MONTREAL, QUEBEC -- 08/07/07 --
MethylGene Inc. (TSX: MYG) today announced its operational and financial results for the second quarter ended June 30, 2007.
Highlights
- Presented positive preliminary data at the American Society for Clinical
Oncology (ASCO) annual meeting from two clinical trials evaluating
MGCD0103 in myelodysplastic syndromes (MDS) and acute myelogenous
leukemia (AML) (Trial 005) and in Hodgkin's lymphoma (Trial 010).
- A 30% response rate, 37% at relevant active doses, was achieved in the
Phase I/II combination trial with Vidaza® (Trial 005) in patients
with MDS and AML.
- In the single-agent Phase II trial for refractory or relapsed Hodgkin's
lymphoma (Trial 010), the Company reported a 40% response rate, a 45%
disease control rate and 75% of patients on this trial experienced tumor
shrinkage.
- MGCD0103 is currently in two Phase I/II combination trials and four
single-agent Phase II trials.
- Manufactured MGCD265, our multi-targeted (c-Met) kinase inhibitor, in
quantities sufficient to commence investigational new drug (IND)-enabling
studies.
- Selected MGCD290 as the Company's clinical candidate for its histone
deacetylase antifungal program. MGCD290 potentiates and broadens the
spectrum of azole activity against human fungal pathogens, including
azole-resistant clinical isolates.
- Presented data for MGCD290 in two poster presentations at the American
Society of Microbiology (ASM).
Financial Results Reported in Canadian Dollars
Total revenues for the second quarter of $3.7 million were $1.1 million higher than for the second quarter of 2006 primarily due to higher clinical trials related revenues received from the Company's collaborator Pharmion Corporation. Overall expenses of $9.9 million were $3.3 million higher in the second quarter of 2007 versus the second quarter of 2006 due primarily to gross research and development expenditures of $8.8 million which were $3.3 million higher due to increased spending for the clinical development of MGCD0103 and the preclinical development of MGCD265.
At June 30, 2007 MethylGene had $71.0 million in cash, cash equivalents, and short-term investments.
Milestones Anticipated for 2007
- Expect to initiate additional MGCD0103 clinical trials: a Phase I combination trial with Taxotere® in solid tumors (Trial 011) and a Phase II combination trial with Vidaza® in lymphomas (Trial 012). The latter trial will include a run-in bioequivalency study using an updated and improved manufacturing process for MGCD0103 required to support potential pivotal trials which could commence in 2008.
- Continue IND-enabling studies for MGCD265, our multi-targeted kinase inhibitor in anticipation of an IND application by year end.
- Initiate manufacturing studies for MGCD290, our HDAC antifungal inhibitor, to support the commencement of IND-enabling studies.
About MethylGene
MethylGene Inc. (TSX: MYG) is a publicly-traded biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics for cancer. The Company's lead product, MGCD0103, is an oral isotype-selective HDAC inhibitor presently in multiple clinical trials for solid tumors and hematological malignancies, including Phase II monotherapy and Phase I/II combination trials with Vidaza® and Gemzar®. MGCD265 is an oral kinase inhibitor targeting the c-Met, Tie-2, Ron and VEGF receptor tyrosine kinases. In addition, MethylGene has several preclinical non-oncology programs: MGCD290, an HDAC inhibitor in combination with azoles for fungal infections; an HDAC program for Huntington's disease; and a beta-lactamase program to overcome antibiotic resistance. MethylGene's development and commercialization partners include Pharmion Corporation, Taiho Pharmaceutical and EnVivo Pharmaceuticals. Please visit our website at www.methylgene.com.
Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute forward-looking statements. Such statements, based as they are on the current expectations of management of MethylGene, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond MethylGene's control. These risks and uncertainties could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Such results, performance or achievements include, but are not limited to, the timing and effects of regulatory action; the continuation of collaborations; the results of clinical trials; the timing of enrollment or completion of clinical trials; the success, efficacy or safety of MGCD0103, MGCD265 or MGCD290; the ability to scale up, formulate and manufacture sufficient GMP, clinical or commercialization quantities of MGCD0103, MGCD265 or MGCD290, and the relative success or the lack of success in developing and gaining regulatory approval and/or market acceptance for any compound or new product including MGCD0103, MGCD265 or MGCD290. Such risks include, but are not limited to, the impact of general economic conditions, economic conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which MethylGene does business, stock market volatility, fluctuations in costs, expectations with respect to our intellectual property position and our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others, changes in the competitive landscape including changes in the standard of care for the various indications in which MethylGene is involved, and changes to the competitive environment due to consolidation, as well as other risks, which you are urged to read, as described in MethylGene's Annual Information Form for the fiscal year ending December 31, 2006, under the heading 'risk factors,' the final prospectus filed on February 23, 2007, and all other documents filed by the Company that can be found at www.sedar.com. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. The reader should not place undue reliance on the forward-looking statements included in this presentation. These statements speak only as an update on the date they are made and MethylGene is under no obligation to revise such statements as a result of any event, circumstance or otherwise except in accordance with law.
Summary financial statements follow.
MethylGene Inc.
Incorporated under the Quebec Companies Act
BALANCE SHEETS
As at Unaudited
June 30, December 31,
2007 2006
$ $
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ASSETS
Current
Cash and cash equivalents 15,885,505 679,507
Short-term investments 55,081,077 65,099,740
Research and development tax credits receivable 1,380,735 718,103
Unbilled revenue 3,293,027 2,505,476
Other current assets 1,815,239 1,894,233
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Total current assets 77,455,583 70,897,059
Property, plant and equipment -- net 3,269,199 3,664,656
Intangible assets -- net 2,286,270 2,101,338
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83,011,052 76,663,053
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 4,480,039 5,073,880
Current portion of unearned revenue 4,066,197 4,331,236
Current portion of lease abandonment cost 154,187 172,294
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Total current liabilities 8,700,423 9,577,410
Unearned revenue 16,693,231 18,675,118
Lease abandonment cost 313,239 381,280
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Total liabilities 25,706,893 28,633,808
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Shareholders' equity
Capital stock 118,094,413 99,294,086
Contributed surplus 8,145,504 7,909,156
Deficit (68,633,836) (59,173,997)
Accumulated other comprehensive loss (301,922) -
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Total shareholders' equity 57,304,159 48,029,245
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83,011,052 76,663,053
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MethylGene Inc.
STATEMENTS OF OPERATIONS AND DEFICIT
Unaudited
Three-month periods Six-month periods
ended June 30, ended June 30,
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2007 2006 2007 2006
$ $ $ $
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REVENUES
Research collaborations
and contract revenues 2,635,158 1,543,053 5,160,125 2,220,776
License and upfront fees 1,018,227 1,029,526 2,035,496 1,748,617
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3,653,385 2,572,579 7,195,621 3,969,393
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EXPENSES
Research and development 8,802,735 5,472,926 15,537,963 10,452,586
Government assistance (313,269) (292,889) (677,820) (575,184)
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Net current research
and development 8,489,466 5,180,037 14,860,143 9,877,402
Government assistance -
recovery of non-refundable
tax credits - (4,275,000) - (4,275,000)
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8,489,466 905,037 14,860,143 5,602,402
General and
administrative 1,277,270 1,134,688 2,460,792 2,552,889
Interest income (832,750) (603,766) (1,588,718) (980,753)
Amortization of property,
plant and equipment 4,451 4,513 9,152 9,107
Lease abandonment cost - 348,482 - 348,482
Bank charges and interest 2,151 2,627 15,529 10,682
Foreign exchange loss 918,358 497,376 898,562 337,545
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9,858,946 2,288,957 16,655,460 7,880,354
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Income (loss) before
income taxes (6,205,561) 283,622 (9,459,839) (3,910,961)
Income taxes - 4,275,000 - 4,275,000
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Net loss for the period (6,205,561) (3,991,378) (9,459,839) (8,185,961)
Deficit, beginning of
period (62,428,275)(55,856,809)(59,173,997) (51,662,226)
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Deficit, end of period (68,633,836)(59,848,187)(68,633,836) (59,848,187)
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Basic and diluted loss
per share (0.17) (0.14) (0.27) (0.32)
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Weighted average
number of common shares
outstanding 36,673,509 28,331,546 34,783,859 25,663,920
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MethylGene Inc.
