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MethylGene is a
biopharmaceutical company focused on the discovery, development and commercialization of
novel therapeutics to fight cancer and infectious diseases
Healthcare
Biotechnology
(MYG-TSX)
MethylGene Inc.
7220, rue Frederick-Banting
Montreal QC Canada H4S 2A1
514-337-3333
Donald F. Corcoran
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Mat 5, 2005
BIO:
Donald F. Corcoran
President & Chief Executive Officer
Mr. Corcoran has been our President and Chief Executive Officer since the Company's
inception. Mr. Corcoran has 22 years of experience in the biotechnology, pharmaceutical
and health care industries. His background includes functional and staff responsibilities
in the areas of finance, accounting, marketing, human resources, business development and
acquisitions/strategic planning. He was instrumental in the creation of MethylGene Inc.
during his tenure as Vice President, Business Development at Hybridon, Inc., a
publicly traded Cambridge, Massachusetts based drug research and development company.
During his time at Hybridon, Inc., Mr. Corcoran was responsible for establishing a number
of corporate alliances with multinational health care companies. Prior to that time,
he served as Business Planning Manager at Schering-Plough Corporation, and served in
a variety of managerial and staff positions at Eli Lilly and Company from 1982 to 1991.
Mr. Corcoran is also a director of Tranzyme Inc., a private United States biotechnology
company located in Research Triangle Park, North Carolina. Mr. Corcoran received a B.A. in
Economics and Biology from Union College, New York and an MBA from Cornell University's
Graduate School of Management.
Company Profile:
MethylGene is a publicly traded biopharmaceutical company focused on the discovery,
development and commercialization of novel therapeutics in cancer and infectious disease.
Two cancer product candidates, MG98, partnered with MGI Pharma for North America and
MGCD0103, partnered with Taiho Pharmaceutical for certain Asian countries, are currently
in clinical trials.
MG98 has entered a randomized two-step Phase II combination trial with interferon alpha in
metastatic renal cell cancer. MGCD0103 is currently in Phase I dose-escalation
monotherapy trials against solid tumours and hematological malignancies. In addition,
MethylGene is in collaboration with Merck to develop small molecule beta-lactamase
inhibitors to overcome antibiotic resistance. MethylGene has a portfolio of preclinical
programs for its kinase and histone deacetylase (HDAC) inhibitors for both oncology and
non-oncology indications, and is exploiting its core HDAC expertise for the treatment of
neurodegenerative diseases with EnVivo Pharmaceuticals.
CEOCFOinterviews: Mr.
Corcoran, will you tell us your vision when you started the company and where you are
today?
Mr. Corcoran: “We began in 1997 with a mission of
getting a drug, which is MG98, into human clinical trials within two years. We
accomplished this and at the same time began to diversify the company. As our
company matured, we decided to build isotypic-selective HDAC enzyme inhibitors in addition
to our DNA Methyltransferase (DNMT) program. Our therapeutic areas are cancer and
infectious disease and these are the areas upon which we will continue to focus on to
build the company.”
CEOCFOinterviews: Why
did you decide to go in that direction?
Mr. Corcoran: “We already had an early and unproven
technology trying to inhibit the messenger RNA of DNA Methyltransferase, which is the
target of MG98. We were looking for ways to diversify, and had the advantage of knowing
that enzyme inhibitors work. We also saw that we could build upon these core
competencies once we established our company in Canada. We believe this was a wise
decision because we could recruit the people with experience and then pursue selected
enzyme targets, for which we subsequently synthesized compounds to inhibit them.”
CEOCFOinterviews: Will
you tell us about the two cancer products?
Mr. Corcoran: “MG98 is an inhibitor of DNA
Methyltransferase, an enzyme that is specific to cancer. MG98 is a drug that is in a
two-step randomized Phase II trial in metastatic renal cell cancer in combination with
interferon alpha. At the end of 2005, we expect to commence the second step of this
trial after having decided what the optimal schedule is for the
combination of MG98 and interferon alpha. We will be recruiting and randomizing 200
patients for the combination trial and 100 for the interferon trial. The primary endpoint
of this trial will be median progression-free survival. Secondary endpoints will be
one-year survival, tumour response and overall survival.
The second compound is called MGCD0103; it is an
isotypic-selective histone deacetylase (HDAC) inhibitor. The function of HDAC enzymes is
to regulate gene expression. However, in the cancer setting when they are over expressed,
which they can be, they inappropriately silence tumor suppressor genes in our bodies.
Therefore, the hypothesis is that if you can inhibit this over expression, which will
reactivate the tumor suppressor genes, you can then intervene in the progression of
cancer. The compound MGCD0103 is currently in three Phase I clinical trials; two are solid
tumor trials as an oral treatment and one is for hematological tumors. By the end of the
second quarter, we expect to have embarked on a second hematological tumor trial, with the
goal to begin a Phase II monotherapy trial or more likely, a Phase I/II combination
trial with a tumor type yet to be designated.”
