Med BioGene Inc.

Med BioGene Inc.

May 29, 2009 15:15 ET

Med BioGene Reports Financial Results for the First Quarter of 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 29, 2009) - Med BioGene Inc. (TSX VENTURE:MBI) today reported its financial results for the first quarter ending March 31, 2009.

Erinn Broshko, MBI's Chief Executive Officer stated, "Med BioGene has made significant progress over the last quarter as we move towards commercializing LungExpress Dx™ in the United States. In particular, we expanded our collaboration with the University Health Network and are undertaking the further validation of LungExpress Dx™, have expanded our commercialization team through strategic appointments and completed a health economic analysis that shows that LungExpress Dx™ has the potential to increase the cure rate of early stage non-small-cell lung cancer and save the health care system significant treatment failure and terminal care costs associated with cancer recurrence."

Recent Business and Scientific Highlights

- April 2009: MBI announced a non-brokered private placement of a minimum of $1.3 million and a maximum of $1.6 million of units. Each unit will be issued at a price of $0.08 and will consist of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant will entitle the holder to purchase one common share at a price of $0.10 for a period of 24 months, subject to the acceleration by MBI of the expiration of the warrants if the closing price of the common shares on the TSX Venture Exchange is greater than $0.30 for twenty or more consecutive trading days.

Berkeley Capital Corp. II ("Berkeley"), a capital pool company listed on the TSX Venture Exchange entered into an agreement with MBI dated April 21, 2009, as amended, to participate in the private placement as the lead order. Under the agreement, Berkeley will invest all of its available cash reserves and subscribe to approximately $635,000 of units. This investment is proposed to be Berkeley's Qualifying Transaction under the rules of the TSX Venture Exchange. Berkeley will hold on June 5, 2009 a special meeting of its shareholders to approve, among other things, Berkeley's participation in the private placement. Following the completion of the private placement, Berkeley will undertake the necessary steps to allow it to distribute the common shares and warrants underlying the units pro rata to its shareholders and thereafter to be delisted from the TSX Venture Exchange and dissolved.

- April 2009: MBI entered expanded its license and development collaboration with the University Health Network to develop and commercialize LungExpress Dx™ to include additional novel gene expression-based markers for early-stage non-small-cell lung cancer (NSCLC).

LungExpress Dx™ is a test for early-stage NSCLC that analyzes the molecular profile of a patient's tumour to provide information to assist in tailoring treatment for that specific patient. LungExpress Dx™ is the first and only gene expression-based test for early-stage NSCLC shown to assist in determining a patient's benefit from chemotherapy and prognosis for survival.

- April 2009: MBI began an additional study to validate LungExpress Dx™ in predicting a patient's prognosis for survival. This study is being performed using an existing independent set of 200-300 early-stage NSCLC patient samples collected over a five-year period and is expected to be completed in the third quarter of 2009.

- March 2009: MBI appointed David G. Matthews as Chief Financial Officer. Mr. Matthews brings to MBI over twenty years of experience in funding and operating life science companies and will play a critical role in executing upon MBI's commercialization strategy.

First Quarter 2009 Financial Results

MBI incurred a loss of $551,530 ($0.01 per share) for the first quarter of 2009, compared to a loss of $492,947 ($0.02 per share) for the first quarter of 2008. The loss reflects MBI's increased commercialization and partnering efforts regarding LungExpress Dx™.

Research and Development

Research and development expenses were $202,288 for the first quarter of 2009, compared to $168,725 for the comparable period a year earlier. Laboratory supplies expenses decreased significantly in the first quarter of 2008 compared to the first quarter of 2009 and were offset by an increase in fees paid to the University Health Network in respect of the collaborative development of LungExpressDx™. Contributions under a Canadian government IRAP grant relating to MBI's cardiovascular program were $11,420 for the first quarter of 2009, compared to $34,465 for the first quarter of 2008. Funding under this grant was fully drawn during the first quarter of 2009 and subsequent to quarter-end the funds relating to this program were collected.

General and Administrative

General and administrative expenses increased marginally to $327,531 during the first quarter of 2009, compared to $311,733 for the first quarter of 2008. Personnel costs and public company costs increased between the comparative quarters and were partly offset by lower communications and professional fees. Stock-based compensation expenses increased to $71,642 as a result of options issued during the first quarter of 2009 to certain members of management and the board of directors.

Liquidity and Capital Resources

At March 31, 2009, MBI had cash and equivalents and government receivables totaling $701,422 compared to $1,057,230 at December 31, 2008. The decrease relates to operational cash outflows during the quarter with no offsetting financing activities. Including the expected proceeds from the proposed financing mentioned above, MBI expects to have sufficient cash to fund its operations through the end of 2009.

About Med BioGene

MBI is a life science company focused on the development and commercialization of genomic-based personalized clinical laboratory diagnostic tests for cancer.

MBI's lead product, LungExpress Dx™, is expected to be the first commercially available gene expression-based test for non-small-cell lung cancer shown to assist in determining a patient's benefit from chemotherapy and prognosis for survival. LungExpress Dx™ will provide to patients and their physicians valuable information in order to more effectively guide treatment and improve the selection of patients for adjuvant chemotherapy.

MBI is committed to advancing personalized medicine by commercializing tests that provide actionable information to both save lives and reduce health care costs.

Certain statements in this press release contain forward-looking information under applicable 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 information, although not all forward-looking information contains these identifying words. Forward looking information includes, but is not limited to, that with respect to future profits, future product revenues, future operations and plans, the use of proceeds from financings, the timing of clinical trials and the completion date for clinical trials 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 on 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 speaks 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 is qualified in its entirety by this cautionary statement and MBI undertakes no obligation to revise or update any 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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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