Abstract #7116 – Poster – A Phase II Study of Mocetinostat, An Oral Isotope-Specific Histone Deacetylase (HDAC) Inhibitor, in Combination with 5-Azacitidine in Patients with Myelodysplastic Syndrome (MDS)

Data was presented from an open-label phase II combination trial in patients with MDS or acute myeloid leukemia (AML). The population included twenty-eight MDS patients who were categorized as relatively poor risk and thirty-eight AML patients. The Objective Response Rate (ORR) (defined as Complete Response (CR) + Complete Response with incomplete blood count recovery (CRi) + Hematological Improvement (HI)) was 61% in the MDS cohorts and 32% in the AML patients and the disease control rate (ORR + stable disease) was 93% in the MDS group and 84% in the AML patients. Two thirds of both MDS and AML patients remained progression free while on study. Among the confirmed highest-risk category of MDS patients, 64% achieved a best response of CR or CRi. Reductions in bone marrow blasts that continued to improve in successive treatment cycles were achieved in MDS and AML patients treated with the combination of mocetinostat and 5-azacitidine. The most common drug-related toxicities of grade 3 or higher were fatigue, thrombocytopenia, anemia and gastrointestinal events.  

Abstract #8535 – Poster – A Phase II Study of Single Agent Mocetinostat, An Oral Isotype-Selective Histone Deacetylase (HDAC) Inhibitor, In Patients With Diffuse Large B-Cell (DLBCL) And Follicular (FL) Lymphomas:

In a poster discussion session, data was presented from an open label multicenter mocetinostat monotherapy trial in a population of seventy-two patients treated with 70 mg – 110 mg mocetinostat monotherapy on a 3x/week schedule. The ORR was 17% in the DLBCL cohort and 10% in the FL group. The disease control rate (defined as ORR plus patients with stable disease at first scan) was 49% in the DLBCL patients and 61% in the FL cohort. The most common drug-related toxicities of grade 3 or higher were fatigue, neutropenia, thrombocytopenia, anemia and hypophosphatemia. “The data generated from 13 clinical trials with 440 patients treated, support the view that mocetinostat has clinical activity as monotherapy and in combination and that further evaluation is warranted” said Dr. Charles Baum, President and Chief Executive Officer. “I believe there is untapped value in the program and we are working with our investigators and the FDA to establish the optimal path forward for mocetinostat.”

The ASCO posters are available on our website at http://methylgene.com/pipeline-myg/mocetinostat/mocetinostat-posters-publications.

About Mocetinostat

Mocetinostat is an orally available, isoform selective histone deacetylase, or HDAC, inhibitor that has been evaluated over 400 patients in multiple Phase I and Phase II clinical trials for the treatment of hematological malignancies and solid tumors. Based on the promising early phase single agent responses in patients with Hodgkin’s disease we are evaluating Phase II study designs in these patients. In addition, we are evaluating plans for development of this agent in combination with azacitidine for the treatment of patients with intermediate and high risk myelodysplastic syndromes, or MDS. Prognosis for the intermediate and high-risk category of MDS patients is poor and there is a need for treatments that will improve clinical outcomes. Mocetinostat is partnered with Taiho Pharmaceutical for selected Asian Territories.

About MethylGene

MethylGene is a publicly-traded biopharmaceutical company engaged in the development and commercialization of novel therapeutics for the treatment of cancer. Our compounds result from internal chemistry efforts targeting the active sites of enzymes that are key drivers of tumor growth. Our clinical development programs are focussed on treating selected tumor types that express high levels of these targets in order to most effectively address unmet patient needs. Our lead program in clinical development is MGCD265, a multi-targeted small molecule kinase inhibitor for treatment of oncology patients with solid tumors. We are also evaluating development opportunities in oncology for mocetinostat, a spectrum-selective HDAC inhibitor and MGCD516, a kinase inhibitor with a distinct target profile.

Notice to Investors

This news release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities.

Dr. Baum will present at 3:00 p.m. EDT on Wednesday June 5, 2013. The presentation will be webcast live and available after the event on the Company’s website at www.methylgene.com.

