MONTREAL, CANADA -- (Marketwired) -- 05/13/13 -- MethylGene Inc. ("MethylGene" or the "Company") (TSX: MYG) today reported financial results for the first quarter ended March 31, 2013.
-- On May 9, 2013 we announced that subject to court approval and approval by our shareholders at our Annual and Special General Meeting, we have proposed to change the company's jurisdiction of incorporation of Canada to the State of Delaware in the United States under the name Mirati Therapeutics, Inc. through a court-approved Plan of Arrangement (the "Arrangement"), and to list on the NASDAQ stock exchange.-- In the first quarter, we made several management changes including the appointment of Mark J. Gergen as Executive Vice President and Chief Operations Officer; the appointment of Jamie A. Donadio as Vice President Finance in our San Diego office; as well as the departures of several executives in our Montreal offices.-- As a company we are now primarily focused on targeted oncology drug development. Our lead oncology program, the multi-targeted kinase inhibitor MGCD265 continues to enroll in both monotherapy and combination therapy trials. We are also actively exploring development plans for our selective HDAC inhibitor, mocetinostat and our differentiated kinase inhibitor, MGCD516.-- The Phase 2 study of MGCD290 in vulvovaginal candidiasis did not demonstrate a benefit of the combination with fluconazole compared to fluconazole alone. However, we continue to believe that MGCD290 may be useful for the treatment of certain fungal indications and we will explore partnering opportunities for the program.
Management has determined that based on an analysis of revenue and expenses that the functional currency for the company will be the U.S. dollar effective January 1, 2013. Furthermore the Company has used the U.S. dollar as its presentation currency.
First Quarter 2013 Financial Results Reported in United States Dollars
The Company's financial statements for the period ended March 31, 2013 have been prepared in accordance with IAS 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB).
Net research and development expenditures for the first quarter of 2013 were $5.5 million, $3.3 million higher than the first quarter of 2012. This increase was primarily due to costs relating to the departure of the company's Chief Scientific Officer, costs relating to the manufacture of and formulation work relating to MGCD265 and costs associated with the recently completed Phase 2 clinical trial for MGCD290.
General and administrative expenses in the first quarter of 2013 were $2.5 million, $1.3 million higher than in the first quarter of 2012 due primarily to costs related to the management changes discussed above as well as the costs incurred in connection with the Arrangement and NASDAQ listing.
Financial income of $74,000, relating primarily to interest income, in the first quarter of 2013 was $6,000 higher compared to the first quarter of 2012 due to higher average cash balances. We recorded a foreign exchange loss of $644,000 in the first quarter of 2013 versus no exchange difference in the first quarter of 2012. The loss in 2013 relates primarily to the transition to the U.S. dollar as our functional currency effective January 1, 2013.