Japanese company strikes deal to acquire the majority of Medicago

Jul. 12, 2013 @ 06:50 PM

The Research Triangle Park operations of Canada-based Medicago, a biopharmaceutical company that’s working to develop vaccines produced using tobacco leaves, are not expected to change following the acquisition of the majority of the company’s shares by a Japanese pharmaceutical company.

Medicago announced an agreement Friday with Mitsubishi Tanabe Pharma Corp. for the company to acquire all of Medicago’s issued and outstanding company shares, except for the shares owned by Philip Morris Investments.
After the completion of the deal, Mitsubishi Tanabe Pharma would own about 60 percent of the company, while Philip Morris Investments would own about 40 percent.
Mitsubishi Tanabe Pharma is offering to pay $1.16 in cash per share. The price is at a premium of 22.1 percent from the July 11 Toronto Stock Exchange closing price of 95 cents.
Medicago’s board has unanimously backed the deal. Philip Morris Investments, the company’s’ primary shareholder with 38.5 percent of all issued and outstanding stock, has agreed to support the deal until April 12 of next year.
Medicago’s officers and directors, who own about 1.6 percent of the issued and outstanding shares, also entered into agreements to vote in favor of the deal.
Medicago previously had a research collaboration with the company that ended in February of last year. The collaboration involved research into the development of new vaccines using the production of particles from plants that act like viruses, helping to prepare the body for an attack by a virus.
Mitsubhisi Tanabe Pharma said in an announcement about the planned acquisition that it believes Medicago’s technology could be used to make a variety of different vaccines to help the company strengthen its product pipeline.
“We are proud to invest in developing novel vaccines in Québec City and North Carolina as part of our global operations,” said Michihiro Tsuchiya, representative director of Mitsubishi Tanabe Pharma Corp., in a prepared statement.
Pierre Labbé, Medicago’s chief financial officer and vice president, said in an interview Friday that Medicago will keep its name, management, team, space and place if the acquisition deal is finalized.
“In fact, it secured the future of the company,” he said. “As we were, a company that was not generating revenue, it was always a challenge to finance the company to continue its development, with (this) deal; it’s going to secure its continued (future).”
Medicago USA employs 70 in the Research Triangle Park. Labbé said the site is producing material for use in clinical trials for a seasonal vaccine candidate.