Oncolytics Biotech Inc. Announces Publication of Research on Combination Reovirus and Cyclophosphamide Treatment

CALGARY, Jan. 7 /PRNewswire-FirstCall/ – Oncolytics Biotech Inc. (TSX:
ONC, NASDAQ: ONCY) (‘Oncolytics’) reported today that a research group led by
Dr. Richard Vile of the Mayo Clinic College of Medicine in Rochester,
Minnesota, published the results of its work testing the antitumor efficacy
and safety of various combinations of reovirus and cyclophosphamide in vivo.
The paper, entitled “Cyclophosphamide Facilitates Antitumor Efficacy against
Subcutaneous Tumors following Intravenous Delivery of Reovirus” appears online
in the January 1, 2008 issue of Clinical Cancer Research.

“This exciting Mayo Clinic work supported the initiation of our
combination REOLYSIN(R) and cyclophosphamide clinical trial, recently approved
by the U.K. health authorities,” said Dr. Matt Coffey, Chief Scientific
Officer of Oncolytics.

The purpose of the research study was to investigate whether it was
possible to use cyclophosphamide, an immune modulator, to enhance the delivery
and replication of the reovirus when delivered intravenously. After testing
various doses and dosing regimens of reovirus and cyclophosphamide in mice, a
metronomic dosing regimen was developed that resulted in increased survival,
high levels of reovirus recovered from regressing tumors, levels of
neutralizing antibodies that were protective, and only very mild toxicities.
The data support investigation in human clinical trials of the use of
cyclophosphamide prior to systemic reovirus administration to modulate, but
not ablate, the immune system.

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 implication of the materials
presented in “Clinical Cancer Research” with respect to REOLYSIN(R), the
Company’s expectations related to the results of trials investigating delivery
of REOLYSIN(R), 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
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.

SOURCE Oncolytics Biotech Inc.