MGI PHARMA/METHYLGENE BEGIN CLINICAL TRIAL OF MG98.

MGI Pharma, Inc., (Nasdaq:MOGN) and MethylGene, Inc. have initiated a clinical trial of MG98, a second-generation antisense inhibitor of DNA methyltransferase, in patients with advanced myelodysplasia (MDS) or relapsed/refractory acute myeloid leukemia (AML). This trial will assess the safety and pharmacokinetic profiles of MG98, define the optimal effective dose of MG98 in these patients --which will aid in the design of future MG98 trials -- and document both the biological and clinical effects of MG98 in patients with advanced MDS and relapsed or refractory AML. Up to 50 patients will participate in the trial and the enrollment period is expected to last approximately 12 months.

MGI Pharma is developing MG98 under an exclusive North American license, research and development agreement for MG98 and other inhibitors of DNA methyltransferase with MethylGene Inc. Phase 2 clinical trials of MG98 in head and neck cancer and in renal cell carcinoma are ongoing.

MG98 is a second-generation antisense oligonucleotide that targets mRNA for the enzyme DNA methyltransferase, which is responsible for silencing tumor suppressor genes. MGI and MethylGene are developing MG98 for the purpose of blocking production of DNA methyltransferase. Preventing DNA methyltransferase production may allow tumor suppressor genes that have been silenced by hypermethylation to be re-activated. Re-activation of tumor suppressor genes is intended to stop or slow tumor growth by restoring growth control mechanisms. MG98 is well tolerated and has already demonstrated anti-cancer activity in Phase 1 trials.

"We are excited about initiating this clinical trial of MG98 for patients with advanced MDS or AML because they may be ideal candidates to potentially benefit from this novel new agent," said Dr. John C. Byrd, D. Warren Brown Professor in Leukemia Research and Director of Hematologic Malignancies of the Division of Hematology-Oncology, at The Arthur James Comprehensive Cancer Center, Ohio State University in Columbus. "Hypermethylation of tumor suppressor genes is common in many cancers, and has been particularly associated with the clinical progression from MDS to AML. More specifically, hypermethylation of the p15 tumor suppressor gene has been found in the majority of patients with advanced MDS, and in nearly all of the patients with AML arising from MDS." Dr. Byrd explained "We're eager to test the hypothesis that reversal of methylation of these tumor suppressor genes may slow or halt the progression of MDS, or in the case of AML, render the disease more susceptible to standard treatments. So this trial of MG98 - with its selective inhibition of DNA methyltransferase and limited toxicities - is very intriguing for these patients. It's an exciting experimental approach to cancer therapy."

MGI and MethylGene intend to further evaluate MG98 in cancers where silencing of tumor suppressor genes by DNA methyltransferase has been documented. In preclinical models, MG98 used alone and in combination with other anti-cancer agents has caused shrinkage or inhibited growth of human tumors. In earlier trials, transient side effects that were occasionally seen included fatigue, anorexia, fever and chills, and elevated liver enzymes.

Early in 2001 MGI and MethylGene announced that a key patent for "Inhibition of DNA Methyltransferase" (U.S. Patent No. 6,184,211) was granted to McGill University which is under a worldwide exclusive license with MethylGene and which provides significant expansion of the licensed intellectual property rights.

About Myelodysplasia and Acute Myeloid Leukemia

Myelodysplastic syndrome (MDS) is a heterogeneous group of clonal stem cell disorders that give rise to progressive cytopenias (decreases in white cells, red cells and platelets), which can evolve into acute myelogenous leukemia (AML). MDS is a spectrum of disorders, ranging from mild anemia, which may require therapy, to severe, progressive cytopenias, out of which can arise the need for regular transfusions and/or acute myeloid leukemia. Common symptoms of MDS include anemia-associated problems, fatigue, pallor, infections and bleeding, generally in elderly patients. The estimated incidence of MDS is 7,000 to 12,000 new cases in the United States annually. With a median survival of one to three years, the estimated prevalence is 10,000 to 25,000 cases. MDS, and for the most part AML, are primarily seen in patients older than 50 years old, where other medical conditions play a significant role in determining their ability to tolerate aggressive therapy. The standard of care for MDS patients is generally accepted to be supportive care treatments, including growth factors, transfusions, and antibiotics -- none of which address the underlying disease.

Leukemias are clonal, neoplastic proliferations of immature cells of the hematopoietic system, which are characterized by aberrant or arrested differentiation. Leukemia cells accumulate in the bone marrow cavity, ultimately replacing most of the normal hematopoietic cells, resulting in the signs and symptoms of the disease. These include most prominently, bone marrow failure and its consequences of anemia, hemorrhage, and infection. The incidence rate of acute myelogenous leukemias (AMLs) in the United States is approximately 2.5 per 100,000 persons. AML affects approximately 9,000 people a year in the United States, and is rare below the age of 40.

About MethylGene

MethylGene Inc. is a privately held, Canadian biopharmaceutical and chemistry-driven rational drug design company focused on the inhibition of quality enzyme targets associated with disease. MethylGene combines functional genomic technologies with the application of mechanism-based small molecules and mRNA inhibitors to discover, patent, develop and commercialize novel therapeutics for cancer and infectious disease. MethylGene's lead compound, MG98, which is partnered for North America with MGI Pharma, is currently in Phase 2 clinical trials. The company has other research and development programs to develop small molecule inhibitors of DNA methyltransferases, histone deacetylases, beta-lactamases and other enzyme targets. For more information about MethylGene, visit http://www.methylgene.com.

About MGI Pharma

MGI Pharma, Inc., Minneapolis, is an oncology-focused biopharmaceutical company that acquires, develops and commercializes proprietary products that address unmet cancer patient needs. MGI is building a balanced product portfolio of proprietary pharmaceuticals, and intends to become a leader in oncology. The company focuses its sales efforts solely in the United States and collaborates with other pharmaceutical or biotechnology companies for its products in international markets.

For more information, visit http://www.mgipharma.com or call 952/346-4771.