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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 http://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.

CONTACT: Oncolytics Biotech Inc., Cathy Ward, 210, 1167 Kensington Cr NW, Calgary, Alberta, T2N 1X7, Tel: (403) 670-7377, Fax: (403) 283-0858, cathy.ward@oncolytics.ca; The Equicom Group, Nick Hurst, 325, 300 5th Ave. SW, Calgary, Alberta, T2P 3C4, Tel: (403) 538-4845, Fax: (403) 237-6916, nhurst@equicomgroup.com; The Investor Relations Group, Erika Moran, 11 Stone St, 3rd Floor, New York, NY, 10004, Tel: (212) 825-3210, Fax: (212) 825-3229, emoran@investorrelationsgroup.com
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Date:Jan 7, 2008
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