2008-07-30 06:30:00
MethylGene Reports Second Quarter 2008 Financial Results
MONTREAL, QUEBEC–(EMWNews – July 30, 2008) – MethylGene Inc. (TSX:MYG), today announced operational and financial results for the second quarter ended June 30, 2008.
Financial Results Reported in Canadian Dollars
Revenue for the three-month period ended June 30, 2008 was $4.3 million compared to revenue of $3.7 million for the second quarter of 2007. This $627,000 increase was primarily due to higher revenue from partners Celgene and Otsuka related to clinical development and research activities. Total expenses for the quarter ended June 30, 2008 were $11.7 million compared to expenses of $9.9 million for the second quarter of 2007. The increase in expenses was primarily due to increased expenditures for the MGCD0103 and MGCD265 clinical programs, Investigational New Drug (IND) enabling studies for MGCD290, higher professional and consulting fees, legal fees and the inclusion of corporate/transaction costs which had previously been capitalized. The Company reported a net loss for the quarter ended June 30, 2008 of $7.4 million or $0.20 per share compared to a net loss of $6.2 million or $0.17 per share for the same period last year.
Revenue for the six-month period ended June 30, 2008 was $8.5 million compared to revenue of $7.2 million for the same period in 2007. Total expenses for the six-month period were $21.1 million compared to $16.7 million for the same six-month period last year. The Company reported a net loss for the six months ended June 30, 2008 of $12.6 million or $0.34 compared to a net loss of $9.5 million or $0.27 for the same period last year.
At June 30, 2008 MethylGene had $48.3 million in cash, cash equivalents and marketable securities. The Company believes that its current financial resources will be sufficient to carry out its current research and development plans into the third quarter of 2009.
About MethylGene
MethylGene Inc. (TSX:MYG) is a publicly-traded, clinical stage, biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics for cancer. The Company’s clinical-stage oncology products include lead compound, MGCD0103, an oral, isoform-selective HDAC inhibitor and MGCD265, an oral, multi-targeted kinase inhibitor targeting the c-Met, Tie-2, Ron and VEGF receptor tyrosine kinases. In addition, MethylGene’s preclinical programs include: MGCD290, an HDAC inhibitor used in combination with azoles for fungal infections, a kinase inhibitor program for ocular diseases, and a sirtuin inhibitor program for cancer. MethylGene’s development and commercialization partners include Celgene Corporation, Taiho Pharmaceutical Co. Ltd., Otsuka Pharmaceutical Co. Ltd. and EnVivo Pharmaceuticals. 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, 2007, 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.
MethylGene Inc.
Incorporated under the Quebec Companies Act
UNAUDITED INTERIM BALANCE SHEETS
(In thousands of Canadian dollars) June 30, December 31,
2008 2007
$ $
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ASSETS
Current
Cash and cash equivalents 26,597 3,208
Available-for-sale marketable securities 21,728 57,525
Research and development tax credits
receivable 1,232 465
Unbilled revenue 4,381 4,196
Interest receivable 257 612
Other current assets 1,326 886
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Total current assets 55,521 66,892
Security deposits 325 325
Property, plant and equipment 2,630 3,089
Intangible assets 1,955 2,007
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60,431 72,313
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 8,134 7,680
Current portion of unearned revenue 4,344 4,117
Current portion of lease abandonment cost 177 186
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Total current liabilities 12,655 11,983
Unearned revenue 14,252 14,558
Lease abandonment cost 439 524
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Total liabilities 27,346 27,065
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Shareholders' equity
Capital stock 118,095 118,095
Contributed surplus 8,699 8,445
Deficit (93,798) (81,196)
Accumulated other comprehensive income
(loss) 89 (96)
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Total shareholders' equity 33,085 45,248
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60,431 72,313
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UNAUDITED INTERIM STATEMENTS OF OPERATIONS AND DEFICIT
(In thousands of Canadian dollars,
except for share and per share amounts)
Three-month periods Six-month periods
ended June 30, ended June 30,
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2008 2007 2008 2007
$ $ $ $
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REVENUES
Research collaborations and
contract revenues 3,192 2,635 6,391 5,160
