Medicago Announces 2011 Fourth Quarter and Year-End Financial Results
QUEBEC CITY, March 29, 2012 /PRNewswire/ – Medicago Inc. (TSX: MDG), 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 fourth quarter and year ended December 31,
2011. The Company’s financial statements and management report are
available at www.sedar.com and at www.medicago.com. The Company also provided an update related to the development of a
quadrivalent seasonal influenza vaccine.
“2011 was an important year for Medicago as we reported positive
clinical results from both our Phase II pandemic H5N1 influenza vaccine
clinical trial and Phase I seasonal influenza trial, commenced
operations at our 97,000-square-foot facility in North Carolina, and
raised over $65 million of equity with investments from Mitsubishi
Tanabe Pharma Corporation and other healthcare-focused funds,” said
Andy Sheldon, President and Chief Executive Officer of Medicago. “We
have already made significant progress in 2012, establishing a
strategic alliance with Mitsubishi Tanabe, completing the fourth
milestone related to the DARPA project, and moving ahead with our
internal rabies vaccine candidate. We expect to continue to take
valuable steps forward including the initiation a Phase I clinical
trial for a one-dose H5N1 VLP vaccine, the completion of the remaining
two DARPA milestones, initiating a US Phase IIa clinical trial for a
quadrivalent seasonal flu vaccine, as well as continuing our efforts to
execute additional contracts for our VLP technology.”
Corporate and Financial Highlights
During the fourth quarter:
-- Successfully completed of the first stage of the research
collaboration, announced initially on April 6, 2011, with a top
10 global pharmaceutical company for the development of a
non-influenza VLP vaccine candidate. Medicago's collaboration
partner has indicated its intent to proceed to the second stage
of the agreement.
-- Philip Morris Investments B.V. exercised its pre-emptive right
and completed private placement of $22.5 million through the
issuance of an aggregate of 34,550,000 common shares of
Medicago at $0.65 in two tranches.
Subsequent to the fourth quarter:
-- Signed a research agreement with Cellectis plant sciences, a
subsidiary of Cellectis SA (Alternext: ALCLS), under which
Medicago and Cellectis will collaborate to improve therapeutic
proteins expressed from tobacco leaves.
-- Successfully completed initial studies towards the development
of a new VLP vaccine candidate for rabies. Results with the
rabies VLP vaccine demonstrated that two doses of one or four
micrograms induced protective levels of neutralizing antibodies
in a mouse model. Medicago expects to move ahead with GMP
process development and a GLP toxicology study in 2012 and,
following this, a Phase I clinical trial.
-- Announced plans to invest approximately $4 million to enhance
the capacity of the pilot production facility located in Quebec
City, which is expected to accelerate preclinical and clinical
development timelines of future product candidates.
-- Received the fourth milestone payment of US$3.56 million from
the Defense Advanced Research Projects Agency ("DARPA"). This
is part of the potential US$21 million DARPA milestone awards
to be earned by Medicago to demonstrate the scalable
manufacturing of its plant-expressed VLP vaccines in the U.S.A.
under a Technology Investment Agreement. Medicago has now
received from DARPA US$19.8 million to date for this project,
with two milestones remaining.
-- Established a strategic alliance with Mitsubishi Tanabe Pharma
Corporation (MTPC) through the execution of a Master Research
Collaboration Agreement to develop and commercialize at least
three new vaccines. MTPC will provide funding for all research
and development costs. Medicago will be entitled to receive
upfront and milestone payments as well as royalties for each
product to be developed under this master agreement. Under this
first agreement to develop a Rotavirus Like Particle (RLP)
vaccine target, MTPC will have the option to license the RLP
vaccine target and assume global development, regulatory and
commercialization responsibilities while Medicago will be
eligible to receive up to a total of $33 million in upfront and
milestone payments as well as royalties on future sales of the
RLP product. Medicago will receive an upfront payment of
$3 million to begin the initial research on rotavirus.
Additional targets under this master agreement are to be
selected by Medicago and MTPC at a later date. MTPC was
recently disclosed at the lead investor in the Company's
September 2011 equity financing.
