Medicago announces second quarter results
QUEBEC CITY, Aug. 29 /CNW/ - Medicago Inc. (TSX-V: MDG), ("Medicago" or
"the Company"), today reported its financial results for the fiscal quarter
ended June 30, 2007. The Company's financial statements and Management's
Discussion and Analysis are available at www.sedar.com and at
www.medicago.com.
In the second quarter of 2007 results obtained in our key influenza
vaccine development program have ensured that Medicago remains on track with
its key deliverables towards its Phase 1 clinical filing in 2008.
Four weeks from receiving the genetic sequences, Medicago's scientists
were able to produce the two principal antigens of the Influenza H5N1
Indonesia clade 2 strain currently circulating in Asia and parts of Europe,
otherwise known as Avian Flu. The two antigens Hemagglutinin and Neuraminidase
were successfully produced at commercially viable levels and Medicago intends
to start pre-clinical testing shortly.
"This is an excellent result and a major milestone for Medicago which
takes us one step further toward full realization of the value of our
technology." said Medicago's President and Chief Executive Officer Andy
Sheldon. "It is also a real-life demonstration of the power of our technology
to deliver fast response and critical surge capacity to assist in protecting
the worldwide population against new emerging Influenza strains. In order to
achieve these milestones, Medicago needs to raise additional financing."
To face pandemic and seasonal vaccine supply challenges, Medicago has
developed a proprietary transient expression system which produces recombinant
vaccine antigens in the cells of non-transgenic plants. Our technology offers
significant advantages of speed and cost over competitive egg-based and cell
culture technologies. It can deliver a vaccine for testing in about a month
after the identification and reception of Hemagglutinin and Neuraminidase
genetic sequences from the pandemic strain. This production time frame has the
potential to allow vaccination of the population before the first wave of the
pandemic strikes and to supply large volumes of vaccine antigens to the world
market including developing countries.
Financial Results
The Company's revenues were nil in the second quarter of 2007, compared
to $77,000 for the same period a year ago. This decrease is due to milestones
payments in 2006 that did not reoccur in the second quarter of 2007.
Consolidated loss for the quarter ended June 30 was $1,550,000 or $0.09
per share, compared to $1,716,000 or $0.20 per share in the second quarter of
2006. The main cost reduction occurred in research and development activities.
Research and development expenses decreased by $243,000 to $875,000 in
the second quarter of 2007 compared to the same period in 2006. This decrease
is attributable to lower wages and salaries, lower travelling charges and
lower level of outsourced contract work.
Investment tax credits were at $310,000 for the three-month period ended
June 30, 2007, $28,000 lower than the three-month period ended June 30, 2006.
These credits are calculated on admissible research and development charges;
the refundable credit rate was the same in the second quarter of 2007 as in
the same quarter in 2006.
General and administrative, business development and intellectual
property expenses increased by $24,000 to $614,000 for the quarter ended June
30, 2007 compared to the same period in 2006.
Other net financial expenses amounted to $ 361,000 for the three-month
period ended June 30, 2007, $88,000 higher compared to the three-month period
ended June 30, 2006. This increase is mainly the result of higher interest
rate on the long-term Bio-Levier loan.
Total consolidated assets were $7.4 million as of June 30, 2007, a
decrease of $1.2 million from $8.6 million as of December 31, 2006. The
variation is due to a decrease in the total of cash and term deposit for
$0.8 million and investment tax credits receivable for $0.3 million.
On August 29, 2007 the Company has granted its interim Chief Financial
Officer, Mr. Vincent Bélanger, 25,000 stock options exercisable at a price of
$0.65 starting from the date of the grand as part of his compensation.
Outlook
The Company expects the following milestones to be completed in 2007 and
2008:
- Completion of preclinical studies for our Avian Flu pandemic vaccine
(H5N1);
- Submission of our first Regulatory Filing (CTA) for our Avian Flu
pandemic vaccine;
- Initialization of Phase I clinical studies.
