MONTREAL, QUEBEC--(Marketwire - July 30, 2010) - MethylGene Inc. (TSX: MYG) today announced financial results for the second quarter ended June 30, 2010. In addition, the Company provided a clinical trial update for its multi-targeted (Met) kinase oncology inhibitor, MGCD265.
Financial Results Reported in Canadian Dollars
Total revenues for the second quarter ended June 30, 2010 were $512,000 compared to $388,000 for the same period last year due to increased collaboration revenue from Otsuka and final revenue reconciliation from the termination of the Celgene collaboration reflected in the second quarter of 2009.
Gross research and development expenditures in the second quarter of 2010 were $2.9 million, down 49 percent, compared to $5.8 million in the second quarter of 2009. This decrease is primarily due to lower research and development expenses as we continue to focus development on our key programs. General and administrative expenses in the second quarter of 2010 were $1.2 million, an increase of $176,000 compared to the second quarter of 2009. The increase was due primarily to higher professional fees which were partially offset by lower compensation expenses. MethylGene incurred a foreign exchange gain of $54,000 in the second quarter of 2010 versus a loss of $726,000 in the second quarter of 2009. The magnitude of the second quarter gain in 2010 versus the loss in the second quarter of 2009 is the result of lower average U.S. denominated assets and a higher average exchange rate for the Canadian dollar versus the U.S. dollar in the second quarter of 2010 versus the second quarter of 2009. The net loss for the second quarter ended June 30, 2010 was $3.4 million or ($0.09) per share compared to a net loss of $6.9 million or ($0.19) per share for the corresponding period last year. These results reflect continued lower operating expenses due to cost control efforts and our focus on key clinical development projects.
As of June 30, 2010, the Company had $14.9 million of cash, cash equivalents, marketable securities and restricted cash. Based on our current assumptions, the Company believes that its current cash, cash equivalents, marketable securities, interest income, projected revenues from current collaborations, projected timing of clinical trials and refundable investment tax credits should be sufficient to carry out its currently planned research and development plans and operations into the second quarter of 2011.
MGCD265 Update (Preliminary Data)
MethylGene continued to enroll patients into the ongoing MGCD265 clinical trials (Trials 101, 102 and 103), which are evaluating the compound in solid tumor patients. The Company has begun BID (twice a day) dosing in all three trials. For the MGCD265-docetaxel combination arm of Trial 103, 16 patients have been enrolled of which six patients are ongoing including four metastatic Stage IV non-small cell lung cancer (NSCLC) patients. Five of the six patients have been treated for four cycles or more including one NSCLC patient who has an objective partial response (PR) and four patients (three NSCLC and one pancreatic) who have experienced stable disease (SD). The NSCLC patients have received three to six prior therapies, including treatment with taxanes and all were smokers. The current treatment duration for these patients (as of July 28, 2010) ranges from 24 to 46 weeks and all four patients experienced tumor shrinkage, as well as a 98 percent decrease in carcinoembryonic antigen (CEA) levels in the patient experiencing a PR. These four NSCLC patients exceed the time to disease progression (TDP) of approximately 12 weeks reported for second-line NSCLC patients treated with docetaxel as described in the Taxotere® label (TAX317 study). The current progression-free survival (PFS) mean and median for these four patients following administration of the MGCD265-docetaxel combination is 34 and 33 weeks respectively.
In the MGCD265-erlotinib arm of Trial 103, 21 patients have been enrolled of which six patients are ongoing. Seven patients experiencing SD were treated for more than four cycles. One of these patients with gastric cancer experienced significant clinical benefit demonstrated by the removal of an indwelling catheter to drain ascites and a decrease in the thickening of the gastric wall. This patient has now been on study for over six cycles. Another patient with metastatic medulloblastoma (an aggressive form of brain cancer) experienced stable disease and was on study for approximately six cycles.
The Company's current goal for all MGCD265 trials is to identify a recommended Phase II dose and schedule in preparation for a randomized, placebo-control, double-blind MGCD265 Phase II trial (Trial 104) in refractory NSCLC patients with the selected comparator agent (erlotinib or docetaxel). There is a current bias to the docetaxel combination based on safety and efficacy data to date.