Update on Seasonal Influenza Vaccine Program
On February 28, 2012, the US FDA Advisory Committee on Vaccines and
Related Products met and agreed to follow the World Health Organization
(WHO) recommendations to change two influenza virus strains for the
2012-2013 seasonal trivalent influenza vaccine. Other health
authorities are expected to adopt the WHO recommendations in due
course. Specifically, the WHO recommendation includes a change in both
the H3N2 A strain and the B strain. The new H3N2 A strain is the
A/Victoria361/2011, previously the A/Perth/16/2009 H3N2 strain, and the
new B strain is B/Wisconsin/1/2010 from the Yamagata lineage,
previously the B/Brisbane/60/2008 strain from the Victoria lineage.
At the same FDA Advisory meeting, there were discussions related to the
consideration of the development of quadrivalent seasonal influenza
vaccines. While no final recommendation was made, there was agreement
that moving to a quadrivalent seasonal influenza vaccine, which would
include two B influenza strains instead of one, would be a preferable
approach given the difficulty in selecting the appropriate B strain
each year. In particular, the two B strains mentioned above were seen
in similar proportions in different countries and are antigenetically
different.
Consistent with Medicago’s goal to deliver state-of-the-art vaccines,
the Company has now decided to include the two new strains as
recommended by the WHO and to move from a trivalent to a quadrivalent
seasonal vaccine formulation containing the two B influenza strains of
the Yamagata and Victoria lineages. The Company believes that this
will ensure the development of the most relevant and effective seasonal
flu vaccine candidate for the Phase IIa clinical trial. As a result,
the Company will now begin initial production of these VLP vaccine
strains, and additional preclinical studies and formulation work will
be required. Therefore, we now expect interim results of the US Phase
IIa quadrivalent seasonal influenza vaccine clinical trial in the first
quarter of 2013.
The decision by the Company to work towards a quadrivalent vaccine
included careful consideration related to the outlook for the seasonal
influenza vaccine market. Current manufacturers are working towards
the approval and sale of quadrivalent vaccines and, one company in
particular, has recently obtained FDA approval for a quadrivalent
vaccine. By expanding Medicago’s development to include a fourth
strain at this time, the we expect the Company to save time and costs
in the future, and create more interest for potential partners.
Corporate Outlook
Expected upcoming milestones include:
-- Initiation of a Phase I clinical trial for a one-dose H5N1 VLP
vaccine with a new adjuvant in the second quarter of 2012, in
partnership with the Infectious Disease Research Institute
(IDRI), with interim data expected in the second half of this
year
-- Completion of the final two milestones related to the DARPA
Technology Investment Agreement.
-- Results of US Phase IIa clinical trial with quadrivalent
seasonal vaccine in the first quarter of 2013
-- Potential contracts (government, pharmaceutical companies)
-- Addition of new pipeline candidates
Financial Results
The Company’s audited consolidated financial statements as at December
31, 2011 and for the year then ended have been prepared in accordance
with IFRS, as issued by the International Accounting Standards Board.
Additionally, the Company’s consolidated statement of financial
position as at January 1, 2010 and the comparative 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.
The consolidated loss for the year ended December 31, 2011, was
$20,992,000 or $0.12 per basic and diluted share. This compares to a
loss of $16,484,000 or $0.13 per basic and diluted share, respectively,
for the twelve-month period ended December 31, 2010. Operating
expenses were $21,382,000 in 2011 compared to $17,667,000 in 2010. The
increase in operating expense of $3,715,000 for 2011 is mainly
explained by the increase in R&D expenses related to the Phase II study
of the H5N1 pandemic influenza VLP vaccine and the Phase I study for
the seasonal VLP vaccine that were completed in 2011, and US expenses
related to the DARPA project that started in August 2010.
Fourth quarter results
The consolidated loss for the three-month period ended December 31,
2011, was $6,651,000 or $0.04 per basic and diluted share. This
compares to a loss of $4,604,000 or $0.04 per basic and diluted share
for the three-month period ended December 31, 2010. Operating expenses
were $6,779,000 in the three-month period ended December 31, 2011
compared to $5,754,000 in 2010. The increase in operating expense of
$1.025,000 for 2011 is mainly explained by the increase in depreciation
of property, plant and equipment related to assets in the US acquired
in 2011 for the DARPA project that started in August 2010.
Cash and short-term investments were $40.4 million as at December 31,
2011, an increase of $31.9 million from December 31, 2010.
As at March 29, 2012, there were 246,670,302 common shares issued and
outstanding as well as 10,010,426 stock options outstanding. Warrants
outstanding and Unit options outstanding as at March 29, 2012 are in
the aggregate of 27,644,236.
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 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 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.
