Oncolytics Biotech® Inc. Receives $7.7 Million from Exercise of Warrants

CALGARY, March 1 /PRNewswire/ – Oncolytics Biotech Inc. (“Oncolytics” or the
“Corporation”) (TSX: ONC) (NASDAQ: ONCY) today announced that the
Corporation’s biggest institutional shareholder, has exercised
1,248,800 warrants, issued in connection with the financing that closed
on November 8, 2010, providing the Corporation with proceeds of
approximately $7.7 million. Oncolytics now has approximately 71.1
million shares issued and outstanding, and cash on hand and available
for operations of approximately $55 million. The Corporation plans to
use the proceeds to fund an additional randomized clinical trial.

The common shares underlying the warrants were offered in Canada by way
of a prospectus supplement to a short-form base shelf prospectus dated
June 10, 2010 that had been filed in the provinces of British Columbia,
Alberta, Manitoba and Ontario. Copies of the prospectus supplement and
accompanying base prospectus relating to the offering may be obtained
from the SEDAR website www.sedar.com, or from the Corporation using the contact information provided below.

The securities issued by Oncolytics have not been and will not be
registered under the United States Securities Act of 1933, as amended
(the “1933 Act”), or the securities laws of any state of the United
, and may not be offered or sold in the United States or to, or
for the account or benefit of, U.S. persons (as defined in Regulation S
under the 1933 Act) unless registered under the 1933 Act and applicable
securities laws of any state of the United States or pursuant to an
exemption from such registration requirements. This press release shall
not constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of the securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful.

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 were received by the
Corporation pursuant to the exercise of warrants, the Corporation’s
cash resources following 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.