Medicago to Receive up to $33 Million in Upfront and Milestone Payments as well as Royalties under a First Agreement to Develop a Rotavirus Vaccine

QUEBEC CITY, March 6, 2012 /CNW/ - 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 the establishment of a strategic alliance with Mitsubishi Tanabe Pharma Corporation (MTPC) through the execution of a Master Research Collaboration Agreement.  The objectives are to develop and commercialize at least three new vaccines with MTPC who will provide funding for all research and development costs. In exchange for granting licensing rights, 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 C$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 C$3 million to begin the initial research on rotavirus. Work on an RLP vaccine target will begin immediately, and additional targets under this master agreement are to be selected by the parties at a later date.

"I am proud to announce this strategic alliance with Mitsubishi Tanabe Pharma for the development of several new vaccines. It vividly demonstrates the value that pharmaceutical companies place on new technology production platforms that have the potential to improve efficacy, cost and speed of production," said Andy Sheldon, President and CEO of Medicago.  "This collaboration leverages the significant strengths of our two companies towards a shared vision that can positively impact vaccine development and benefit patients worldwide."

"We have the utmost respect for Mitsubishi Tanabe Pharma's scientific and commercial leadership in vaccines," said Frederic Ors, Vice President, Business Development of Medicago. "This collaboration is consistent with our business strategy to develop new vaccine targets with significant market potential along with a knowledgeable partner that is committed to supporting rapid development."

"We are excited to be forming this strategic alliance with Medicago using their innovative, plant-based VLP technologies. Our research collaboration aims to create new and better vaccines that will improve the health of people around the world," said Dr. Michihiro Tsuchiya, President and Chief Executive Officer of MTPC.

Rotavirus is the most common cause of severe diarrhea in infants and young children globally. The worldwide incidence of rotavirus is estimated at 125 million cases each year, and is responsible for more than 500,000 deaths annually. More than 85% of these deaths occur in Africa and Asia, and over two million are hospitalized each year with pronounced dehydration. Children under five years of age, especially those between six months and two years, are most vulnerable to the disease. While vaccines against rotavirus gastroenteritis are currently available and are the single prevention and control measure with the most significant impact on reducing severe disease incidence, economic barriers to access remain an issue in many developing countries.

In addition to the RLP vaccine target, Medicago's pipeline includes the initiation of a U.S. Phase II clinical trial for a seasonal flu vaccine with interim data expected in the third quarter of this year.  A Phase I clinical trial for a one-dose H5N1 VLP vaccine with a new adjuvant is planned for 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.  GMP process development and a GLP toxicology study for a rabies vaccine are ongoing. 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.

About Mitsubishi Tanabe Pharma Corporation
Mitsubishi Tanabe Pharma Corporation is a research-driven pharmaceutical company based in Osaka. Our philosophy states that "We contribute to the healthier lives of people around the world through the creation of pharmaceuticals". In accordance with this philosophy, we strive to continually discover drugs with new value and to provide those drugs to patients around the world. Mitsubishi Tanabe Pharma is taking on the challenge of drug discovery in the fields of autoimmune disorders, diabetes, and renal diseases, as well as in other fields with high levels of unmet medical needs. To that end, the Company is strengthening its R&D pipeline.
Additional information about Mitsubishi Tanabe Pharma Corporation is available at www.mt-pharma.co.jp/e

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 "Risks Factors and Uncertainties" in Medicago's Annual Information Form filed on March 31, 2011 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.