About MethylGene

MethylGene is a publicly-traded biopharmaceutical company engaged in the development and commercialization of novel therapeutics for the treatment of cancer. Our compounds result from internal chemistry efforts targeting the active sites of enzymes that are key drivers of tumor growth. Our clinical development programs are focussed on treating selected tumor types that express high levels of these targets in order to most effectively address unmet patient needs. Our lead program in clinical development is MGCD265, a multi-targeted small molecule kinase inhibitor for treatment of oncology patients with solid tumors. We are also evaluating development opportunities in oncology for mocetinostat, a spectrum-selective HDAC inhibitor and MGCD516, a kinase inhibitor with a distinct target profile.

Notice to Investors

This news release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities.

Data will be presented from two phase II clinical programs describing the safety and efficacy of mocetinostat as monotherapy in diffuse large cell B-cell and follicular lymphomas and in combination with 5-azacitidine in myelodysplastic syndrome.

Poster Presentation:   A phase II study of mocetinostat, an oral isotype-specific histone deacetylase (HDAC) inhibitor, in combination with 5-azacitidine in patients with myelodysplastic syndrome (MDS).

Date and Time: Sunday June 2, 8:00 AM to 11:45 AM (CT)
Session: Leukemia, Myelodysplasia and Transplantation
Abstract No.: 7116
Location: S Hall A2

Poster Discussion Session: A phase II study of single agent mocetinostat, an oral isotype-selective histone deacetylase (HDAC) inhibitor, in patients with diffuse large B-cell (DLBCL) and follicular (FL) lymphomas.
Date and Time: Monday June 3, 1:15 PM to 5:15 PM (CT)
Session: Lymphoma and Plasma Cell Disorders
Abstract No.: 8535
Location (display): E450b
Poster discussion: 4:45 PM to 5:45 PM (CT), room E354b

About Mocetinostat

Mocetinostat is an orally available, isoform selective histone deacetylase, or HDAC, inhibitor that has been evaluated over 400 patients in multiple Phase I and Phase II clinical trials for the treatment of hematological malignancies and solid tumors. Based on the promising early phase single agent responses in patients with Hodgkin’s disease we are evaluating Phase II study designs in these patients. In addition, we are evaluating plans for development of this agent in combination with azacitidine for the treatment of patients with intermediate and high risk myelodysplastic syndromes, or MDS. Prognosis for the intermediate and high-risk category of MDS patients is poor and there is a need for treatments that will improve clinical outcomes. Mocetinostat is partnered with Taiho Pharmaceutical for selected Asian Territories.

About MethylGene

MethylGene is a publicly-traded biopharmaceutical company engaged in the development and commercialization of novel therapeutics for the treatment of cancer. Our compounds result from internal chemistry efforts targeting the active sites of enzymes that are key drivers of tumor growth. Our clinical development programs are focussed on treating selected tumor types that express high levels of these targets in order to most effectively address unmet patient needs. Our lead program in clinical development is MGCD265, a multi-targeted small molecule kinase inhibitor for treatment of oncology patients with solid tumors. We are also evaluating development opportunities in oncology for mocetinostat, a spectrum-selective HDAC inhibitor and MGCD516, a kinase inhibitor with a distinct target profile.

Notice to Investors

This news release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities

 Corporate Highlights

• On May 9, 2013 we announced that subject to court approval and approval by our shareholders at our Annual and Special General Meeting, we have proposed to change the company’s jurisdiction of incorporation of Canada to the State of Delaware in the United States under the name Mirati Therapeutics, Inc. through a court-approved Plan of Arrangement (the “Arrangement”), and to list on the NASDAQ stock exchange.
• In the first quarter, we made several management changes including the appointment of Mark J. Gergen as Executive Vice President and Chief Operations Officer; the appointment of Jamie A. Donadio as Vice President Finance in our San Diego office; as well as the departures of several executives in our Montreal offices.
• As a company we are now primarily focused on targeted oncology drug development. Our lead oncology program, the multi-targeted kinase inhibitor MGCD265 continues to enroll in both monotherapy and combination therapy trials. We are also actively exploring development plans for our selective HDAC inhibitor, mocetinostat and our differentiated kinase inhibitor, MGCD516.
•  The Phase 2 study of MGCD290 in vulvovaginal candidiasis did not demonstrate a benefit of the combination with fluconazole compared to fluconazole alone. However, we continue to believe that MGCD290 may be useful for the treatment of certain fungal indications and we will explore partnering opportunities for the program.

Management has determined that based on an analysis of revenue and expenses that the functional currency for the company will be the U.S. dollar effective January 1, 2013. Furthermore the Company has used the U.S. dollar as its presentation currency.

