Business is on Track for MethylGene
Balance Sheet Continues to be Strong
Grant Zeng, CFA
(T.MYG): ETF Research Reports
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On August 2,
reported its financial results for the second quarter ended June
There was no revenue in the second quarter of 2012 compared to $1.3
million for the second quarter of 2011. The decline in revenue was
due to the completion of the research component of the agreement
with Otsuka Pharmaceutical Co. Ltd. in June of 2011.
Research and development expenditures for the second quarter of
2012 were $3.7 million versus $1.8 million in the second quarter of
2011. This increase was primarily due to increased clinical
development activity for both the MGCD290 and MGCD265 programs.
General and administrative expenses in the second quarter of 2012
were $1.1 million, no change versus the second quarter of 2011.
Net loss for the second quarter of 2012 was $4.7 million, or $0.01
per share, compared to a net of $1.5 million, or $0.005 per share,
for the same period last year.
We are very pleased to see the Company's balance sheet continued to
be strong at the end of second quarter of 2012. Cash, cash
equivalents, marketable securities and restricted cash totaled
$22.2 million as at June 30, 2012. According to our model, the cash
balance can last into the fourth quarter of 2013.
Clinical Programs are on Track to Advance
In addition to the financial results, MethylGene also provided an
update on its clinical programs.
In October 2011, MethylGene initiated a
Phase II (Study 290-005)
clinical study evaluating MGCD290 in combination with fluconazole
vs. fluconazole alone in patients with
moderate to severe
acute vulvovaginal candidiasis
This study is a multicenter, randomized, double-blinded,
placebo-controlled trial. This trial focuses on the most severe
infections and therefore patients with mild disease are excluded.
The purpose of the trial is to evaluate the safety and efficacy of
fluconazole versus fluconazole + MGCD290. The primary endpoint for
this trial is the Therapeutic Cure at day 28, which is a composite
endpoint of Clinical Cure (resolution of signs and symptoms of the
infection) and Mycological Cure (an absence of yeast in culture).
Recruitment is ongoing at sites in the US and Canada with moderate
to severe AVVC. The Company expects to enroll approximately 180
patients to get 150 evaluable patients for the primary endpoint.
Nineteen sites in the United States are now open for enrolment, and
as of August 1, 2012, 74 patients have been enrolled in the trial.
Based on the current rate of enrollment, management expects to
report top line data from this trial around the end of 2012.
As recurrent VVC patients are now eligible for enrollment in the
VVC trial following a protocol amendment, the Company has decided
not to proceed with a separate recurrent VVC trial at this time.
MethylGene is preparing for another Phase II trial with MGCD290.
MGCD265 is a rationally designed, orally available Met/VEGF
receptor kinase inhibitor in development for oncology indications.
At the ASCO Annual Meeting in June, 2012, MethylGene presented data
using plasma samples from trial patients demonstrating a
dose-response relationship between increased plasma concentration
of MGCD265 and inhibition of Met phosphorylation in a novel ex vivo
assay system. MGCD265 continues to be well tolerated in both
monotherapy and in combination trials.
In the ongoing
monotherapy trials (265-101), grade 3-4 treatment-related adverse
events have been infrequent and long-term stable disease has been
observed in sarcomatoid bladder, papillary renal, neuroendocrine,
thymic and colon cancer.
combination trial, objective responses have been observed in
non-small cell lung cancer (NSCLC), prostate cancer and endometrial
cancer. Of ten evaluable NSCLC patients in this trial, two achieved
partial remission and all ten patients achieved disease control
(partial remission or stable disease) at the first tumor
assessment. These data compare favorably in the context of
historical data (docetaxel monotherapy).
combination trial, prolonged stable disease has been observed in
gastric, esophageal, NSCLC and chordoma. MGCD265 has been well
tolerated in combination with either full dose docetaxel or
Enrollment of patients continues in the MGCD265 monotherapy and
combination trials. The development plan for MGCD265 includes
expansion cohorts in select tumor types once the recommended Phase
II dose is defined and data from the expansion cohorts will be used
to guide randomized Phase II trials.
The Company plans to continue enrolling patients in 265-101
monotherapy and 265-103 combination trials with docetaxel or
erlotinib until a maximum tolerated dose (MTD) is reached. Upon
reaching the MTD, the Company intends to initiate a series of open
label expansion cohorts to better characterize the effects seen in
early trials and support the plans for future randomized Phase II
We have an Outperform rating on MethylGene. Please see our
full report on August 6, 2012.