Med BioGene Reports Financial Results for 2012

Med BioGene Inc. (TSX VENTURE:MBI) today reported its financial results for 2012
(all amounts are in United States dollars).


Erinn B. Broshko, MBI's Executive Chairman, commented: "2012 and the beginning
of 2013 has seen Med BioGene hit some very important milestones. In respect of
our commercialization efforts, our commercial partner, Precision Therapeutics,
successfully completed their final clinical studies in advance of the expected
launch of GeneFX(R) Lung by mid of 2013. In respect of our litigation with
Signal Genetics LLC and Respira Health LLC, we had a recent significant victory
in the Supreme Court of the State of New York and are confident that we will be
successful in having the remaining claims and causes of action dismissed.
Lastly, in respect of our cash position, we restructured our future milestone
payments with Precision such that, upon the expected launch of GeneFX Lung, MBI
believes that it will have enough cash resources with receipt of the first
milestone payment to fund operations until approximately the third quarter of
2015. We are very pleased with our progress and are confident in the commercial
prospects of GeneFx Lung." 


Recent Business Highlights

Change of Marketing Name of Lung Cancer Test 

On March 27, 2013, MBI announced that Precision Therapeutics has decided upon a
new marketing name for GeneFx Lung. Instead of LungExpress Dx, Precision plans
to market the test under the brand name GeneFx Lung.


Precision expects to commence commercialization of GeneFx Lung through its
CLIA-certified laboratory by mid-2013.  


Precision currently markets a number of tests through its CLIA-certified
laboratory, including ChemoFx(R), BioSpeciFx(R), miRview(R)mets2 and GeneFx(R)
Colon. Both GeneFx Colon and GeneFx Lung are gene expression-based tests and,
accordingly, share the brand name GeneFx. 


Successful Completion of GeneFx Lung Clinical Studies 

On January 23, 2013, MBI and Precision announced that Precision had successfully
completed their previously announced clinical studies to validate the use of
GeneFx Lung with tissue preserved by RNAlater(R), a molecular fixative.  


RNAlater eliminates the need to flash-freeze specimens and to keep specimens
frozen throughout storage and transport, a process that can be cumbersome and
costly. It also eliminates the need for preserving tissue in formalin, which is
known to cross-link and degrade the nucleic acids rendering them less suitable
for specific downstream molecular applications. 


The clinical studies were conducted using patient specimens prospectively
accrued by Precision from a consortium of medical centers in the United States. 


In advance of commercialization, Precision has established an advisory board
comprised of world leaders in lung cancer research and treatment from the United
States, Canada, France and Italy. 


"Precision's efforts in commercializing this important test underscores our
ongoing commitment to improving the outcomes of cancer patients by providing
personalized medicine solutions that aim to increase quality of life and cancer
survival rates," said Sean McDonald, Precision's President and Chief Executive
Officer. "The successful completion of our clinical studies provides further
evidence of the robustness of our test and we are moving closer to providing
patients and doctors with a tool to address a critical unmet need." 


Erinn Broshko commented: "We are very pleased with the progress made by
Precision and are looking forward to our clinically valuable test being
available to lung cancer patients. The commercial success of a molecular
diagnostic test depends, in large measure, upon the extent of its integration
into current pathological processes. The use of GeneFx Lung with RNAlater will
allow pathologists to avoid the logistics involved with using flash-frozen tumor
specimens and, instead, to handle and ship specimens at room temperature,
thereby simplifying the process significantly. We believe that this will
materially enhance the commercial prospects of our test."


Update Regarding Litigation with Signal Genetics LLC and Respira Health LLC 

On February 25, 2013, MBI provided an update in regard to its ongoing litigation
with Signal Genetics LLC and Respira Health LLC. 


In February 2011, Signal and Respira filed a lawsuit against MBI and Precision
in the Supreme Court of the State of New York asserting twelve causes of action
against MBI. MBI continues to believe that the lawsuit is frivolous, vexatious
and entirely without merit and is defending the lawsuit vigorously. MBI has
received financial support from Precision to, among other things, conduct such
defense and to cover any settlement (in both cases, half of which is credited
against future royalties that may be owed to MBI by Precision) or award of
damages made against MBI (which would not be credited against such future
royalties), subject in all cases to certain threshold limits. 


Discovery in the lawsuit has been completed and, on August 24, 2012, MBI filed
with the Court a motion for partial summary judgment to dismiss Signal and
Respira's claims for lost profits arising from alleged breaches of contract and
the duty of good faith and fair dealing, and causes of action for negligent
misrepresentation, unfair competition and unjust enrichment. 


On February 20, 2013, the Court heard oral argument in connection with MBI's
motion. In a Decision and Order of the same date, the Court granted MBI's motion
and dismissed Signal and Respira's: (1) claims against MBI for lost profit
damages arising from alleged breaches of contract and the duty of good faith and
fair dealing; (2) cause of action against MBI for negligent misrepresentation;
and (3) cause of action against MBI for unfair competition. No trial date has
been set with respect to the remaining claims. 


Erinn Broshko commented: "This decision is a significant setback for Signal and
Respira. We have always believed that the lawsuit is entirely without merit and
are confident that we will be successful in having the remaining claims and
causes of action dismissed."


2012 Financial Results 

MBI incurred a loss of $368,083 ($0.00 per share) for 2012 compared to having
net income of $1,530,192 ($0.02 per share) for 2011. MBI did not generate any
revenue during 2012, but generated net licensing revenue of $2,069,773 during
2011.


