MethylGene Announces Annual and Special Meeting of Shareholders and Provides Corporate Update

MONTREAL, QUEBEC--(Marketwire - April 23, 2010) - MethylGene Inc. (TSX: MYG)

Shareholders Recommended to Approve Non-dilutive Financing

Company Resumes Mocetinostat Phase II Clinical Trial (Trial 008) in Patients with Relapsed or Refractory Follicular Lymphoma

Otsuka Extends Collaboration for Development of Kinase Inhibitors in Ocular Diseases

MethylGene Inc. (TSX: MYG) today announced that it will hold its Annual and Special Meeting of Shareholders on Friday, May 14, 2010 at 10:00 a.m. EDT at the offices of Davies Ward Phillips & Vineberg LLP, 1501 McGill College Avenue, 26th Floor, Montreal, Quebec. For those who are unable to attend in person, the corporate presentation given by Mr. Donald F. Corcoran, MethylGene's President and Chief Executive Officer, will be available by live webcast on the Company's website at www.methylgene.com.

Shareholder Approval for Arrangement

At this annual and special meeting, shareholders will be asked, among other matters, to approve the transaction announced on March 26, 2010 which will allow the Company to carry on its affairs as a corporation governed by the Canada Business Corporations Act and provide gross proceeds of up to $8.9 million in non-dilutive capital to MethylGene. MethylGene's Board of Directors unanimously recommends that MethylGene shareholders approve the transaction which will provide the Company, together with its cash on hand, with sufficient cash to operate into the second quarter of 2011. Shareholders are expected to receive their proxy materials by the end of April. The Management Information Circular prepared in connection with the Annual and Special Meeting of Shareholders and describing the arrangement transaction are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

Corporate Update Highlighting Recent Accomplishments:

MGCD265: Kinase (Met) Inhibitor

MGCD265 is currently being evaluated in two Phase I clinical trials (Trial 101 and Trial 102) in patients with solid tumors, and in the first stage of a Phase II program (Trial 103). Trial 103 is to determine the maximum tolerated dose of MGCD265 in combination with docetaxel (Taxotere®) or erlotinib (Tarceva®) in preparation for the randomized second stage of the trial in non-small cell lung cancer patients (Trial 104). Preclinical data was recently presented at the AACR 101st Annual Meeting. Updated clinical data from Trials 101 and 102, as well as additional preclinical data, demonstrating MGCD265's activity when combined with taxanes and erlotinib, will be published and presented in posters sessions at the American Society of Clinical Oncology (ASCO) Annual Meeting to be held in Chicago from June 4 to 8, 2010.

MGCD290: Hos2 Fungal Inhibitor in Combination with Fluconazole

The Company has completed enrollment for its MGCD290 Phase I program, with a total of 120 healthy volunteers in the study. The study included 14 continuous days of oral dosing with up to 540mg of MGCD290 combined with 400mg of fluconazole. Fluconazole is an approved agent commonly used to combat fungal infections. To date, MGCD290 has been very well tolerated with good pharmacokinetic properties. MGCD290, when combined with azoles, including fluconazole, potentiates and broadens the spectrum of activity of azole antifungal agents against multiple human fungal pathogens, including azole-resistant clinical isolates. MethylGene has identified further development steps including a number of potential proof-of-concept Phase II trials in various patient populations for discussion with potential partners. The Company will likely require a partner and/or additional funding to significantly advance MGCD290 beyond its current stage of development. Additional data for MGCD290 will be disclosed at a future scientific venue.

Mocetinostat (MGCD0103) Phase II Clinical Trial Resumed

The Company announces the continuation of the Phase II clinical trial (Trial 008), with the opening of four clinical sites, evaluating mocetinostat, an isoform-selective histone deacetylase (HDAC) inhibitor product candidate, in the cohort of patients with relapsed or refractory follicular lymphoma (FL) who have had three or more prior therapies. During this continued trial, the Company is expecting to enroll up to 13 FL patients at five cancer centers in North America. Patients will receive 70 mg of mocetinostat orally three times weekly for a total of 12 doses per each 28-day cycle. Key objectives of this study are to determine the overall response rate, progression-free survival and duration of response.

As previously reported, the objective response rate for the first 28 FL patients treated with mocetinostat was 11 percent (one complete response and two partial responses) and 54 percent of the evaluable FL patients experienced tumor reduction as assessed by CT scan. The median duration on study for responders was greater than 11 cycles. MethylGene will report additional data from this trial in a poster presentation at ASCO Annual Meeting in June.

In addition, MethylGene was recently granted a European patent for mocetinostat. Mocetinostat is also covered by granted patents in Australia, Canada, China, Hong Kong, Japan, South Korea and the United States.

Otsuka Pharmaceutical Co. Ltd. Extends Funded Research Collaboration

Otsuka Pharmaceutical Co. Ltd. has extended its funded research collaboration with MethylGene for the development of novel, small molecule kinase inhibitors for the local delivery and treatment of ocular diseases, excluding cancer, for an additional six months. The collaboration originated in March 2008. With this extension, Otsuka will provide US$705,000 to MethylGene in research funding for the six-month period ending September 2010. The collaboration may be extended beyond this six-month period.

"MethylGene has made progress on a number of product development fronts and we view our pipeline as fundamentally sound, benefiting from strong science in novel and validated areas," said Donald F. Corcoran, President and Chief Executive Officer of MethylGene Inc. "We look forward to further advancing our lead compound, MGCD265. We will continue to maintain financial prudence and cost control with an eye toward enhancing value. The proposed non-dilutive financing transaction is an example of the initiatives under evaluation to provide additional resources to the Company to enhance our clinical pipeline and, ultimately, shareholder value. With the shareholder approval and closing of the non-dilutive financing, the extension of our funded collaboration with Otsuka and additional expenditure controls, the Company expects to extend its cash resources to pursue our planned development into the second quarter of 2011."

The Company's primary focus in 2010 is on the clinical development of MGCD265. This focus provides for continuing expenditure control including additional headcount reductions. MethylGene will continue to seek and evaluate partnerships, collaborations, strategic relationships and other alternatives as well as continue to monetize assets in order to provide additional resources to the Company.

About MethylGene

MethylGene Inc. (TSX: MYG) is a publicly-traded, clinical stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics with a focus on cancer. The Company's product candidates include: MGCD265, an oral, multi-targeted kinase inhibitor targeting the Met, VEGF, Ron and Tie-2 receptor tyrosine kinases that is in multiple clinical trials for cancer; MGCD290, a fungal Hos2 inhibitor for use in combination with fluconazole for serious fungal infections which is nearing completion of Phase I clinical studies; and mocetinostat (MGCD0103), an oral, isoform-selective HDAC inhibitor for cancer which has been in multiple Phase II clinical trials and is licensed to Taiho Pharmaceutical Co. Ltd in certain Asian countries. A fourth compound discovered using MethylGene's HDAC platform, EVP-0334 - a potential cognition enhancing agent, is in Phase I trials sponsored by EnVivo Pharmaceuticals Inc. MethylGene also has a funded collaboration with Otsuka Pharmaceutical Co. Ltd. for applications in ocular diseases using the Company's proprietary kinase inhibitor chemistry. 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 MGCD265, MGCD290 or mocetinostat (MGCD0103); the ability to scale up, formulate and manufacture sufficient GMP, clinical or commercialization quantities of MGCD265, MGCD290 or mocetinostat, 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 MGCD265, MGCD290 or mocetinostat. 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, as described in MethylGene's Annual Information Form for the fiscal year ending December 31, 2009, under the heading "Risk Factors" which you are urged to read 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.