In order to attain these milestones, Medicago needs to raise additional
financing.
About Medicago Inc.
Medicago is a biotechnology company focused on the development, production
and commercialization of protein-based biopharmaceuticals using a proprietary
manufacturing system developed from its expertise in the genetic engineering
of plants. Medicago's Proficia technology offers speed, flexibility and cost
advantages that can greatly improve the accessibility of today's emerging
biopharmaceuticals for both partners and patients.
Forward Looking Statements
This press release contains forward-looking statements which reflect the
Company's current expectations regarding future events. The forward-looking
statements involve risks and uncertainties. Actual results could differ
materially from those projected herein. The Company disclaims any obligation
to update these forward-looking statements.
The TSX Venture Exchange Inc. has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Interim Consolidated Statement of Earnings (unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
$ $ $ $
Revenues from research
agreements - 77,474 18,500 121,959
Expenses
Research and development 875,430 1,119,061 1,614,911 2,306,687
Research grants and
contributions (159,358) (27,660) (222,426) (55,243)
Research and development
tax credits (310,000) (338,437) (386,000) (603,199)
General and
administrative 614,161 590,173 1,156,613 1,284,336
Exchange loss (gain) (3,116) (1,747) (357) (2,173)
Depreciation of property,
plant and equipment 153,810 151,249 292,134 299,669
Amortization of
intangible assets 18,212 27,843 49,233 55,472
Other financial expenses,
net 361,097 273,362 711,214 535,815
1,550,236 1,793,844 3,215,322 3,821,364
Loss and comprehensive
loss for the period (1,550,236) (1,716,370) (3,196,822) (3,699,405)
Basic and diluted loss
per share (0.09) (0.20) (0.18) (0.43)
Consolidated Statement of Deficit (unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------
2007 2006 2007 2006
$ $ $ $
Balance at the beginning
of the period 31,645,165 24,495,351 30,269,947 22,512,316
Adjustment related to the
implementation of new
accounting standards (271,368) -
Loss and comprehensive
loss for the period 1,550,236 1,716,370 3,196,822 3,699,405
------------------------------------------------
Balance at the end of
the period 33,195,401 26,211,721 33,195,401 26,211,721
------------------------------------------------
------------------------------------------------
Consolidated Balance Sheets
As at As at
June 30, December 31,
2007 2006
$ $
(unaudited) (audited)
Assets
Current assets
Cash and cash equivalents 873,574 442,929
Term deposit 100 1,230,188
Current portion of security deposit on a
lease agreement 20,000 20,000
Accounts receivable 108,526 79,130
Financing receivable 228,852 171,926
Investment tax credits receivable 316,850 581,167
Grants receivable 10,000 23,125
Prepaid expenses 105,680 74,312
--------------------------
1,663,582 2,622,777
Security deposit on a lease agreement 20,000 20,000
Property, plant and equipment 4,305,062 4,536,560
Intangible assets 1,400,369 1,433,552
--------------------------
7,389,013 8,612,889
--------------------------
--------------------------
Liabilities
Current liabilities
Bank loan - 300,000
Accounts payable and accrued liabilities 654,317 990,338
Current portion of long-term debt 13,072 13,072
--------------------------
667,389 1,303,410
Long-term debt 13,589,826 13,067,121
--------------------------
14,257,215 14,370,531
--------------------------
Shareholders' Deficiency
Share capital 23,463,903 22,152,413
Contributed surplus 801,868 798,034
Other equity components 2,061,428 1,561,858
Deficit (33,195,401) (30,269,947)
--------------------------
(6,868,202) (5,757,642)
--------------------------
7,389,013 8,612,889
--------------------------
--------------------------
%SEDAR: 00023641E
For further information: Andrew J. Sheldon, President and Chief
Executive Officer, Tel.: (418) 658-9393, Email: info@medicago.com; Eric
Bouchard, Investor Relations, The Equicom Group, Tel: (514) 844-7997, Email:
ebouchard@equicomgroup.com
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