Medicago, Inc. Receives Regulatory Approval to Begin Human Clinical Testing With its Avian Flu Pandemic Vaccine

QUEBEC CITY, QUEBEC--(Marketwire - August 25, 2009) - Medicago Inc. (TSX VENTURE: MDG) a biotechnology company focused on developing highly effective and affordable vaccines based on proprietary manufacturing technologies and Virus-Like Particles (VLPs), today announced that it has received clearance from Health Canada to commence a Phase I human clinical trial with its H5N1 Avian Influenza vaccine (“H5N1 vaccine”). Enrollment of volunteers is now underway.

The Phase I placebo-controlled, double-blind, dose-escalating study will evaluate safety, tolerability and the immune response of the Company’s H5N1 vaccine candidate in up to 48 healthy volunteers between the ages 18 to 60. Volunteers will receive two doses, injected 21 days apart of either a placebo or the influenza vaccine at doses of 5, 10 or 20 micrograms. The trial will take place at the Vaccine Evaluation Center of McGill University in Montreal, Canada, under the supervision of Dr. Brian Ward. Results of this study are expected during the fourth quarter of 2009.

“The acceptance of our Clinical Trial Application by Health Canada represents a major milestone in the company’s development of novel influenza vaccines. It is a testament to the quality of our technology and demonstrates our ability to advance candidates towards human trials,” said Andy Sheldon, President and CEO of Medicago. “This trial will be the first in which a plant-based vaccine will be injected into humans in Canada. We believe we have a compelling vaccine against influenza - a candidate, which at low dosage may protect against different strains of influenza that have the potential of becoming a pandemic. Combined with our rapid response and low cost manufacturing capabilities, we believe our vaccine would address an unmet gap in pandemic influenza preparedness efforts.”

“All of our studies to date confirm that we have a safe and effective vaccine candidate entering human trials,” said Nathalie Landry, VP Product Development of Medicago.” The data collected will support further clinical trials expected in 2010. As our influenza vaccines candidates are produced using the same manufacturing platform, favourable safety information from this trial may support our other programs and reduce overall development timelines. Furthermore, by conducting this first trial in Canada we will also have the opportunity to build a robust application that will satisfy regulatory requirements of U.S. and European regulatory agencies at a later stage of clinical development.”

About Medicago’s pandemic flu vaccine candidate

Medicago’s H5N1 vaccine candidate was formulated to protect against the Indonesian influenza virus. It is manufactured in Nicotiana benthamiana, a relative of the tobacco plant, using the Company’s proprietary VLP technology. VLPs have several advantages over traditional flu vaccines. They are made to look like a virus, allowing them to be recognized readily by the body’s immune system, however, they lack the core genetic material making them non-infectious and unable to replicate. Medicago’s VLP-based vaccine has shown in preclinical studies it can provide protection against different strains of avian flu, such as the Vietnam and Turkey strains, and it may provide significant immune protection after a single dose. FDA-approved H5N1 influenza vaccines in the United States require two 90-microgram doses, administered at least four weeks apart to achieve appropriate level of antibodies in 44% of vaccinated individuals. Because Medicago’s technology requires the genetic sequence of a viral strain and not the live influenza virus, vaccines can be manufactured within 4 weeks of obtaining the genetic sequence of a pandemic strain. This is in contrast with all current manufacturing technologies which rely on strain adaptation, a process that requires an additional 4-6 months before vaccine production can be initiated.

About Medicago

Medicago is committed to provide highly effective and affordable vaccines based on proprietary Virus-Like Particle (VLP) and manufacturing technologies. Medicago is developing VLP vaccines to protect against H5N1 pandemic influenza, using a transient expression system which produces recombinant vaccine antigens in non-transgenic plants. This technology has potential to offer advantages of speed and cost over competitive technologies. It could deliver 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 press release contains forward-looking statements which reflect Medicago’s current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein. Medicago disclaims any obligation to update these forward-looking statements.

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