VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct 3, 2012) - Med BioGene Inc. (TSX VENTURE:MBI) today provided an update regarding the commercialization of LungExpress Dx and ongoing litigation with Signal Genetics LLC and Respira Health LLC.
Commercialization of LungExpress Dx
LungExpress Dx 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 LungExpress Dx 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. LungExpress Dx was subsequently validated in predicting patient mortality in four independent studies involving data from tumor specimens totaling 676 untreated early-stage NSCLC patients. LungExpress Dx is expected to provide better-informed and personalized treatment decisions to assist in the selection of patients for adjuvant chemotherapy.
On April 15, 2011, MBI closed its commercialization, license and research reimbursement agreement (the "Commercialization Agreement") with Precision Therapeutics, Inc. The Commercialization Agreement provides to Precision exclusive global rights to develop and commercialize LungExpress Dx.
LungExpress Dx is currently validated for use with frozen tumour tissue. Precision is responsible for all costs associated with the development and commercialization of LungExpress Dx and is commencing clinical studies to validate the use of LungExpress Dx with tissue preserved by RNARetain, a molecular fixative. RNARetain 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.
These clinical studies are being conducted using patient specimens collected prospectively by Precision from a consortium of medical centers in the United States. This collection is complete and the final step of validation using RNARetain has begun.
Precision expects to commence commercialization of LungExpress Dx in its CLIA-certified laboratory by mid-2013. 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.
Sean McDonald, Precision''s President and Chief Executive Officer stated: "We are looking forward to completing our clinical validation studies and improving the utility and accessibility of LungExpress Dx. We are completely committed to making this important test available to patients and physicians and to improving the outcomes of cancer patients by providing personalized medicine solutions."
Erinn Broshko, Executive Chairman of Med BioGene, commented: "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 LungExpress Dx with RNARetain 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 and are encouraged by the progress made by Precision."
Amendment of Commercialization Agreement
Under the terms of the Commercialization Agreement, Precision has paid to MBI license fees and research reimbursement of $2.3 million, half of which is credited against future royalties that may be owed to MBI by Precision. In addition, MBI is eligible to receive up to $1 million in payments based on the achievement of certain milestones, all of which are credited against future royalties that may be owed to MBI by Precision. MBI and Precision have amended, among other things, these milestone payments such that Precision will now pay to MBI, following the commercial launch of LungExpress Dx, amounts totaling $500,000 and, following the achievement of $5 million in net revenues from LungExpress Dx, amounts totaling $500,000.
MBI will also receive royalty payments in the high single digits based on a percentage of Precision''s future net revenues associated with the commercialization of LungExpress Dx.
Erinn Broshko further commented: "By restructuring the milestone payments in our commercialization agreement, we expect to extend MBI''s cash runway following the commercialization of LungExpress Dx to allow us the opportunity to demonstrate increasing clinical and commercial success of our test. As a result of our focused burn rate, we believe that MBI currently has sufficient cash resources to continue with operations until approximately the first quarter of 2014. If Precision commercializes LungExpress Dx around the expected timeframe then, with receipt of the $500,000 in milestone payments from Precision relating to commercial launch, we believe that MBI will have sufficient cash resources to fund operations until approximately the third quarter of 2015."
Litigation with Signal Genetics, LLC and Respira Health LLC
In February 2011, Signal Genetics LLC ("Signal") and Respira Health LLC ("Respira") filed a lawsuit against MBI and Precision Therapeutics, Inc. 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 (half of which is credited against future royalties that may be owed to MBI by Precision) and to cover any settlement or award of damages made against MBI, subject in all cases to certain threshold limits.
Discovery in the lawsuit has been completed and, on August 24, 2012, MBI filed a motion for partial summary judgment to dismiss the claims of Signal and Respira for lost profits, and causes of action for negligent misrepresentation, unfair competition and unjust enrichment. The hearing to rule on that motion has not yet been scheduled.
About Precision Therapeutics
Precision is a leading life science company based in Pittsburgh, Pennsylvania, and 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
MBI is a life science company based in Vancouver, British Columbia, that is currently focused on managing the license and rights to LungExpress Dx, a proprietary gene expression-based test for early-stage non-small-cell lung cancer. LungExpress Dx is expected to provide better-informed and personalized treatment decisions to assist in the selection of patients for adjuvant chemotherapy. MBI has partnered with Precision Therapeutics for the global commercialization of LungExpress Dx. MBI''s common shares are traded on the TSX Venture Exchange. For more information, please visit www.medbiogene.com.
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