MethylGene Reacquires Rights from Celgene

Celgene has terminated its licensing agreement with MethylGene for oncology histone deacetylase (HDAC) inhibitors, including MGCD0103. As a result, MethylGene will reacquire the rights to these programs. MethylGene also announced plans to implement a strategic initiative to focus its resources on the clinical development of its pipeline.
   
As part of the termination, Celgene will continue to support MGCD0103 for 90 days to help with the transition. Celgene acquired the rights to MGCD0103 through its March 2008 acquisition of Pharmion Corp. MethylGene now owns the worldwide rights to MGCD0103 (with the exception of certain Asian territories), MGCD265 and MGCD290, all of which are at various stages of clinical development.
   
“We believe regaining exclusive rights to MGCD0103 will allow MethylGene to accelerate submissions to the FDA aimed at lifting the partial clinical hold for MGCD0103,” said Donald F. Corcoran, president and chief executive officer of MethylGene. “We believe that MGCD0103 represents a promising opportunity for the treatment of cancer and has demonstrated clinical activity in a number of tumor types evaluated to date. With MGCD0103 back in MethylGene’s hands, upon successful lifting of the partial clinical hold, we will evaluate the funding requirements, development pathway, partnerships and alternative arrangements needed to potentially move the program forward.”
   
MethylGene also announced it will discontinue its discovery research activities. The first phase of the reduction will occur during the next two months with additional reductions planned during 2009 as funded discovery research with Celgene and Otsuka Pharmaceutical are concluded. It is expected that approximately half of the company’s staff of 109 full-time employees will be affected by the transition.
   
“We are aligning the organization toward our development opportunities in order to better realize the value of our proprietary clinical pipeline. By streamlining the organization to focus on development, we expect to extend our current cash resources and progress our clinical pipeline toward nearer term value enhancing milestones,” said Mr. Corcoran. “Decisions such as this are difficult. We are a company that has grown due to the talent, hard work and expertise of our employees and we greatly appreciate their contributions. We owe it to our colleagues and to our shareholders to seek success in the clinical development and ultimate commercialization of our lead compounds.”