CEOCFOinterviews: Will
you tell us about the partnerships?
Mr. Corcoran: “MG98 is partnered with MGI Pharma, an
oncology specialty company. They have an oncology sales force and are an oncology
development company. We have licensed to them North American rights, and have kept 50% of
co-promotion rights and profit sharing in North America. In addition, we own the rights
around the world. With MGCD0103, we have a partner in Asia, Taiho Pharmaceuticals; one of
the leading oncology companies in Japan. We have provided them with a license in Japan, Korea,
Taiwan and China; about 15% of the pharmaceutical world. We retain the rights in 85% of
the world. They will fund, develop and commercialize the compound in their territory and
we receive a royalty. We are also receiving from them $13.5 million in funding for
clinical trials in North America, of which we still have about $10 million to utilize.
Taiho is paying chemists in our labs $2 million a year for two years to come up with
next-generation compounds of HDAC inhibitors. In addition, we can use these compounds in
other indications outside of oncology. Our goal is to retain as much North American rights
as possible with the ultimate goal of putting a sales and marketing force together in North
America. As previously mentioned, for MG98 we have kept 50% of the North American market
and for our HDAC inhibitor, we have 100% of the North American market."
CEOCFOinterviews: Do you have a partnership with
Merck?
Mr. Corcoran: “Also in our pipeline is a beta-lactamase inhibitor. When exposed to
beta-lactam antibiotics, bacteria, over time, have evolved a defense mechanism rendering
the beta-lactam antibiotics ineffective or the dose of the antibiotic must be increased to
be effective. The industry has countered by making beta-lactamase inhibitors but these are
limited as they can only be paired with penicillins. We believe we have discovered a way
to build a broad-spectrum inhibitor that can be paired with not only penicillins, but also
with carbapenems and cephalosporins. This was complementary to Merck’s current
pipeline and they saw the opportunity. They have a number of beta-lactamase antibiotics in
their portfolio, specifically their leading carbapenem called Primaxin®, which in
2004 had over $640 million in sales. They are looking at pairing our beta-lactamase
inhibitor with Primaxin® and other drugs to possibly overcome the resistance mechanism.”
CEOCFOinterviews: Do you have the financing you need
to go forward?
Mr. Corcoran: “We went public in June of 2004. Before we went public, we had raised
over $115 million in funding of which $42 million came from venture capitalists and the
residual amount came from partnerships and government grants or funding. When we went
public on the Toronto Stock Exchange at the end of June in 2004, we raised another $23
million. With that money and the cash we had when we were a private company, we have about
two years of cash that will get us into 2007."
CEOCFOinterviews: How do you stand out from the crowd?
Mr. Corcoran: “The enzyme targets we go after are interesting and novel. The HDACs
are particularly interesting to the pharmaceutical industry. We have a number of
competitors with pan HDAC Inhibitors. As there are eleven HDAC isoforms, we had to make a
decision whether we were going to inhibit all eleven like our competitors had, or were we
going to take the time to try to understand the underlying molecular biology of each
isoform. Our science began to show a subset of HDACs are involved in cancer and we had the
skill set from a medicinal chemistry point-of-view to make isotypic-selective inhibitors.
This is our mission and this is what has differentiated us from the rest of the HDAC
world. Because there are eleven of these isoforms, there is now evidence in the literature
pointing to other disease indications, outside of cancer, in which these enzymes appear to
play a role. We have the tools to begin examining areas like inflammation, diabetes and
neurodegenerative diseases. For example, we are collaborating with a EnVivo
Pharmaceuticals (Boston) to use HDACs in neurodegenerative diseases. With
isotypic-selectivity, we can apply inhibitors in the diseases where you need to be
isotypic, whereas in cancer you may be able to tolerate a bit of toxicity if you are
hitting enzymes that are not involved in the cancer.”
CEOCFOinterviews: In
closing, why is this a good time for potential investors to be interested?
Mr. Corcoran: “We are probably twelve to eighteen months
away from identifying the oral clinical candidate for a dual action Kinase inhibitor. You
are looking at a company that has renewable competencies. As we move drugs into clinical
trials, we can put that research team of biologists and medicinal chemists onto a new
project and move that forward; we are showing we can do that. We have two drugs in cancer
clinical trials as we speak and we have good partnerships. With the HDAC opportunities
outside of cancer, we have many possibilities available to us. In terms of the
comparables, if one looks at the evaluation, we are very attractive in comparison to other
cancer or HDAC companies. One of our competitors, Aton, was purchased by Merck in March of
last year and it appeared that they spent $125 million U.S. upfront for their purchase
with additional milestone payments to come. Our valuation today with multiple projects,
not just one compound, is below that figure. I think it is an attractive time for people
to look at MethylGene as we have done deals, are proven financial managers, have very good
scientists and a robust pipeline.”
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