Medicago announces 2011 second quarter financial results

QUEBEC CITY, QC, Aug. 12, 2011 /PRNewswire/ - Medicago Inc. (TSX: MDG), a biotechnology company focused on developing highly effective and affordable vaccines based on proprietary manufacturing technologies and Virus-Like Particles (VLPs), today announced its operational and financial results for the second quarter ended June 30, 2011. The Company's financial statements and management report are available at www.sedar.com and at www.medicago.com.

"During the second quarter, we made significant progress on the clinical advancement of our product pipeline. Our positive Phase II clinical trial results for our H5N1 vaccine candidate coupled with our positive U.S. Phase I clinical trial results for our seasonal vaccine candidate continue to demonstrate that our rapid plant-based vaccine technology produces VLP vaccines that are safe and among the most effective of the industry," said Andy Sheldon, President and CEO of Medicago. "The second half of 2011 will see the opening of our 97,000 square foot U.S. grade vaccine facility, the continued development of our seasonal flu vaccine candidate with a U.S. clinical trial, as well as the expansion of our product pipeline outside of influenza and potential contracts with governments and pharmaceutical companies."

Highlights:

Corporate

  • Reported positive phase II results for its clinical trial with its H5N1 avian influenza vaccine. The vaccine was found to be safe, well tolerated and also induced a solid immune response which is among the most effective of the industry.
  • Reported positive U.S. phase I results in its clinical trial with its H1N1 / seasonal influenza vaccine candidate. All tested doses were found safe and well-tolerated. A single dose of 5 μg met the 3 CHMP immunogenicity criteria.This phase I trial is expected to lead to Medicago's U.S. phase IIa trial for its seasonal trivalent vaccine with the recommended H1N1, H3N2 and B influenza strains.
  • Signed research collaboration with the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) for the development of a VLP vaccine candidate for the prevention of Ebola.
  • Signed research collaboration with a top 10 global pharmaceutical company for the development of a non-influenza vaccine candidate.

Financial

  • Received the third milestone payment of $5.6 million (U.S.) from DARPA. This is part of the $21-million (U.S.) DARPA grant awarded to Medicago to demonstrate the scalable manufacturing of its plant-expressed virus-like particle vaccines in the United States under a technology investment agreement. Medicago has received $16.3 million (U.S.) to date for this project.
  • Closed an offering of 34,117,600 units at a price of $0.51 per unit, representing gross proceeds of $17,399,976. Each Unit is comprised of one common share and one quarter of one common share purchase warrant.  Each full Warrant has an exercise price of $0.75, exercisable for a period of 24 months. Philip Morris Investments BV, an insider of the Company, participated in the offering and acquired 17,058,800 units.

Outlook

Upcoming milestones include among others:

  • Operational U.S. vaccine facility
  • Initiation of U.S. phase II  clinical trial with trivalent seasonal vaccine if authorization granted by the FDA
  • Potential contracts  with governments and pharmaceutical companies
  • Addition of new pipeline candidates

Financial Results

The Compay's unaudited interim consolidated financial statements as at June 30, 2011 and for the six months then ended have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. Additionally, the Company's unaudited consolidated statement of financial position as at January 1, 2010 and the comparative unaudited consolidated financial statements for 2010 have been adjusted to reflect our adoption of IFRS on a retrospective basis, effective on January 1, 2010 (the "Transition Date"). Consequently, all comparative financial information presented in this MD&A reflects the consistent, retrospective application of IFRS.

For the three and six-month period ended June 30, 2011, the Company had revenues of $38,000 that were generated by the research collaboration agreement for the development of a non-influenza vaccine candidate with a top 10 global pharmaceutical company announced earlier this year.  Revenues in 2010 were generated by the successful completion of the proof of concept contract with the United States Army Research, Development and Engineering Command for $34,000.

Consolidated loss for the three and six-month period ended June 30, 2011 were  $4,883,000 and $9,934,000, or $0.03 and $0.06 per basic and diluted share compared to a loss of $3,998,000 and $7,741,000, or $0.03 and $0.07 per basic and diluted share for the three and six-month period ended June 30, 2010. Increase in the loss for the six month period is mainly explained by the increase in R&D expenses in relation with the H5N1 Phase II clinical trial and the H1N1/seasonal vaccine Phase I clinical trial.

Cash and short-term investments were $16.6 million as at June 30, 2011 an increase of $8.1 Million from December 31, 2010.  In April 2011, Medicago closed an offering of 34,117,600 units at a price of $0.51 per Unit, representing gross proceeds of $17,399,976.

As at August 12, 2011, there were 173,416,202 common shares issued and outstanding as well as 8,539,508 stock options outstanding.  Warrants outstanding and Unit options outstanding as at August 12, 2011 represented a total of 27,277,736.

About Medicago

Medicago is committed to provide highly effective and competitive vaccines based on proprietary Virus-Like Particle (VLP) and manufacturing technologies. Medicago is developing VLP vaccines to protect against pandemic and seasonal influenza, using a transient expression system which produces recombinant vaccine antigens in the cells of non-transgenic plants. This technology has potential to offer advantages of speed and cost over competitive technologies. It promises 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.

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 business operates. Any statements contained herein that are not statements o 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 31, 2011 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.

SOURCE Medicago Inc.

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