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Mitsubishi Tanabe Acquires Medicago for $357M

By Catherine Shaffer
Staff Writer

Osaka, Japan-based Mitsubishi Tanabe Pharma Corp.  moved to acquire Canadian vaccine developer Medicago Inc. for $357 million, or $1.16 in cash per share, a premium of about 22.1 percent to the closing price of Medicago's stock on July 11. The acquisition follows a successful strategic alliance in 2012, under which the companies agreed to develop and commercialize at least three vaccines using Medicago's virus-like particle technology (VLP).

Medicago's plant-expressed VLPs consist of protein shells studded with short strands of the proteins specific to the desired disease target. VLPs are engineered to look like a virus, allowing them to be recognized readily by the body's immune system, but they lack the core genetic material, rendering them noninfectious and unable to replicate.

VLP-based vaccines are made using only the genetic sequence of the virus or bacteria, and don't require an actual sample of that material.

Mitsubishi and Medicago chose rotavirus as the first and primary focus of their collaboration. Globally, rotavirus is the most common cause of severe diarrhea in infants and young children, with a worldwide incidence estimated at 125 million cases each year, causing more than 500,000 deaths annually. More than 85 percent of those deaths occur in Africa and Asia, and more than two million patients are hospitalized each year with pronounced dehydration.

Under the acquisition agreement, MTPC will acquire all issued and outstanding common shares in Quebec City-based Medicago, except for the shares held by Philip Morris Investments B.V. Upon completion of the transaction, MTPC will own 60 percent of Medicago, and Philip Morris will own 40 percent.