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MSI Methylation Sciences, Inc. (MSI) provides an update on its corporate activities, including its recent arbitration award of $20 million USD against Quark Venture Inc (Quark)
BURNABY, B.C., Oct. 18, 2018 (GLOBE NEWSWIRE) -- 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 (Strada™) relative to placebo added to ongoing antidepressant therapy, in patients suffering from Major Depressive Disorder who have had an inadequate response to current antidepressant therapy. As MSI announced at the time, 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. 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 against Quark. 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 against MSI 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 that the arbitrator ordered to be paid. Therefore, 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 certain alleged errors of law related to the assessment of damages, and to have the award set aside on procedural grounds. Each party opposes the other’s petition, with MSI having filed its response to Quark on September 10. MSI is now focused on concluding its enforcement proceedings against Quark and continuing to develop its formulation assets to maximize shareholder value.
MSI Methylation Sciences, Inc. (MSI) 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. For more information, please visit www.methylationsciences.com
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