MethylGene Inc. (TSX:MYG) today reported financial results for the
fourth quarter and full year ended December 31, 2011.
Highlights
-- During the fourth quarter we commenced our first randomized, controlled
Phase 2 study with MGCD290, and our two Phase 1 dose escalation studies
with MGCD265 continued to enroll patients.
-- On January 4th, 2012 we strengthened our management team with the
appointment of Rachel Humphrey, MD as Executive Vice President and Chief
Medical Officer.
-- On November 13th, 2011 we reported final results for MGCD265 Trial 265-
102 at the 2011 AACR-NCI-EORTC Molecular Targets and Cancer Therapeutics
Conference.
-- We finished the quarter with over $29 million in cash and equivalents to
fund our development programs.
"Last year was a very successful year for MethylGene," said
Charles Grubsztajn, President and CEO of MethylGene. "In 2011 we
raised $34.5 million from thought-leading investors, made key
additions to our management team and Board of Directors, reported
data on MGCD265 at ASCO in June, and commenced a randomized,
controlled Phase 2 trial with our first-in-class antifungal agent
MGCD290. We expect continued clinical progress, and to report
additional clinical data, in 2012."
International Financial Reporting Standards
The financial statements of the Company for the year ended
December 31, 2011, have been prepared for the first time in
accordance with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB).
They have been prepared: on a historical cost basis, except for
financial instruments that have been measured at fair value; in
accordance with IAS 1, Presentation of Financial Statements; in
accordance with IFRS 1, First-time Adoption of IFRS; and in
accordance with IFRS standards and IFRIC interpretations issued and
effective or issued and early adopted as at the time of preparing
these statements.
Fourth Quarter 2011 Financial Results Reported in Canadian
Dollars
Revenues for the fourth quarter of 2011 of $468,000 were
$348,000 lower versus the fourth quarter of 2010 due to lower
research collaborations and contract revenues from Otsuka
Pharmaceutical Co. Ltd. ("Otsuka"), as the research component of
our collaboration agreement ended in June 2011.
Research and development expenditures, net of investment tax
credits, for the fourth quarter of 2011 were $3.1 million compared
to $1.9 million for the fourth quarter of 2010. This increase is
mainly due to higher compensation and third-party clinical costs as
we increased clinical development activities related to both of our
lead programs, MGCD290 and MGCD265. These increases were partially
offset by lower lease-related costs.
General and administrative expenses in the fourth quarter of
2011 were $1.0 million compared to $879,000 in the fourth quarter
of 2010. This increase relates to higher compensation costs
partially offset by lower professional fees.
Financial income of $82,000, relating primarily to interest
income, in the fourth quarter of 2011 was $67,000 higher compared
to the fourth quarter of 2010 due to increased cash balances and
higher average interest rates versus the prior year. The Company
recorded a foreign exchange loss of $9,000 in the fourth quarter of
2011 versus a loss of $17,000 in the fourth quarter of 2010.
The net loss and comprehensive loss for the fourth quarter of
2011 was $3.6 million, or ($0.01) per share, versus a net loss and
comprehensive loss of $2.0 million or ($0.05) per share for the
same period last year. The improved loss per share relates to the
higher average number of shares outstanding at the respective
quarter ends, partially offset by the higher loss in the fourth
quarter of 2011 compared to the fourth quarter of 2010.
Full Year 2011 Financial Results in Canadian Dollars
Revenues for 2011 of $3.1 million were $703,000 higher versus
2010, as higher license and up-front fees from Otsuka and Taiho
Pharmaceutical Co. Ltd. offset lower research collaborations and
contract revenues from Otsuka as the research component of the
collaboration agreement ended in June 2011.
Research and development expenditures, net of investment tax
credits, for 2011 were $8.8 million versus $10.9 million for 2010.
This decrease is mainly due to lower lease-related costs and lower
compensation costs. Third-party clinical development costs in
connection with our lead programs MGCD290 and MGCD265 were
marginally higher in 2011 as compared to 2010.
General and administrative expenses in 2011 were $4.3 million
versus $6.1 million in 2010. This decrease relates primarily to the
one-time costs of $1.5 million associated with the departure of the
previous CEO in 2010, which was partially offset by higher non-cash
stock option expenses in 2011.
Financial income of $262,000 for 2011, relating primarily to
interest income, was $238,000 higher versus 2010 due to increased
cash balances and higher average interest rates versus the prior
year. The Company recorded a foreign exchange gain of $42,000 in
2011 compared to a loss of $72,000 in 2010.
The net loss and comprehensive loss for 2011 was $9.7 million,
or ($0.04) per share, versus a net loss and comprehensive loss of
$14.7 million or ($0.36) per share for the same period last year.
The improved loss per share relates to the higher average number of
shares outstanding at the respective year ends and the lower loss
in 2011 compared to 2010.
Cash, cash equivalents, marketable securities and restricted
cash totaled $29.6 million as at December 31, 2011 compared to $8.6
million as at December 31, 2010. Due to increased clinical
activity, the Company believes it has sufficient financial
resources to carry forward its current clinical development and
operating plans only into the fourth quarter of 2013.
