Medicago said today it agreed to be acquired by Mitsubishi Tanabe Pharma for $357 million, creating a combined biopharma focused in part on continuing the acquired company’s work with rapid development of plant-based vaccines.
The deal comes less than a month after Medicago announced a first success from a collaboration with MItsubishi Tanabe, the successful production of a Rotavirus virus-like particle vaccine candidate comprising all four structural antigens of rotavirus (VP2, VP4, VP6, and VP7) using Medicago's plant-based manufacturing platform. That vaccine is in preclinical phases, according to Medicago's website.
And seven months ago, Medicago said it would evaluate a closed-plant cultivation system developed by the parent of the acquiring company, Mitsubishi Chemical Holdings, to produce Nicotiana benthamiana plants for protein production using Medicago's technologies.
"Mitsubishi Tanabe Pharma’s capabilities in biopharmaceutical research, development, and commercialization along with its financial stability offer us the ideal opportunity to realize the full potential of our platform," Andy Sheldon, Medicago’s president and CEO, said in a statement. "These resources provide us the ability to foster the development of innovative vaccines with the financial stability to expand our Quebec, Canadian, U.S., and global operations."
Mitsubishi Tanabe will be the 60% owner of the combined company; the other 40% will be held by an investment entity of Philip Morris International, which now owns part of Medicago.
Headquartered in Quebec City, QC, Medicago is focused on developing vaccines and therapeutic proteins for a broad range of infectious diseases. The company says it can develop and test plant-based vaccines about a month after genetic sequences from a pandemic strain are identified. Those vaccines are based on the company’s virus-like particles, and developed through a transient expression system that produces recombinant vaccine antigens in plants—a technology the company says can offer stronger vaccines faster and at lower cost over conventional technologies.
"Medicago also intends to expand development into other areas such as biosimilars and biodefense products where the benefits of our technologies can make a significant difference," the company said in the statement.
The acquisition is subject to approval by Medicago shareholders and regulatory agencies as well as other customary closing conditions. The deal is expected to close later this year.
Mitsubishi Tanabe agreed to pay Medicago a $9.25 million "termination" fee if the deal falls through because it made misrepresentations or breached covenants. In addition, Mitsubishi Tanabe said it will reimburse Medicago's expenses up to $1.5 million if regulatory agencies fail to approve the transaction.
And as a further sweetener, Mitsubishi Tanabe offered Medicago a noninterest loan of up to three installments totaling $13.5 million, saying it would provide the acquired company with "adequate" cash liquidity until the deal closes, if that occurs after September 15. However, Medicago agreed to repay the loan by issuing shares to Mitsubishi Tanabe if the deal were to be terminated.