MONTREAL, QUEBEC--(Marketwire - November 12, 2010) - MethylGene Inc. (TSX: MYG) today announced financial results for the third quarter ended September 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 third quarter ended September 30, 2010 were $587,000 compared to $485,000 for the same period last year due to increased collaboration revenue from Otsuka.
Gross research and development expenditures in the third quarter of 2010 were $3.0 million, down 34 percent, compared to $4.6 million in the third quarter of 2009. This decrease is due to lower research and development expenses for MGCD265 and MGCD290. General and administrative expenses in the third quarter of 2010 were $2.7 million, an increase of $1.5 million compared to the third quarter of 2009 as we recorded a $1.5 million expense in relation to the departure of the previous President and Chief Executive Officer. MethylGene incurred a foreign exchange loss of $26,000 in the third quarter of 2010 versus a loss of $188,000 in the third quarter of 2009. The lower loss 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. The net loss for the third quarter ended September 30, 2010 was $4.8 million or ($0.12) per share compared to a net loss of $5.4 million or ($0.15) per share for the corresponding period last year, reflecting lower operating expenses due to continued cost control efforts.
As of September 30, 2010, the Company had $10.6 million of cash, cash equivalents, and restricted cash. Based on current assumptions, the Company believes that its current cash, cash equivalents, interest income, projected revenues from current collaborations, projected timing of clinical trials and refundable investment tax credits should be sufficient to carry out its planned research and development plans and operations to the end of the first quarter of 2011. Management is actively pursuing various alternatives.
MGCD265 Update
Over 120 patients have been enrolled in three ongoing MGCD265 Phase 1 and Phase 1/2 clinical trials. The compound has been well tolerated and has demonstrated preliminary clinical activity as a single agent and in combination with docetaxel and erlotinib.
In the Phase 1/2 docetaxel-arm of Trial 265-103 (MGCD265 in combination with full-dose docetaxel), the maximum-tolerated dose (MTD) has been reached and the Company is defining the recommended Phase 2 dose. Five patients have been on the study for more than four months. Of these, four non-small cell lung cancer (NSCLC) patients have experienced stable disease for durations ranging from 8 to 13 months. One NSCLC patient achieved a confirmed partial response and the other three patients all had tumor shrinkage accompanying their stable disease. These results exceed the expectation for docetaxel alone. In the erlotinib-arm of Trial 265-103 (MGCD265 in combination with full-dose erlotinib), dose escalation continues and MethylGene believes that it is close to reaching the MTD. Twelve patients have been on study for more than four months. Of these, there is one gastric cancer patient who is currently experiencing stable disease for 11 months. The most frequent MGCD265-related toxicities in both arms of Trial 265-103 are fatigue and diarrhea, consistent with Trials 265-101 and 265-102.
In monotherapy Trial 265-101, seven patients have been on study for more than four cycles. Dose escalation is continuing in order to determine the MTD. In monotherapy Trial 265-102, the MTD has been reached and the recommended Phase 2 dose is being confirmed. Ten patients have been on study for more than four cycles, including a papillary renal cell carcinoma patient and sarcomatoid bladder cancer patient with extended stable disease durations of approximately one year. In both Trials 265-101 and 265-102, MGCD265 is well tolerated with fatigue, diarrhea and elevated lipase the most common toxicities.
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 fungal infections which has completed Phase 1 clinical studies; and mocetinostat (MGCD0103), an oral, isoform-selective HDAC inhibitor for cancer which has been in multiple Phase 2 clinical trials and is currently in a Phase 2 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 1 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
UNAUDITED INTERIM
BALANCE SHEETS
(In thousands of Canadian dollars)
September 30, December 31,
2010 2009
$ $
-----------------------------
ASSETS
Current
Cash and cash equivalents 9,629 14,210
Marketable securities - 3,863
Restricted cash 200 -
Research and development tax credits
receivable 1,525 992
Unbilled revenue 422 328
Interest receivable 17 17
Other current assets 917 1,033
Assets held for sale 57 -
-----------------------------
Total current assets 12,767 20,443
Security deposits 210 385
Restricted cash 800 -
Property, plant and equipment 554 1,173
-----------------------------
14,331 22,001
-----------------------------
-----------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 5,147 5,811
Current portion of unearned revenue 584 584
Current portion of lease abandonment cost 192 196
-----------------------------
Total current liabilities 5,923 6,591
Unearned revenue 2,091 2,529
Lease abandonment cost 236 380
-----------------------------
Total liabilities 8,250 9,500
-----------------------------
Shareholders' equity
Capital stock 119,189 119,189
Contributed surplus 15,336 9,014
Deficit (128,443) (115,712)
Accumulated other comprehensive income (1) 10
-----------------------------
Total shareholders' equity 6,081 12,501
-----------------------------
14,331 22,001
-----------------------------
-----------------------------
MethylGene Inc.
