MSI has been engaged in a protracted dispute with Quark Venture Inc. regarding the latter’s breach of an investment agreement in 2016. The latest in a series of dispute decisions was issued on December 6, 2019 by the British Columbia Court of Appeal.  This judgement denied Quark’s appeal of a BC Supreme Court decision which had denied Quark leave to appeal a $20M USD Arbitration Award in MSI’s favor.  The text of the most recent judgement is available on the BC Court of Appeal website.  https://www.bccourts.ca/jdb-txt/ca/19/04/2019BCCA0448.htm.

The deadline to apply for leave to appeal to the Supreme Court of Canada has passed without an application and, as a result, Quark has exhausted its avenues to appeal.

On January 8, 2020, Quark filed a Notice of Intention to make a proposal to creditors under the Bankruptcy and Insolvency Act (the “BIA”). https://mnpdebt.ca/en/corporate/engagements/1032951-b-c-ltd-formerly-quark-venture-inc  Subsection 69(1) of the BIA has the effect of staying enforcement of the court orders that Quark pay MSI, as well as staying any legal proceedings brought against Quark for 30 days.

Dispute History

In a January 2016 press release, MSI announced the results of its first Phase 2 clinical trial, evaluating the efficacy and safety of MSI-195 relative to placebo added to ongoing antidepressant therapy, in patients suffering from Major Depressive Disorder.  As MSI announced at the time, MSI-195 did not demonstrate efficacy over placebo for the primary endpoint, however post-hoc exploratory analysis identified a number of key factors associated with beneficial treatment differences.  Additionally, MSI-195 was well tolerated.  MSI has published two manuscripts detailing the clinical trial and post-hoc analysis.

In September 2016, MSI and Quark jointly announced a $30 million USD investment to continue clinical development of MSI-195 for the treatment of depression. After making an initial payment of $1 million USD under the investment agreement, in November 2016 Quark declined to make any further payments.

After being unable to resolve the matter with Quark, MSI initiated a binding arbitration proceeding. The arbitrator, on June 21, 2018 in a 45-page ruling, found in favour of MSI, determining that Quark had breached the parties’ investment agreement and making an award in MSI’s favour of $20 million USD plus interest.  The arbitrator also dismissed a Quark’s counterclaim and in so doing concluded that “MSI did not make misrepresentations to Quark as Quark has alleged”.  MSI was not required to issue any shares to Quark as a result of the ruling.

Since the $20 million USD award was issued, Quark has not paid any portion of the amount ordered.  In July of 2018 MSI petitioned the British Columbia Supreme Court for leave to enforce the award.  Quark, for its part, initiated a petition to seek leave to appeal the award and to have the award set aside. In March of 2019, those petitions were resolved with MSI’s petition for leave to enforce granted, and Quark’s petition, for leave to appeal and to have the award set aside, dismissed. In response, Quark filed notices of appeal to the B.C. Court of Appeal from the B.C. Supreme Court’s decisions on those petitions. Around that time (August of 2019) Quark changed its name from Quark Ventures Inc. to 1032951 B.C. Ltd. The appeal was heard September 4, 2019, and that has now been resolved with the Court of Appeal dismissing Quark’s appeal in the December 6^th decision.

Most recently, on January 8, 2020, Quark has filed a Notice of Intention to make a proposal to its creditors including MSI under the Bankruptcy and Insolvency Act.  As a result, MSI’s enforcement of the $20M USD award has been stayed. MSI will consider and evaluate its options in order to resolve the matter.

 

David MacDonald

President

T: (778) 806-4898

For more information, please visit www.methylationsciences.com

On March 27^th, 2019, the British Columbia Supreme Court issued a judgement granting MSI leave to enforce its $20M USD Arbitration Award (plus interest and costs) against Quark.  The Court dismissed Quark’s petition for leave to appeal the Arbitration Award.  The text of the 20 page judgement is available on the Courts of British Columbia Website.  https://www.courts.gov.bc.ca/jdb-txt/sc/19/04/2019BCSC0440.htm

Dispute History

In a January 2016 press release, MSI announced the results of its first Phase 2 clinical trial designed to evaluate the efficacy and safety of MSI-195 relative to placebo added to ongoing antidepressant therapy, in patients suffering from Major Depressive Disorder.  As MSI announced at the time, MSI-195 did not demonstrate efficacy over placebo for the primary endpoint, however post-hoc exploratory analysis identified a number of key factors associated with beneficial treatment differences.  Additionally, MSI-195 was well tolerated.  A research report describing the study and post-hoc analysis was presented at the June 2016 American Society of Clinical Psychopharmacology scientific conference.

