Medicago Announces 2012 Second Quarter Financial Results

QUEBEC CITY, Aug. 14, 2012 /PRNewswire/ - Medicago Inc. (TSX: MDG, OTCQX: MDCGF), a biopharmaceutical company focused on developing highly effective and competitive 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, 2012. The Company's financial statements and management report are available at and at

"In the second quarter of 2012, we successfully completed our research collaboration agreement with a Top 10 global pharmaceutical company, held our first Investor Day and tour of the facility in Durham, North Carolina, and Medicago common shares commenced trading on the OTCQX International," said Andy Sheldon, President and Chief Executive Officer of Medicago. "Following the achievement of the rapid fire test, we recently completed the final DARPA milestone, and plan to continue the validation process of the facility in North Carolina. In addition, we are moving forward with IDRI towards the initiation a Phase I clinical trial for an H5N1 VLP vaccine with a new adjuvant, continuing development of a quadrivalent seasonal flu vaccine with interim data expected in the first quarter of 2013, as well as pursuing our efforts to execute additional contracts for our VLP technology."

Corporate and Financial Highlights
During the second quarter of 2012:

  • Successfully completed a research collaboration agreement with a Top 10 global pharmaceutical company for the development of a non-influenza vaccine candidate.
  • The first Medicago Investor Day and site tour was held at our facility in Durham, North Carolina.
  • Medicago stock is now trading on OTCQX International, the premier tier of the U.S. Over-the-Counter marketplace, and Company information is available via Standard & Poor's Capital IQ's Market Access Program.
  • Andy Sheldon was named CEO of the Year by the Vaccine Industry Excellence awards at the World Vaccine Congress in Washington, DC.

Subsequent to the second quarter:

  • Announced the successful completion of a key milestone under an agreement with the Defense Advanced Research Projects Agency (DARPA). The milestone was the production of at least 10 million doses of H1N1 VLP influenza vaccine candidate in one month (the "rapid fire test").   The rapid fire test was conducted at Medicago's facility in Durham, North Carolina. As part of the rapid fire test, production of the H1N1 VLP influenza vaccine candidate began on March 25th, 2012, and was completed in 30 days on April 24th, 2012.  The production lots were then tested by a third party laboratory to confirm both the immunogenicity of the vaccine candidate and the number of doses produced.  Testing confirmed that a single dose of the H1N1 VLP influenza vaccine candidate induced protective levels of neutralizing antibodies in an animal model.  The production of significantly more than 10 million doses, as defined by the testing conditions, were confirmed.
  • Medicago secured DTC Eligibility by The Depository Trust Company for its shares on the OTCQX effective July 25, 2012. This electronic method of clearing securities speeds up the receipt of stock and cash, and thus accelerates the settlement process for investors.
  • Following the completion of the rapid fire test, Medicago received the fifth milestone payment of US$1.0 million from DARPA. Medicago also received the final milestone payment of US$0.145 million following the completion of the final report.  Medicago has now earned the full US$21 million in DARPA milestone awards demonstrating the scalable manufacturing of its plant-expressed VLP vaccines. Medicago has developed a state-of-the-art,  97,000-square-foot vaccine facility in Research Triangle Park (RTP), North Carolina. This facility is a large, cost-effective and scaled-up facility for Medicago's VLP plant-based vaccine technology. This DARPA project is part of the Blue Angel influenza vaccine rapid response demonstration program which seeks to identify new ways to produce large amounts of high quality vaccine grade protein in less than 3 months in response to emerging and novel biologic threats.

Corporate Outlook
Expected upcoming milestones include:

  • Initiation of a Phase I clinical trial toward improved efficacy of an H5N1 VLP vaccine with a new adjuvant, run by the Infectious Disease Research Institute (IDRI), with interim data expected in the first quarter of 2013;
  • Preparation for US Phase IIa clinical trial with quadrivalent seasonal with interim results expected in the first quarter of 2013;
  • Potential contracts (government, pharmaceutical companies); and
  • Addition of new pipeline candidates.

Financial Results
The consolidated loss for the three-month period ended June 30, 2012, was $8,099,000 or $0.03 per basic and diluted share.  This compares to a loss of $4,883,000 or $0.03 per basic and diluted share for the three-month period ended June 30, 2011.  Operating expenses were $8,470,000 in the three-month period ended June 30, 2012, compared to $4,958,000 in the same period of 2011.  The increase in operating expense of $3,512,000 is mainly explained by the increase in R&D costs, G&A expenses, depreciation of property, plant and equipment related to assets in the US acquired in 2011 in relation with the DARPA project, and financial costs related to the interest on the finance lease for the US facility.

Cash and short-term investments were $27.7 million as at June 30, 2012, a decrease of $12.7 million from December 31, 2012.

As at August 14, 2012, there were 246,850,858 common shares issued and outstanding as well as 10,687,426 stock options outstanding.  Warrants outstanding and Unit options outstanding as at August 14, 2012, are in the aggregate of 25,478,861.

Medicago Inc.
Interim Consolidated Statements of Income
        Three-month period ended
June 30,
  Six-month period ended
June 30,
Revenues from research agreements       370,339   37,856   526,954 37,856
Operating expenses                  
Research and development       5,781,534   2,854,961   11,104,520 5,753,955
General and administrative       1,466,138   1,531,912   3,819,600 3,080,106
Depreciation of property, plant and equipment       693,912   231,312   1,370,717 455,901
Amortization of intangible assets       49,870   36,650   96,866 66,986
Financial income       (235,871)   (53,494)   (337,998) (56,535)
Financial costs       713,952   356,177   1,559,771 708,457
        8,469,535   4,957,518   17,613,476 10,008,870
Loss for the period before deferred  income taxes       (8,099,196)   (4,919,662)   (17,086,522) (9,971,014)
Deferred income taxes       -   36,673   - 36,673
Net loss for the period       (8,099,196)   (4,882,989)   (17,086,522) (9,934,341)
Basic and diluted loss per share       (0.03)   (0.03)   (0.07) (0.06)

Selected Balance Sheet Data
        June 30,   December 31,
Cash and short-term investments       27,723,000   40,362,000
Total assets       65,182,000   80,394,000
Long-term debt       17,472,000   17,927,000
Finance lease liability       17,246,000   17,359,000

About Medicago
Medicago is a clinical-stage biopharmaceutical company developing novel vaccines and therapeutic proteins to address a broad range of infectious diseases worldwide. The Company is committed to providing highly effective and competitive vaccines and therapeutic proteins based on its proprietary VLP and manufacturing technologies. Medicago is a worldwide leader in the development of VLP vaccines using a transient expression system which produces recombinant vaccine antigens in plants. This technology has potential to offer more potent vaccines with speed and cost advantages over competitive technologies, enabling the development of a vaccine for testing in approximately one 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, and supply large volumes of vaccine antigens to the world market. Medicago also intends to expand development into other areas such as biosimilars and biodefense products where the benefits of our technologies can make a significant difference. Additional information about Medicago is available at

Forward Looking Statements
This news release includes certain forward-looking statements or forward-looking information for the purposes of applicable securities laws and such statements and information 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 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 "Risk Factors and Uncertainties" in Medicago's Annual Information Form filed on March 29, 2012, 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.