STATEMENT OF COMPREHENSIVE LOSS
Unaudited
Three-month Six-month
period ended period ended
June 30, June 30,
2007 2007
$ $
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Net loss for the period (6,205,561) (9,459,839)
Other comprehensive loss
Unrealized gain on available-for-sale
cash equivalents, net of
reclassification to income
of realized gains and losses 132,825 5,091
Unrealized loss on available-for-sale
short-term investments,
net of reclassification to income
of realized gains and losses (202,111) (235,024)
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Other comprehensive loss for the period (69,286) (229,933)
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Comprehensive loss for the period (6,274,847) (9,689,772)
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MethylGene Inc.
STATEMENTS OF CASH FLOWS
Unaudited
Three-month periods Six-month periods
ended June 30, ended June 30,
2007 2006 2007 2006
$ $ $ $
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OPERATING ACTIVITIES
Net loss for the period (6,205,561) (3,991,378) (9,459,839) (8,185,961)
Items not affecting cash:
Amortization of property,
plant and equipment 331,714 319,033 678,481 634,634
Amortization of
intangible assets 39,994 33,304 78,153 65,733
Unrealized foreign
exchange loss on
short-term investments - 12,958 - 1,638
Write-down of patents - - 13,689
Write-off of property,
plant and equipment 32,767 - 32,767 -
Warrants related to
license fees 1,335 1,335 2,655 2,655
Non-cash stock-based
compensation expense 180,826 224,036 247,450 367,511
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(5,618,925) (3,400,712) (8,420,333) (7,100,101)
Changes in non-cash
working capital
balances relating
to operations (606,602) (1,210,949) (2,318,871) 1,087,883
Changes in
available-for-sale
cash equivalents 132,825 - 5,091 -
Changes in long-term
portion of unearned
revenue (1,009,876) (1,030,689) (1,981,887) 18,561,277
Change in long-term
portion of lease
abandonment costs - 232,044 - 232,044
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Cash flows related to
operating activities (7,102,578) (5,410,306) (12,716,000) 12,781,103
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INVESTING ACTIVITIES
Acquisitions of
property, plant
and equipment (149,528) (169,131) (315,791) (286,291)
Acquisitions of
intangible assets (130,223) (103,724) (263,085) (175,954)
Purchases of
short-term
investments (44,844,527) (16,260,607) (73,680,968)(43,724,893)
Proceeds from
maturities of
short-term
investments 27,629,658 18,202,396 83,392,617 39,379,364
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Cash flows related
to investing
activities (17,494,620) 1,668,934 9,132,773 (4,807,774)
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FINANCING ACTIVITIES
Issuance of common
shares 54,425 22,809,074 20,191,975 27,423,874
Share issue costs (29,944) (546,226) (1,402,750) (585,970)
Repayment of
obligation under
capital leases - (2,131) - (5,577)
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Cash flows related to
financing activities 24,481 22,260,717 18,789,225 26,832,327
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Increase (decrease)
in cash and cash
equivalents (24,572,717) 18,519,345 15,205,998 34,805,656
Cash and cash
equivalents,
beginning of period 40,458,222 16,816,573 679,507 530,262
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Cash and cash
equivalents, end
of period 15,885,505 35,335,918 15,885,505 35,335,918
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Cash and cash
equivalents consist of:
Cash 1,778,614 1,178,195 1,778,614 1,178,195
Cash equivalents 14,106,891 34,157,723 14,106,891 34,157,723
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15,885,505 35,335,918 15,885,505 35,335,918
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Contacts:
Rx Communications Group, LLC
Rhonda Chiger
917-322-2569
rchiger@rxir.com
MethylGene Inc.
Donald F. Corcoran
President & CEO
514-337-3333 ext. 373
mctavishk@methylgene.com