License and up-front fees 1,088 1,018 2,117 2,036
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4,280 3,653 8,508 7,196
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EXPENSES
Research and development 10,469 8,803 19,360 15,538
Government assistance (419) (313) (783) (678)
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Net research and development 10,050 8,490 18,577 14,860
General and administrative 1,378 1,244 3,059 2,428
Interest income (419) (833) (1,012) (1,589)
Amortization of property,
plant and equipment 4 5 8 9
Write-off of property, plant
& equipment - 33 - 33
Corporate and other transaction
costs 503 - 503 -
Bank charges and interest 9 2 19 16
Foreign exchange loss (gain) 126 918 (44) 899
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11,651 9,859 21,110 16,656
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Net loss for the period (7,371) (6,206) (12,602) (9,460)
Deficit, beginning of period (86,427) (62,428) (81,196) (59,174)
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Deficit, end of period (93,798) (68,634) (93,798) (68,634)
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Basic and diluted loss per
share (0.20) (0.17) (0.34) (0.27)
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Weighted average number of
common shares outstanding 36,682,398 36,673,509 36,682,398 34,783,859
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UNAUDITED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(In thousands of Canadian dollars)
Three-month periods Six-month periods
ended June 30, ended June 30,
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2008 2007 2008 2007
$ $ $ $
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Net loss for the period (7,371) (6,206) (12,602) (9,460)
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Other comprehensive income
(loss)
Change in unrealized gains
(losses) on available-for-
sale cash equivalents and
marketable securities 161 (202) 292 (405)
Reclassification adjustment
to net loss for realized
losses (gains) on available
-for-sale cash equivalents
and marketable securities (171) 133 (107) 175
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(10) (69) 185 (230)
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Comprehensive loss for the
period (7,381) (6,275) (12,417) (9,690)
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UNAUDITED INTERIM STATEMENTS OF CASH FLOWS
(In thousands of Canadian dollars)
Three-month periods Six-month periods
ended June 30, ended June 30,
--------------------------------------------------------------------------
2008 2007 2008 2007
$ $ $ $
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OPERATING ACTIVITIES
Net loss for the period (7,371) (6,206) (12,602) (9,460)
Items not affecting cash:
Amortization of property,
plant and equipment 298 332 612 678
Amortization of intangible
assets 32 40 63 78
Write-off of property,
plant and equipment - 33 - 33
Stock-based compensation
expense 92 181 254 247
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(6,949) (5,620) (11,673) (8,424)
Net change in non-cash
working capital balances
related to operations 1,905 (605) (442) (2,317)
Unrealized gain on available
-for-sale cash equivalents 11 133 152 6
Change in long-term portion
of unearned revenue (1,087) (1,010) (314) (1,982)
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Cash flows related to
operating activities (6,120) (7,102) (12,277) (12,717)
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INVESTING ACTIVITIES
Acquisitions of property,
plant and equipment (42) (150) (153) (316)
Acquisitions of intangible
assets (11) (130) (11) (263)
Purchases of available-for-
sale marketable securities (17,681) (44,845) (43,683) (73,681)
Proceeds from maturities of
available-for-sale
marketable securities 27,499 27,630 79,513 83,393
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Cash flows related to
investing activities 9,765 (17,495) 35,666 9,133
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FINANCING ACTIVITIES
Issuance of common shares - 54 - 20,192
Share issue costs - (30) - (1,403)
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Cash flows related to
financing activities - 24 - 18,789
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Increase (decrease) in cash
and cash equivalents 3,645 (24,573) 23,389 15,205
Cash and cash equivalents,
beginning of period 22,952 40,458 3,208 680
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Cash and cash equivalents,
end of period 26,597 15,885 26,597 15,885
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Cash and cash equivalents
consist of:
Cash 2,136 1,779 2,136 1,779
Cash equivalents 24,461 14,106 24,461 14,106
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26,597 15,885 26,597 15,885
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