UNAUDITED INTERIM
STATEMENTS OF OPERATIONS AND DEFICIT
(In thousands of
Canadian dollars,
except for share and
per share amounts)
Three-month period Nine-month period
ended September 30, ended September 30,
2010 2009 2010 2009
$ $ $ $
---------------------------------------------------
REVENUES
Research collaborations
and contract revenues 441 347 1,134 2,125
License and up-front
fees 146 138 439 413
---------------------------------------------------
587 485 1,573 2,538
---------------------------------------------------
EXPENSES
Research and
development 3,036 4,579 9,801 17,741
Government assistance (424) (238) (814) (803)
---------------------------------------------------
Net research and
development 2,612 4,341 8,987 16,938
General and
administrative 2,739 1,283 5,280 3,621
Interest income (17) (13) (33) (169)
Amortization and write-
off of property, plant
and equipment 3 3 9 13
Gain on disposal of
property, plant and
equipment (2) - (7) (6)
Corporate and other
transaction costs - 42 - 160
Bank charges and
interest 7 6 24 21
Foreign exchange loss 26 188 40 269
---------------------------------------------------
5,368 5,850 14,300 20,847
---------------------------------------------------
Loss before income tax (4,781) (5,365) (12,727) (18,309)
Future income tax
expense (14) (55) (4) (139)
---------------------------------------------------
Net loss for the period (4,795) (5,420) (12,731) (18,448)
Deficit, beginning of
period (123,648) (105,150) (115,712) (92,122)
---------------------------------------------------
Deficit, end of period (128,443) (110,570) (128,443) (110,570)
---------------------------------------------------
---------------------------------------------------
Basic and diluted loss
per share (0.12) (0.15) (0.32) (0.50)
Weighted average number
of common shares 40,418,580 36,682,398 40,418,580 36,682,398
---------------------------------------------------
UNAUDITED INTERIM
STATEMENTS OF COMPREHENSIVE LOSS
(In thousands of
Canadian dollars)
Three-month period Nine-month period
ended September 30, ended September 30,
2010 2009 2010 2009
$ $ $ $
---------------------------------------------------
Net loss for the period (4,795) (5,420) (12,731) (18,448)
---------------------------------------------------
Other comprehensive
loss
Unrealized gains
(losses) on cash
equivalents and
marketable securities,
net of income tax
expense of nil for the
three-month period
ended September 30,
2010 (2009 - nil) and
$11 for the nine-month
period ended September
30, 2010 (2009 - $81) (1) (54) 24 127
Reclassification to net
loss of realized gains
on cash equivalents
and marketable
securities, net of
income tax recovery of
$14 for the three-
month period ended
September 30, 2010
(2009 - $55) and a tax
recovery of $15 for
the nine-month period
ended September 30,
2010 (2009 - $220) (33) (122) (35) (491)
---------------------------------------------------
(34) (176) (11) (364)
---------------------------------------------------
Comprehensive loss for
the period (4,829) (5,596) (12,742) (18,812)
---------------------------------------------------
---------------------------------------------------
MethylGene Inc.
UNAUDITED INTERIM
STATEMENTS OF CASH FLOWS
(In thousands of
Canadian dollars)
Three-month period Nine-month period
ended September 30, ended September 30,
2010 2009 2010 2009
$ $ $ $
--------------------------------------------------
OPERATING ACTIVITIES
Net loss for the period (4,795) (5,420) (12,731) (18,448)
Items not affecting cash
Amortization of
property, plant and
equipment 160 241 568 758
Write-off of property,
plant and equipment - - - 2
Gain on disposal of
property, plant and
equipment (2) - (7) (6)
Stock-based
compensation expense 9 21 56 131
Future income tax
expense 14 55 4 139
--------------------------------------------------
(4,614) (6,110) (12,110) (17,424!)
Net change in non-cash
working capital
balances related to
operations 525 (869) (1,148) (666)
Change in long-term
portion of unearned
revenue (145) (138) (438) (412)
--------------------------------------------------
Cash flows related to
operating activities (4,234) (6,110) (13,696) (18,502)
--------------------------------------------------
INVESTING ACTIVITIES
Acquisitions of
property, plant and
equipment (3) (7) (8) (16)
Purchases of marketable
securities - (1,500) (2,751) (25,578)
Restricted cash - - (1,000)
Proceeds from maturities
of marketable
securities 1,652 13,177 6,614 53,119
Proceeds from disposal
of property, plant and
equipment 3 - 9 11
--------------------------------------------------
Cash flows related to
investing activities 1,652 11,670 2,864 27,536
--------------------------------------------------
FINANCING ACTIVITIES
Proceeds from
reorganization 31 - 7,216 -
Costs of reorganization (50) - (950) -
--------------------------------------------------
Cash flows related to
financing activities (19) - 6,266 -
--------------------------------------------------
Foreign exchange gain
(loss) on cash
equivalents held in
foreign currency (48) (138) (15) 46
--------------------------------------------------
Increase (decrease) in
cash and cash
equivalents (2,649) 5,422 (4,581) 9,080
Cash and cash
equivalents, beginning
of period 12,278 9,605 14,210 5,947
--------------------------------------------------
Cash and cash
equivalents, end of
period 9,629 15,027 9,629 15,027
--------------------------------------------------
Cash and cash
equivalents consist of:
Cash 1,162 3,549 1,162 3,549
Cash equivalents 8,467 11,478 8,467 11,478
--------------------------------------------------
9,629 15,027 9,629 15,027
--------------------------------------------------
--------------------------------------------------
Contacts:
Rx Communications Group, LLC
Rhonda Chiger
917-322-2569
rchiger@rxir.com
MethylGene Inc.
Charles Grubsztajn
President & CEO
514-337-3333 ext. 373
mctavishk@methylgene.com