About MethylGene
MethylGene Inc. (TSX:MYG) is a small molecule drug development
company that is advancing two 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 currently in Phase 2 trials for
vulvovaginal candidiasis and MGCD265, an oral Met/VEGF receptor
kinase inhibitor that is in Phase 1/2 clinical trials for solid
tumor cancers. 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.
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 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
STATEMENTS OF FINANCIAL POSITION (unaudited)
(In thousands of Canadian
dollars)
As at
December 31, December 31, January 1,
2011 2010 2010
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ASSETS
Current
Cash and cash equivalents 10,050 7,361 14,210
Marketable securities 18,878 - 3,249
Restricted cash and
marketable securities 300 597 -
Accounts and other
receivables 174 726 794
Other current assets 1,574 1,027 1,576
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Total current assets 30,976 9,711 19,829
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Security deposits 55 115 385
Restricted cash and
marketable securities 355 655 614
Property, plant and
equipment, net 223 430 1,173
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Total assets 31,609 10,911 22,001
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LIABILITIES AND
SHAREHOLDERS' EQUITY
Current
Trade payables and accrued
liabilities 3,812 4,161 5,811
Current portion of deferred
revenues - 527 584
Current portion of provision - 392 196
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Total current liabilities 3,812 5,080 6,591
Other liability 28 - -
Deferred revenues - 1,771 2,529
Provision - - 380
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Total liabilities 3,840 6,851 9,500
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Shareholders' equity
Share capital 145,685 119,189 119,189
Warrants 6,041 - -
Contributed surplus 16,188 15,289 9,076
Deficit (140,145) (130,418) (115,764)
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Total shareholders' equity 27,769 4,060 12,501
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Total liabilities and
shareholders' equity 31,609 10,911 22,001
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STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (unaudited)
(In thousands of Canadian dollars except
for share and per share amounts)
For the year ended December 31,
--------------------------------
2011 2010
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Revenue
Research collaborations and contract
revenues 791 1,574
License and up-front fees 2,301 815
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Total revenue 3,092 2,389
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Expenses
Research and development, net 8,834 10,874
General and administrative 4,289 6,121
Foreign exchange (gain) loss (42) 72
Financial income (262) (24)
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Total expenses 12,819 17,043
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Net loss and comprehensive loss for the year (9,727) (14,654)
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Basic and diluted loss per share (0.04) (0.36)
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Weighted average number of common shares 247,209,193 40,418,580
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STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
(In thousands of
Canadian dollars)
Total
Share Contributed shareholders'
capital Warrants surplus Deficit equity
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Balance as at January
1, 2010 119,189 - 9,076 (115,764) 12,501
Net loss for the year - - - (14,654) (14,654)
Stock option
compensation expense - - 23 - 23
Proceeds from
reorganization, net
of costs - - 6,190 - 6,190
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Balance as at December
31, 2010 119,189 - 15,289 (130,418) 4,060
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Balance as at January
1, 2011 119,189 - 15,289 (130,418) 4,060
Net loss for the year - - - (9,727) (9,727)
Stock option
compensation expense - - 931 - 931
Costs of
reorganization - - (32) - (32)
Issuance of common
shares, net of costs 26,496 - - - 26,496
Issuance of warrants,
net of costs - 6,041 - - 6,041
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Balance as at December
31, 2011 145,685 6,041 16,188 (140,145) 27,769
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STATEMENTS OF CASH FLOWS (unaudited)
(In thousands of Canadian dollars)
For the year ended December 31,
--------------------------------
2011 2010
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Operating activities
Net loss for the year (9,727) (14,654)
Non-cash adjustments reconciling net loss to
operating cash flows
Depreciation of property, plant and
equipment 194 703
Write-off of property, plant and equipment 76 -
Gain on disposal of property, plant and
equipment (30) (39)
Reversal of provision for lease
resiliation (51) -
Stock option compensation expense 931 23
License and up-front fees (2,298) (814)
Interest income (290) (55)
Lease incentive 28 -
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(11,167) (14,836)
Net changes in non-cash working capital
balances relating to operations (529) (947)
Interest received 194 54
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Cash flows related to operating activities (11,502) (15,729)
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Investing activities
Purchase of property, plant and equipment (109) (7)
Purchases of marketable securities (43,660) (1,099)
Restricted cash 597 (638)
Disposal and maturities of marketable
securities 24,782 4,348
Proceeds from disposal of property, plant
and equipment 76 86
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Cash flows related to investing activities (18,314) 2,690
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Financing activities
Issuance of common shares 28,088 -
Share issuance cost (1,592) -
Issuance of warrants 6,404 -
Warrant issuance cost (363) -
Proceeds from reorganization - 7,216
Cost of reorganization (32) (1,026)
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Cash flows related to financing activities 32,505 6,190
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Increase (decrease) in cash and cash
equivalents 2,689 (6,849)
Cash and cash equivalents, beginning of year 7,361 14,210
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Cash and cash equivalents, end of year 10,050 7,361
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Contacts: MethylGene Inc. Joseph Walewicz Vice President,
Business & Corporate Development 514-337-3333 ext.
373ir@methylgene.com www.methylgene.com The Trout Group LLC Thomas
Fechtner Vice President 646-378-2931tfechtner@troutgroup.com
www.troutgroup.com