, MRI, and pathological examination of the tumor. The trial is expected to enrol a total of 45 patients in three or more clinical sites across Canada. 

Cancer of the prostate is one of the most common cancers in men, representing approximately one-third of all male cancers in western society. It is second to lung cancer as the leading cause of cancer deaths in men. There are an estimated 16,600 new cases of prostate cancer in Canada and the American Cancer Society estimates that there will be 198,100 new cases in the US in 2001. 

About Oncolytics Biotech 

Oncolytics is a Calgary-based biotechnology company focused on the development of the human Reovirus (REOLYSIN(R)), as a potential cancer therapeutic. Oncolytics researchers have demonstrated that the reovirus is able to selectively kill cancer cells and, in vitro, kill human cancer cells derived from many types of cancer including breast, prostate, pancreatic and brain tumours. Research has also yielded successful cancer treatment results in a number of animal models. In November of 2000, Oncolytics entered into a worldwide licensing agreement with Pfizer Inc. for the development and marketing of the reovirus for animal health applications. 

To find out more about Oncolytics Biotech Inc. (TSE: ONC), (NASDAQ: ONCY), visit the Company's website

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 ability to broaden its investor base in the United States, the potential of REOLYSIN(R) as a cancer therapeutic, and the belief that Ras pathway has broad potential in the treatment of many cancers, 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 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, uncertainties related to the regulatory process and general changes to the economic environment. 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.