MEDICAGO ANNOUNCES 2010 FOURTH QUARTER AND YEAR-END FINANCIAL RESULTS

Mar 30, 2011, 17:00 ET from Medicago Inc.

QUEBEC CITY, QC, March 30 /PRNewswire-FirstCall/ -  Medicago Inc. (TSX: MDG), a biotechnology company focused on developing highly effective and competitive vaccines based on proprietary manufacturing technologies and Virus-Like Particles, today announced its operational and financial results for the fourth quarter and year ended December 31, 2010. The Company's financial statements and management report are available at www.sedar.com and at www.medicago.com.

Highlights

Corporate and Product Development

  • Award of US$21 million from the Defense Advanced Research Projects Agency (DARPA) under a Technology Investment Agreement to provide scalable manufacturing of its plant-expressed VLP vaccines in the U.S.A. and commenced the construction of its U.S. vaccine facility. The facility is projected to be operational in the fall of 2011.
  • Selected to participate with the Infectious Disease Research Institute on a multimillion DARPA grant for a single dose H5N1 vaccine
  • Received US$1M in funding by U.S.-based PATH pursuant to a research collaboration agreement. Medicago and PATH will work together on a broad coverage influenza vaccine based on Medicago's proprietary plant-based Virus-Like Particle (VLP) technologies for the developing world.
  • Discovered a breakthrough method of preparing plant derived recombinant proteins and VLPs and filed two international patent applications under the Patent Cooperation Treaty (PCT).
  • Demonstrated cross protection  would be a major competitive advantage when administering Influenza vaccines to human populations. Medicago has now demonstrated that its avian influenza vaccine can cross protect against different strains of H5N1 influenza.
  • Subsequent to year-end, reported positive phase II interim results for its clinical trial with its H5N1 avian influenza vaccine.  The vaccine was found to be safe, well tolerated and also induced a solid immune response.
  • Subsequent to year-end, received FDA clearance to initiate phase I clinical trial for its phase I H1N1 influenza VLP vaccine candidate clinical trial in the United States. This phase I trial will lead into Medicago's U.S. phase IIa trial for its seasonal trivalent vaccine with the recommended H1N1, H3N2 and B influenza strains.

Financial

  • Completed a C$7.5 million equity offering. The proceeds from this offering will be mainly used to fund the Company's participation in the DARPA project.
  • Graduated to the Toronto Stock Exchange (the "TSX") from the TSX Venture Exchange and listed its common shares on the TSX.

"2010 was a successful year for Medicago. Our rapid, efficacious and competitive vaccine technology was in our opinion recognized by the U.S. Department of Defense who awarded us  US$21M. Our U.S. facility is being constructed and expected to be operational later this year," said Andy Sheldon, President and CEO of Medicago. "On the clinical front, we continued to make key advancements in our pipeline products. We recently achieved positive phase II interim results from our clinical evaluation of our pandemic H5N1 Influenza VLP vaccine candidate. We also achieved FDA clearance to initiate a phase I clinical trial for our H1N1/seasosanal vaccine candidate."

"2011 will also prove to be an important year. We will be reporting final phase II data for our H5N1 vaccine candidate and phase I clinical data for our seasonal candidate. This data will be followed by the initiation of a U.S. phase II clinical trial for our seasonal canadidate. We believe that our proprietary plant-based manufacturing technology has the potential to transform the speed and economics of vaccine production. As we are now entering, later-stage clinical development, we will work to continue to execute potential contracts with governments and pharmaceutical companies to roll-out our VLP vaccine technology globally," added Mr. Sheldon.

Outlook

In the first quarter of 2011, the Company reported positive interim phase II results for its clinical trial with its H5N1 avian influenza vaccine. The Company is proceeding with the second part of the phase II trial with final results expected in Q2 2011. Upcoming milestones include among others:

  • Phase II final results with its H5N1 vaccine
  • Initiation of U.S. phase I clinical trial with its H1N1 vaccine / seasonal vaccine. Results are expected in Q2 2011.
  • Operational U.S. vaccine facility
  • Initiation of U.S. phase II  clinical trial with trivalent seasonal vaccine if authorization granted by FDA
  • Potential contracts  with governments and pharmaceutical companies
  • Addition of new pipeline candidates (vaccines, biosimlar enzymes)

Subsequent event

On March 25, 2011 the Company announced that it has agreed to sell up to 34,117,600 units (each, a "Unit") at a price of $0.51 per Unit, representing gross proceeds of $17,399,976 (the "Offering"). Each Unit is comprised of one common share (a "Common Share") and one quarter of one common share purchase warrant (each, a "Warrant"). Each full Warrant will have an exercise price of $0.75, exercisable for a period of 24 months following the closing date of the Offering. The Warrants are subject to an accelerated expiry if, at any time after the closing of the offering, the published closing trade price of the Common Shares on the TSX is equal or superior to $1.00 for any 30 consecutive trading days, in which event the Company may give the holders a written notice that the Warrants will expire at 5:00 p.m. (Montréal time) on the 30th day from the receipt of such notice.

Net proceeds from the Offering will be used for continued clinical development of the Company's plant-based manufactured Influenza Virus Like Particles ("VLP") vaccines, to fund the development of additional potential product candidates and for other general corporate and working capital purposes.  The Offering is expected to close on or about April 5, 2011, subject to the satisfaction of all necessary regulatory approvals, including the conditional listing approval of the Toronto Stock Exchange.

Financial Results

Consolidated loss for the three-month period ended December 31, 2010 was $4,568,000 or $0.04 per basic and diluted share, compared to a loss of $3,891,000 or $0.04 per basic and diluted share in the same period in 2009. For the twelve-month period ended December 31, 2010, consolidated loss amounted to $16,344,000 or $0.13 per basic and diluted share compared to a loss of $12,475,000 or $0.13 per basic and diluted share in the same period of 2009. Increase in the loss for the three and twelve-month period is mainly explained by the increase in R&D expenses in relation with the H5N1 Phase II clinical trial that is underway and the H1N1/seasonal vaccine Phase I that has just started.

Cash and short-term investments were $8.5 million as at December 31, 2010.

As at March 29, 2011, there were 138,922,102 common shares issued and outstanding, 8,725,046 stock options outstanding, 1,203,704 unit options outstanding and 16,159,586 warrants outstanding.

About Medicago

Medicago is a clinical-stage biotechnology company, developing effective and competitive vaccines based on proprietary Virus-Like Particles (VLP) and manufacturing technologies. Medicago is developing VLP vaccines to protect against pandemic and seasonal influenza, using a transient expression system which produces recombinant vaccine antigens in non-transgenic plants. This technology has potential to offer advantages of speed and cost over competitive technologies. It could deliver a vaccine for testing in about a month after the identification and reception of the genetic sequence. This production time frame has the potential to allow vaccination of the population before the first wave of a pandemic strikes and to supply large volumes of vaccine antigens to the world market. Additional information about Medicago is available at www.medicago.com.

Forward Looking Statements

This news release includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with Medicago's business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to Medicago or its management. The forward-looking statements are not historical facts, but reflect Medicago's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks Factors and Uncertainties" in Medicago's Annual Information Form filed on March 31, 2011 with the regulatory authorities. Medicago assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.

                                  

 

SOURCE Medicago Inc.