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QUEBEC CITY—Biopharmaceutical company Medicago Inc. hasinked a licensing agreement with Philip Morris Products SA (PMP), a subsidiaryof Philip Morris International Inc. focused on vaccines in China.
 
 
Per the terms of the agreement, Medicago will grant PMP anexclusive license for the development, commercialization and manufacture ofMedicago's pandemic and seasonal influenza vaccines for China. PMP will payMedicago $4.5 million upfront, and Medicago is also eligible to receivedevelopment milestone payments of up to $7.5 million, as well as royalties onfuture sales of influenza vaccines by PMP in China that make use of Medicagotechnologies.
 
 
"We look forward to working closely with PMP to developour pandemic and seasonal influenza vaccine candidates in the comingyears," Andy Sheldon, CEO of Medicago, said in a press release."Strengthening our VLP platform and international expansion to emergingmarkets like China is a key component of our growth strategy, and thispartnership represents an important milestone in achieving this strategy."
 
The companies have also signed a separate agreement, inwhich Medicago has licensed a portfolio of plant-based protein developmenttechnologies from PMP in exchange for signing an exclusive, worldwide licensingagreement. The technologies consist of tools and methods for the production ofproteins in plants, and are expected to be a complement to Medicago's currentpatent portfolio. Medicago will make a payment of $700,000 to PMP, and theagreement features no additional milestone payments. PMP will be eligible toreceive royalties on the future sales of any Medicago products that result anduse the licensed PMP technologies.
 
 
Philip Morris Investments B.V., a subsidiary of PhilipMorris International, currently holds 98,608,800 shares of Medicago commonstock, which equates to roughly 40 percent of Medicago's issued and outstandingcommon shares. As a result, PMP, which is also a subsidiary of Philip MorrisInternational, is considered a related party of Medicago, making theaforementioned transactions "related party transaction." All transactions havebeen approved by Medicago's board of directors.
 
Medicago's approach in vaccine development is based onproprietary manufacturing technologies and Virus-Life Particles (VLPs).Medicago notes on its website that VLPs "consist of protein shells studded withshort strands of the proteins specific to whatever disease the vaccine isintended to control. VLPs are made to look like a virus, allowing them to berecognized readily by the body's immune system, however, they lack the coregenetic material, making them non-infectious and unable to replicate." Unlikeother vaccines, VLP-based vaccines require only the genetic sequence of thevirus, rather than an actual sample. VLPs are also more effective in activatingkey aspects of immune response for immune stimulation and immunological memory.
 
Medicago has initiated a Phase IIa clinical trial for aquadrivalent seasonal flu vaccine, and expects to see interim data by the firstquarter of next year. In addition, the company announced on Aug. 16 the receipt of U.S. Food and Drug Administration authorization for a PhaseI clinical trial of an H5N1 VLP vaccine with GLA adjuvant, a trial that will beperformed in partnership with the Infectious Disease Research Institute.Medicago is also working on a rabies vaccine, a rotavirus vaccine in alliancewith Mitsubishi Tanabe Pharma and at least two other vaccine candidates.

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