In September 2016 MSI and Quark jointly announced a $30 million USD investment to continue clinical development of MSI-195 for the treatment of depression. After making an initial payment of $1 million USD under the investment agreement, in November 2016 Quark declined to make any further payments.

After being unable to resolve the matter with Quark, MSI initiated a binding arbitration proceeding. The arbitrator, on June 21, 2018 in a 45-page ruling, found in favour of MSI, determining that Quark had breached the parties’ investment agreement and making an award in MSI’s favour of $20 million USD.  The arbitrator also dismissed Quark’s counterclaim and in so doing concluded that “MSI did not make misrepresentations to Quark as Quark has alleged”.  MSI was not required to issue any shares to Quark as a result of the ruling.  The arbitrator subsequently ordered that Quark pay interest to MSI as well.

Since the $20 million USD award was issued, Quark has not paid to MSI any portion of the amount ordered to be paid.  In late July MSI petitioned the British Columbia Supreme Court for leave to enforce the award.  Quark, for its part, initiated a petition on August 20, 2018 to seek leave to appeal the award on the basis of alleged errors of law related to the assessment of damages, and to have the award set aside on procedural grounds. On March 27, 2019, those petitions were resolved with MSI’s petition for leave to enforce granted, and Quark’s petition, for leave to appeal and to have the award set aside, dismissed. On April 10^th and 11^th, 2019, Quark filed notices of appeal to the B.C. Court of Appeal from the B.C. Supreme Court’s decisions on those petitions. MSI will ask the Court of Appeal to dismiss the appeals with costs to MSI.

David MacDonald

President

T: (604) 435-5155

For more information, please visit www.methylationsciences.com

MSI Methylation Sciences Inc., a pharmaceutical company developing oral, small molecule therapies for major depressive disorder (MDD), announced the results of its first Phase 2 clinical trial designed to evaluate the efficacy and safety of MSI-195 (Strada™) relative to placebo added to ongoing antidepressant therapy, in patients suffering from MDD who have had an inadequate response to current antidepressant therapy.

MSI-195 did not demonstrate efficacy over placebo for the primary endpoint. While the topline results were disappointing, post-hoc exploratory analysis identified a number of key factors associated with beneficial treatment differences for MSI-195 vs. Placebo. For example, a large responsive patient sub-group was identified when patients with high BMI (>40) and unstable symptom profiles were excluded. This analysis with 143 patients (74 on MSI-195 and 69 on placebo) showed the MSI-195 treated group achieved a clinically significant reduction in Montgomery–Asberg Depression Rating Scale (MADRS) of -3.41 (p value 0.031) relative to placebo (LOCF-ITT analysis) with an effect size of 0.36.

Additionally, MSI-195 was well tolerated. No serious adverse events were recorded during the trial. The overall adverse event profile for MSI-195 was as expected with the most frequently reported adverse events being gastrointestinal disorders. All other treatment emergent adverse events showed no difference between placebo and drug arms.

“While we did not meet our primary endpoint, we are encouraged to see, within our exploratory analysis, robust support for clinically significant efficacy in a large subset of patients. We believe the HORIZON study was a well conducted trial and very informative in planning our future studies,” said Barry Guld, co-founder & CEO at MSI. “Given the safety and clear direction provided through exploratory efficacy analysis in our first trial, our focus will be on future clinical development of MSI-195.”

About the HORIZON Trial

The HORIZON trial was a US, double-blind, randomized, placebo-controlled, Phase 2, add-on clinical trial investigating the ability of MSI-195 plus current anti-depressant therapy to decrease depressive symptoms based on the Hamilton Depression Rating Scale (HAMD-17) and Montgomery–Asberg Depression Rating Scale (MADRS), with Major Depressive Disorder (MDD) patients who have had an inadequate response to current anti-depressant therapy. This trial focused on MDD patients who have failed to respond to anti-depressant therapy for at least 6 weeks. The trial was designed to measure safety and efficacy over an 8 week period.

