MethylGene Initiates Phase I HDAC Cancer Trial in Hematological Malignancies; MGCD0103 to be Tested in Leukemias and Myelodysplastic Syndrome.

MONTREAL -- MethylGene Inc. (TSX:MYG), a biopharmaceutical company, today announced that it has initiated the first of two dose escalating Phase I trials for MGCD0103 in hematological (blood cell) cancers. MGCD0103 is a rationally designed isotypic selective small molecule inhibitor of histone deacetylase (HDAC). The second hematologic cancer trial is scheduled to be initiated in early 2005. Both trials seek to determine the safety, pharmacokinetics, pharmocodynamics and tolerability of MGCD0103 in patients with leukemias or myelodysplastic syndrome.

For the first trial, MGCD0103 will be given orally three times per week for a three-week cycle. The trial will be conducted at the Princess Margaret Hospital in Toronto, Canada and at the University of Texas M.D. Anderson Cancer Center in Houston, Texas. For the second trial, MGCD0103 will be given orally twice weekly for a three-week cycle. One of the two clinical sites for this trial will be the University of Chicago; the second site is still to be confirmed. Each trial is expected to enroll between 18-25 patients. The Company expects to enroll the first patients in early 2005. These two dosing schedules are based on data and observations obtained from two ongoing monotherapy solid tumor trials with MGCD0103.

"HDAC inhibitors are rapidly gaining recognition as a promising new strategy to fight cancers," said Donald F. Corcoran, President & CEO at MethylGene. "These trials are part of a robust clinical program we have designed for MGCD0103, which also includes two dose-escalating Phase I monotherapy clinical trials in solid tumours which are ongoing in Canada and the United States."

"In preclinical work, MGCD0103 displayed a number of desirable characteristics including oral potency, isotypic selectivity and in vivo tumour inhibition in a variety of animal tumour models. Based on these results, we are hopeful that targeted and selective inhibition of cancer-related HDAC isoforms will lead to improved therapies for the treatment of both solid tumours and blood cancers," said Dr. Jeffrey M. Besterman, Sr. Vice President of Research and Development.

MethylGene's small molecule HDAC program for oncology, including MGCD0103 and its analogues, is licensed to Taiho Pharmaceutical for Japan, China, Taiwan and Korea. In exchange for development and commercialization rights, Taiho provides MethylGene with contract payments that could total up to US $37.5 million, which includes preclinical and clinical support for the development of MGCD0103 for North America.

About HDAC

Histone deacetylases (HDAC) are a family of 11 enzymes that are involved in the regulation of gene expression and as such may be master regulators for disease. It has been established in the scientific literature and observed by MethylGene's scientists and potential collaborators that isotypic selective inhibition of certain HDAC enzymes may have the potential to impact diseases including cancer, diabetes, inflammation, cardiovascular and neurodegenerative diseases. MethylGene is currently developing MGCD0103, an isotypic selective inhibitor targeting specific HDAC enzymes involved in the regulation of tumour suppressor genes in cancer.

About MethylGene

MethylGene is a 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 into the first step of a randomized two-step Phase II combination trial with interferon alpha in metastatic renal cell cancer. MGCD0103 is currently in two Phase I dose-escalation monotherapy trials against solid tumours. In collaboration with Merck, MethylGene is developing small molecule beta-lactamase inhibitors to overcome antibiotic resistance. MethylGene has a portfolio of preclinical programs underway 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 neurodegenerative diseases with EnVivo Pharmaceuticals. Please visit MethylGene's website at www.methylgene.com.

Except for historical information, this press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risk and uncertainties, (which can be found in the Company's prospectus dated June 18, 2004 and can be found on www.sedar.com) which may cause but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting.