Biotechnology company Medicago (TSX:MDG), whose technology makes vaccines from tobacco leaves, now has an additional $11.1 million from an investor who knows a thing or two about the golden leaf: Philip Morris (NYSE:PM).
Medicago shareholders approved the investment, the second tranche of a $22.5 million private placement with the tobacco giant. Philip Morris is acquiring 17.2 million Medicago shares at 64 cents per share. The private placement is expected to close today and is subject to customary closing conditions.
“The completion of this financing further strengthens our strong cash position, allowing us to advance our pandemic and seasonal influenza vaccine candidates, further advance our overall programs including vaccines outside of influenza and realize the full potential of our rapid and effective manufacturing platform,” Medicago President and CEO Andrew Sheldon said in a statement.
Quebec, Canada-based Medicago last month opened a new vaccine facility in Research Triangle Park, North Carolina that was designed to produce up to 120 million doses of pandemic flu vaccine and 40 million doses of seasonal influenza vaccine annually. The company is also conducting R&D that could yield additional vaccines. The company has reported positive phase 2 clinical trial results for an H5N1 pandemic flu vaccine and is in phase 1 studies for an H1N1 flu vaccine. Medicago is researching its technology to potentially address other viruses as well.
Medicago’s technology makes virus-like particles, or VLPs, from tobacco leaves. These VLPs are not the actual influenza virus but they mimic its structure, prompting an immune system response. Because the VLPs are not actual virus, they cannot infect people and they are unable to replicate. The technology to make VLPs is faster and less expensive than traditional vaccine production methods.
Philip Morris entered into the investment agreement with Medicago in October and the first tranche raised $11.2 million. The second tranche increases Philip Morris’ stake in Medicago to about 40 percent of the company’s outstanding shares.
Photo from Flickr user Donald Lee Pardue
