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Vaccination Technology Tackles Swine Flu

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Canadian company Medicago hopes to revolutionize production.

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While the current strain of swine flu is relatively benign, we're also in the dog days of summer where nuisances like allergies and sunburn take precedence. A good percentage of mild swine flu cases are going unreported because they're so common, according to a doctor I recently spoke with.

This brings us to the messy situation where everyone would like to have insurance against a more severe winter version of swine flu. Unfortunately, the vaccine producers aren't going to be able to produce enough for everyone who wants it. Most vaccine manufacturers grow the virus in chicken eggs but current reports are showing that swine flu vaccine production is half or less compared to the production of most influenza vaccines using this method. The bottom line is that current vaccine manufacturing methods are unable to produce large amounts of vaccine on short notice.

Medicago (MGD.V) is a small company that floated onto the TSX Venture Exchange in 2006. It specializes in the manufacture of influenza vaccines using a proprietary manufacturing system developed from the genetic engineering of plants.

On July 15, 2008, the company announced that its "proprietary plant-based vaccine development and production technologies can deliver large volumes of vaccines, just one month after the identification of genetic sequences from an emerging pandemic strain. This rapid time frame is critical as it could allow the vaccination of a population before the first wave of the pandemic strikes."

These claims were supported by a $15.975 million investment from Philip Morris (PM) that came as a result of Medicago's research on using the tobacco plant to generate vaccines. Philip Morris currently owns 49.8% of Medicago and their ownership is likely to increase through the exercise of in-the-money warrants.

The ability to rapidly produce new vaccines in large quantities has led to discussions with countries around the globe for strategic partnerships that would allow domestic vaccine production infrastructures. Those discussions are starting to lead to deals.

This week it announced the signing of a memorandum of understanding with Ajanta Pharma Limited to discuss and negotiate an agreement to commercialize Medicago's pandemic and seasonal influenza VLP-based vaccines in India and other territories. It also has a partnership agreement with Genopole biopark in France to build a commercial facility.

Given current vaccine production concerns, it appears that Medicago's technology will be able to make major inroads. Vaccine production is a $21 billion business that is projected to quadruple by 2015.
Position in Medicago.

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