For more information on the HORIZON Study, please visit www.clinicaltrials.gov

About Major Depressive Disorder (MDD)

Major depressive disorder (MDD) is a condition in which patients exhibit depressive symptoms, such as a depressed mood or a loss of interest or pleasure in daily activities consistently for at least a two-week period, and demonstrate impaired social, occupational, educational or other important functioning. Depression is the leading cause of disability in the US and in other major market economies.

About MSI Methylation Sciences Inc.

Methylation Sciences (“MSI” or the “Company”) is focused on developing new products based on molecules which have clinical proof of concept but have yet to be exploited in the major pharmaceutical markets. The Company’s first product, Strada™, is based on S-adenosyl methionine, a naturally occurring molecule produced throughout the body, where it plays a vital role in the one-carbon cycle. The Company has developed superior oral formulations of this molecule with Strada™ being the first in clinical development. MSI has a broad intellectual property portfolio and pipeline of candidates.

For more information, please visit www.methylationsciences.com

MSI Methylation Sciences Inc., a pharmaceutical company developing a once-daily oral, small molecule therapy for adjunctive treatment of major depressive disorder (MDD), announced today the treatment of the last patient in its HORIZON Phase 2 study. The HORIZON Study is designed to evaluate the efficacy and safety of Strada™ in patients suffering from MDD who have had an inadequate response to current antidepressant therapy. The HORIZON Study is being conducted exclusively in the US, under an IND, filed by MSI with the Food and Drug Administration, Center for Drug Evaluation and Research, Division of Psychiatry Products in 2013. The Company expects results from the HORIZON Study in early Q4 2015.

 

“The completion of the treatment phase of the HORIZON Study represents a major milestone in the development of Strada™ and MSI” said Barry Guld, President and Chief Executive Officer of MSI. “The World Health Organization estimates that roughly 5% of the World’s population will experience depression during their life time. Depression represents the largest loss of work and medical costs, estimated at over $80 billion. We believe that Strada™ is a generally well-tolerated and efficacious drug candidate to treat depression.”

Unlike most currently approved antidepressants, which act on serotonin and related neurotransmitter pathways in the brain, Strada™ is acting through a different mechanism of action in the treatment of depression.  One possibility is the mediation of cytokine effects on the CNS which may play a role in changing the pathophysiology of the disease.

“The currently marketed antidepressants all work through similar pathways in the brain and do not adequately treat almost half of individuals with major depression.” said Dr. Steven Targum, Chief Medical Officer of MSI. “This represents a large problem.  New medicines that work in different ways represent tools for both doctors and patients in the treatment of people who inadequately respond to marketed antidepressants.  We look forward to evaluating the data from our HORIZON trial.”

MSI also announced today that European Patent EP 2464358 was issued by the European Patent Office on June 17, 2015. This patent along with patents that have issued in the US and in Europe add to the intellectual property surrounding MSI’s lead anti-depressant drug, Strada™.

Four patents have been issued within the last year to MSI: US Patent 8,975,238 (issued March 10/15), European Patent EP 2753336 (issued May 6/15), US Patent 8,865,203 (issued October 21/14) and European Patent EP 2464358 (issued June 17/15).

“We are pleased to receive these patents which increase the depth of intellectual property protection for Strada™  in the United States and expand the protection across Europe,” said Barry Guld, “The patents cover key composition features of Strada™ as well as the unique pharmacokinetic profiles engendered by MSI’s novel formulation techniques.  This intellectual property provides a long patent life for our product, extending into late 2033”.

About Major Depressive Disorder (MDD)

Major depressive disorder (MDD) is a condition in which patients exhibit depressive symptoms, such as a depressed mood or a loss of interest or pleasure in daily activities consistently for at least a two-week period, and demonstrate impaired social, occupational, educational or other important functioning. Depression is the leading cause of disability in the US and in other major market economies.

About the HORIZON Trial

The HORIZON trial is a US, double-blind, randomized, placebo-controlled, Phase 2, add-on clinical trial investigating the ability of  Strada™  plus current anti-depressant therapy to decrease depressive symptoms based on the Hamilton Depression Rating Scale (HAM-D17). The study has over 300 patients enrolled with Major Depressive Disorder (MDD) who have had an inadequate response to current anti-depressant therapy. This trial focuses on MDD patients who have had an inadequate response to anti-depressant therapy for at least 6 weeks.  The trial is designed to measure safety and efficacy over an 8 week period.

