MethylGene Initiates Phase II Program for MGCD265 in Solid Tumors and Non-Small Cell Lung Cancer Patients

MONTREAL, QUEBEC--(Marketwire - September 02, 2009) - MethylGene Inc. (TSX: MYG) announced it has initiated its Phase II program (Trial 103) evaluating MGCD265, the Company’s multi-targeted (c-Met) kinase inhibitor, in combination with approved anticancer agents Tarceva® (erlotinib, developed by Genentech Inc. - a wholly owned member of the Roche Group, OSI Pharmaceuticals Inc., Roche Group and Chugai Pharmaceutical Co. Ltd.) and docetaxel. The trial will initially enroll patients with advanced metastatic malignancies, followed by patients with non-small cell lung cancer (NSCLC) who have had no prior treatment with either Tarceva or docetaxel. Both Tarceva and docetaxel are therapeutics approved as single agents for use in NSCLC.

The first stage of this open-label trial consists of two parallel arms which will evaluate multiple ascending doses of MGCD265 in combination with Tarceva or docetaxel. For both study arms, MGCD265 will be administered orally on a daily basis for 21-days (one cycle). One arm will include docetaxel which will be administered intravenously once every three weeks (Day 1 of each cycle) and in the other arm, Tarceva will be administered orally on a daily basis. Key objectives for this portion of the study will be to evaluate the safety of the combination treatments, to measure the pharmacodynamic and pharmacokinetic characteristics and to determine the maximum tolerated dose to be used in the second stage of the trial.

In the second stage of the trial, patients with advanced NSCLC (stage 3b or 4) who have failed at least one prior regimen of chemotherapy will be randomized into one of the three study arms: MGCD265 in combination with Tarceva or docetaxel (based on results from the first-stage); MGCD265 alone; or Tarceva or docetaxel alone. Objectives for this stage of the trial will be to evaluate the antitumor activity of MGCD265 alone and in combination with Tarceva or docetaxel, progression-free survival and to further assess safety.

“This Phase II trial is particularly interesting since the c-Met pathway appears important in tumorigenesis and, it has also been shown that c-Met and EGFR, the target of Tarceva, functionally cooperate,” commented Dr. Peter J. O’Dwyer, Professor of Medicine at the University of Pennsylvania School of Medicine / Director of the Experimental Therapeutics Program at the University of Pennsylvania Cancer Center (UPCC) and a principal investigator for this trial. “Importantly, the amplification of c-Met is believed to be a mechanism of resistance to EGFR inhibitors in NSCLC patients; therefore, blocking c-Met offers a compelling rationale to overcome resistance to EGFR inhibitors in this patient population. In addition, docetaxel is a commonly used chemotherapeutic for treating non-small cell lung cancer patients and other solid tumors, and preclinically, it has demonstrated synergy in in vivo studies with MGCD265. I look forward to evaluating MGCD265 in this trial with the goal of improving the outcome for our patients.”

Data Previously Reported for MGCD265 Phase I Trials

In May, preliminary MGCD265 Phase I data from two clinical trials (Trials 101 and 102) evaluating the compound in solid tumors were published in the proceedings from the American Society of Clinical Oncology’s (ASCO) annual meeting. At the doses tested, MGCD265 demonstrated early signs of activity and a good safety profile.

As reported at ASCO, 12 patients in Trial 102 have been evaluated for efficacy at dose levels of 24, 48, 96 and 192 mg/m2 with a cohort at 340 mg/m2 currently ongoing. Of these patients, five experienced stable disease per RECIST criteria, including one patient with aggressive bladder cancer with sarcomatoid histology who received MGCD265 treatment for 12 cycles (approximately one year) and a medullary thyroid cancer patient who experienced tumor shrinkage. Interestingly, an archived tumor biopsy obtained prior to MGCD265 treatment from the patient with aggressive bladder cancer showed elevated c-Met expression and phosphorylation. In Trial 101, ten patients have been evaluated for efficacy at dose levels of 24, 48, 96 and 150 mg/m2 with a cohort of 300mg/m2 currently ongoing. Two of these patients experienced stable disease per RECIST criteria.

“We are pleased to commence the next step in evaluating our proprietary c-Met kinase inhibitor, MGCD265,” said Donald F. Corcoran, President and Chief Executive Officer of MethylGene. “The biologic targets of MGCD265 appear important in a number of solid tumor indications and several competitor compounds have demonstrated preliminary utility in clinical trials. We are encouraged by MGCD265’s preclinical profile as well as its early signs of activity and safety demonstrated to date in our Phase I trials.”

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 c-Met, VEGF, Ron and Tie-2 receptor tyrosine kinases that is in Phase II clinical trials for cancers; MGCD290, a fungal Hos2 (HDAC) inhibitor being developed for use in combination with fluconazole for serious fungal infections that is in Phase I clinical studies; 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 Taiho Pharmaceutical Co. Ltd. A fourth compound discovered using MethylGene’s HDAC platform, EVP-0334 - a potential cognition enhancing agent, is in a Phase I study 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 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, 2008, 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.