Medicago announces 2009 first quarter financial results

    QUEBEC CITY, May 27 /CNW/ - Medicago Inc. (TSX-V: MDG), a biotechnology
company focused on developing highly effective and affordable vaccines based
on proprietary manufacturing technologies and Virus-Like Particles, today
announced its operational and financial results for the first quarter ended
March 31, 2009. The Company's financial statements and management report are
available at and at
    "During the quarter, we focused on moving our lead H5N1 VLP vaccine
candidate into final preclinical studies in preparation for a CTA-filing this
summer," said Andy Sheldon, President and CEO of Medicago. "We completed our
pre-CTA meeting with Health Canada, which is an important milestone for the
Company as it highlights our ability to advance a candidate towards human
clinical trials. If granted approval by Health Canada, we will initiate a
Phase I clinical trial in the third quarter of this year."
    "In parallel with the development of our lead candidate, we initiated
work on a VLP vaccine candidate against the new strain of influenza, A (H1N1)
that recently surfaced in North America. We successfully expressed a H1 VLP
antigen within 14 days of receiving the genetic sequence of the new virus.
This rapid timeline establishes the capability of our proprietary vaccine
manufacturing technology in plants and our ability to potentially be a first
responder solution in the event of a pandemic. Results from a first animal
study to confirm the immunogenic potential of this new candidate are expected
in June 2009," concluded Mr. Sheldon.


    Medicago is currently concluding all the necessary preclinical work for
its H5N1 VLP pandemic vaccine to enable it to file a CTA with Health Canada in
2009 which would then, following its review by Health Canada, allow it to
proceed into human clinical trials. Upcoming milestones also include:

    -   Results from lethal challenge in ferrets and safety study in rats for
        H5N1 VLP pandemic vaccine
    -   Submission of a CTA to Health Canada and Initiation of a Phase I
        clinical trial for H5N1 pandemic vaccine
    -   Results from immunogenicity study in mice with new H1 VLP candidate
    -   Completion of immunogenicity study in mice for seasonal vaccine
    -   Completion of agreement with first country for pandemic vaccine
        production facility

    Financial Results

    Consolidated loss for the three-month period ended March 31, 2009 was
($2,625,000) or ($0.03) per basic and diluted share, compared to a loss of
($326,000) or ($0.01) per basic and diluted share in the same period in 2008.
    There were no revenues in the first quarter of 2009 compared to
$1,665,000 in the first quarter of 2008. This decrease is due to revenues
generated by two agreements signed with Philip Morris International ("PMI").
Revenues were offset by $196,000, representing the value of the 2,000,000
common share purchase warrants granted to PMI upon the execution of the
non-exclusive licensing agreement in February 2008.
    Research and development ("R&D") expenses totaled $1,397,000 in the first
quarter of 2009 compared to $1,101,000 in the first quarter of 2008. R&D
expenses were higher mainly as a result of the Company's preclinical studies
on its H5N1 VLP vaccine and the development of a cGMP process for the
production of clinical materials for the upcoming Phase I trial.
    Investment tax credits decreased by $234,000 for the three-month period
ended March 31, 2009, compared to the three-month period ended March 31, 2008.
The decrease in tax credits for the quarter resulted from a decrease in the
provincial tax credits rate from 37.5% to 17.5% applicable to the R&D
activities of the Company as a result of the private placement of PMI.
    General and administrative ("G&A"), business development and intellectual
property ("IP") expenses totalled $893,000 for the three-month period ended
March 31, 2009, compared to $660,000 in the same period of 2008. The increase
was mainly due to an increase in travelling expenses, licenses and patents
costs and salaries. The increase in travelling expenses is explained by more
investor relations and business development activities. The increase in
salaries is explained the hiring of a CFO in May 2008 and the hiring of a
Director, Investor Relations and Communications in January 2009.
    Other net financial expenses amounted to $244,000 for the three-month
period ended March 31, 2009, compared to $389,000 in the same period in 2008.
This decrease is mainly the result of a lower interest rate on the Bio-levier
loan and higher interest income explained by the increase in cash, cash
equivalents and short-term investments.
    As at March 31, 2009, the Company had consolidated assets of $18.7
million, including cash, cash equivalents and short-term investments of $11.8
million, compared to consolidated assets of $20.6 million, including cash and
cash equivalents of $14.0 million as at December 31, 2008.
    As at May 26, 2009, there were 90,324,940 common shares issued and
outstanding, 5,817,245 stock options outstanding, 64,933,196 warrants
outstanding, and 280,000 unit options outstanding.

    Voting Results of Annual and Special Meeting of Shareholders

    At the Annual and Special Meeting of Shareholders held yesterday, all
matters put before the shareholders were approved, including the amendment of
the Stock Option Plan to increase the number of options available under the
Stock Option Plan to 9.0 million. The Board of Directors will consist of
Randal Chase, Andrew J. Sheldon, Pierre Seccareccia, Jonathan Goodman, Damien
Levesque, Pierre Des Marais II and Louis P. Vézina. For further details,
please see the management proxy circular available on

    About Medicago

    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

    Forward Looking Statements

    This press release contains forward-looking statements which reflect
Medicago's current expectations regarding future events. The forward-looking
statements involve risks and uncertainties. Actual results could differ
materially from those projected herein. Medicago 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; Medicago Inc., Arianna Vanin, Director, Investor
Relations, (514) 796-3993

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