Medicago announces 2006 results

    QUEBEC CITY, April 17 /CNW/ - Medicago Inc. (TSX-V:MDG), a developer and
manufacturer of vaccines and therapeutic proteins using its rapid and cost
effective plant-based platform, today announced its operational and financial
results for the fiscal year ended on December 31, 2006.

    2006 Highlights

    IPO on the TSX Venture
    Medicago successfully completed its IPO on the TSX Venture on August 30,

    Expression of two major antigens of Influenza vaccines
    We have expressed the principal antigens responsible for developing
immunity against influenza and have demonstrated, in an animal study, for one
of these antigens that we can protect against challenge from Influenza virus.
Results from an animal study are expected on the second antigen in the 2nd
quarter of 2007.

    Successful completion of milestones with partner Acambis
    We have continued our progress with our partner Acambis and have achieved
all the milestones specified in the contract.

    Positive animal studies results for MED-205 (cholesterol lowering)
    We had encouraging positive results with our cholesterol lowering
compound MED-205 by demonstrating lowering of total cholesterol and
Tri-glycerides in an animal model. These results compare favorably to existing
products already on the market.
    "We are pleased with our performance throughout 2006 as we successfully
met the objectives we set at the time of our initial public offering last
August," said Andy Sheldon, President and Chief Executive Officer of Medicago.
"We have delivered on critical scientific milestones within our
protein-production program, among which the Neuraminidase and Hemagglutinin
expression results represent key achievements that will allow us to address
the fast-growing market for Influenza vaccines. As an early-stage company, we
have proven we can pursue our unique technology development programs while
respecting the established timeline and solidifying our current partnerships.
In 2007, we will apply the same diligence to our daily operations in order to
meet the next scientific milestones. This will include continued development
of our Influenza vaccine candidates namely our H5N1 vaccine against avian flu
and the signature of new strategic partnership."


    The Company plans to complete the major scientific milestones necessary
to proceed into first-in-man clinical trials of vaccines in 2008. Other
upcoming milestone events expected in 2007 and 2008 include:

    -   Completion of preclinical studies on a H5N1 vaccine
    -   Submission of the first IND for H5N1 Vaccine
    -   Phase I clinical studies results
    -   Signature of new strategic partnerships


    Total revenue for the fiscal year ended December 31, 2006 was $156,000
compared to $566,000 for the corresponding period in 2005. This decrease is
due to the completion in 2005 of agreements commenced in 2004 with two clients
that generated revenues of $516,000 during 2005. This decrease was partly
offset with higher revenues from agreements begun in 2005 for $86,000 and a
new agreement in 2006 for $20,000.
    Total expenditures for the year ended December 31, 2006 were $7,914,000
compared with $7,123,000 for the year ended December 31, 2005.
    Research and development expenses for the fiscal year ended December 31,
2006 were $4,260,000 a decrease of $606,000 from the 2005 fiscal year. This
decrease is mainly a result of lower wages and salaries and lower consultant
    Investment tax credits were at $902,000 for the year ended December 31,
2006, $520,000 lower than the year ended December 31, 2005. The decrease is
due to the fact that federal investment tax credits were not refundable once
the company became public in August 2006 and the lower level of research and
development expenses in 2006.
    General and administrative, business development and intellectual
property expenses for the year ended December 31, 2006 increased by $109,000
to $2,694,000 compared to 2005. This increase is mainly attributable to higher
legal fees related to more patents granted than in 2005.
    Other net financial expenses amounted to $1,157,000 for the year ended
December 31, 2006, $516,000 higher compared to the year ended December 31,
2005. This increase is mainly the result of higher interest on the long-term
Bio-Levier debt. Concerning the Bio-Levier debt, interest amounting to
$1,052,000 was capitalized to the principal during 2006 ($383,000 in 2005).
    Consolidated loss for the year ended December 31, 2006 was $7,758,000 or
$0.68 per basic and diluted share compared to a loss of $6,556,000 or $0.77
per basic and diluted share in 2005.
    The Company had cash and cash equivalents, and term deposit totalling
$1.7 million at December 31, 2006, a decrease of $0.7 million from
December 31, 2005. The Company had working capital of $1.3 million as at
December 31, 2006.
    Total consolidated assets were $9.5 million as of December 31, 2006, a
decrease from $12.4 million as of December 31, 2005 due to a decrease in the
current assets of a term deposit for $1 million and investment tax credits
receivable for $1.5 million. Long-term debt increased by $3.9 million to
$14 million, result of the use of the remaining amount available on the
Bio-Levier debt and the capitalized interest on this debt. As of December 31,
2006, there were 17,112,440 common shares issued and outstanding, 1,628,978
stock options outstanding, 3,872,321 warrants outstanding and 140,268 unit
options outstanding.
    Subsequent to the end of the year, the Company announced that it launched
a pre-clinical study for an influenza vaccine. The object of this pre-clinical
study is to test the immunogenicity of the Hemagglutinin (HA) developed by
Medicago. The results of this study should be published in the second quarter
of 2007.
    Additional information about the Company, including the MD&A and
financial results may be found on SEDAR at

    About Medicago:

    Medicago is a biotechnology company focused on the development,
production and commercialization of vaccines and therapeutic 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 vaccines and biopharmaceuticals for both
partners and patients. The Company is developing its own proprietary pipeline
of vaccines and also has established collaboration agreements notably with
Acambis PLC (LSE: ACM, for the development of several

    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


                                                           2006         2005
                                                              $            $

    Revenues from research agreements                   156,087      566,035

    Research and development                          4,269,184    4,874,688
    Research grants and contributions                   (72,544)    (166,670)
    Research and development tax credits               (901,715)  (1,421,945)
    General and administrative, business
     development and intellectual property            2,693,751    2,584,974
    Exchange loss (gain)                                 14,067        2,958
    Depreciation of property, plant and equipment       620,792      503,394
    Amortization of intangible assets                   132,760      103,965
    Other financial expenses, net                     1,157,423      641,139
                                                      7,913,718    7,122,503
    Loss for the year                                (7,757,631)  (6,556,468)
    Basic and diluted loss per share                      (0.68)       (0.77)

    %SEDAR: 00023641EF

For further information:

For further information: Medicago, Inc., Andy Sheldon, President and
CEO, Pierre Labbé, Vice-President and CFO, (418) 658-9393; Investor relations,
The Equicom Group Inc., Eric Bouchard, (514) 844-7997,

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