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Med BioGene Inc.: Med BioGene Reports Financial Results for the Second Quarter of 2009

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  Published in Business and Finance on Monday, August 17th 2009 at 13:22 GMT, Last Modified on 2009-08-17 13:22:52 by Market Wire
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 17, 2009) - Med BioGene Inc. (TSX VENTURE:MBI) today reported its financial results for the second quarter of 2009.

Erinn Broshko, MBI's Chief Executive Officer stated, "Over the last quarter, Med BioGene continued to drive towards the commercialization of LungExpress Dx^TM. On the business side, despite difficult financial markets, we closed a $1.6 million private placement and subsequently entered into an agreement with SEP Capital Corporation to increase the amount to be raised in the financing. On the development front, we progressed in our current study with the University Health Network in Toronto to validate LungExpress Dx^TM for use in predicting a patient's prognosis for survival and we are continuing with the development and validation of our commercial PCR-based assay."

LungExpress Dx^TM is intended to classify patients into high and low risk groups based upon the molecular profile of an individual patient's tumour. The test is expected to be used to improve the selection of patients beyond current clinical parameters, such as stage and histology, for adjuvant chemotherapy.

Recent Business and Scientific Highlights

- MBI closed in June 2009 a non-brokered private placement reaching its maximum subscription of $1.6 million of units. Each unit was priced at $0.08 and consisted of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant will entitle the holder to purchase one common share at a price of $0.10 for a period of 24 months, subject to the acceleration by MBI of the expiration of the warrants if the closing price of the common shares on the TSX Venture Exchange is greater than $0.30 for twenty or more consecutive trading days.

- MBI announced in July 2009 an increase in the amount to be raised under the above noted private placement. MBI and SEP Capital Corporation ("SEP"), a capital pool company listed on the TSX Venture Exchange (TSX VENTURE:SEP.P), entered into an agreement whereby SEP will invest all of its available cash reserves and subscribe for units under the private placement. As of December 31, 2008, SEP had cash reserves of $475,979. Each unit will have the same terms as those issued in the first two tranches of the private placement. The SEP investment is subject to certain conditions, including acceptance by the TSX Venture Exchange and SEP shareholder approval. SEP is holding on September 11, 2009 a meeting of its shareholders to approve the investment. Closing of the investment is expected shortly thereafter.

- MBI and the University Health Network continued with their current study to validate LungExpress Dx^TM for use in predicting a patient's prognosis for survival. This study is being performed using an existing independent set of approximately 200 early-stage non-small-cell lung cancer patient samples collected over a five-year period and is expected to be completed in the third quarter of 2009.

Second Quarter 2009 Financial Results

MBI incurred a loss of $579,975 ($0.01 per share) for the second quarter of 2009, compared to a loss of $616,733 ($0.02 per share) for the same period a year earlier. Comparing results for the first half of 2009 and 2008, MBI's net loss increased marginally to $1,131,505 from $1,109,680. The losses incurred in the first half of 2009 reflect MBI's ongoing product development, validation and commercialization efforts regarding LungExpress Dx^TM.

Research and Development

Research and development expenses were $222,502 for the second quarter of 2009, compared to $261,101 for the comparable period a year earlier, representing a decrease of 15%. Research and development costs were consistent in the first half of 2009 compared to the first half of 2008. Personnel costs were lower as were license and contract research fees, while patent filing expenses and consulting fees were higher. MBI expects that the costs relating to development of LungExpress Dx^TM will increase throughout 2009. Stock based compensation decreased due to the completion of vesting of option grants.

General and Administrative

For the second quarter of 2009, general and administrative expenses decreased slightly to $334,447 compared to $336,207 for the same period in the prior year. General and administrative expenses increased marginally to $661,978 during the first half of 2009, compared to $647,940 for the same period a year earlier. Personnel costs increased, while business development and consulting fees were lower in the first half of 2009. There were only minor variations in the other aspects of MBI's administration costs comparing the first half of 2009 with the same period in 2008.

Liquidity and Capital Resources

At June 30, 2009, MBI had cash and cash equivalents and government receivables totaling $1,641,693 compared to $1,057,230 at December 31, 2008. This increase is a result of MBI closing a non-brokered private placement in June 2009. The net cash outflow from operations for the first half of 2009 was $1,135,839 compared to $1,120,814 for the same period a year earlier.

Corporate Matters

On August 13, 2009, MBI granted to a director and commercial development consultant five-year incentive stock options to purchase an aggregate of 300,000 common shares. The options have an exercise price of $0.10 per share. Also, in respect of the incentive stock options to purchase an aggregate of 3,975,000 common shares granted by MBI on February 25, 2009, MBI increased the exercise price thereof from $0.045 to $0.10 per share effective the date of grant.

About Med BioGene

MBI is a life science company focused on the development and commercialization of genomic-based personalized clinical laboratory diagnostic tests.

MBI's lead product, LungExpress Dx^TM, is expected to be the first commercially available gene expression-based test for early-stage non-small-cell lung cancer that analyzes the molecular profile of a patient's tumour to provide information to assist in tailoring treatment for that specific patient. LungExpress Dx^TM is the first and only gene expression-based test for non-small-cell lung cancer shown to assist in determining a patient's benefit from chemotherapy and prognosis for survival.

MBI is committed to advancing personalized medicine by commercializing tests that provide clinically relevant information to both save lives and reduce health care costs.

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 is not limited to, that 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. 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 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. 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 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.