Last updated on April 23, 2014 at 10:36 EDT

Medicago and Philip Morris Products Sign Commercial Agreement for Influenza Vaccines in China

September 25, 2012

Medicago to receive up to US$12 million in upfront and milestone
payments as well as royalties

QUEBEC CITY, Sept. 25, 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 the
signing of a licensing agreement with Philip Morris Products SA
(“PMP”), a subsidiary of Philip Morris International Inc.
(NYSE/Euronext Paris: PM), the leading international tobacco company
with products sold in approximately 180 countries. Under the agreement,
Medicago grants PMP an exclusive license to develop, commercialize and
manufacture Medicago’s pandemic and seasonal influenza vaccines for
China.  In addition, Medicago has signed an exclusive, worldwide
license for a portfolio of plant-based protein development technologies
from PMP.

Medicago will receive an upfront payment of US$4.5 million from PMP.  In
addition, Medicago is eligible to receive development milestone
payments totalling US$7.5 million, as well as royalty payments on any
future sales of pandemic and seasonal influenza vaccines by PMP in
China which utilize the Medicago technologies.

In a separate agreement, in exchange for signing an exclusive, worldwide
licensing agreement, Medicago has licensed a portfolio of plant-based
protein development technologies from PMP.  These technologies include
tools and methods for producing proteins in plants which are expected
to complement Medicago’s existing patent portfolio. Medicago will pay
US$0.7 million to PMP, and there are no additional milestone payments
associated with this agreement.  PMP is entitled to receive royalty
payments on any future sales of Medicago products which utilize the
technologies licensed from PMP.

“We look forward to working closely with PMP to develop our pandemic and
seasonal influenza vaccine candidates in the coming years,” said Andy
Sheldon, Chief Executive Officer of Medicago. “Strengthening our VLP
platform and international expansion to emerging markets like China is
a key component of our growth strategy, and this partnership represents
an important milestone in achieving this strategy.”

Philip Morris Investments B.V., a subsidiary of Philip Morris
International, holds 98,608,800 common shares of Medicago, representing
approximately 40% of the issued and outstanding common shares of
Medicago. Therefore, PMP, which is also a subsidiary of Philip Morris
International, is considered a “related party” of Medicago under Multilateral Instrument 61-101 respecting Protection of Minority
Security Holders in Special Transactions
(Regulation 61-101 respecting Protection of Minority Security Holders in
Special Transactions
in Québec) (“MI 61-101″). The transactions described in this press release are
“related party transaction” under MI 61-101 but are exempt from formal
valuation and minority approval requirements under MI 61-101. The Board
of Directors of Medicago has reviewed and approved all agreements
referenced in this press release.

Medicago’s pipeline includes the initiation of a U.S. Phase IIa clinical
trial for a quadrivalent seasonal flu vaccine, with interim data
expected in the first quarter of 2013. A Phase I clinical trial for a
H5N1 VLP vaccine with a new adjuvant is planned in partnership with the
Infectious Disease Research Institute (IDRI), with interim data
expected in the first quarter of 2013. GMP process development and a
GLP toxicology study for a rabies vaccine are ongoing. Medicago is also
working with Mitsubishi Tanabe Pharma under a strategic alliance to
develop a vaccine for rotavirus, and at least two additional vaccine
candidates.  In addition to vaccines, Medicago is conducting research
and development in the area of biosimilar products.

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 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. Such statements include but are not limited
to statements related to the agreements with Philip Morris Products SA
referenced in this press release. 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.

Source: PR Newswire