First Quarter 2013 Financial Results Reported in United States Dollars

To view the complete first quarter financial statements click here.

The Company’s financial statements for the period ended March 31, 2013 have been prepared in accordance with IAS 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB).

Net research and development expenditures for the first quarter of 2013 were $5.5 million, $3.3 million higher than the first quarter of 2012. This increase was primarily due to costs relating to the departure of the company’s Chief Scientific Officer, costs relating to the manufacture of and formulation work relating to MGCD265 and costs associated with the recently completed Phase 2 clinical trial for MGCD290.

General and administrative expenses in the first quarter of 2013 were $2.5 million, $1.3 million higher than in the first quarter of 2012 due primarily to costs related to the management changes discussed above as well as the costs incurred in connection with the Arrangement and NASDAQ listing.

Financial income of $74,000, relating primarily to interest income, in the first quarter of 2013 was $6,000 higher compared to the first quarter of 2012 due to higher average cash balances. We recorded a foreign exchange loss of $644,000 in the first quarter of 2013 versus no exchange difference in the first quarter of 2012. The loss in 2013 relates primarily to the transition to the U.S. dollar as our functional currency effective January 1, 2013.

The net loss and comprehensive loss for the first quarter ended March 31, 2013 was $8.6 million, or ($0.02) per share, compared to a net loss and comprehensive loss of $3.4 million, or ($0.01) per share, for the same period last year. The increased loss per share relates to the higher net loss and comprehensive loss for the quarter relating to the higher operating costs and was partially offset by the higher number of outstanding shares at the end of the first quarter 2013 versus the same period last year.

Cash, cash equivalents, marketable securities and restricted cash totaled $29.9 million as at March 31, 2013 compared to $37.4 million on December 31, 2012. The Company believes it has sufficient financial resources to carry forward its current clinical development and operating plans into the second quarter of 2014.

About MethylGene

MethylGene is a publicly-traded biopharmaceutical company engaged in the development and commercialization of novel therapeutics for the treatment of cancer. Our compounds result from internal chemistry efforts targeting the active sites of enzymes that are key drivers of tumor growth. Our clinical development programs are focussed on treating selected tumor types that express high levels of these targets in order to most effectively address unmet patient needs. Our lead program in clinical development is MGCD265, a multi-targeted small molecule kinase inhibitor for treatment of oncology patients with solid tumors. We are also evaluating development opportunities in oncology for pipeline programs mocetinostat, a spectrum-selective HDAC inhibitor and MGCD516, a kinase inhibitor with a distinct target profile.

Under the Arrangement, MethylGene will create a holding corporation, Mirati Therapeutics, Inc. (“Mirati”), incorporated in the State of Delaware, and Mirati will become the ultimate parent corporation of MethylGene and its subsidiaries.  Concurrently with the Arrangement, Mirati is making an application to list its shares of common stock (“Mirati Shares”) on the NASDAQ Capital Market (“NASDAQ”), which we anticipate will result in the Mirati Shares being listed on both NASDAQ and the Toronto Stock Exchange (“TSX”) for a period of time.  In connection with the NASDAQ listing, we will file with the Securities and Exchange Commission in the United States a registration statement on Form 10 for the purpose of registering the Mirati Shares under Section 12(g) of the Securities Exchange Act of 1934, as amended.

The Arrangement is subject to the approval of the Ontario Superior Court of Justice (the “Court”) and satisfaction or waiver of the conditions to closing set out in the arrangement agreement between the Corporation and Mirati dated May 8, 2013 (the “Arrangement Agreement”).  In order to proceed and in addition to approval by the Court, a special resolution approving the Arrangement (the “Arrangement Resolution”) must be approved at the Meeting (as defined herein) by two-thirds of the votes cast by the shareholders of MethylGene (“Shareholders”), present in person or represented by proxy.

The annual and special meeting of Shareholders (the “Meeting”) to approve, among other things, the Arrangement Resolution, will be held on June 25, 2013 at 10:00 a.m. Toronto time (EDT), in the Grand Boardroom of the offices of Stikeman Elliott LLP at 1155 René-Lévesque Blvd. West, 40^th Floor, Montréal, Québec. Shareholders of record as of the close of business May 16, 2013, will be entitled to receive notice of and vote at the Meeting.

