METHYLGENE ISSUES SHARES TO
OTSUKA PHARMACEUTICAL CO., LTD.

Montreal, Quebec. October 20, 2009 - MethylGene Inc. (TSX: MYG) today announced that, further to its news release dated October 14, 2009, it has issued 3,686,182 common shares to Otsuka Pharmaceutical Co., Ltd. as per the terms of the research collaboration and license agreement dated March 25, 2008, between MethylGene and Otsuka for the development of  small molecule kinase inhibitors for ocular diseases excluding cancer. Otsuka acquired newly-issued common shares of MethylGene at a purchase price of approximately $0.43 per share, for gross proceeds of $1,573,410 (US$1,500,000) to MethylGene.

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 c-Met, VEGF, Ron and Tie-2 receptor tyrosine kinases that is in Phase I and Phase II clinical trials for cancers; MGCD290, a fungal Hos2 inhibitor being developed for use in combination with fluconazole for serious fungal infections that is in Phase I clinical studies; and mocetinostat (MGCD0103), an oral, isoform-selective HDAC inhibitor for cancers which has been in multiple Phase II clinical trials and 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, is in a Phase I study 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.