VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 3, 2011) - Med BioGene Inc. (TSX VENTURE:MBI) today reported its financial results for the year ended December 31, 2010 (all amounts are in United States dollars).
Erinn Broshko, MBI's Chief Executive Officer stated, "Med BioGene is pleased to complete 2010 and begin 2011 with the closing of our global commercialization partnership with Precision Therapeutics for LungExpress Dx™. In addition to the partnership providing to Med BioGene upfront, milestone and royalty payments, it allows us to reach our stated goal of commercializing LungExpress Dx in the near term as the first multi-gene prognostic test available commercially for non-small-cell lung cancer."
Mr. Broshko added that, "The Precision partnership also follows the publication in the prominent Journal of Clinical Oncology of a study detailing the development and validation of LungExpress Dx. We believe that the results described in the Journal of Clinical Oncology paper, along with the results of a subsequent validation study presented at the joint meeting of the American Association for Cancer Research and International Association for the Study of Lung Cancer, establish that the use of LungExpress Dx will result in better-informed and personalized treatment decisions and improve the selection of patients who may benefit from adjuvant chemotherapy."
Business and Scientific Highlights
|Under terms of the agreement, Precision will pay to MBI within 120 days of closing license fees and research reimbursement of US$2.3 million, half of which is credited against future royalties that may be owed to MBI by Precision. In addition, MBI is eligible to receive up to US$1.0 million in payments based on achievement of certain milestones associated with the development and commercialization of LungExpress Dx, all of which are credited against future royalties that may be owed to MBI by Precision. MBI will receive royalty payments based on a market percentage rate of Precision's future revenues associated with the commercialization of LungExpress Dx or any other products incorporating MBI's technology. Precision is responsible for all future costs associated with the development and commercialization of LungExpress Dx.|
|Precision Therapeutics is a Pittsburgh, Pennsylvania-based private, venture capital-backed company. MBI and Precision believes that LungExpress Dx will be a synergistic and important addition to Precision's flagship test, ChemoFx®. Whereas LungExpress Dx can identify early non-small-cell lung cancer (NSCLC) stage patients who have a poor prognosis and may benefit from chemotherapy, ChemoFx seeks to quantify an individual patient's probable tumor response to various chemotherapeutic and biologic agents. In 2010, Precision received approximately 21,500 live tissue specimens for its ChemoFx test from across all fifty states (as well as certain countries outside the U.S.), of which more than 15% were in NSCLC.|
|Precision intends to apply the same commercial and clinical strategy applied to ChemoFx pertaining to clinical trial validation, selling and marketing and test reimbursement to LungExpress Dx to drive increasing awareness, acceptance and adoption of LungExpress Dx as a stand-alone product and as a compliment to ChemoFx.|
|Precision has approximately 270 employees, including a selling and marketing team consisting of more than 70 employees who currently work with over 700 treating physicians in oncology. Precision performs all clinical testing at its certified laboratories in Pittsburgh.|
|Drs. Yang Xie and John D. Minna of the Hamon Center for Therapeutic Oncology Research and Simmons Cancer Center, University of Texas Southwestern Medical Center commented in the accompanying editorial that "...the tumor biomarker information [from the 15-gene signature] benefited patients in several ways: for patients whose tumors showed a good prognosis, it not only suggested that the patients did not need ACT [adjuvant chemotherapy], but that it might in fact be harmful. For patients with tumors with poor prognoses, the tumor biomarker information suggested that they needed additional therapy, and that they were likely to gain survival benefit from ACT. Thus, ACT would be worth the treatment toxicity for these patients."|
|The publication (http://jco.ascopubs.org/content/early/2010/09/07/JCO.2009.26.4325.abstract) and editorial (http://jco.ascopubs.org/cgi/doi/10.1200/JCO.2010.31.0144) can be accessed online at the Journal of Clinical Oncology.|
|The study was led by MBI's collaborators, Drs. Ming-Sound Tsao, Frances A. Shepherd and Igor Jurisica, at the University Health Network, Princess Margaret Hospital in Toronto. Other centers involved in the study included: University of Toronto; National Cancer Institute of Canada Clinical Trials Group and Queen's University; Center for Cancer Genome Discovery, Dana-Farber Cancer Institute; Broad Institute of Massachusetts Institute of Technology; Harvard University; Cleveland Clinic; and the Max Planck Institute for Neurological Research with Klaus-Joachim-Zülch Laboratories of the Max Planck Society and the Medical Faculty of the University of Köln.|
|The first presentation was made by MBI and details the initial results of a health economic evaluation of LungExpress Dx. The study was undertaken my MBI and Quorum Consulting of San Francisco and outlines the potential clinical utility and cost savings associated with the use of LungExpress Dx in the management of early-stage non-small-cell lung cancer (NSCLC) patients.|
|The second presentation was made by MBI's collaborators at the University Health Network and details the positive results from an independent validation study of LungExpress Dx. The study met its primary endpoint in confirming that the 15-gene expression-based signature underlying LungExpress Dx is an independent prognostic marker in early-stage NSCLC for identifying, more selectively than routine staging, patients with significantly different prognoses and may provide additional clinical value beyond standard measures of risk.|
2010 Financial Results
MBI incurred a loss of $2,898,203 ($0.04 per share) for 2010 compared to a loss of $2,134,571 ($0.04 per share) for 2009. MBI did not generate any revenue during 2010 or 2009.