The Board and management of MethylGene believe that the proposed Arrangement is in the best interests of MethylGene and, accordingly, recommend that Shareholders vote FOR the Arrangement Resolution.  The Board determined that the Arrangement is in the best interests of MethylGene primarily due to the belief and rationale that the Arrangement should:

• improve Mirati’s ability to attract financing in the larger U.S. capital markets from a greater number of U.S. investors with investment interest in the biopharmaceutical industry, which has been where the majority of our investors in recent financings have come from;
• enhance the marketability of our capital stock by raising our profile in the United States, which is where over 90% of our Shareholders reside;
• ultimately improve the trading liquidity of the Mirati Shares compared to the current trading of the common shares of MethylGene (the “Common Shares”) on the TSX, through the combination of the additional listing on the NASDAQ, potentially lower Shareholder transaction costs and increased interest from institutional investors;
• eliminate potentially adverse “passive foreign investment company” tax issues for certain Shareholders who are U.S. citizens or resident in the United States; and
• provide greater opportunity to attract and retain key personnel.

The Board chose the State of Delaware because Delaware has a modern and flexible corporate code, well-developed corporate law and a court system with considerable expertise in dealing with corporate issues. In connection with the Arrangement, we intend to locate our corporate headquarters in the San Diego, California area, a major biotechnology center.

Upon completion of the Arrangement, it is anticipated that each Shareholder will receive one Mirati Share for every 50 Common Shares held, which will have the effect of a 1 for 50 reverse split of our Common Shares. Subject to adjustment for fractional shares and dissent rights, the Arrangement should have no material effect on the relative ownership and voting interests of Shareholders.  In addition, all outstanding options and common share purchase warrants of MethylGene will become exercisable for Mirati Shares and their terms will be proportionately adjusted to reflect the 1 for 50 effective reverse split.

A management proxy circular (the “Circular”) in connection with the solicitation of proxies for the Meeting is expected to be mailed to Shareholders on approximately May 24, 2013, and will contain further details with respect to the Arrangement and proposed NASDAQ listing.  The foregoing description of the Arrangement does not purport to be complete and is qualified in its entirety by reference to the Circular and the copy of the Arrangement Agreement, which will be available at www.sedar.com.  MethylGene cautions Shareholders and others considering trading in securities of MethylGene that the Arrangement is subject to certain material conditions, some of which are beyond MethylGene’s control, including TSX, Shareholder and Court approval, and there can be no assurance that the Arrangement and the transactions contemplated therein, or any other transaction, will be completed.  The transaction is expected to be completed in early July 2013.

About MethylGene

MethylGene is a publicly-traded biopharmaceutical company engaged in the development and commercialization of novel therapeutics for the treatment of cancer. Our compounds result from internal chemistry efforts targeting the active sites of enzymes that are key drivers of tumor growth. Our clinical development programs are focussed on treating patients with tumor types that are selected for high levels of expression of these targets in order to most effectively address unmet needs in oncology.  Our lead program in clinical development is MGCD265, a multi-targeted small molecule kinase inhibitor for treatment of oncology patients with solid tumors. We are also evaluating development opportunities for pipeline programs mocetinostat, a selective HDAC inhibitor and MGCD516, a kinase inhibitor with a distinct target profile.

Notice to Investors

This news release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities.

Montreal, Canada, April, 8, 2013 – MethylGene Inc. (TSX:MYG) today announced that preclinical data for the kinase inhibitor MG516 was presented at the American Association for Cancer Research (AACR) Annual Meeting held in Washington DC. In a poster entitled “Preclinical characterization of MG516, a novel inhibitor of receptor tyrosine kinases involved in resistance to targeted therapies” data was presented showing that MG516 possesses potent inhibitory activity against a spectrum of tyrosine kinase receptor targets including Eph receptors and Ret as well as Met, Axl and VEGF-R family members. The study incorporated data from in vitro kinase and cell-based analyses. In a broad variety of animal models of human cancer, MG516 demonstrated significant inhibition of tumor growth accompanied by suppression of the target kinases. MG516 also reversed resistance to the VEGFR inhibitor sunitinib in an in vivo preclinical tumor model.  

“MG516 inhibits a novel spectrum of targets that have been shown to be drivers of tumor growth” said Dr. Charles Baum, President and Chief Executive Officer of MethylGene Inc. “This molecule is a valuable addition to MethylGene’s oncology portfolio that is complementary to our MGCD265 program and has the potential to address unmet needs in patients with cancer”.

