Medicago, Inc. Announces 2012 Fourth Quarter and Year-End Financial Results
Published: Mar 29, 2013
QUEBEC CITY, March 28, 2013 /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, 2012. The Company's financial statements and management report are available at www.sedar.com and at www.medicago.com.
"2012 was a significant year for Medicago as we completed multiple strategic agreements for our plant-based vaccines. We have been successful in attracting major players and are now opening doors to new global opportunities," said Andy Sheldon, President and CEO of Medicago. "These include a strategic alliance with Mitsubishi Tanabe which includes $33 million in upfront and milestone payments, our first commercial license agreement for influenza vaccines in China with Philip Morris Products, as well as the successful completion of a $21 million project with U.S. Department of Defense for the production of significantly more than 10 million doses of H1N1 influenza VLP vaccine at our commercial-scale facility in North Carolina. In addition, we completed a research collaboration agreement with a top 10 pharmaceutical company, a collaboration with Mitsubishi Chemical Corporation and recently signed a $15 million non-dilutive loan with a major pharmaceutical company with whom we are continuing discussions to finalize a licensing agreement which may also include co-promotion rights of Medicago vaccines in certain markets and, if successfully concluded will result in the principal of the loan being applied as upfront payments upon the execution of the licensing agreement."
"2013 will also prove to be an important year. We expect to report interim pandemic readiness Phase II data for our H5N1 vaccine candidate and Phase II clinical data for our quadrivalent seasonal candidate. We believe that our proprietary plant-based manufacturing technology has the potential to transform the speed and economics of vaccine production. We will work to continue to execute potential contracts with governments and pharmaceutical companies to roll-out our compelling VLP vaccine technology globally," added Mr. Sheldon.
- Received clearance by the U.S. Food and Drug Administration (FDA) to initiate a Phase I clinical trial for its H5N1 avian influenza VLP vaccine candidate. The trial is being run by the Infectious Disease Research Institute (IDRI), a Seattle-based non-profit research organization that is a leading developer of adjuvants used in vaccines combating infectious disease. Results are expected in the first half of 2013.
- Received positive results from an independent preclinical study on the cross-protection effects of Medicago's H5N1 VLP vaccine candidate ("H5N1 VLP vaccine"). The study was conducted under the National Institute of Allergy and Infectious Diseases' Animal Models of Infectious Disease Program. The findings show that Medicago's vaccines could provide broad protection against multiple influenza strains.
Corporate and Financial Highlights
- 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. All the development and commercialization costs will be paid by MTPC. 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.
- Successfully completed and earned the full US$21 million from the Defense Advanced Research Projects Agency ("DARPA"). Medicago demonstrated the scalable manufacturing of its plant-expressed VLP vaccines in the U.S.A. under a Technology Investment Agreement. The final milestone was the production of at least 10 million doses of H1N1 virus-like particle influenza vaccine candidate in one month ("rapid fire test"). Testing confirmed that a single dose of the H1N1 VLP influenza vaccine candidate induced protective levels of neutralizing antibodies in an animal model.
- Signed its first commercial license agreement for influenza vaccines in China with Philip Morris Products. Medicago grants PMP an exclusive license to develop, commercialize and manufacture Medicago's pandemic and seasonal influenza vaccines for China. Medicago to receive up to US$12 million in upfront and milestone payments as well as royalties.
- 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.
- Successfully completed its research collaboration agreement with a top 10 global pharmaceutical company for the development of a non-influenza VLP vaccine candidate.
- Commenced trading on the OTCQX International under the symbol MDCGF. The OTCQX is the premier tier of the U.S. over-the-counter marketplace, providing a U.S. quotation opportunity to significantly broaden and enhance Medicago's access and exposure within the U.S. market.
- Completed the first step in a research collaboration with Cellectis plant sciences, a U.S.-based subsidiary of Cellectis Group (Alternext: ALCLS), to improve therapeutic proteins produced in tobacco plants.
- Awarded a non-refundable contribution of up to $493,000 from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP). The funding will support the development of new potency assays and process analytical technologies for Medicago's pandemic and seasonal influenza VLP vaccine candidates.
- Received $415,000 in financial support from the Quebec government and the municipality of Quebec City to fund a feasibility study for a unique biopharmaceutical production project.
Subsequent to year end:
- Awarded an Indefinite Delivery / Indefinite Quantity (ID/IQ) contract from DARPA based on Medicago having met all the technical requirement standards for the contract and is now allowed to bid for the manufacture and delivery of certain tobacco-produced proteins.
- Executed a $15,000,000 loan agreement with a major Pharmaceutical company. Medicago and its partner are continuing discussions to finalize a licensing agreement. In such an event, Medicago will not be required to pay interest on the loan.
- Investissement Quebec has agreed to a three-year extension of the maturity date of Medicago Inc.'s 2003 loan made under the BioLevier program. Originally, the maturity date of the loan in the principal amount of $15.3-million, was Dec. 31, 2014, and is now Dec. 31, 2017. Under this new agreement, Medicago will be required to make minimum annual repayments of $1.75-million, $2.5-million and $2.5-million in 2014, 2105 and 2016, respectively, with the remaining balance due on Dec. 31, 2017.
Execution of a collaboration agreement with Mitsubishi Chemical Holdings
Corporation ("MCHC") to develop a next generation technology for plant
Expected upcoming milestones include:
- Initiation of a Phase II H5N1 clinical trial for a one-dose H5N1 VLP with interim data expected in the second half of this year.
- Initiation of a US Phase II clinical trial for a quadrivalent seasonal influenza vaccine with interim data expected in the second half of this year.
- Potential contracts (government, pharmaceutical companies).
- Addition of new pipeline candidates.
The consolidated loss for the year ended December 31, 2012, was $32,666,000 or $0.13 per basic and diluted share. This compares to a loss of $20,992,000 or $0.12 per basic and diluted share, respectively, for the twelve-month period ended December 31, 2011. Operating expenses were $38,194,000 in 2012 compared to $21,382,000 in 2011. The increase in operating expense for 2012 is mainly explained by the increase in R&D expenses related to US expenses for the DARPA project that was successfully completed in 2012, the preparation for the Phase IIa clinical trial of the quadrivalent influenza seasonal vaccine, of the preparation and beginning of the production of H5N1 pandemic vaccine quantities for our upcoming extended phase II and of work on our new rabies vaccine, other potential targets, and on the rotavirus candidate as part of our collaboration with MTPC.
Fourth quarter results
The consolidated loss for the three-month period ended December 31, 2012, was $10,818,000 or $0.04 per basic and diluted share. This compares to a loss of $6,650,000 or $0.03 per basic and diluted share for the three-month period ended December 31, 2011. Operating expenses were $11,139,000 in the three-month period ended December 31, 2011 compared to $6,650,000 in 2011. The increase in operating expense for 2012 is mainly explained by the fact that the net R&D expenses in the US were $4,270,000 higher in 2012 compared to 2011. This increase is mainly explained by the fact that the Corporation did not recognize any amount as grant revenue from DARPA compared to $3,812,000 in 2011.
Cash and short-term investments were $11.3 million as at December 31, 2012, a decrease of $29.1 million from December 31, 2011.
As at March 28, 2013, there were 247,979,304 common shares issued and outstanding as well as 12,686,186 stock options outstanding. Warrants outstanding and Unit options outstanding as at March 28, 2013 are in the aggregate of 24,455,713.
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.