Med BioGene Inc. (TSX VENTURE:MBI) today reported its financial results for the
three months ended March 31, 2013 (all amounts are in United States dollars).
Erinn B. Broshko, MBI's Executive Chairman, commented: "2012 and the beginning
of 2013 has seen Med BioGene hit some very important milestones. In respect of
our commercialization efforts, our commercial partner, Precision Therapeutics,
successfully completed their final clinical studies in advance of the expected
launch of GeneFX(R) Lung by mid of 2013. In respect of our litigation with
Signal Genetics LLC and Respira Health LLC, we had a recent significant victory
in the Supreme Court of the State of New York and are confident that we will be
successful in having the remaining claims and causes of action dismissed.
Lastly, our cash position was strengthened by the exercise of warrants and
agents' warrants. We are very pleased with our progress and are looking forward
to the commercial launch of GeneFx Lung."
Recent Business Highlights
Exercise of Warrants
In May 2013, 2,318,000 warrants and agents' warrants to purchase an equal number
of common shares of MBI at a price of $0.10 per share were exercised for gross
proceeds to MBI of $231,800. As such, as of May 28, 2013, MBI had cash and cash
equivalents of approximately $470,000.
Change of Marketing Name of Lung Cancer Test
On March 27, 2013, MBI announced that Precision Therapeutics has decided upon a
new marketing name for GeneFx Lung. Instead of LungExpress Dx, Precision plans
to market the test under the brand name GeneFx Lung.
Precision expects to commence commercialization of GeneFx Lung through its
CLIA-certified laboratory by mid-2013.
Precision currently markets a number of tests through its CLIA-certified
laboratory, including ChemoFx(R), BioSpeciFx(R), miRview(R)mets2 and GeneFx(R)
Colon. Both GeneFx Colon and GeneFx Lung are gene expression-based tests and,
accordingly, share the brand name GeneFx.
Successful Completion of GeneFx Lung Clinical Studies
On January 23, 2013, MBI and Precision announced that Precision had successfully
completed their previously announced clinical studies to validate the use of
GeneFx Lung with tissue preserved by RNAlater(R), a molecular fixative.
RNAlater eliminates the need to flash-freeze specimens and to keep specimens
frozen throughout storage and transport, a process that can be cumbersome and
costly. It also eliminates the need for preserving tissue in formalin, which is
known to cross-link and degrade the nucleic acids rendering them less suitable
for specific downstream molecular applications.
The clinical studies were conducted using patient specimens prospectively
accrued by Precision from a consortium of medical centers in the United States.
In advance of commercialization, Precision has established an advisory board
comprised of world leaders in lung cancer research and treatment from the United
States, Canada, France and Italy.
"Precision's efforts in commercializing this important test underscores our
ongoing commitment to improving the outcomes of cancer patients by providing
personalized medicine solutions that aim to increase quality of life and cancer
survival rates," said Sean McDonald, Precision's President and Chief Executive
Officer. "The successful completion of our clinical studies provides further
evidence of the robustness of our test and we are moving closer to providing
patients and doctors with a tool to address a critical unmet need."
Erinn Broshko commented: "We are very pleased with the progress made by
Precision and are looking forward to our clinically valuable test being
available to lung cancer patients. The commercial success of a molecular
diagnostic test depends, in large measure, upon the extent of its integration
into current pathological processes. The use of GeneFx Lung with RNAlater will
allow pathologists to avoid the logistics involved with using flash-frozen tumor
specimens and, instead, to handle and ship specimens at room temperature,
thereby simplifying the process significantly. We believe that this will
materially enhance the commercial prospects of our test."
Update Regarding Litigation with Signal Genetics LLC and Respira Health LLC
On February 25, 2013, MBI provided an update in regard to its ongoing litigation
with Signal Genetics LLC and Respira Health LLC.
In February 2011, Signal and Respira filed a lawsuit against MBI and Precision
in the Supreme Court of the State of New York asserting twelve causes of action
against MBI. MBI continues to believe that the lawsuit is frivolous, vexatious
and entirely without merit and is defending the lawsuit vigorously. MBI has
received financial support from Precision to, among other things, conduct such
defense and to cover any settlement (in both cases, half of which is credited
against future royalties that may be owed to MBI by Precision) or award of
damages made against MBI (which would not be credited against such future
royalties), subject in all cases to certain threshold limits.
Discovery in the lawsuit has been completed and, on August 24, 2012, MBI filed
with the Court a motion for partial summary judgment to dismiss Signal and
Respira's claims for lost profits arising from alleged breaches of contract and
the duty of good faith and fair dealing, and causes of action for negligent
misrepresentation, unfair competition and unjust enrichment.
On February 20, 2013, the Court heard oral argument in connection with MBI's
motion. In a Decision and Order of the same date, the Court granted MBI's motion
and dismissed Signal and Respira's: (1) claims against MBI for lost profit
damages arising from alleged breaches of contract and the duty of good faith and
fair dealing; (2) cause of action against MBI for negligent misrepresentation;
and (3) cause of action against MBI for unfair competition. No trial date has
been set with respect to the remaining claims.
Erinn Broshko commented: "This decision is a significant setback for Signal and
Respira. We have always believed that the lawsuit is entirely without merit and
are confident that we will be successful in having the remaining claims and
causes of action dismissed."
First Quarter 2013 Financial Results
MBI incurred a loss of $78,414 ($0.00 per share) for the three months ended
March 31, 2013 compared to a loss of $121,296 ($0.00 per share) for the three
months ended March 31, 2012.
