Pharmion Corporation and MethylGene Inc. announced research collaboration for the development of novel small molecule inhibitors targeting sirtuins, a separate and distinct class of histone deacetylase enzymes (Class 3 HDACs) implicated in cell survival and death.

Pharmion and MethylGene's Class I specific HDAC inhibitor, MGCD0103, has demonstrated efficacy in a number of tumour types, and the sirtuins represent potentially attractive novel cancer targets within a related family of enzymes. Sirtuins (including SIRT1) have been shown to deacetylate histone proteins and numerous transcription factors, leading to promotion of normal cell survival and aberrant gene silencing in cancer cells. Inhibition of sirtuins allows re-expression of silenced tumour suppressor genes, leading to reduced growth of cancer cells, and anti-cancer effects have been observed with SIRT1 inhibitors in vitro and in vivo. As yet, no sirtuin inhibitors have entered the clinic. Synergies in gene re-expression have been demonstrated by combining SIRT1 inhibition with either standard cytotoxics or other epigenetic modifying drugs, including inhibitors of DNA methylation and histone deacetylation. Two epigenetic therapy combinations are already under active investigation in phase 2 studies combining Pharmion's Vidaza, a DNA hypomethylating agent, with Pharmion and MethylGene's HDAC inhibitor, MGCD0103. The parties intend to explore combinations with resulting anti-sirtuins as well.

This agreement expands the January 2006 license and collaboration agreement between Pharmion and MethylGene for the research, development and commercialization of MethylGene's oncology HDAC inhibitors, led by MGCD0103 currently in phase 2 clinical trials. Sirtuin inhibitors, the third epigenetic modality to be explored for anticancer activity by Pharmion, and the second in collaboration with MethylGene, are expected to be studied both as monotherapy and combination therapy in the treatment of cancer once a clinical candidate is identified. MethylGene has already identified a series of potent lead compounds, and Pharmion expects to file an initial Investigational New Drug (IND) application within the next 24 to 30 months.

"Sirtuins represent a new component of epigenetic tumour suppressor gene silencing that may potentially link some epigenetic changes associated with aging with those found in cancer, and, in particular, SIRT1 has emerged as a key contributor to the epigenetic silencing of genes that drive tumourigenesis," said Stephen B. Baylin, MD, Professor of Medicine and Oncology, Sidney Kimmel Comprehensive Cancer Center at Johns Hopkins University School of Medicine in Baltimore, Maryland.

"By extending our collaboration with MethylGene to develop inhibitors of sirtuins, we are extending our leadership position in the development of epigenetic therapies, taking advantage of our translational medicine expertise in the preclinical and clinical development of these agents, and continuing the build out of our focused oncology pipeline," said Patrick J. Mahaffy, President and Chief Executive Officer of Pharmion. "With the recent survival data demonstrated by Vidaza in higher-risk MDS, epigenetic therapies are rapidly emerging as an important component of cancer therapy and we believe that the sirtuins represent important new targets in the epigenetic field."

"Sirtuins are an area of increasing interest to us due to their potential broad application in epigenetic regulation of disease. This collaboration, focused in cancer, enhances the joint vision of our companies to be actively involved in this important area of cancer research," said Donald F. Corcoran, President and Chief Executive Officer of MethylGene. "In addition, we are pleased to be collaborating on this project with Pharmion, as together our Companies have demonstrated a strong synergistic working relationship with the advancement of MGCD0103 through clinical trials."

Under the terms of the agreement, MethylGene and Pharmion will share in the research, development and commercialization of the sirtuin inhibitor program. Pharmion will fund the preclinical research program, including approximately US $5 million in FTE support to MethylGene over an 18 month period. Once a development candidate is identified, the Companies expect to share in development funding in accordance with the terms of the existing license and collaboration agreement -- 40 percent for MethylGene and 60 percent for Pharmion. Pharmion's milestone payments to MethylGene could reach approximately US $22 million based on the achievement of development and regulatory goals, with the nearest-term milestone of US $2 million to be paid upon enrollment of the first patient in a Phase I trial. In addition, Pharmion could pay MethylGene up to approximately US $79 million upon the achievement of sales milestones.

MethylGene will receive royalties on net sales in North America ranging from 10.5 to 21 per cent and of 8.5 to 13 per cent for all other licensed territories. These royalties may be subject to certain reductions if the commercialized product is not based on MethylGene's current lead compounds and related analogs. MethylGene will have an option, at its sole discretion, as long as it continues to co-develop, to co-promote approved products in North America and, in lieu of receiving royalties, to share the resulting net profits equally with Pharmion. If MethylGene exercises its right, at its sole discretion, to discontinue development funding, Pharmion will be responsible for 100 percent of development costs incurred thereafter. Under MethylGene's October 2003 agreement with Taiho Pharmaceutical, Taiho has the exclusive right to develop and commercialize any resulting sirtuins cancer product in Japan, Korea, Taiwan and China in exchange for preclinical funding, royalties and milestones.

Epigenetics refers to changes in the regulation of gene expression, and DNA methylation and histone deacetylation are two of the more studied epigenetic regulators of gene expression. Epigenetic changes can silence gene expression and, unlike DNA mutations, may be reversed by targeting the enzymes involved. The silencing of key cell cycle control genes and tumour suppressor genes through these two mechanisms of epigenetic regulation has been demonstrated in vitro and in vivo in haematological malignancies and in solid tumours. These key growth control genes can be re-expressed in cancer cells when DNA hypermethylation is reversed by Vidaza and/or inappropriate histone deacetylation is inhibited by MGCD0103. Rather than using molecules that kill both normal and tumour cells, as do traditional anticancer agents, targeted epigenetic therapy reactivates the silenced tumour suppressor genes thereby re-establishing the cancer cell's natural mechanisms to control abnormal growth.

MethylGene Inc. is a publicly-traded biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics for cancer. The Company's lead product, MGCD0103, is an oral isotype-selective HDAC inhibitor presently in multiple clinical trials for solid tumors and hematological malignancies, including phase II monotherapy and phase I/II combination trials with Vidaza and Gemzar.

Pharmion is a leading global oncology company focused on acquiring, developing and commercializing innovative products for the treatment of haematology and oncology patients in the US, Europe and additional international markets.