MethylGene to Resume Development of its HDAC Inhibitor, MGCD0103 (Mocetinostat)

MONTREAL, QUEBEC--(Marketwire - September 21, 2009) - MethylGene Inc. (TSX: MYG), today announced that the U.S. Food and Drug Administration (FDA) has lifted the partial clinical hold placed on MGCD0103, the Company’s proprietary selective histone deacetylase (HDAC) inhibitor for cancer. New patient enrollment in the refractory follicular lymphoma cohort of the Company’s ongoing Phase II clinical trial (Trial 008) is expected to resume as soon as possible.

“We are pleased with the FDA’s action,” said Donald F. Corcoran, President and Chief Executive Officer of MethylGene. “The lifting of the partial clinical hold opens the door to enrolling new patients as well as to further evaluate the development pathways, partnering opportunities and financing options for MGCD0103. The implementation of measures to monitor for pericarditis and pericardial effusion is expected to be relatively straightforward. As previously disclosed at various scientific meetings and in publications, HDAC inhibitors generally, and MGCD0103 in particular, have demonstrated efficacy in a number of tumor types as single agents and in combination therapies. We believe our compound remains a promising opportunity for the treatment of various cancers.”

“Our extensive analysis of the data from 437 patients who were treated with MGCD0103 did not identify a clear correlation between MGCD0103 exposure and pericarditis or pericardial effusion,” said Dr. Jeffrey M. Besterman, Chief Scientific Officer of MethylGene. “In patients treated with MGCD0103, we have seen an incidence of serious adverse events of pericarditis or pericardial effusion of approximately four percent. No pericardial events were fatal and the majority resolved without sequelae. Based on literature and other investigator-driven reviews, the rates of pericardial findings have been reported to vary up to approximately 40 percent for patients with various advanced cancers, who may have received multiple anticancer therapies. The procedures and testing we have in place are relatively simple and non-invasive. We plan to disclose additional data on our findings, which were included in our submission to the FDA, at appropriate scientific venues in the near future.”

The conditions agreed to between MethylGene and the FDA for new patient enrollment in MGCD0103 clinical trials include the exclusion of patients who are diagnosed with cardiac abnormalities prior to starting MGCD0103 therapy (i.e. myocardial infarction, congestive heart failure, and pericardial disease) and patient monitoring by electrocardiogram (EKG) and echocardiography (ECHO) at baseline and while on study. These diagnostic tests are non-invasive and relatively common and inexpensive procedures. The Company’s Complete Response accepted by the FDA included specific guidance for identifying patients at potential risk for, and guidance to manage patients who may develop pericarditis or pericardial effusions. In addition, an independent data safety monitoring board will be implemented with the responsibility of evaluating the safety of MGCD0103 clinical trials. The Company has committed to ongoing data analysis and reporting of any new pericardial events.

“As a lead clinical investigator for MGCD0103 clinical trials, I am pleased to learn that new patients will be able to be enrolled in the Phase II trial of patients with refractory follicular lymphoma,” said Dr. Anas Younes, Professor of Medicine and Director, Clinical Investigation and Translational Research in the Department of Lymphoma/Myeloma, M.D. Anderson Cancer Center. “Data previously reported at the American Society of Hematology and the American Society of Clinical Oncology annual meetings were promising for the compound. The continuation of this trial will help us to further understand the potential role of MGCD0103 in the treatment of lymphomas and other malignancies.”

Previously Disclosed MGCD0103 Clinical Results

MGCD0103 has been evaluated in multiple Phase I and Phase II clinical trials in both solid tumor and hematological cancers and has demonstrated both single-agent and combination activity. Previously reported activity data from several clinical trials are summarized below:

Trial 005: A Phase I/II Study of MGCD0103 and Azacitidine Combination Therapy in Patients with Myelodysplastic Syndrome or Acute Myelogenous Leukemia. Of 52 evaluable patients, 36 percent (19 patients) demonstrated objective responses to the combined treatment. There were eight complete responses (CR), ten complete responses with incomplete peripheral count recovery (CRi), and one partial response (PR). Among the 23 evaluable patients receiving MGCD0103 at a dose of 90 mg, 43 percent (10 patients) achieved an objective response.

Trial 008: A Phase II Study of MGCD0103 in Patients with Relapsed or Refractory Follicular Lymphoma (FL) or Diffuse Large B-cell Lymphoma (DLBCL). Enrollment in the DLBCL cohort has been completed with 41 patients, and 28 patients have been enrolled in the follicular lymphoma cohort as of November 2008, for a total of 69 patients; 59 patients were evaluable for efficacy. In the DLBCL cohort, the objective response rate was 15 percent (one CR and five PRs) for enrolled patients and of the evaluable patients in this cohort, 60 percent experienced tumor reduction as assessed by CT scan. The objective response rate for enrolled patients in the FL cohort was 11 percent (3 PRs) and 54 percent of the evaluable FL patients experienced tumor reduction as assessed by CT scan.

Trial 010: A Phase II Study of Single-Agent MGCD0103 in Patients with Relapsed or Refractory Hodgkin Lymphoma. The starting dose was initially 110 mg, and a second group with a starting dose of 85 mg was also evaluated. A total of 51 patients have been enrolled and enrollment is complete. Twenty-three (23) patients received the initial starting dose of 110 mg, and 28 patients were treated in the 85 mg dose group. As reported at ASH in December 2007, of 21 evaluable patients who received the 110 mg starting dose, 38 percent (8 patients) showed objective responses - two CRs and six PRs. The overall disease control rate (CR+PR+ stable disease greater than or equal to six cycles) was 43 percent. Tumor reductions were observed in 86 percent of patients who had CT scans and 57 percent of the patients experienced tumor shrinkages greater than 30 percent. The two CR patients had preliminary progression-free survival of 14 and 9 months, respectively, at the time of analysis. Data presented for 15 enrolled patients in the 85 mg cohort showed two patients with PRs and one patient with stable disease for more than six cycles resulting in an objective response rate of 13 percent and a disease control rate of 20 percent. Tumor shrinkage as measured by CT scan was observed in eight out of ten (80 percent) patients who had a CT scan.

MGCD0103 has received orphan drug designation from the FDA and has been designated an Orphan Medicinal Product by the EMEA for the treatment of refractory Hodgkin lymphoma and acute myelogenous leukemia. In addition, the generic name, mocetinostat, has been accorded to MGCD0103 by the United States Adopted Names (USAN) Council.

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 I and Phase II clinical trials for cancers; MGCD290, a fungal Hos2 inhibitor being developed for use in combination with fluconazole for serious fungal infections that is in Phase I clinical studies; and mocetinostat (MGCD0103), an oral, isoform-selective HDAC inhibitor for cancers 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 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.