About MG516

MG516 is a multi-targeted kinase inhibitor that covers a novel spectrum of targets including members of the Eph receptor family, the Met receptor, the Ret receptor tyrosine kinase, and all three vascular endothelial growth factor receptors (VEGFR 1, 2, 3). Eph is over-expressed in several cancers including gastric, breast, prostate and esophageal and is associated with resistance to HER2 inhibitors. Ret is expressed and has a role in medullary thyroid carcinoma, and recent data suggest a possible role as a driver of growth in lung cancer.  MG516 has demonstrated potent inhibition of kinases in vitro, in multiple cell-based assays and has shown up to 100% of tumor growth inhibition in vivo against a number of tumor types in xenograft studies. In preclinical models anti-tumor activity is achieved at low doses and MG516 is well tolerated without significant weight loss or myelosuppression. MG516 is in advanced preclinical development and ready to commence IND-enabling studies.

About MethylGene

MethylGene Inc. (TSX:MYG) is a drug development company that is advancing novel therapeutics for the treatment of patients with cancer and infectious disease in human clinical trials. The Company’s lead clinical stage product candidates are: MGCD265, a multi-targeted receptor tyrosine kinase inhibitor that is in Phase I/II clinical trials for patients with solid tumors and MGCD290, an oral antifungal agent targeting the fungal Hos2 enzyme that was in Phase II trials for vulvovaginal candidiasis. MethylGene owns all rights to its lead product candidates, and has partnerships with Otsuka Pharmaceutical Co. Ltd., Taiho Pharmaceutical Co. Ltd., and EnVivo Pharmaceuticals, Inc. for its other pipeline programs.

Montreal, Canada, March, 18, 2013 – MethylGene Inc. (TSX:MYG) today reported topline results from its human efficacy trial (Trial 290-005) with MGCD290, a novel antifungal agent targeting the fungal enzyme, Hos2.  Trial 290-005 was a randomized, multicenter, double-blind, placebo-controlled trial designed to test whether MGCD290, in combination with fluconazole, was superior to fluconazole alone in patients with moderate-to-severe vulvovaginal candidiasis (“VVC”).

The study showed no statistically significant benefit of MGCD290 plus fluconazole compared to fluconazole alone.  There were no serious treatment-related adverse events and non-serious adverse events were evenly distributed between treatment groups. This clinical trial was conducted across nineteen sites in the USA and enrolled 171 patients with positive fungal cultures in their vaginal fluid at baseline. Detailed data will be presented  at a future meeting. 

“We are disappointed that the study did not demonstrate efficacy of MGCD290 in patients with VVC.  We will review the data internally and with key opinion leaders to determine the next steps for the MGCD290 program.” said Dr. Charles Baum, President and Chief Executive Officer of MethylGene. “The company’s primary focus will continue to be the advancement of our novel oncology compounds. We expect to provide further updates on the oncology programs in the second half of 2013.”

About MGCD290

MGCD290 is a first-in-class, orally available, small molecule inhibitor of the fungal enzyme Hos2. In preclinical models the combination with azole antifungal agents results in broader coverage of fungal pathogens and decreases resistance to the most widely used antifungal agents. MGCD290 was being developed as a combination product with fluconazole, the most widely used triazole antifungal.  In vitro, MGCD290 in combination with fluconazole reverses fluconazole resistance (primary and acquired) in a wide range of fungal species, including Candida glabrata. MGCD290 has completed multiple Phase I studies in healthy adult volunteers and has shown an excellent safety profile without drug-drug interactions in combination with fluconazole.

About MethylGene

MethylGene Inc. (TSX:MYG) is a drug development company that is advancing novel therapeutics for the treatment of patients with cancer and infectious disease in human clinical trials. The Company’s lead product candidates are: MGCD290, an oral antifungal agent targeting the fungal Hos2 enzyme that was in Phase II trials for vulvovaginal candidiasis, and MGCD265, a multi-targeted receptor tyrosine kinase inhibitor that is in Phase I/II clinical trials for patients with solid tumors. MethylGene owns all rights to its lead product candidates, and has partnerships with Otsuka Pharmaceutical Co. Ltd., Taiho Pharmaceutical Co. Ltd., and EnVivo Pharmaceuticals, Inc. for its other pipeline programs.