Research and Development 

Research and development expenses were $nil for 2012 compared to $94,519 for
2011. Under the terms of MBI's commercialization agreement with Precision,
Precision is responsible for all future costs associated with the development
and commercialization of GeneFx Lung. 


General and Administrative

General and administrative expenses, including non-cash share-based expenses
associated with the prior issuance of stock options and foreign exchange, were
$368,083 for 2012 compared to $732,216 for 2011, representing a decrease of 50%.

Consistent with MBI's cost saving initiatives and focused burn rate, general and
administrative expenses, exclusive of non-cash share-based expenses associated
with the prior issuance of stock options and foreign exchange, were $257,138 for
2012.


Liquidity and Capital Resources 

At December 31, 2012, MBI had cash and equivalents totalling $355,326 and
working capital of $294,655 compared to cash and equivalents of $685,170 and a
working capital of $556,446 at December 31, 2011. 


Cash used in operating activities was $329,549 for 2012 compared to cash
provided by operating activities of $252,586 for 2011.  


Cash provided by investing activities was $nil for 2012 compared to $64,499 for
2011. The cash provided by investing activities consisted of proceeds from the
disposition of capital assets. 


Cash provided by financing activities was $nil for 2012 compared to $212,930 for
2011. The cash provided by financing activities consisted of proceeds on the
issuance of shares. 


In September 2012, MBI and Precision amended their commercialization agreement
to restructure the potential milestone payments payable by Precision. Under the
amended commercialization agreement, MBI is eligible to receive from Precision
up to $1.0 million in the following milestone payments, all of which are
credited against future royalties that may be owed to MBI by Precision:
following the commercial launch of GeneFx Lung, amounts totaling $500,000 and,
following the achievement of $5 million in net revenues from GeneFx Lung,
amounts totaling $500,000. 


By restructuring the milestone payments in the commercialization agreement,
management expects to extend MBI's cash runway following the commercialization
of GeneFx Lung to allow MBI the opportunity to demonstrate increasing clinical
and commercial success of GeneFx Lung. As a result of MBI's cost savings
initiatives and focused burn rate, management believes that MBI currently has
sufficient cash resources to continue with operations until approximately the
first quarter of 2014. If Precision commercializes GeneFx Lung by mid-2013 as
previously announced, then, with receipt of the $500,000 in milestone payments
from Precision relating to commercial launch, management believes that MBI will
have sufficient cash resources to fund operations until approximately the third
quarter of 2015.


About Gene(R)Fx Lung

GeneFx Lung is a proprietary gene expression-based test to improve upon staging
for identifying those patients with early-stage non-small-cell lung cancer
(NSCLC) who, following surgical removal of their tumor, are at higher and lower
risks of mortality. In an initial study of patient specimens from the National
Cancer Institute of Canada Clinical Trials Group JBR.10 trial, published in the
Journal of Clinical Oncology, patients classified by GeneFx Lung as higher risk
benefited from adjuvant chemotherapy, and those classified as lower risk did not
benefit and may have experienced a detrimental effect from adjuvant
chemotherapy. GeneFx Lung was subsequently validated in predicting patient
mortality in four independent studies involving data from tumor specimens
totaling 676 untreated early-stage NSCLC patients. GeneFx Lung is expected to
provide better-informed and personalized treatment decisions to assist in the
selection of patients for adjuvant chemotherapy. 


On April 15, 2011, Precision and Med BioGene closed their commercialization
agreement. The agreement provides to Precision exclusive global rights to
develop and commercialize GeneFx Lung.


About Precision Therapeutics, Inc.

Precision, a leading life science company based in Pittsburgh, Pennsylvania, is
dedicated to improving the outcomes of cancer patients by providing personalized
medicine solutions that aim to increase quality of life and cancer survival
rates. Precision offers a portfolio of products developed to help guide
physicians and patients with difficult clinical decisions throughout the cancer
care continuum. For more information, please visit
www.precisiontherapeutics.com. 


About Med BioGene Inc. 

Med BioGene is a life science company based in Vancouver, British Columbia that
is currently focused on managing the license and rights to GeneFx Lung. Med
BioGene's common shares are listed for trading on the TSX Venture Exchange. For
more information, please visit www.medbiogene.com. 


Certain information in this press release contains forward-looking information
and statements ("forward-looking information") of MBI under applicable Canadian
and United States 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 the timing, completion and/or results of clinical trials or studies, the
timing for commercialization of any products, future profits, future product
revenues, future shareholder value, future operations and plans, the completion
and use of proceeds from transactions or financings 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 upon uncertain assumptions that
could cause a 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 speak
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 herein is
qualified in its entirety by this cautionary statement and MBI undertakes no
obligation to revise or update any such 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. Certain information included
in this press release in respect of Precision and its scientific, clinical and/
or commercialization efforts and expectations have been provided to MBI by
Precision. MBI may not have been able to confirm the accuracy of such
information and you should not place undue reliance on any such information,
including any information regarding Precision that may constitute
forward-looking information. A redacted copy of the Commercialization Agreement
between MBI and Precision may be found at www.sedar.com. Each trademark, trade
name or service mark of any entity appearing in this press release belongs to
its holder.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Med BioGene Inc.
Erinn B. Broshko
Executive Chairman
(800) 641-3593
ebroshko@medbiogene.com
www.medbiogene.com
Med Biogene (TSXV:MBI)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024