MONTREAL, QUEBEC--(Marketwire - June 14, 2011) - MethylGene Inc. (TSX:MYG) today reported financial results for the first quarter ended March 31, 2011. In addition, the Company provided a corporate and clinical update for its product candidates MGCD265 and MGCD290.
Financial Results Reported in Canadian Dollars
The Company's financial statements for the period ended March 31, 2011 have been prepared for the first time in accordance with IAS 34, Interim Financial Reporting, for International Financial Reporting Standards (IFRS). The financial impact of adopting IFRS was minimal with no material impact in the restatement of the first quarter of 2010 and full year of 2010, and no material impact for the 2011 first quarter results.
As part of the private placement that was announced on March 24, 2011, the Company issued $765,000 of convertible debentures in the first quarter of 2011. The private placement subsequently closed on April 4, 2011 raising $34.5 million including the convertible debentures which converted at closing.
Total revenues for the first quarter ended March 31, 2011 were $1.3 million compared to $474,000 for the same period last year due to the accelerated amortization of deferred revenue in relation to the research and license agreement with Otsuka Pharmaceutical Co. Ltd ("Otsuka"), as the research component of the research and license agreement will conclude on June 30, 2011. The deferred revenue in relation to this agreement is being amortized over the first two quarters of 2011 as our substantive obligations to Otsuka will end on June 30, 2011.
Gross research and development expenditures in the first quarter of 2011 were $1.9 million, a decrease of 49 percent, compared to $3.8 million in the first quarter of 2010. This decrease is due to lower compensation costs, the termination of four of our leases and lower clinical development expenses for MGCD265 and MGCD290. General and administrative expenses in the first quarter of 2011 were $1.0 million, a decrease of $273,000 compared to the first quarter of 2010 reflecting lower compensation and lease costs and lower professional fees. MethylGene incurred a foreign exchange loss of $11,000 in the first quarter of 2011 versus a loss of $97,000 in the first quarter of 2010 due primarily to lower average U.S. denominated net assets in Q1, 2011. The net loss and comprehensive loss for the first quarter ended March 31, 2011 was $1.6 million or ($0.04) per share compared to a net loss of $4.5 million or ($0.11) per share for the corresponding period last year, reflecting the higher revenue and lower operating expenses.
As of March 31, 2011, the Company had $6.5 million of cash, cash equivalents and restricted cash and marketable securities. As previously noted, the Company completed a $34.5 million private placement after the close of the quarter. Including the amount raised in the private placement, the Company believes it has sufficient financial resources to extend its current clinical development and operations plans into 2014.
MGCD265 Clinical Development – Met / VEGF Inhibitor for Cancer
MethylGene today announced that it will pursue the clinical development of MGCD265 in three cancer indications: non-small cell lung (NSCLC), gastric and prostate. It is expected that patients with advanced forms of these malignancies will begin to be enrolled in the third quarter of 2011.
In order to pursue this next phase of the MGCD265 clinical development program, the protocols for ongoing Trials MGCD265-101 and MGCD265-103 have been amended to include expansion cohorts and an optimized formulation.
"We are pleased to advance MGCD265 into these indications in which the drug has exhibited signs of activity," commented Charles Grubsztajn, President and Chief Executive Officer. "Expanding the cohorts in our ongoing clinical trials will allow us to confirm early signals in order to prepare for future trials. We expect to begin reporting data in 2012."
The expanded cohorts of Trial 265-101 will be open-label and enroll approximately 20 gastric and prostate cancer patients who will be administered MGCD265 as a single-agent twice daily (BID).
For Trial MGCD265-103, both the docetaxel and erlotinib arms of the study have been expanded for additional cohorts. It is expected that approximately 60 NSCLC, prostate and gastric cancer patients will be enrolled.
In the docetaxel arm of Trial MGCD265-103, enrollment will focus on patients with NSCLC and prostate cancer. Data for 24 patients with advanced solid malignancies treated with MGCD265+docetaxel were reported at the American Society of Clinical Oncology (ASCO) in early June. As an update to this data, one prostate cancer patient treated with MGCD265+docetaxel has experienced a minor response with tumor shrinkage of 29 percent (30 percent tumor shrinkage is required per RECIST for labeling as a partial response). In addition, a patient with ovarian cancer has had stable disease for eight months and has not required therapeutic paracentesis for ascites (drainage of fluid) for the past five months. Both patients are ongoing.
In the erlotinib arm of the trial, enrollment will focus on patients with gastric cancer. At ASCO earlier this month, the Company reported on 34 patients who have been treated with the MGCD265+erlotinib combination, including gastric cancer patients. One gastric cancer patient achieved complete resolution of ascites and reduction in the thickness of the gastric wall and remains stable on study for more than one year. A second gastric patient has also demonstrated a reduction in ascites and has been stable on treatment for nine months.
MGCD290 – Hos2 Inhibitor for Fungal Infections
The Company has completed four Phase 1 clinical trials in healthy adult volunteers evaluating MGCD290 as a single-agent and in combination with fluconazole. MethylGene is planning to initiate Phase 2 clinical trials with MGCD290 in combination with fluconazole in acute vulvovaginal candidiasis (VVC) and recurrent VVC. Additional details for these Phase 2 trials will be disclosed later this year.
Appointments to the Board of Directors
At the Company's annual meeting of shareholders held on June 14, Mr. Charles Grubsztajn, MethylGene's President and Chief Executive Officer, and Dr. Peter Thompson, Founder and Managing Director of Strategicon Partners, were elected to the Company's Board of Directors. Mr. Jay Moorin, General Partner of ProQuest Investments and Mr. André Archimbaud, a biotech consultant, who have been board members since 2006 and 2009, respectively did not stand for re-election. The Company's Board of Directors is now comprised of six members.
"On behalf of the Board of Directors and the Company, I would like to thank Messrs. Jay Moorin and André Archimbaud for their many contributions to MethylGene," said Dr. Martin Godbout, Chair of the Board of Directors. "I would also like to welcome Dr. Peter Thompson, an executive with broad pharmaceutical experience, to our Board and, of course, also welcome MethylGene's President and Chief Executive Officer, Charles Grubsztajn."
Dr. Thompson is a seasoned entrepreneur and executive with over 20 years of industry experience. He co-founded Trubion Pharmaceuticals, and served as Chief Executive Officer and Chairman from its inception through its initial public offering on NASDAQ and then as a public company until his retirement in 2009. Dr. Thompson is the former Vice President & General Manager of Chiron Informatics at Chiron Corporation and held various executive positions at Becton Dickinson, including Vice President, Research and Technology Department of BD Bioscience. Dr. Thompson is a co-founder of iMetrikus, a clinical decision support company, where he served as Chief Executive Officer and Chairman. He is the founder and Managing Director of Strategicon Partners, an investment and management services company and is a Venture Partner with OrbiMed Advisors. Dr. Thompson is an Affiliate Professor of Neurosurgery at the University of Washington and serves as a Director of Anthera (NASDAQ:ANTH), CoDa Therapeutics, Principia Biosciences, and Response Biomedical (TSX:RBM). Dr. Thompson is an Ernst & Young Entrepreneur of the Year awardee, an inventor on numerous patents, and a board-certified internist and oncologist. He was on staff at the National Cancer Institute following his internal medicine training at Yale University. He received his medical and undergraduate degrees from Brown University.
First Quarter 2011 Conference Call
A conference call will be held on June 16 at 9:00 a.m. EDT to discuss the financial results and to provide a corporate and clinical update for the Company's programs.
MethylGene would like to invite all interested parties to participate by dialing 416-981-9000 or 1-888-383-1618.
Representing MethylGene on the call will be:
Charles Grubsztajn, President and Chief Executive Officer
Dr. Jeffrey M. Besterman, Executive Vice President and Chief Scientific Officer
Klaus Kepper, Vice President Finance and Chief Financial Officer
A question and answer session will follow, at which time the operator will direct participants as to the correct procedure for submitting questions. A live audio webcast of the conference call will be available at www.methylgene.com.
A telephone replay of the conference call will also be available from June 16 through June 23, 2011. To access the replay, dial 416-626-4100 or 1-800-558-5253 and enter the reservation number 21526561#.
