Med BioGene Inc.
TSX VENTURE : MBI

Med BioGene Inc.

August 29, 2007 22:53 ET

Med BioGene Inc. Reports Financial Results for the Second Quarter 2007

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 29, 2007) - Med BioGene Inc. (TSX VENTURE:MBI) today reported its financial results for the second quarter ending June 30, 2007.

Recent Business Highlights

- July 30, 2007: MBI announced that Dr. Nathan Yoganathan, MBI's founder, President and Chief Scientific Officer had transitioned to a senior advisory role as Chief Scientific Advisor. Dr. Bradley W. McLean, a senior scientist with MBI, was appointed Chief Scientific Officer.

Prior to joining MBI in early 2007, Dr. McLean led the research and development of a prodrug at Twinstrand Therapeutics Inc., a clinical stage biotechnology company, to specifically target late-stage prostate cancer and the development of a chemically modified (PEGylated) variant of Twinstrand's lead cancer therapeutic. Prior to joining Twinstrand, Dr. McLean was a post-doctoral fellow at the British Columbia Research Institute for Children's and Women's Health and InphoGene BioCommunications Inc. a private genomics and bioinformatics company, undertaking research into Ewings sarcoma, a rare pediatric cancer. Dr. McLean holds a B.Sc. (Hons.) and an M.Sc. from Queen's University and a Ph.D. from the University of British Columbia.

- June 1 and 29, 2007: MBI closed a brokered private placement through the issuance of 6,816,008 and 677,500 units, respectively, at a price of $0.45 per unit for gross proceeds of approximately $3.37 million. Fraser Mackenzie Limited was the agent for the private placement.

Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder thereof to purchase one common share at a price of $0.65 for a period of 36 months following the closing date of the private placement; provided that, MBI may accelerate the expiry date for such warrants if, at any time following the expiry of the four-month hold period, the closing price of MBI's common shares on the TSX Venture Exchange is greater than $0.85 for 20 or more consecutive trading days.

Second Quarter 2007 Financial Results

MBI reported a net loss of $732,333 ($0.03 per share) in the three months ended June 30, 2007, compared to a net loss of $2,363,307 ($0.13 per share) in the three months ended June 30, 2006. The decrease was due primarily to not having any transaction costs associated with the Company's listing of its common shares on the TSX Venture Exchange in April 2006. This decrease was partially offset by increased general and administrative expenses of $170,918, and increased research and development expenses of $292,809 associated with the hiring of additional scientists and expanded research and development activities.

Research and Development

Research and development expenses were $399,867 for the three months ended June 30, 2007, compared to $107,058 for the three months ended June 30, 2006. The increase was due to increased personnel expenses of $97,921 associated with the hiring of additional scientists over the comparative year. Consulting fees increased by $24,961 as a result of engaging additional consultants involved with the Company's expanding lymphoma and cardiovascular disease biomarker programs. In addition, laboratory activities increased in the three months ended June 30, 2007, compared to the three months ended June 30, 2006, as a result of increased analysis of diseased tissue and blood samples which increased laboratory supplies and microarray expenditures by $145,811. In addition, stock-based compensation costs increased by $44,136 due to compensation recognition associated primarily with the May 2006 stock option grants. Legal filing fees increased by $29,601 in the three months ended June 30, 2007 associated with patent application filing fees for the Company's Gene Expression Profiling System™. These increases were partially offset by $47,784 of government contributions accrued in the three months ended June 30, 2007 for the Company's cardiovascular disease biomarker program compared to no government contributions during the comparative quarter in 2006.

General and Administrative

General and administrative expenses were $326,020 for the three months ended June 30, 2007, compared to $155,102 for the three months ended June 30, 2006. The increase was due primarily to an increase in stock-based compensation expenses of $91,760, the hiring of a Chief Executive Officer and Office Manager and an expansion of the Company's office space in May 2006, and the hiring of additional accounting personnel in May 2007.

Liquidity and Capital Resources

At June 30, 2007, the Company had $2,536,085 of cash and cash equivalents, compared to $613,016 at December 31, 2006, and had working capital of $2,260,941 at June 30, 2007, compared to $147,309 at December 31, 2006. This increase relates to the closing of the brokered private placement in June 2007 which resulted in net cash proceeds of $3,047,651.

About Med BioGene

MBI is a biotechnology company with advanced research and development in gene expression technology. MBI intends to utilize its expertise in gene expression to identify those genes, known as "biomarkers", which mark the presence of various diseases. These biomarkers will be used as an effective tool for accurate and rapid screening and diagnosis and to unlock innovation in therapeutic development and treatment. With a robust set of qualified biomarkers, disease screening and diagnosis will be quicker, less invasive and more accurate and the safety of new therapeutics will be increased, drug products will get to patients in less time and treatment decisions will be more informed.

MBI is currently focused on developing and validating biomarkers in respect of lymphoma, leukemia and cardiovascular disease through its Gene Expression Profiling System™.

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 are not limited to, those 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. These forward-looking statements or information are only predictions 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 are 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. Our forward-looking information does not reflect the potential impact of any future partnerships, collaborations, acquisitions, mergers, dispositions, joint ventures or investments 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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