Med BioGene Inc.
TSX VENTURE : MBI

Med BioGene Inc.

November 27, 2009 18:06 ET

Med BioGene Reports Financial Results for the Third Quarter of 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 27, 2009) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO UNITED STATES PERSONS OR FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES

Med BioGene Inc. (TSX VENTURE:MBI) today reported its financial results for the third quarter of 2009.

Erinn Broshko, MBI's Chief Executive Officer stated, "Med BioGene has continued to make significant progress over the last quarter. On the clinical front, we successfully completed our recent validation study of LungExpress Dx™ which confirmed the biological robustness of our gene signature. On the financing front, we closed the final tranche of our $1.96 million private placement and announced the engagement of Rodman & Renshaw, LLC of New York City to act as lead underwriter in connection with our proposed initial public offering of common shares in the United States and concurrent listing of our shares on The NASDAQ Capital Market. In advance of our proposed U.S. IPO we are undertaking an interim private placement of up to $2.5 million. The successful results from our validation study, coupled with our efforts to strengthen our balance sheet, move us closer to commercializing the first multi-gene prognostic test for early-stage non-small-cell lung cancer."

LungExpress Dx™ is a proprietary 15-gene expression-based assay that classifies patients into high and low risk prognostic groups based upon the molecular profile of a particular patient's tumour and is expected to be used in conjunction with existing clinical parameters to provide additional independent clinical value beyond standard measures of risk.

Recent Business and Clinical Highlights

- On November 16, 2009, MBI announced the engagement of Rodman & Renshaw, LLC to act as lead underwriter in connection with MBI's proposed initial public offering of common shares in the United States (the "U.S. IPO") and concurrent listing of its common shares on The NASDAQ Capital Market. MBI intends to file as soon as possible with the United States Securities and Exchange Commission a registration statement in respect of the U.S. IPO. Listing of the common shares on The NASDAQ Capital Market will be subject to MBI fulfilling all applicable listing requirements.

MBI also announced an interim non-brokered private placement (the "Private Placement") of a maximum of $2.5 million of units. Each unit will be issued at a price of $0.14, being the closing price of MBI's common shares on the TSX Venture Exchange on November 12, 2009, 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 $0.20 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 is greater than $0.30 for twenty or more consecutive trading days.

- On October 15, 2009 MBI announced positive results from the recent validation study of LungExpress Dx™ undertaken by MBI and its collaborators at the University Health Network (Princess Margaret Hospital) in Toronto. The study met its primary endpoint in confirming that the 15-gene expression-based assay underlying LungExpress Dx™ is an independent prognostic marker in early-stage non-small-cell lung cancer (NSCLC) for identifying, more selectively than routine staging, patients with significantly different prognoses and may provide additional clinical value beyond standard measures of risk. MBI and UHN expect to submit for publication the detailed results of the study. The study was performed using an existing independent set of 183 early-stage non-small-cell lung cancer patient samples collected over a five-year period.

- On October 8, 2009 MBI closed the third and final tranche of its previously announced nonbrokered private placement, resulting in aggregate gross proceeds of $1,960,000. MBI issued to SEP Capital Corporation ("SEP"), a capital pool company listed on the TSX Venture Exchange (TSXV: SEP.P) 4,500,000 units for gross proceeds of $360,000. MBI also issued to SEP 125,000 units in satisfaction of $10,000 of expenses related to the private placement. Each unit has the same terms as those issued in the first two tranches of the private placement.

Third Quarter 2009 Financial Results

MBI incurred a loss of $676,376 ($0.01 per share) for the third quarter of 2009, compared to a loss of $675,383 ($0.02 per share) for the same period a year earlier. Comparing results for the first nine months of 2009 and 2008, MBI's net loss increased marginally to $1,807,881 from $1,785,063. The losses incurred during the first nine months of 2009 reflect MBI's ongoing product development, validation and commercialization efforts regarding LungExpress Dx™.

Research and Development

Research and development expenses were $389,154 for the third quarter of 2009, compared to $330,877 for the comparable period a year earlier, representing an increase of 18%.

Comparing the same nine months of 2009 and 2008, research and development costs decreased marginally from $892,290 in 2008 to $813,944 in 2009. This reduction in expenditures was a result of a reduction in payroll expenses and substantially lower laboratory supplies expenditures. These savings were offset partially by increased license and development fees incurred in respect of LungExpress Dx™ and other third-party contract research fees. Stock based compensation decreased due to the completion of vesting of certain option grants.

General and Administrative

For the third quarter of 2009, general and administrative expenses decreased by 15% to $268,284 compared to $320,437 for the same period in the prior year.

During the first nine months of 2009, general and administrative expenses increased by 11% to $930,262 compared to $836,791 for the same period a year earlier. This increase was a result of higher personnel and consulting fees. This was partly offset by lower stock-based compensation expenses resulting from the completion of vesting of earlier option grants.

Liquidity and Capital Resources

At September 30, 2009, MBI had cash and cash equivalents and government receivables totaling $1,128,014 compared to $1,057,230 at December 31, 2008. The increase in cash balances is a result of the closing in June 2009 of the first two tranches of MBI's previously announced private placement, offset by the cash outflows from operations for the first nine months of 2009 of $1,356,738.

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. For more information, please visit www.medbiogene.com.

Certain statements in this press release contain forward-looking information and statements ("forward-looking statements") under applicable Canadian and United States 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, those with respect to: the U.S. IPO; the Private Placement; the listing of common shares on The NASDAQ Capital Market; future operations and plans; and the use of proceeds from the U.S. IPO and/or Private Placement. These forward-looking statements are 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 the forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties and are 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 statements. These risks and uncertainties include, but are not limited to: the successful and timely completion of MBI's ongoing development and validation studies of its product candidates, including LungExpress Dx™; market and clinical acceptance and commercialization of MBI's product candidates, including LungExpress Dx™; the clinical application and adoption of genomics; MBI's lack of product revenues and history of operating losses; the ownership, date of invention, validity or enforceability of MBI's intellectual property; MBI's ability to achieve its growth strategy; MBI's ability to attract and retain high-quality personnel; the uncertainties of market factors and regulatory processes to which MBI's business is subject; market conditions for capital raising; MBI's ability to obtain the capital required to fund the development, validation and commercialization of its product candidates, including LungExpress Dx™; the closing of the U.S. IPO and/or Private Placement; and satisfaction of the applicable NASDAQ Capital Market listing requirements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. MBI's forward-looking statements do not reflect the potential impact of any future partnerships, collaborations, acquisitions, mergers, dispositions, joint ventures or investments that MBI may make. All forward-looking statements are qualified in their entirety by this cautionary statement and MBI 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.

This press release is intended for distribution outside the United States only and is not intended for distribution to United States newswire services or dissemination in the United States. The securities being offered have not been, nor in the case of the Private Placement will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, United States persons absent United States registration or an applicable exemption from the United States registration requirements. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, securities of MBI in the United States.

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

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