Medicago Seen In Vaccine Partnership With U.S. MilTORONTO (Dow Jones)--Medicago Inc. (MDG.T) has agreed to final terms with the U.S. military for a funding award with respect to the company's proposal to develop a plant-based vaccine production facility, according to people familiar with the matter.
Shares of Medicago are halted on the Toronto Stock Exchange. The stock last traded at 45 Canadian cents.
In late June, the company said its proposal for developing a large, cost-effective and rapid scale-up of Medicago's technology to deliver good-manufacturing-practise vaccine material was being reviewed by the Defense Advanced Research Projects Agency, or DARPA.
The company submitted its proposal in March 2010 in response to a solicitation.
These kinds of agreements can be worth tens of millions of dollars. For instance, in mid-July, Canadian biotech Tekmira Pharmaceuticals Inc. (TKM.T) was awarded a research contract from the U.S. government's Department of Defense Chemical and Biological Defense Program to develop its SNALP technology to treat Ebola virus. The initial phase of the contract is worth US$34.7 million to Tekmira in the next three years, and up to US$140 million for the entire program.
In addition, the pact gave a boost to Tekmira's share price as well as some added liquidity in the market.
The deal with Medicago, if finalized, would be another sign of the U.S. government's interest in building infrastructure and collaborating with companies that have capabilities in pandemic outbreak/preparedness and bioterrorism.
Traditional vaccine-production uses eggs, whereas Medicago's method uses tobacco plants, a process that's much faster and cheaper, as the capital costs associated with a plant-based facility are 10% of those at a conventional facility, the company has said.
Medicago declined to comment.
A DARPA spokesman couldn't be reached for comment.
-By Andy Georgiades; Dow Jones Newswires; 416-306-2031; andy.georgiades@dowjones.com