$15,975,000 investment by Philip Morris International in Medicago

    QUEBEC CITY, Sept. 22 /CNW/ - Medicago Inc. ("Medicago") (TSX-V: MDG)
today announced that it has signed on September 19, 2008 a non-binding letter
of intent with Philip Morris International ("PMI") for a private placement of
45,000,000 units (the "Units") at a price of $0.355 per Unit for proceeds of
$15,975,000. The proceeds of the private placement will be used to further
fund the development of Medicago's pandemic and seasonal influenza vaccines.
    "We are very pleased to expand our relationship with PMI which was
previously identified as the Fortune 100 company in our press releases of
April 7, 2008, February 7, 2008 and December 19, 2007. The investment
demonstrates their commitment and confidence in our proprietary plant-based
technology platform," said Andy Sheldon, President & CEO of Medicago. "This
transaction provides us with the necessary capital to continue the development
of our vaccine candidates and will bring additional expertise to further
develop our vaccine production technologies."
    Each Unit is priced at $0.355 per Unit and consists of one common share
(the "Common Shares") and one common share purchase warrant of Medicago (the
"Warrants"). The price per Unit represents a 18.33% premium over volume
weighted average trading price of the common shares of Medicago calculated for
the twenty trading day period ending on September 18, 2008. Each warrant
("Warrant") will entitle its holder to purchase one share for a period of 24
months following the closing Date at a price equal to: (i) CAD$0.375 for the
fist year following the date of the issuance of the Warrants; and (ii) $0.405
for the second year following the date of the issuance of the Warrants (the
"Warrant Exercise Price"). The Common Shares, the Warrants and the Common
Shares underlying the Warrants will be subject to a statutory four-month hold
period. After the closing, PMI will hold an interest representing 49.9% of the
then outstanding common shares of Medicago, 45,000,000 warrants allowing PMI
to acquire 45,000,000 common shares and an additional 2,000,000 warrants
received at the signature of the non-exclusive license agreement signed in
February 2008 and allowing PMI to acquire 2,000,000 common shares.
    All the necessary documentation is expected to be signed by November 3,
2008 and is subject to the approval of the TSX Venture Exchange as well as
certain customary conditions, including the completion by PMI of a due
diligence review prior to closing. It will also require the approval of
Medicago shareholders and Medicago plans to hold a special meeting of its
shareholders to consider and vote on the proposed transaction as soon as

    This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities of Medicago in the United States. The
securities have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") or any state
securities laws and may not be offered or sold within the United States or to
U.S. Persons unless registered under the U.S. Securities Act and applicable
state securities laws or unless an exemption from such registration is

    About Medicago Inc.

    Medicago is committed to provide highly effective and affordable vaccines
based on proprietary Virus-Like Particle (VLP) and manufacturing technologies.
Medicago is developing VLP vaccines to protect against H5N1 pandemic
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 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.

    About Philip Morris International

    Philip Morris International (PMI) is the leading international tobacco
company, with seven of the world's top 15 brands, including Marlboro, the
number one cigarette brand worldwide. PMI has more than 75,000 employees and
its products are sold in approximately 160 countries. In 2007, the company
held an estimated 15.6% share of the total international cigarette market
outside of the U.S. For more information, see www.pmintl.com.

    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 assumes no responsibility for the content or
    accuracy of this press release.

    %SEDAR: 00023641EF

For further information:

For further information: Medicago Inc.: Andy Sheldon, President and CEO,
(418) 658-9393; Media and Investors: Arianna Vanin, The Equicom Group, P.
(514) 844-4680, E. avanin@equicomgroup.com

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