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Medicago announces 2010 second quarter financial results
QUEBEC CITY, Aug. 13 /CNW/ - Medicago Inc. (TSX: MDG), a biotechnology company focused on developing highly effective and affordable vaccines based on proprietary manufacturing technologies and Virus-Like Particles, today announced its operational and financial results for the second quarter ended June 30, 2010. The Company's financial statements and management report are available at www.sedar.com and at www.medicago.com.
"We have made great strides in the advancement of our rapid and cost-effective VLP plant-based vaccine technology. Our recent award of $21M from the Defense Advanced Research Projects Agency (DARPA) demonstrates the need for our solution of rapidly producing cost-effective quality vaccines," said Andy Sheldon, President and CEO of Medicago. "We will develop a U.S. state-of-the-art facility in order to participate in the $7B seasonal and pandemic vaccine market. This facility will also provide us with enhanced access to the various grant programs in both the U.S.A. and Canada and we will be ready to take part in these additional funding opportunities."
"Our H5N1 pandemic vaccine should enter phase 2 clinical trials this quarter. We will continue to discuss opportunities with other pharmaceutical companies and governments to roll-out our rapid and cost-effective vaccine technology around the globe." stated Mr. Sheldon.
Key Corporate Developments
<< - Subsequent to quarter end, it was announced that Medicago USA Inc. was awarded a $US21 million grant from the Defense Advanced Research Projects Agency (DARPA) to provide scalable manufacturing of its plant-expressed VLP vaccines in the U.S.A. under a Technology Investment Agreement. - Signed a memorandum of understanding with PT Bio Farma to identify and develop select vaccine targets of mutual interest, with the final goal being to establish a partnership to build a plant-based manufacturing facility in the Republic of Indonesia. - Graduated to the Toronto Stock Exchange (the "TSX") from the TSX Venture Exchange and listed its common shares on the TSX - Subsequent to quarter end, entered, as of August 10, 2010, into an agency agreement to sell up to 18,518,520 Units at a price of
.405 per Unit, representing gross proceeds of $7.5 million. The proceeds from this offering will be used to fund the Company's participation in the DARPA cost-sharing program. >>
Outlook
The Company expects to initiate a phase II clinical trial in the second-half of 2010 with results available thereafter. Upcoming 2010 milestones include among others:
<< - Submission of a CTA to Health Canada to initiate a Phase II clinical trial for H5N1 pandemic vaccine - Initiation of a Phase II clinical trial for H5N1 pandemic vaccine - Completion of preclinical studies for an H1N1 vaccine >>
Financial Results
Consolidated losses for the three-month period ended June 30, 2010 was $3,963,000 or
.03 per basic and diluted share compared to a loss of $2,794,000 or
.03 per basic and diluted share for the three-month period ended June 30, 2009. Since the beginning of the year the consolidated loss was $7,672,000 or
.06 per basic and diluted share compared to a loss of $5,419,000 or
.07 per basic and diluted share.
Research and development (R&D) expenses increased by $1,034,000 to $2,861,000 for the second quarter of 2010 compared to the second quarter of 2009. For the six-month period ended June 30, 2010 R&D expenses increased by $2,198,000 to $5,423,000. The increase in R&D expenses is mainly related to the upcoming Phase II study.
Research grants and contribution increased by $229,000 and $ 566,000 for the three and six-month period ended June 30, 2010. The increase is mainly explained by the grant from Quebec's Consortium for Drug Discovery (CQDM) that was obtained in the second quarter of 2009. Grant from the CQDM totaled $1,773,000 of which $990,000 is still available as of June 30, 2010.
Research and development tax credits were $144,000 and $310,000 for the three and six-month period ended June 30, 2010, $24,000 lower than three-month period ended June 30, 2009 and $37,000 higher than the six-month period ended June 30, 2009.
General and administrative, business development and intellectual property (G&A) expenses increased by $49,000 to $905,000 for the three-month period ended June 30, 2010 compared to 2009. For the six-month period ended June 30, 2010, G&A expenses increased by $347,000 to $2,095,000. This increase is mainly explained by the fees paid for the graduation of the company from the TSX-V to the TSX, and increased business development and investor relation activities.
Net financial expenses amounted to $243,000 for the three-month period ended June 30, 2010, $67,000 higher compared to the three-month period ended June 30, 2009. This increase is explained by lower interest income ($83,000) mainly the result of decrease in cash, cash equivalents and short-term investments and lower interest rates in 2010. For the six-month period ended June 30, 2010 net financial expenses increased by $68,000 to $489,000 and this is mainly explained by lower interest rate on the Bio-Levier loan for $31,000 and lower interest income for $115,000.
As at June 30, 2010 cash, cash equivalents and short-term investments were of $6.9 million, a decrease of $7.4 million from December 31, 2009. This decrease is mainly the result of loss for the six-month period net of items not affecting cash and cash equivalents for $6,898,000 that was partly offset by the exercise of 3,443,500 warrants totaling $861,000 since the beginning of 2010.
As at August 13, 2010, there were 118,388,582 common shares issued and outstanding, 7,263,188 stock options outstanding and 59,011,196 warrants outstanding.
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 pandemic and seasonal influenza using a transient expression system which produces recombinant vaccine antigens in non-transgenic plants. Their lead vaccine candidate, H5N1, has successfully completed a PI clinical trial and will be entering a PII clinical trial in 2010. Medicago's 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 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 24, 2010 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.
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