Mr. Michael Moore reports

ONCOLYTICS BIOTECH COLLABORATES WITH SOLTI TO CONDUCT A WINDOW OF OPPORTUNITY STUDY IN BREAST CANCER WITH PELAREOREP

Oncolytics Biotech Inc. has entered into a clinical collaboration with SOLTI, an academic research group dedicated to clinical and translational research in breast cancer. This clinical collaboration, being sponsored by Oncolytics and facilitated by SOLTI, is a window of opportunity study (WOO) in the neoadjuvant setting for breast cancer. Patients will receive the appropriate standard of care for their cancer subtype plus pelareorep with or without the anti-PD-L1 cancer immunotherapy atezolizumab (Tecentriq). Patients are biopsied on day one, followed immediately by treatment and a final biopsy after three weeks, on the day of their mastectomy. Data generated from this study are intended to confirm that the virus is acting as a novel immunotherapy and to provide comprehensive biomarker data by breast cancer subtype, to support Oncolytics's phase 3 study in metastatic breast cancer, and is expected in mid-2019.

"We are thrilled to enter into this collaboration with SOLTI and sponsor this window of opportunity study. We expect that this study will provide additional biomarker and immunological data to support our planned phase 3 study in metastatic breast cancer," said Matt Coffey, president and chief executive officer of Oncolytics Biotech. "This data should confirm the findings of our phase two study and generate a robust biomarker plan designed to potentially enhance our phase 3 program. Importantly, it will also generate additional data demonstrating how the promotion of a virally induced inflamed phenotype should synergize with checkpoint inhibitors targeting PD-L1 like atezolizumab."

The study, facilitated by SOLTI, will be co-ordinated by Dr. Aleix Prat, head of medical oncology at the Hospital Clinic of Barcelona, associate professor of the University of Barcelona and the head of the translational genomics and targeted therapeutics in solid tumours group at August Pi i Sunyer Biomedical Research Institute (IDIBAPS), and member of Oncolytics's scientific advisory board. SOLTI has a network of more than 300 professionals, mostly medical oncologists, in over 80 hospitals in Spain, Portugal, France and Italy. Final study design and other details will be announced upon enrolment of the first patient, expected around the end of 2018 or very early 2019.

"It has been demonstrated that when reovirus infects a tumour, it promotes the release of immuno-stimulatory signals. This in turn results in the upregulation of PD-L1 on tumour cells and the recruitment of inflammatory immune cells like NK-cells and cytotoxic T-cells to the tumour, which are required prerequisites for checkpoint inhibitors to function effectively. In short, it turns cold tumours hot," said Dr. Prat. "We believe pelareorep can demonstrate the necessary inflamed tumour phenotype to prime tumours for PD-L1 blockade, which could potentially represent a promising form of cancer immunotherapy combination with atezolizumab. Results from this study will seek to establish the virus as an important immuno-oncology agent in breast cancer, which could ultimately support the expansion of pelareorep beyond metastatic breast cancer into first-line therapy."

About breast cancer

Breast cancer is the most common cancer in women worldwide, with nearly 1.7 million new cases diagnosed in 2012, representing about 25 per cent of all cancers in women. Incidence rates vary widely across the world, from 27 per 100,000 in Middle Africa and Eastern Asia to 92 per 100,000 in Northern America. It is the fifth-most common cause of death from cancer in women, with an estimated 522,000 deaths (6.4 per cent of the total).

Breast cancer starts when cells in the breast begin to grow out of control. These cells usually form a tumour that can often be seen on an X-ray or felt as a lump. The tumour is malignant (cancer) if the cells can grow into (invade) surrounding tissues or spread (metastasize) to distant areas of the body.

Genomic research has led to a better understanding of how genes and proteins classify breast cancer as hormone receptor positive, human epidermal growth factor receptor 2 negative (HR+/HER2-), hormone receptor positive, human epidermal growth factor receptor 2 positive (HR+/HER2+), hormone receptor negative, human epidermal growth factor receptor 2 positive (HR-/HER2+) or triple negative breast cancer (TNBC).

About pelareorep

Pelareorep is a non-pathogenic, proprietary isolate of the unmodified reovirus: a first-in-class intravenously delivered immuno-oncolytic virus being evaluated for the treatment of solid tumours and hematological malignancies. The compound induces selective tumour lysis and promotes an inflamed tumour phenotype through innate and adaptive immune responses to treat a variety of cancers.

About Oncolytics Biotech Inc.

Oncolytics is a biotechnology company developing pelareorep, an intravenously delivered immuno-oncolytic virus. The compound induces selective tumour lysis and promotes an inflamed tumour phenotype -- turning cold tumours hot -- through innate and adaptive immune responses to treat a variety of cancers. Oncolytics's clinical development program emphasizes three pillars: chemotherapy combinations to trigger selective tumour lysis and immunotherapy and immune modulator (IMiD) combinations to produce innate and adaptive immune responses. Oncolytics is currently conducting and planning additional studies in combination with checkpoint inhibitors and targeted and IMiD therapies in solid and hematological malignancies, as it prepares for a phase 3 registration study in metastatic breast cancer.

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