Current Objectives
-- Complete the two ongoing Phase I clinical trials (Trials 101 and 102)
evaluating MGCD265 in patients with solid tumors;
-- Complete MGCD265 Trial 103 in solid tumor patients to identify a
recommended Phase II dose and regimen in combination with two comparator
agents (Tarceva® or Taxotere®) in preparation for a randomized trial
with the chosen comparator agent in NSCLC patients (Trial 104);
-- Continue to enroll refractory or relapsed follicular lymphoma patients
in the mocetinostat Phase II trial (Trial 008);
-- Report updated clinical trial data at appropriate scientific venues for
MGCD265 and the completed Phase I studies for MGCD290 a fungal Hos2
inhibitor; and
-- Continue to seek and evaluate partnerships, collaborations, strategic
relationships and other alternatives, as well as monetize assets to
enhance clinical outcomes for the Company's development stage compounds
and to provide additional resources to the Company.
About MethylGene
MethylGene Inc. (TSX: MYG) is a publicly-traded, clinical stage biopharmaceutical company focused on the 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 has completed 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 currently in a Phase II trial in refractory or relapsed follicular lymphoma. Mocetinostat 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 for neurodegenerative diseases has successfully completed 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.
MethylGene Inc.
Incorporated under the Canada Business Corporation Act
BALANCE SHEETS
(In thousands of Canadian dollars)
June 30, December 31,
2010 2009
$ $
----------------------
ASSETS
Current
Cash and cash equivalents 12,278 14,210
Marketable securities 1,652 3,863
Restricted cash 200 -
Research and development tax credits receivable 1,382 992
Unbilled revenue 375 328
Interest receivable 15 17
Loan receivable 31 -
Other current assets 1,161 1,033
----------------------
Total current assets 17,094 20,443
Security deposits 385 385
Restricted cash 800 -
Property, plant and equipment 769 1,173
----------------------
19,048 22,001
----------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 4,798 5,811
Current portion of unearned revenue 584 584
Current portion of lease abandonment cost 194 196
----------------------
Total current liabilities 5,576 6,591
Unearned revenue 2,237 2,529
Lease abandonment cost 284 380
----------------------
Total liabilities 8,097 9,500
----------------------
Shareholders' equity
Capital stock 119,189 119,189
Contributed surplus 15,377 9,014
Deficit (123,648) (115,712)
Accumulated other comprehensive income 33 10
----------------------
Total shareholders' equity 10,951 12,501
----------------------
19,048 22,001
----------------------
MethylGene Inc.
STATEMENTS OF OPERATIONS AND DEFICIT
(In thousands of Canadian dollars, except for share and per share
amounts)
Three-month period Six-month period
ended June 30, ended June 30,
2010 2009 2010 2009
$ $ $ $
--------------------------------------------------------
REVENUES
Research
collaborations
and contract
revenues 365 251 693 1,778
License and up-
front fees 147 137 293 275
--------------------------------------------------------
512 388 986 2,053
--------------------------------------------------------
EXPENSES
Research and
development 2,933 5,756 6,765 13,162
Government
assistance (176) (270) (390) (566)
--------------------------------------------------------
Net research and
development 2,757 5,486 6,375 12,596
General and
administrative 1,234 1,058 2,541 2,338
Interest income (9) (24) (16) (155)
Amortization and
write-off of
property, plant
and equipment 3 4 6 10
Gain on disposal
of property,
plant and
equipment (1) (10) (5) (6)
Corporate and
other transaction
costs - 71 - 118
Bank charges and
interest 10 7 17 15
Foreign exchange
(gain) loss (54) 726 14 81
--------------------------------------------------------
3,940 7,318 8,932 14,997
--------------------------------------------------------
Loss before income
tax (3,428) (6,930) (7,946) (12,944)
Future income tax
recovery
(expense) 14 13 10 (84)
--------------------------------------------------------
Net loss for the
period (3,414) (6,917) (7,936) (13,028)
Deficit, beginning
of period (120,234) (98,233) (115,712) (92,122)
--------------------------------------------------------
Deficit, end of
period (123,648) (105,150) (123,648) (105,150)
--------------------------------------------------------
Basic and diluted
loss per share (0.09) (0.19) (0.20) (0.36)
Weighted average
number of common
shares 40,418,580 36,682,398 40,418,580 36,682,398
--------------------------------------------------------
MethylGene Inc.
