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MONTREAL, QUEBEC--(Marketwire - June 30, 2010) - MethylGene Inc.(TSX:MYG) today announced that Otsuka Pharmaceutical Co. Ltd. has further extended its funded research collaboration with MethylGene for the development of novel, small molecule kinase inhibitors for the local delivery and treatment of ocular diseases, excluding cancer, to the end of June 2011. In April 2010, MethylGene announced that the collaboration, originally formed in March 2008, was extended through September, 2010. This new extension will provide an additional US$1.27 million to MethylGene in research funding. This funding is in addition to the US$705,000 in funding previously announced by the Company on April 23, 2010.

Under this research collaboration, MethylGene is entitled to receive up to approximately US$50.5 million in milestone payments, as well as royalties on net sales of any resulting product. The first milestone payment of US$1.5 million would be received upon the commencement of the first GLP toxicity study by Otsuka.

"We are pleased to continue and expand the mutual efforts of our collaboration with Otsuka for the development of our kinase inhibitor technology for use in the treatment of ocular diseases," said Donald F. Corcoran, President and Chief Executive Officer of MethylGene. "Otsuka is very committed to the collaboration and with this extension has added a team of Otsuka chemists to work in parallel with our chemists to create additional novel and backup inhibitors. We look forward to the program continuing to progress, moving toward the potential selection of a lead product candidate during 2011."

About MethylGene

MethylGene Inc. (TSX:MYG) is a publicly-traded, clinical stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics with a focus on cancer. The Company's product candidates include: MGCD265, an oral, multi-targeted kinase inhibitor targeting the Met, VEGF, Ron and Tie-2 receptor tyrosine kinases that is in multiple clinical trials for cancer; MGCD290, a fungal Hos2 inhibitor for use in combination with fluconazole for serious fungal infections which has completed Phase I clinical studies; and mocetinostat (MGCD0103), an oral, isoform-selective HDAC inhibitor for cancer which has been in multiple Phase II clinical trials and is currently in a Phase II trial in refractory or relapsed follicular lymphoma. Mocetinostat is licensed to Taiho Pharmaceutical Co. Ltd in certain Asian countries. A fourth compound discovered using MethylGene's HDAC platform, EVP-0334 - a potential cognition enhancing agent for neurodegenerative diseases has successfully completed Phase I trials sponsored by EnVivo Pharmaceuticals Inc. MethylGene also has a funded collaboration with Otsuka Pharmaceutical Co. Ltd. for applications in ocular diseases using the Company's proprietary kinase inhibitor chemistry. Please visit our website at [ www.methylgene.com ].

Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute forward-looking statements. Such statements, based as they are on the current expectations of management of MethylGene, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond MethylGene's control. These risks and uncertainties could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Such results, performance or achievements include, but are not limited to, the timing and effects of regulatory action; the continuation of collaborations; the results of clinical trials; the timing of enrollment or completion of clinical trials; the success, efficacy or safety of MGCD265, MGCD290 or mocetinostat (MGCD0103); the ability to scale up, formulate and manufacture sufficient GMP, clinical or commercialization quantities of MGCD265, MGCD290 or mocetinostat, and the relative success or the lack of success in developing and gaining regulatory approval and/or market acceptance for any compound or new product including MGCD265, MGCD290 or mocetinostat. Such risks include, but are not limited to, the impact of general economic conditions, economic conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which MethylGene does business, stock market volatility, fluctuations in costs, expectations with respect to our intellectual property position and our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others, changes in the competitive landscape including changes in the standard of care for the various indications in which MethylGene is involved, and changes to the competitive environment due to consolidation, as well as other risks, as described in MethylGene's Annual Information Form for the fiscal year ending December 31, 2009, under the heading "Risk Factors" which you are urged to read and all other documents filed by the Company that can be found at [ www.sedar.com ]. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. The reader should not place undue reliance on the forward-looking statements included in this presentation. These statements speak only as an update on the date they are made and MethylGene is under no obligation to revise such statements as a result of any event, circumstance or otherwise except in accordance with law.