Oncolytics Biotech® Inc. Enters into Sponsorship Agreement with NCIC CTG for Randomized Phase II Study in Non-Small Cell Lung Cancer

–Company to Host Conference Call to Discuss Randomized Phase II

CALGARY, June 5, 2012 /PRNewswire/ – Oncolytics Biotech Inc. (“Oncolytics”)
(TSX:ONC) (NASDAQ:ONCY) announced today that it has entered into an
agreement whereby the NCIC Clinical Trials Group (CTG) at Queen’s
University in Kingston, Ontario, will sponsor and conduct a randomized
Phase II study of REOLYSIN® in patients with advanced or metastatic non-small cell lung cancer

“This agreement expands our program with the NCIC CTG to a total of
three randomized studies, including the colorectal and prostate studies
we announced earlier in 2012,” said Dr. Brad Thompson, President and
CEO of Oncolytics. “This study builds upon both of our existing NSCLC
clinical studies, as well as clinical research combining REOLYSIN® with docetaxel.”

The study will be an open-label, randomized, non-blinded, Phase II
clinical study of REOLYSIN. Patients with squamous cell histology will
be treated with REOLYSIN given in combination with docetaxel versus
docetaxel alone.  Patients with non-squamous cell histology will be
treated with REOLYSIN given in combination with pemetrexed versus
pemetrexed alone. Approximately 150 total response evaluable patients
will be enrolled, after a patient safety run in.

Conference Call Details

Dr. Brad Thompson, President and CEO of Oncolytics, will host a
conference call and webcast on Tuesday, June 5th, 2012 at 7:00 a.m. MT
(9:00 a.m. ET) to discuss in more depth the Company’s randomized Phase
II clinical trial program. To access the conference call by telephone,
dial 1-647-427-7450 or 1-888-231-8191. A live audio webcast will also
be available at the following link: http://www.newswire.ca/en/webcast/detail/986501/1062975 or through the Company’s website at www.oncolyticsbiotech.com/presentations. Please connect at least 10 minutes prior to the webcast to ensure
adequate time for any software download that may be needed. A replay of
the webcast will be available at www.oncolyticsbiotech.com and will also be available by telephone through June 12th, 2012. To
access the telephone replay, dial 1-416-849-0833 or 1-855-859-2056 and
enter reservation number 88541070 followed by the number sign.

About Lung Cancer

The Canadian Cancer Society estimates that 25,600 Canadians will be
diagnosed with lung cancer and that 20,200 Canadians are expected to
die from the disease in 2012.  The American Cancer Society estimates
that 226,160 new cases of lung cancer will be diagnosed in the United
and that 160,340 Americans are expected to die from the disease
in 2012. Approximately 80% of all lung cancer cases are of the
non-small cell type.

About the NCIC Clinical Trials Group at Queen’s University

The NCIC Clinical Trials Group (NCIC CTG) is a cancer clinical trials
cooperative group that conducts Phase I-III trials testing anti-cancer
and supportive therapies across Canada and internationally. It is a
national research program of the Canadian Cancer Society. The NCIC
CTG’s Central Office is located at Queen’s University in Kingston,
Ontario, Canada
. The Group is committed to assessing all modalities of
therapy for a spectrum of cancer types. More than 60 member
institutions, from major cancer centres to community hospitals, enroll
patients in NCIC Clinical Trials Group 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 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 Company’s
expectations related to the Phase II non-small cell lung cancer trial
sponsored by the NCIC CTG, 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 laws.

SOURCE Oncolytics Biotech Inc.