For more information on the HORIZON Study, please visit www.clinicaltrials.gov.

About MSI Methylation Sciences Inc.

MSI Methylation Sciences Inc. (“MSI” or the “Company”) is focused on developing new products based on molecules which have clinical proof of concept but which have yet to be exploited in the major pharmaceutical markets. The first product is based on S-adenosylmethionine (a naturally occurring molecule produced throughout the body, where it plays a vital role in the one-carbon cycle). The company has developed superior oral formulations of this molecule with Strada™ being the first in clinical development. The Company has a broad intellectual property portfolio and pipeline of candidates.

For more information, please visit www.methylationsciences.com

MSI Methylation Sciences Inc., a pharmaceutical company developing a once-daily oral, small molecule therapy for adjunctive treatment of major depressive disorder (MDD), announced the completion of patient recruitment for its HORIZON Phase 2 Study. HORIZON is designed to evaluate the efficacy and safety of MSI-195 (Strada™) in patients suffering from MDD who have had an inadequate response to current antidepressant therapy. The Horizon Study is being conducted exclusively in the US, under an IND, filed by MSI with the Food and Drug Administration, Center for Drug Evaluation and Research, Division of Psychiatry Products in 2013. The Company expects results from the HORIZON Study in late 2015.

 

“The HORIZON Study represents the leading edge in clinical design for a depression trial with a strong emphasis on quality. The primary objective of the HORIZON Study is to compare the change in the total Hamilton Depression Rating Scale (HAM-D17) between randomization and end of study for placebo vs. Strada™ plus antidepressant.” Said Steven D. Targum MD, Chief Medical Officer at MSI. “We are hopeful that Strada™ will become a new treatment option for patients whose depressive symptoms have not adequately responded to their current antidepressant. Generally, treating doctors and patients prefer to use add-on therapies over switching antidepressants because it reduces the risk of relapse or of a set-back in treatment. Strada™ has a different mechanism of action than other available antidepressants, has been reported to show good tolerability in previous clinical trials and may address the need for an effective add-on therapy.”

 

“The completion of the enrollment of the HORIZON Study represents a milestone in the development of Strada™ and MSI” said Barry Guld, President and Chief Executive Officer of MSI. “The World Health Organization estimates that 1 in 20 people will experience depression during their life time, with an estimated 18 million people in the US alone and over 35,000 suicides a year being reported. The estimated cost to the US economy through loss of work and increase medical expenses is estimated at over $80 billion,” further shared Mr. Guld. “Even with the currently approved medications for MDD, only two thirds of the patients respond to front line therapy. We believe that there exists a large opportunity for a safe, efficacious therapy to treat depression.”

                                                                                   ###

About Major Depressive Disorder (MDD)

Major depressive disorder (MDD) is a condition in which patients exhibit depressive symptoms, such as a depressed mood or a loss of interest or pleasure in daily activities consistently for at least a two-week period, and demonstrate impaired social, occupational, educational or other important functioning. Depression is the leading cause of disability in the US and in other major market economies.

About the HORIZON Trial

The HORIZON trial is a US, double-blind, randomized, placebo-controlled, Phase 2, add-on clinical trial investigating the ability of Strada™ plus current anti-depressant therapy to decrease depressive symptoms based on the Hamilton Depression Rating Scale (HAM-D17), with over 300 patients enrolled with Major Depressive Disorder(MDD) who have had an inadequate response to current anti-depressant therapy. This trial focuses on MDD patients who have failed to respond to anti-depressant therapy for at least 6 weeks.  The trial is designed to measure safety and efficacy over an 8 week period.

For more information on the HORIZON Study, please visit www.clinicaltrials.gov.

About MSI Methylation Sciences Inc.

Methylation Sciences (“MSI” or the “Company”) is focused on developing new products based on molecules which have clinical proof of concept but have yet to be exploited in the major pharmaceutical markets. The Company’s first product, Strada™, is based on S-adenosyl methionine, a naturally occurring molecule produced throughout the body, where it plays a vital role in the one-carbon cycle. The Company has developed superior oral formulations of this molecule with Strada™ being the first in clinical development. MSI has a broad intellectual property portfolio and pipeline of candidates.

For more information, please visit www.methylationsciences.com.

Company Contact:

Nancy Harrison
Chief Business Officer
Email: nharrison@methylationsciences.com
Tel: (604) 435-5155