MethylGene Inc. (TSX:MYG) is a clinical-stage biopharmaceutical company that develops novel therapeutics for cancer and infectious disease. The Company's lead product candidates include: MGCD265, an oral Met/VEGF receptor kinase inhibitor that is in Phase 1/2 clinical trials for solid tumor cancers and MGCD290, a fungal Hos2 inhibitor, for use in combination with fluconazole for fungal infections, which has completed Phase 1 clinical studies. The Company's partners include Otsuka Pharmaceutical Co. Ltd., Taiho Pharmaceutical Co. Ltd., and EnVivo Pharmaceuticals, Inc.
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, 2010, 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.
STATEMENTS OF FINANCIAL POSITION (Unaudited)
|[In thousands of Canadian dollars]|
|March 31, |
|December 31, |
|January 1, |
|Cash and cash equivalents||5,672||7,361||14,210|
|Restricted cash and marketable securities||200||597||—|
|Accounts and other receivables||568||726||794|
|Other current assets||1,293||1,027||1,576|
|Total current assets||7,733||9,711||19,829|
|Restricted cash and marketable securities||655||655||614|
|Property, plant and equipment, net||233||430||1,173|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Trade payables and accrued liabilities||4,233||4,161||5,811|
|Current portion of deferred revenues||1,082||527||584|
|Current portion of provision||17||392||196|
|Total current liabilities||6,097||5,080||6,591|
|Total shareholders' equity||2,494||4,060||12,501|
|Total liabilities and shareholders' equity||8,924||10,911||22,001|
STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited)
|[In thousands of Canadian dollars except for share and per share amounts]|
|Three months ended|
|Research collaborations and contract revenues||400||328|
|License and up-front fees||883||146|
|Research and development, net||1,825||3,618|
|General and administrative||1,025||1,298|
|Foreign exchange loss||11||97|
|Net loss and comprehensive loss for the period||(1,571||)||(4,539||)|
|Basic and diluted loss per share||(0.04||)||(0.11||)|
|Weighted average number of common shares||40,418,580||40,418,580|
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
|[In thousands of Canadian dollars]|
|Share capital||Contributed surplus||Deficit||Total shareholders' equity|
|Balance as at January 1, 2010||119,189||9,076||(115,764||)||12,501|
|Net loss for the period||—||—||(4,539||)||(4,539||)|
|Stock option compensation expense||—||22||—||22|
|Balance as at March 31, 2010||119,189||9,098||(120,303||)||7,984|
|Balance as at January 1, 2011||119,189||15,289||(130,418||)||4,060|
|Net loss for the period||—||—||(1,571||)||(1,571||)|
|Stock option compensation expense||—||5||—||5|
|Balance as at March 31, 2011||119,189||15,294||(131,989||)||2,494|
STATEMENTS OF CASH FLOWS (Unaudited)
|[In thousands of Canadian dollars]|
|Three months ended|
|Non-cash adjustments reconciling net loss to operating cash flows|
|Depreciation of property, plant and equipment||92||224|
|Write-off of property, plant and equipment||59||—|
|Gain on disposal of property, plant and equipment||(23||)||(4||)|
|Reversal of provision for lease resiliation||(51||)||—|
|Stock option compensation expense||5||22|
|Unrealized foreign exchange loss||—||29|
|Net changes in non-cash working capital balances relating to operations||(1,447||)||(2,024||)|
|Cash flows related to operating activities||(2,920||)||(6,285||)|
|Purchase of property, plant and equipment||—||(5||)|
|Purchases of marketable securities||—||(1,128||)|
|Disposal and maturities of marketable securities||—||3,863|
|Proceeds from disposal of property, plant and equipment||69||5|
|Cash flows related to investing activities||466||2,735|
|Issuance of convertible debentures||765||—|
|Cash flows related to financing activities||765||—|
|Increase (decrease) in cash and cash equivalents||(1,689||)||(3,550||)|
|Cash and cash equivalents, beginning of period||7,361||14,210|
|Cash and cash equivalents, end of period||5,672||10,660|