Effective immediately, the responsibilities of Dr. Besterman have been assumed by Charles Baum, MD PhD, CEO, and the responsibilities of Mr. Kepper and Mr. Walewicz have been assumed by Mark Gergen, COO.  Each of the executives will depart following a brief transition period.

“I want to personally thank Klaus, Jeff and Joe for their contributions to MethylGene” said Dr. Charles Baum, President and CEO, “we wish them the best in their future pursuits”.

About MethylGene

MethylGene Inc. (TSX:MYG) is a drug development company that is advancing novel therapeutics for cancer and infectious disease in human clinical trials. The Company’s lead product candidates are: MGCD290, an oral antifungal agent targeting the fungal Hos2 enzyme that is in a Phase II trial for vulvovaginal candidiasis, and MGCD265, a multi-targeted receptor tyrosine kinase inhibitor that is in Phase I/II clinical trials for patients with solid tumors. MethylGene owns all rights to its lead product candidates, and has partnerships with Otsuka Pharmaceutical Co. Ltd., Taiho Pharmaceutical Co. Ltd., and EnVivo Pharmaceuticals, Inc. for its other pipeline programs.

Highlights

• On November 12, 2012, we announced the appointment of Charles M. Baum, M.D., Ph.D., as President and Chief Executive Officer.
• On November 21, 2012, we completed a private placement of $26.1 million, extending our financial resources into the second half of 2014.
• We completed enrollment in the randomized controlled Phase II study evaluating MGCD290 plus fluconazole in patients with moderate to severe vulvovaginal candidiasis. We expect to report topline data from this study in March 2013.
• We announced the appointment of Mark J. Gergen to the position of Executive Vice President and Chief Operating Officer on February 19, 2013.

 “2012 was a year of progress and renewal for MethylGene,” said Charles Baum, M.D., Ph.D., President and CEO of MethylGene. “We are continuing to build momentum in our clinical programs, and we are moving forward in 2013 with a strengthened leadership team.”   

International Financial Reporting Standards

The financial statements of the Company for the year ended December 31, 2012, have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Click here to view the 2012 MD&A and Financial Statements.

Fourth Quarter 2012 Financial Results Reported in Canadian Dollars

There were no revenues in the fourth quarter of 2012, a reduction of $468,000 versus the fourth quarter of 2011. License and up-front fees decreased by $468,000 as we amortized the remaining deferred revenue in relation to the Taiho agreement in the fourth quarter of 2011.

Research and development expenditures for the fourth quarter of 2012, net of investment tax credits, were $4.9 million, which was $1.8 million higher versus the fourth quarter of 2011. This increase was mainly due to increased clinical development activities for both of our lead programs, MGCD290 and MGCD265, resulting in higher internal and third-party clinical costs.

General and administrative expenses in the fourth quarter of 2012 were $1.4 million, up $0.3 million versus the fourth quarter of 2011, primarily due to increased non-cash stock option costs and increased professional expenses relating to the appointment of our new CEO.

Financial income, relating primarily to interest income, was $64,000 in the fourth quarter of 2012, $18,000 lower than the fourth quarter of 2011 due to lower average cash balances for the quarter versus the prior year. The Company recorded a foreign exchange loss of $9,000 in the fourth quarter of 2012, similar to that realized in the fourth quarter of 2011.

The net loss and comprehensive loss for the fourth quarter of 2012 was $6.3 million, or ($0.016) per share, versus a net loss and comprehensive loss of $3.6 million, or ($0.01) per share, for the same period last year. The increased loss per share is primarily due to the increase in the net loss and comprehensive loss in the fourth quarter of 2012 versus the fourth quarter of 2011 due to higher operating costs, partially offset by the higher average number of shares outstanding in the fourth quarter of 2012 compared to the fourth quarter of 2011.

Full Year 2012 Financial Results in Canadian Dollars

Revenues for 2012 were $2,000, a reduction of $3.1 million versus 2011. Research collaboration and contract revenues decreased by $0.8 million as the research component of the Otsuka agreement ended on June 30, 2011 and the license and up-front fees decreased by $2.3 million as we amortized the remaining deferred revenues under the Otsuka and Taiho agreements in 2011.

