Medicago announces completion of bought deal financing


QUEBEC CITY, Nov. 27 /CNW/ - Medicago Inc. ("Medicago" or the "Company") (TSX-V: MDG), a biotechnology company focused on developing highly effective and affordable vaccines based on proprietary manufacturing technologies and Virus-Like Particles ("VLP"), today announced the closing of its previously announced bought deal financing of subscription receipts (the "Offering"). The underwriters have exercised their over-allotment option in full bringing the total gross proceeds from $10,080,000 to $11,592,000. The Offering was made pursuant to a short form prospectus dated November 19, 2009 and filed in the provinces of Québec, Ontario, Alberta, Saskatchewan and British Columbia. The proceeds from the Offering will be used to support the implementation of the Company's business plan, namely the continued clinical development of the Company's plant manufactured Influenza VLP vaccines and for general corporate and working capital purposes.

The Offering was conducted through a syndicate of underwriters led by Paradigm Capital Inc., as lead underwriter, together with Bloom Burton & Co. and Dundee Securities Corporation. A total of 16,100,000 subscription receipts (the "Subscription Receipts") were issued at a price of C$0.72 per Subscription Receipt. Each Subscription Receipt represents the right to receive one unit (a "Unit") of Medicago, without any additional consideration, upon the earlier of: (i) the date on which Philip Morris Participations B.V. ("PMP") refuses to exercise the Preemptive Right (as defined below), (ii) the date on which PMP subscribes to Units of Medicago pursuant to its Preemptive Right, or (iii) December 15, 2009. Each Unit consists of one common share in the share capital of Medicago (a "Common Share") and one half of one Common Share purchase warrant (each, a "Warrant"). Each whole Warrant will be exercisable at a price of C$1.00 until 5:00 p.m. on November 26, 2010.

As previously announced, Medicago is a party to a Representation Right and Preemptive Right Agreement made as of October 21, 2008, with Philip Morris Participations B.V ("PMP"), and available on SEDAR (the "Preemptive Right Agreement"), under which Medicago cannot issue Common Shares without offering PMP or its affiliates the right to subscribe to a number of Common Shares which would preserve PMP's proportionate entitlement in the Company. On November 6, 2009, Medicago notified PMP of the Offering and offered PMP to subscribe to Units pursuant to the Preemptive Right Agreement. In accordance with the Preemptive Right Agreement, PMP has until December 14, 2009, being 25 business days from the date of Medicago's notice, to accept the offer, failing which PMP shall be deemed to have waived its preemptive right.

The TSX Venture Exchange has conditionally approved the listing of the Subscription Receipts and the Common Shares comprised in the Units and the Common Shares issuable upon the exercise of the Warrants, subject to Medicago fulfilling all the requirements of the Exchange. The Subscription Receipts are listed on the TSX Venture Exchange under the symbol MDG.R.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

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 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 Company 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 25, 2009 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.

    Neither TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.

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SOURCE Medicago Inc.

For further information: For further information: Medicago Inc., Andrew J. Sheldon, President and Chief Executive Officer, (418) 658-9393; Medicago Inc., Arianna Vanin, Director, Investor Relations, (514) 796-3993

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