TORONTO (Reuters) - Canada's Medicago Inc MDG.TO is several years ahead of its competitors in the development and means to produce plant-based vaccines to respond rapidly to new strains of influenza, its CEO said on Tuesday.
The company said earlier on Tuesday that it had been awarded a $21 million grant from the U.S. Department of Defense to build a facility that can mass-produce its influenza vaccines, but shares plunged nearly 18 percent following the announcement of a $7 million equity offering.
The offering, which entails selling up to 17,283,952 units at 40.5 cents a unit, will partly be used to help fund the Defense Department project.
“In general terms, we’ve probably got several years ahead of most of the people that might be doing similar things,” Chief Executive Andy Sheldon told Reuters in an interview.
Medicago says it can produce a vaccine for testing a month or less after the identification of a strain. It says its plant-based vaccine technologies could offer speed and cost benefits compared with traditional vaccine production.
The defense department project will consist of developing a 90,000 square-foot facility in North Carolina designed to produce up to 10 million doses of flu vaccines a month, with the potential for further expansion in the future.
“The capital expense to build such a facility -- we would generally estimate that it’s somewhere between 10 to 15 times less than if was an egg-based or cell-culture facility,” said Sheldon, adding that the cost of goods is also much less than egg-based or cell-based production.
Sheldon says there’s a need for faster production technology, noting that during the previous pandemic, it took companies about six months from the time of the pandemic announcement to be able to supply the vaccines.
Medicago hopes to begin phase II of a clinical trial of its H5N1 vaccine this fall, with results expected before the end of the year.
“This puts us, in terms of influenza vaccine production, a long way ahead of anybody who is in the plant-based field,” said Sheldon.
The company currently uses plants such as tobacco leaves to produce pandemic and seasonal flu vaccines using proprietary manufacturing technology and its “Virus-Like Particles”, or VLPs, that resemble a virus, but are non-infectious and can not replicate.
Looking ahead, the company aims to apply its technology to other vaccines and says it is starting to look at whether it can apply the platform to areas outside the vaccine arena.
Shares of the Quebec City-based company, halted on Monday pending the news, closed down 7 Canadian cents, or 15.6 percent, to 38 Canadian cents once trading resumed mid-afternoon Tuesday on the Toronto Stock Exchange. More than 2.3 million shares changed hands.
Editing by Frank McGurty
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