Vaccine developer Medicago (TSX:MDG) will target rotovirus, the leading cause of diarrhea in infants and children worldwide, under a new partnership with Japanese firm Mitsubishi Tanabe Pharma.

Medicago stands to gain nearly $33 million in payments from Mitsubish Tanabe under the vaccine collaboration and development deal, plus royalties on future sales of a new rotovirus vacine. The companies aim to develop and commercialize at least three new vaccines. The additional vaccine targets will be chosen at a later date

Mitsubishi Tanabe will fund R&D costs and Medicago will license rights to its vaccine technology to the pharma company. If Mitsubishi Tanabe exercises its option to license vaccines developed from the partnership, the Japanese pharma will take on responsibility for global development, regulatory and commercialization efforts.
Quebec, Canada-based Medicago, has proprietary vaccine technology that can make vaccines from tobacco leaves. The technology makes virus-like particles, or VLPs, that mimic the structure of a virus and prompt an immune response from the body. But because the particles are not the actual virus, they cannot infect people and they are unable to replicate. Medicago last year opened its largest facility in Research Triangle Park, which is designed to play a role in manufacturing vaccine in response to pandemic viral outbreaks.

Rotavirus is the most common cause of severe diarrhea in infants and young children globally, leading to an estimated 125 million cases each year. More than 500,000 of those cases result in death. The companies say that 85 percent of these deaths occur in Africa and Asia. Vaccines against rotavirus gastroenteritis are currently available but their cost remains a barrier to access in many developing countries.

Medicago’s technology could address the issues of vaccine availability and cost. The technology develops new vaccines much faster and at less cost compared to traditional methods. Under the agreement, Medicago will receive a nearly $3 million upfront payment to start rotovirus research with additional payments contingent on development milestones.

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