It's big news for the Canadian biotech scene. Mitsubishi Tanabe Pharma has agreed to acquire Quebec City-based Medicago, a developer of plant-based vaccines for pandemic flu and other diseases. The deal would give the Japanese drug company a 60% stake in the vaccine developer, with Philip Morris Investments holding onto its sizable ownership of the biotech and keeping a 40% stake.
As part of one of the 30 largest drugmakers, Medicago ($MDG.TO) would presumably advance its unorthodox approach for growing vaccine-like particles in plants without its current financial constraints. Philip Morris, the tobacco giant with a 38.5% stake in Medicago, has invested in the biotech outfit for years and helped keep its experimental programs alive. Medicago has a shot at turning wild tobacco plants into drug factories, a potentially efficient alternative to egg-based production of vaccines, yet getting to market is expensive.
Mitsubishi has agreed to pay C$1.16 in cash for each of Medicago's shares, a 22.1% premium on the closing price of C$0.95 per share on Thursday, July 11, according to the company. The company says that the deal values it at C$357 million, including assumption of debts. Phillip Morris and the company's board of directors have already backed the buyout deal. In special meeting to vote on the deal, they need 66 2/3% shareholder approval and support from more than half of minority stockholders.
"Mitsubishi Tanabe Pharma's capabilities in biopharmaceutical research, development, and commercialization along with its financial stability offer us the ideal opportunity to realize the full potential of our platform," Andy Sheldon, Medicago's president and CEO, stated. "These resources provide us the ability to foster the development of innovative vaccines with the financial stability to expand our Quebec, Canadian, U.S. and global operations."
Mitsubishi has an existing collaboration with Medicago, so the two companies are no strangers. The deal comes as Medicago works on vaccines for pandemic and seasonal flu, rotavirus and using its platform to produce biosimilars.
- here's the release