Research and Development
Research and development expenses were $652,724 for 2010 compared to $988,636 for 2009, representing a decrease of 34%.
General and Administrative
General and administrative expenses were $2,130,242 for 2010 compared to $1,070,204 for 2009. Consistent with MBI's press release of November 2, 2010, it was then determined that the closing of the proposed United States initial public offering was no longer considered to be likely and, as such, MBI wrote-off the deferred costs associated with the offering in the amount of $1,184,118. Apart from these offering costs, general and administrative expenses decreased by 12%.
Liquidity and Capital Resources
At December 31, 2010, MBI had cash and equivalents totalling $126,797 and a working capital deficiency of $1,570,261, compared to cash and equivalents of $1,522,428 and working capital of $642,166 at December 31, 2009.
Cash used in operating activities was $1,433,740 in 2010 compared to $1,179,272 in 2009. The cash used in operating activities consisted mainly of salaries and related employee costs, payments to third parties and company operating costs. As described above, as at December 31, 2010, MBI wrote-off deferred costs relating to the proposed United States initial public offering and, as such, removed such costs from the balance sheet and expensed the same in the current period. The offering costs consisted mainly of legal, accounting, printing and investor relations consulting.
Cash used in investing activities was $nil in 2010 compared to $2,959 in 2009.
Cash provided by financing activities was $95,040 in 2010 compared to $1,898,538 in 2009. During 2010, MBI received $95,040 from the exercise of warrants.
About Med BioGene
MBI is a life science company focused on the development and commercialization of genomic-based personalized clinical laboratory diagnostic tests. MBI is committed to advancing personalized medicine by commercializing tests that provide clinically relevant information to improve patient treatment and reduce health care costs. MBI and Precision Therapeutics have partnered to commercialize MBI's flagship test, LungExpress Dx. For more information on MBI, please visit www.medbiogene.com. For more information on Precision Therapeutics, please visit www.precisiontherapeutics.com.
Certain statements in this press release contain forward-looking statements and information ("forward-looking statements") under applicable United States and Canadian securities legislation. Words such as "anticipates", "believes", "estimates", "expects", "intends", "may", "plans", "projects", "will", "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward looking statements include, but are not limited to, that with respect to the timing, completion and/or results of clinical trials or studies, future profits, future product revenues, future shareholder value, future operations and plans, the completion and use of proceeds from transactions or financings and the prospects for negotiating partnerships or collaborations and their timing. These forward-looking statements are only a prediction based upon the party's current expectations, and actual events or results may differ materially. A party may not actually achieve the plans, intentions or expectations disclosed in its forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on uncertain assumptions that could cause a party's actual results and the timing of events to differ materially from those anticipated in such forward-looking information. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. A party's forward-looking statements do not reflect the potential impact of any future partnerships, collaborations, acquisitions, mergers, dispositions, joint ventures or investments that that party may make. All forward-looking statements are qualified in their entirety by this cautionary statement and a party undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise after the date of this press release, other than as required by applicable law.
LungExpress Dx is MBI's trademark. ChemoFx is Precision's registered trademark. Each trademark, trade name or service mark of any other entity appearing in this news release belongs to its holder.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.