General and Administrative
General and administrative expenses, including non-cash share-based expenses
associated with the prior issuance of stock options and foreign exchange, were
$78,414 for the three months ended March 31, 2013 compared to $121,296 for the
three months ended March 31, 2012, representing a decrease of 35%.
Liquidity and Capital Resources
At March 31, 2013, MBI had cash and equivalents totalling $291,717 and working
capital of $220,522 compared to cash and equivalents of $355,326 and a working
capital of $294,655 at December 31, 2012.
Cash used in operating activities was $63,601 for the three months ended March
31, 2013 compared to $92,918 for the three months ended March 31, 2012.
In May 2013, 2,318,000 warrants and agents' warrants to purchase an equal number
of common shares of MBI at a price of $0.10 per share were exercised for gross
proceeds to MBI of $231,800. As such, as of May 28, 2013, MBI had cash and cash
equivalents of approximately $470,000.
In September 2012, MBI and Precision amended their commercialization agreement
to restructure the potential milestone payments payable by Precision. By
restructuring the milestone payments, management expects to extend MBI's cash
runway following the commercialization of GeneFx Lung to allow MBI the
opportunity to demonstrate increasing clinical and commercial success of GeneFx
Lung. Under the amended commercialization agreement, MBI is eligible to receive
from Precision up to $1.0 million in the following milestone payments, all of
which are credited against future royalties that may be owed to MBI by
Precision: following the commercial launch of GeneFx Lung, amounts totaling
$500,000 and, following the achievement of $5 million in net revenues from
GeneFx Lung, amounts totaling $500,000.
Results from Annual and Special Meeting
At MBI's annual and special meeting of shareholders held on May 17, 2013, all
resolutions put to the shareholders as proposed by the MBI board of directors
were approved, with the exception of the special resolution amending MBI's
articles to reduce the quorum required for the transaction of business at a
meeting of shareholders, which was not approved.
About Med BioGene Inc.
MBI is a life science company based in Vancouver, British Columbia that is
currently focused on managing the license and rights to GeneFx Lung. MBI's
common shares are listed for trading on the TSX Venture Exchange. For more
information, please visit www.medbiogene.com.
About GeneFx(R) Lung
GeneFx Lung is a proprietary gene expression-based test to improve upon staging
for identifying those patients with early-stage non-small-cell lung cancer
(NSCLC) who, following surgical removal of their tumor, are at higher and lower
risks of mortality. In an initial study of patient specimens from the National
Cancer Institute of Canada Clinical Trials Group JBR.10 trial, published in the
Journal of Clinical Oncology, patients classified by GeneFx Lung as higher risk
benefited from adjuvant chemotherapy, and those classified as lower risk did not
benefit and may have experienced a detrimental effect from adjuvant
chemotherapy. GeneFx Lung was subsequently validated in predicting patient
mortality in four independent studies involving data from tumor specimens
totaling 676 untreated early-stage NSCLC patients. GeneFx Lung is expected to
provide better-informed and personalized treatment decisions to assist in the
selection of patients for adjuvant chemotherapy.
On April 15, 2011, Precision Therapeutics, Inc. and Med BioGene closed their
commercialization agreement. The agreement provides to Precision exclusive
global rights to develop and commercialize GeneFx Lung.
Precision expects to commence commercialization of GeneFx Lung through its
CLIA-certified laboratory by mid-2013.
About Precision Therapeutics, Inc.
Precision, a leading life science company based in Pittsburgh, Pennsylvania, is
dedicated to improving the outcomes of cancer patients by providing personalized
medicine solutions that aim to increase quality of life and cancer survival
rates. Precision offers a portfolio of products developed to help guide
physicians and patients with difficult clinical decisions throughout the cancer
care continuum. For more information, please visit
www.precisiontherapeutics.com.
Certain information in this press release contains forward-looking information
and statements ("forward-looking information") of MBI under applicable Canadian
and United States legislation. Words such as "anticipates," "believes,"
"estimates," "expects," "intends," "may," "plans," "projects," "will," "would"
and similar expressions are intended to identify forward-looking information,
although not all forward-looking information contains these identifying words.
Forward looking information includes, but is not limited to, that with respect
to the timing, completion and/or results of clinical trials or studies, the
timing for commercialization of any products, 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. This
forward-looking information is only a prediction based upon MBI's current
expectations, and actual events or results may differ materially. MBI may not
actually achieve the plans, intentions or expectations disclosed in its
forward-looking information. Forward-looking information is subject to known and
unknown risks and uncertainties and is based upon uncertain assumptions that
could cause MBI'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 this forward-looking information, which speak
only as of the date of this press release. MBI's forward-looking information
does not reflect the potential impact of any future partnerships,
collaborations, acquisitions, mergers, dispositions, joint ventures or
investments that MBI may make. All forward-looking information herein is
qualified in its entirety by this cautionary statement and MBI undertakes no
obligation to revise or update any such forward-looking information as a result
of new information, future events or otherwise after the date of this press
release, other than as required by applicable law. Certain information included
in this press release in respect of Precision and its scientific, clinical and/
or commercialization efforts and expectations have been provided to MBI by
Precision. MBI may not have been able to confirm the accuracy of such
information and you should not place undue reliance on any such information,
including any information regarding Precision that may constitute
forward-looking information. A redacted copy of the commercialization agreement
between MBI and Precision may be found at www.sedar.com. Each trademark, trade
name or service mark of any entity appearing in this press release belongs to
its holder.
FOR FURTHER INFORMATION PLEASE CONTACT:
Med BioGene Inc.
Erinn B. Broshko
Executive Chairman
(800) 641-3593
ebroshko@medbiogene.com
www.medbiogene.com
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