Medicago Announces Private Placement of up to $24.5 Million

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QUEBEC CITY, Sept. 23, 2011 /CNW/ - Medicago Inc. ("Medicago" or the "Corporation") (TSX: MDG), a biotechnology company focused on developing highly effective and competitive vaccines based on proprietary manufacturing technologies and Virus-Like Particles ("VLPs"), announces that it has entered into an agency agreement with a syndicate of agents to complete a private placement of up to $24.5 million (the "Offering").The Offering is made on a best-efforts basis by a syndicate of agents co-lead by Bloom Burton & Co. Inc., Desjardins Capital Markets and Paradigm Capital Inc. The agents have received, to date, signed subscription agreements from investors, including a strategic investor that is a top 50 global pharmaceutical company, representing the proposed entire amount of the Offering.

Under the terms of the Offering, the Corporation will issue up to 37,693,500 common shares of its share capital at a price of $0.65 per common share for gross proceeds of up to $24,500,775. The common shares issued in connection with the private placement will be issued pursuant to exemptions from the prospectus requirements of applicable securities laws and will be subject to a four month hold period.

Net proceeds from the Offering will be used for continued clinical development of the Corporation's plant-based manufactured Influenza VLPs 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 September 27^th, 2011, subject to the satisfaction of all necessary regulatory approvals as well as to the satisfaction of customary closing conditions provided for in the agency agreement and the subscription agreements.

The Corporation has obtained an advance ruling from the Ministère du Revenu du Québec confirming that the Corporation is a qualified issuing corporation for the purposes of the Québec Stock Savings Plan II ("QSSP II") and that the common shares to be issued as part of the Offering will be "qualified shares" for a QSSP II qualified mutual fund.

This press release does not constitute an offer to sell or a solicitation to buy any securities in any jurisdiction.

About Medicago

Medicago is committed to provide highly effective and competitive vaccines based on proprietary 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 the cells of non-transgenic plants. This technology has potential to offer advantages of speed and cost over competitive technologies. It promises a vaccine for testing in about a month after the identification and reception of genetic sequences from a pandemic strain. 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.

For further information:

Medicago, Inc.				Medicago Inc.
Andy Sheldon				Christina Cameron
President and CEO				Investor Relations Manager
[phone]				[phone] x156