Oncolytics Biotech® Inc. Accelerates Warrant Expiry Date

CALGARY, Dec. 23 /PRNewswire/ – Oncolytics Biotech Inc. (“Oncolytics” or the
“Corporation”) (TSX:ONC; NASDAQ:ONCY) today announced, that in
accordance with the terms of the warrant indenture for the warrants
issued by the Corporation on November 23, 2009, the Corporation has
provided the required written notice to holders of such warrants that
the expiry date has been accelerated to the close of business on Monday
January 24, 2011

Under the terms of the warrant indenture, if the 10-day volume-weighted
average trading price of the common shares of Oncolytics (the “Common
Shares”) on the Toronto Stock Exchange exceeds the Canadian dollar
equivalent (based on the Bank of Canada noon spot rate on the final day
of the 10-day period) of US$6.50 per Common Share, then, at any date
subsequent to this date, at the Corporation’s sole discretion and upon
the Corporation sending the holder written notice of such accelerated
exercise date and issuing a news release announcing such accelerated
exercise date, the expiry date of the warrant shall be the day that is
30 days following the later of (i) the date on which such notice is
sent to the holder; and (ii) the date on which such announcement is
made by news release. As of the close of business on December 23, 2010,
the 10-day volume-weighted average trading price of the Common Shares
exceeded the Canadian dollar equivalent of US$6.50. Warrants may be
exercised through payment of the exercise amount of US$3.50 per whole
warrant up to 4:30 P.M. Calgary time on January 24, 2011.

If all of the warrants subject to this acceleration are exercised,
Oncolytics will receive proceeds of approximately US$6.75 million. Any
warrants not exercised prior to the accelerated expiry date and time
will expire without any further action being taken.

The common shares underlying the warrants are being offered in the
United States
pursuant to a prospectus supplement to Oncolytics’
effective Form F-10 shelf registration statement (File # 333-167250)
previously filed with the United States Securities and Exchange
Commission on June 10, 2010, pursuant to the United States Securities
Act of 1933, as amended. Copies of the prospectus supplement and
accompanying base prospectus relating to the offering may be obtained
from the Securities and Exchange Commission website at http://www.sec.gov, or from the Corporation using the contact information provided below.

This press release does not and shall not constitute an offer to sell or
the solicitation of an offer to buy any of the securities, nor shall
there be any sale of the securities in any state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any state or

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.  Forward-looking
statements, including the amount of proceeds that could be received by
the Corporation pursuant to the exercise of warrants, the Corporation’s
expectations as to progress in the clinical trial program and the
Corporation’s belief as to the potential of REOLYSIN as a cancer
therapeutic, involve known and unknown risks and uncertainties, which
could cause the Corporation’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 success and timely completion of clinical studies
and trials, the Corporation’s ability to successfully commercialize
REOLYSIN, 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 Corporation’s quarterly and annual filings with the Canadian
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 Corporation does not undertake to update these forward-looking
statements, except as may be required pursuant to applicable securities

SOURCE Oncolytics Biotech Inc.