Research and development expenditures, net of investment tax credits, for 2012 were $15.1 million, or $6.2 million higher than in 2011. This increase was driven by higher compensation costs relating to strengthening the clinical development department with the addition of key senior management, and higher third-party clinical development costs relating to our lead programs MGCD290 and MGCD265 in 2012 as compared to 2011. The increased expenses were partially offset by a $0.8 million increase in investment tax credits relating to the reversal of an accrual in 2012.

General and administrative expenses in 2012 were $5.4 million, a $1.1 million increase over 2011, primarily as a result of the departure of the previous CEO and higher non-cash stock option expenses, partially offset by lower lease related costs.

Financial income, relating primarily to interest income, was $241,000 for 2012, a decrease of $21,000 versus 2011 due to lower average cash assets versus the prior year. The Company recorded a foreign exchange loss of $13,000 in 2012 compared to a gain of $42,000 in 2011.

The net loss and comprehensive loss for 2012 was $20.3 million, or ($0.06) per share, versus a net loss and comprehensive loss of $9.7 million, or ($0.04) per share, for 2011. The increased loss per share relates to the increased net loss and comprehensive loss in 2012 due to the reduced revenues and higher operating costs partially offset by the higher average number of shares outstanding in 2012.

Cash, cash equivalents, marketable securities and restricted cash totalled $37.2 million as at December 31, 2012 compared to $29.6 million as at December 31, 2011. The Company believes that based on its current clinical plan that it has sufficient financial resources to carry forward is current clinical development and operating plans into the second half of 2014.

About MethylGene

MethylGene Inc. (TSX:MYG) is a drug development company that is advancing novel therapeutics for cancer and infectious disease in human clinical trials. The Company’s lead product candidates are: MGCD290, an oral antifungal agent targeting the fungal Hos2 enzyme that is in a Phase II trial for vulvovaginal candidiasis, and MGCD265, a multi-targeted receptor tyrosine kinase inhibitor that is in Phase I/II clinical trials for patients with solid tumors. MethylGene owns all rights to its lead product candidates, and has partnerships with Otsuka Pharmaceutical Co. Ltd., Taiho Pharmaceutical Co. Ltd., and EnVivo Pharmaceuticals, Inc. for its other pipeline programs.

Mr. Gergen is a healthcare industry veteran and most recently was Senior Vice President, Corporate Development for Amylin Pharmaceuticals, Inc. At Amylin, Mr. Gergen was a member of the Executive Committee with broad responsibilities including corporate development, strategic planning, and alliance management. While at Amylin, Mr. Gergen was responsible for the establishment of a number of key partnerships, he also led the dissolution of Amylin’s long term diabetes partnership with Eli Lilly and Company and the subsequent sale of Amylin to Bristol-Myers Squibb in 2012 in a transaction valued at $7 billion.

Prior to Amylin, Mr. Gergen held leadership roles of increasing responsibility in healthcare and life science companies. He was Executive Vice President of CardioNet, Inc. with broad responsibilities including those of CFO and COO. He served as Chief Financial and Development Officer and later CEO and Chief Restructuring Officer of Advanced Tissue Sciences, Inc. and held key leadership roles for Medtronic. Inc. Mr. Gergen began his career as an attorney and received his Juris Doctor degree from the University of Minnesota Law School and his undergraduate degree in business administration from Minot State University.  Mr. Gergen has served on a number of private company and organization boards of directors.

“I am pleased to welcome Mark to the MethylGene team at an important juncture in our company’s development” said Dr. Charles Baum, President and CEO. “His experience will be instrumental in accelerating our business plan.”

“I am excited to join Charles and the team at MethylGene,” said Mr. Gergen “The Company has a unique opportunity to help patients by developing novel therapies for unmet medical needs with promising anti-fungal and oncology assets that have the potential to create value for shareholders.”

About MethylGene

MethylGene Inc. (TSX:MYG) is a drug development company that is advancing novel therapeutics for cancer and infectious disease in human clinical trials. The Company’s lead product candidates are: MGCD290, an oral antifungal agent targeting the fungal Hos2 enzyme that is in a Phase II trial for vulvovaginal candidiasis, and MGCD265, a multi-targeted receptor tyrosine kinase inhibitor that is in Phase I/II clinical trials for patients with solid tumors. MethylGene owns all rights to its lead product candidates, and has partnerships with Otsuka Pharmaceutical Co. Ltd., Taiho Pharmaceutical Co. Ltd., and EnVivo Pharmaceuticals, Inc. for its other pipeline programs.