STATEMENTS OF COMPREHENSIVE LOSS
(In thousands of
Canadian dollars)
Three-month period Six-month period
ended June 30, ended June 30,
2010 2009 2010 2009
$ $ $ $
--------------------------------------------------------
Net loss for the
period (3,414) (6,917) (7,936) (13,028)
--------------------------------------------------------
Other
comprehensive
loss
Change in
unrealized gains
on cash
equivalents and
marketable
securities, net
of income tax
expense of $12
for the three-
month period
ended June 30,
2010 (2009 - $52)
and $11 for the
six-month period
ended June 30,
2010 (2009 - $81) 35 117 25 181
Reclassification
to net loss of
realized losses
(gains) on cash
equivalents and
marketable
securities, net
of income tax
expense of $2 for
the three-month
period ended June
30, 2010 (2009 -
tax recovery of
$39) and a tax
recovery of $1
for the six-month
period ended June
30, 2010 (2009 -
$165) 13 (88) (2) (369)
--------------------------------------------------------
48 29 23 (188)
--------------------------------------------------------
Comprehensive loss
for the period (3,366) (6,888) (7,913) (13,216)
--------------------------------------------------------
MethylGene Inc.
STATEMENTS OF CASH FLOWS
(In thousands of
Canadian dollars)
Three-month period Six-month period
ended June 30, ended June 30,
2010 2009 2010 2009
$ $ $ $
--------------------------------------------------------
OPERATING
ACTIVITIES
Net loss for the
period (3,414) (6,917) (7,936) (13,028)
Items not
affecting cash
Amortization of
property, plant
and equipment 184 252 408 517
Write-off of
property, plant
and equipment - - - 2
Gain on disposal
of property,
plant and
equipment (1) (10) (5) (6)
Stock-based
compensation
expense 17 40 47 110
Future income
tax (recovery)
expense (14) (13) (10) 84
--------------------------------------------------------
(3,228) (6,648) (7,496) (12,321)
Net change in non-
cash working
capital balances
related to
operations 198 1,114 (1,673) 203
Change in long-
term portion of
unearned revenue (147) (137) (293) (274)
--------------------------------------------------------
Cash flows related
to operating
activities (3,177) (5,671) (9,462) (12,392)
--------------------------------------------------------
INVESTING
ACTIVITIES
Acquisitions of
property, plant
and equipment - (9) (5) (9)
Purchases of
marketable
securities (1,652) (13,539) (2,751) (24,078)
Restricted cash (1,000) - (1,000) -
Proceeds from
maturities of
marketable
securities 1,099 9,087 4,962 39,942
Proceeds from
disposal of
property, plant
and equipment 1 10 6 11
--------------------------------------------------------
Cash flows related
to investing
activities (1,552) (4,451) 1,212 15,866
--------------------------------------------------------
FINANCING
ACTIVITIES
Proceeds from
reorganization 7,185 - 7,185 -
Costs of
reorganization (900) - (900) -
--------------------------------------------------------
Cash flows related
to financing
activities 6,285 - 6,285 -
--------------------------------------------------------
Foreign exchange
gain on cash
equivalents held
in foreign
currency 62 74 33 184
--------------------------------------------------------
Increase
(decrease) in
cash and cash
equivalents 1,618 (10,048) (1,932) 3,658
Cash and cash
equivalents,
beginning of
period 10,660 19,653 14,210 5,947
--------------------------------------------------------
Cash and cash
equivalents, end
of period 12,278 9,605 12,278 9,605
--------------------------------------------------------
Cash and cash
equivalents
consist of:
Cash 775 2 775 2
Cash equivalents 11,503 9,603 11,503 9,603
--------------------------------------------------------
12,278 9,605 12,278 9,605
--------------------------------------------------------
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
