Oncolytics Biotech® Inc. Announces Publication of Preclinical Research on Synergistic Combination of Chemotherapy with Oncolytic Virotherapy

CALGARY, Aug. 2, 2011 /PRNewswire/ – Oncolytics Biotech Inc. (“Oncolytics”)
(TSX:ONC, NASDAQ:ONCY) announced today that an international team of
researchers has reported on a study in the online version of Molecular Therapy, a publication of The American Society of Gene and Cell Therapy,
investigating the timing of chemotherapy delivery that optimizes the
efficacy of systemic REOLYSIN®. The paper is entitled “Precise Scheduling of Chemotherapy Primes
VEGF-producing Tumors for Successful Systemic Oncolytic Virotherapy,”
authored by Kottke et al. The report describes when best to administer taxanes with reovirus to
optimize viral delivery to the tumor mass. The researchers demonstrated
that this drug combination was superior to either treatment alone, and
were able to reproducibly cure nearly half of the treated animals by
employing this optimized schedule of paclitaxel/REOLYSIN.

“This research supports and further rationalizes the dose schedules
currently employed in our ongoing clinical efforts in the phase II and
phase III setting,” said Dr. Matt Coffey, Chief Operating Officer of
Oncolytics. “These data will allow us to refine our planned studies for
additional tumor indications.”

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 the
materials presented in “Molecular Therapy” 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

SOURCE Oncolytics Biotech Inc.