MethylGene Exercises Right to Convert MGCD0103 Collaboration with Celgene to Pre-Determined Royalty and Milestone Arrangement
By taking this action, MethylGene, after a 90-day transition period, will no longer be responsible for funding development costs required to obtain market approval for MGCD0103, and Celgene will assume 100 percent of the program costs for its licensed territories. In addition, MethylGene will receive royalties in lieu of profit sharing in North America and is eligible to receive milestone payments of up to US $141 million, as agreed in the original contract between the companies. Celgene will also pay royalties to MethylGene on annual net sales in its territories.
"We believe that MGCD0103 presents a promising opportunity for the treatment of cancer. After thoughtful and careful analysis conducted with outside consultants, we have concluded that converting to a royalty at this time is financially advantageous," said Donald F. Corcoran, President and Chief Executive Officer of MethylGene. "Moving forward, while participating in the upside and potential of MGCD0103, we will be focusing on developing the two compounds of which we own 100 percent - MGCD290 which is expected to enter into Phase I clinical trials by the end of this year and, in particular, MGCD265 which is in two Phase I clinical trials."
MethylGene's royalties in North America will increase from a floor of 13 percent to a higher royalty range based on annual net sales reflecting MethylGene's co-development funding and contribution for MGCD0103 to date. The royalty rate in other Celgene territories outside of North America remains in a 10 to 13 percent range based on annual net sales. MethylGene maintains its rights under the original terms of the agreement to co-develop and co-promote subsequent compounds, including second generation histone deacetylase (HDAC) inhibitors and sirtuin inhibitors for cancer.
About MethylGene
MethylGene Inc. (Toronto:MYG.TO - News) is a publicly-traded, clinical stage, biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics for cancer. The company's product candidates include: MGCD265, an oral, multi-targeted kinase inhibitor targeting the c-Met, Tie-2, Ron and VEGF receptor tyrosine kinases and is in Phase I clinical trials for solid tumor cancers; MGCD290, a fungal Hos2 (HDAC) inhibitor used in combination with azoles for fungal infections; and MGCD0103, an oral, isoform-selective HDAC inhibitor which has been in multiple clinical trials for solid tumors and hematological malignancies and is licensed to Celgene Corporation and Taiho Pharmaceutical. In addition, MethylGene's preclinical programs include: a kinase inhibitor program for ocular diseases and a sirtuin inhibitor program for cancer. MethylGene's development and commercialization partners include Celgene Corporation, Taiho Pharmaceutical Co. Ltd., Otsuka Pharmaceutical Co. Ltd. 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, 2007, under the heading 'risk factors,', 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.
Contact:
Contacts: Investor Relations Contacts: Rhonda Chiger Rx Communications Group, LLC 917-322-2569 rchiger@rxir.com
MethylGene Inc. Donald F. Corcoran President & CEO 514-337-3333 ext. 373 mctavishk@methylgene.com http://www.methylgene.com
Source: MethylGene Inc.