Oncolytics Biotech Announces Publication of REOLYSIN Abstract for the ASCO 2018 Annual Meeting CALGARY, AB and

Oncolytics Biotech Announces Publication

of REOLYSIN Abstract

for the ASCO 2018 Annual Meeting

CALGARY, AB and SAN DIEGO, CA, May 16, 2018

-- Oncolytics Biotech Inc. (TSX: ONC) (OTCQX: ONCYF), currently developing REOLYSIN (pelareorep),

an intravenously delivered immuno-oncolytic virus turning cold tumors hot, today announced publication of an abstract on pelareorep

for the American Society of Clinical Oncology (ASCO) 2018 Annual Meeting. The meeting will take place from June 1 - 5, 2018 at

McCormick Place, Chicago, IL.

The abstract, authored by Wilkinson et

al., "Pelareorep to promote the expression of a IFN-gamma-related gene signature that predicts response to checkpoint blockade

therapy", outlines results of a study assessing whether pelareorep promotes a predictive inflamed tumor phenotype that correlates

with a response to immunotherapy in breast cancer (BC), colorectal cancer (CRC), hepatocellular carcinoma (HCC) and non-small cell

lung cancer (NSCLC). The results suggest that all cell lines are susceptible to pelareorep's induced cytopathic effect. In

particular, BC and HCC cells lines had a significantly inflamed phenotype and also upregulated key chemokines known to promote

response to immunotherapy.

"These results clearly demonstrate that

viral priming in both BC and HCC tumors can activate interferon gamma-related gene expression which both upregulates checkpoint

ligands on tumor cells and promotes activation and infiltration of lymphocytes into the tumor," said Dr. Matt Coffey, President

and CEO of Oncolytics Biotech. "They also support the hypothesis that the virus is engaging a dramatic immune response against

the tumor in our recent mBC trial but also suggests that the virus may very well act as a backbone for checkpoint blockage by promoting

an inflamed phenotype in the tumor microenvironment."

The complete Abstract can be found online at

https://am.asco.org/. Full details from the poster presentation will be announced when it is being presented on Monday, June 4

from 8:00 - 11:30 in Hall A, poster board #303.

About REOLYSIN/Pelareorep

REOLYSIN, also known as pelareorep, is a non-pathogenic,

proprietary isolate of the unmodified reovirus: a first-in-class intravenously delivered immuno-oncolytic virus for the treatment

of solid tumors and hematological malignancies. The compound induces selective tumor lysis and promotes an inflamed tumor phenotype

through innate and adaptive immune responses to treat a variety of cancers.

About Oncolytics Biotech Inc.

Oncolytics is a biotechnology company developing

REOLYSIN , also known as pelareorep, an intravenously delivered immuno-oncolytic virus. The compound induces selective

tumor lysis and promotes an inflamed tumor phenotype -- turning "cold" tumors "hot" -- through innate and

adaptive immune responses to treat a variety of cancers. Oncolytics' clinical development program emphasizes three pillars: chemotherapy

combinations to trigger selective tumor lysis and immuno-therapy and immune modulator (IMiD) combinations to produce innate and

adaptive immune responses. Oncolytics is currently planning its first registration study in metastatic breast cancer, as well

as studies in combination with checkpoint inhibitors and targeted and IMiD therapies in solid and hematological malignancies.

For further information, 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 and forward-looking information

under applicable Canadian securities laws (such forward-looking statements and forward-looking information are collectively referred

to herein as "forward-looking statements"). Forward-looking statements, including the Company's belief as to the potential

and mode of action of REOLYSIN, also known as pelareorep, as a cancer therapeutic; and other statements related to anticipated

developments in the Company's business and technologies 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 pelareorep as

a cancer treatment, the success and timely completion of clinical studies and trials, the Company's ability to successfully commercialize

pelareorep, 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 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.