Med BioGene Inc. (TSX VENTURE:MBI) today reported its financial results for the
six months ended June 30, 2013 (all amounts are in United States dollars).
Erinn B. Broshko, MBI's Executive Chairman, commented: "The first half of 2013
has seen Med BioGene hit some very important milestones. In respect of our
commercialization efforts, our partner, Precision Therapeutics, successfully
completed their final clinical studies and are moving rapidly to the launch of
GeneFx(R) Lung in the United States under CLIA expected in the fall of 2013. In
respect of our litigation with Signal Genetics LLC and Respira Health LLC, MBI
and Precision executed a settlement agreement with Signal and Respira for the
dismissal of all remaining claims, with Precision being solely responsible for
all financial obligations under the settlement. In respect of the petition
launched by certain dissident shareholders of MBI, we are confidently looking
forward to the court hearing on August 30, 2013 and continue to believe that the
claims made by the petitioners are entirely without merit. Lastly, our cash
position was strengthened by the recent 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
Update on Commercialization of GeneFx Lung
Precision plans to commercialize GeneFx Lung under CLIA (Clinical Laboratory
Improvement Amendments of 1988), the United States federal regulations
applicable to clinical laboratory testing. Commercial launch is expected in the
fall of 2013.
In order to receive a CLIA-certificate relating to GeneFx Lung to allow for the
commencement of commercial testing, Precision is in the process of completing
certain "wet laboratory work" and associated data analysis demonstrating the
analytical validity of the assay in Precision's laboratory. Precision expects
this laboratory work and data analysis to be completed in October 2013 and
anticipates receipt of their CLIA-certification and product launch thereafter.
The foregoing timelines relating to the expected completion of laboratory work
and data analysis, receipt of CLIA-certification and product launch are
Precision's current best estimates; however, given the short timelines noted,
unforeseeable events, however minor, may result in delays.
In anticipation of commercialization, Precision is integrating GeneFx Lung into
its sales, marketing and reimbursement teams and will continue with its
successful strategy of having their teams interact directly with surgeons,
oncologists, pathologists and patient advocacy groups to convey the clinical and
health economic benefits of their tests.
The long-term commercial success of GeneFx Lung will depend largely upon the
extent to which third-party payers reimburse the test. In the United States,
government insurers, such as Medicare and Medicaid, and third party insurers
generally require evidence of both clinical validity (i.e. reliability of test
results associated with the target disease) and clinical utility (i.e. whether
the test results affect actual clinical decision-making) before reimbursing for
a molecular diagnostic test.
Precision believes that it has sufficient evidence of the clinical validity of
GeneFx Lung from existing and in-process peer-reviewed publications which
demonstrate the prognostic power of the test. In order to establish evidence of
the clinical utility of GeneFx Lung, Precision is planning to initially commence
commercialization of the test through a select group of top-tier clinical and
academic institutions to assess the impact of the GeneFx Lung risk determination
on physician treatment recommendations and patient care decisions. It is
expected that this study will show that GeneFx Lung provides actionable
information which affects the decisions of physicians and will provide to
insurers compelling evidence of clinical utility. Precision is planning to
undertake a broad national commercial roll-out of GeneFx Lung approximately
three to six months from their initial focused launch of the test. The adoption
and recommendation of the use of GeneFx Lung by these centers of excellence and
their key opinion leaders in lung cancer is also expected to increase general
awareness, acceptance and adoption of the test.
Presentation of GeneFx Lung Data at ASCO
On June 1, 2013, Precision presented data regarding GeneFx Lung at the American
Society of Clinical Oncology (ASCO) Annual Meeting in Chicago, Illinois. The
presentation was titled "Performance of a Prognostic Genomic Signature for
Early-Stage NSCLC in Matched Fresh Frozen and RNA-Stabilized Tissue" and
detailed the successful completion of the 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 is cumbersome and costly
and limits test adoption as many laboratories are not equipped to work with
frozen specimens. 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 study was undertaken by Precision Therapeutics of Pittsburgh,
Pennsylvania, Almac Diagnostics Ltd. of Craigavon, Northern Ireland and the
University Health Network and Princess Margaret Hospital of Toronto, Ontario.
Settlement Agreement for Dismissal of Lawsuit by Signal Genetics LLC and Respira
Health LLC
On August 22, 2013, MBI announced that it and Precision had entered into a
settlement agreement with Signal Genetics LLC and Respira Health LLC for the
dismissal all of Signal and Respira's remaining legal claims made against MBI
and Precision in the Supreme Court of the State of New York.
Pursuant to the settlement agreement, within three days of the payment by
Precision to Signal and Respira of a certain financial obligation to be made on
or by January 5, 2014, Signal and Respira will dismiss and withdraw all of their
remaining legal claims made against MBI and Precision.
The terms of the settlement are confidential. As part of MBI and Precision's
commercialization agreement, Precision is solely responsible for all financial
obligations under the settlement agreement.
Petition by Dissident Shareholders
On August 21, 2013, MBI announced that the petition (the "Petition") filed by
certain shareholders of MBI against the company in the British Columbia Supreme
Court will be heard by the Court on August 30, 2013. After reviewing and
responding to the affidavit evidence filed by the petitioners with the Court,
MBI continues to believe that the claims made in the Petition are entirely
without merit.
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 C$231,800.
Second Quarter 2013 Financial Results
MBI incurred a loss of $217,585 ($0.00 per share) for the six months ended June
30, 2013 compared to a loss of $223,418 ($0.00 per share) for the six months
ended June 30, 2012. Comparing to the second quarter of 2013 to the second
quarter of 2012, MBI incurred a loss of $139,171 ($0.00 per share) and a loss of
$102,121, respectively.
General and Administrative
Exclusive of non-cash items of share based payments (2013 - $nil; 2012 -
$84,207), general and administrative expenses were $217,585 for the six months
ended June 30, 2013, compared to $139,211 for the six months ended June 30,
2012.
Exclusive of non-cash items of share based payments (2013 - $nil; 2012 -
$31,350), general and administrative expenses were $139,171 for the three months
ended June 30, 2013 compared to $70,771 for the three months ended June 30,
2012.
The increase in general and administrative expenses were largely due to MBI
incurring $63,675 of legal fees relating to MBI's opposition of the
above-mentioned petition filed in the British Columbia Supreme Court on June 4,
2013 by certain shareholders of MBI against the company.
Liquidity and Capital Resources
At June 30, 2013, MBI had cash and equivalents totalling $396,991 and working
capital of $298,607 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 $182,779 for the six months ended June 30,
2013 compared to $169,939 for the six months ended June 30, 2012.
Cash provided by financing activities was $225,792 for the six months ended June
30, 2013 compared to $nil for the six months ended June 30, 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 C$231,800.
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.
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.
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.
The TSX Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release.
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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