Quebec government to help Medicago distance itself from tobacco industry

A vial of a plant-derived COVID-19 vaccine candidate, developed by Medicago, is shown in Quebec City on Monday, July 13, 2020 as part of the company’s Phase 1 clinical trials in this handout photo. THE CANADIAN PRESS/HO, Medicago

The Quebec government wants to help Medicago replace a troublesome shareholder that is preventing it from selling its vaccines internationally.

In May, the World Health Organization (WHO) rejected the Quebec biopharmaceutical's COVID-19 vaccine, which uses plants in its manufacturing process. The reason for the rejection is the presence of tobacco company Philip Morris as a minority shareholder in the company, a decision linked to a policy of the UN agency adopted in 2005.

Quebec wants to help the company replace the minority shareholder, said Economy Minister Pierre Fitzgibbon on the sidelines of an economic announcement in Montreal on Monday.

"Medicago is a fine Quebec company. They have several structuring development plans. So, I want to see Medicago be committed to Quebec as they are. If to achieve this, we can facilitate the purchase of Philip Morris' shares, we will do it," Fitzgibbon said.

Medicago's Covifenz vaccine, the only COVID-19 shot manufactured in Canada, was licensed by Health Canada in February for adults aged 18 to 64. In December, the company said its two-dose vaccine was 71 per cent effective in preventing COVID-19 infections, according to a large study that included several variants, including Delta. The company's results do not include the Omicron variant, which was not circulating during the study period.

The federal government has signed a contract to purchase up to 76 million doses of Covifenz. Canada had planned to donate any excess vaccine to low-income countries through the COVAX vaccine-sharing alliance. Since the WHO has denied Medicago's request, Canada will not be able to donate doses of Covifenz.

NEGOTIATIONS UNDERWAY

Fitzgibbon has been in discussions with Mitsubishi Tanabe Pharma executives to resolve the impasse, but the Japanese company must first negotiate the purchase of Philip Morris' stake itself, he said.

"It's going to be more up to Mitsubishi to buy out its American partner, Philipp Morris. It's not up to us to do that. I've offered that the government can participate," the minister said.

Mitsubishi is a 79 per cent shareholder in Medicago. Philip Morris owns the balance of the shares, 21 per cent.

Mistubishi is approaching the Legault government for assistance. The company is asking for support so that Medicago's vaccines "can receive a favourable reception from the WHO and be marketed on a large scale," according to a recent entry in the Quebec Registry of Lobbyists. "The nature, form and amount of funding are unknown," the company states in the registry.

When asked about it on Monday, Fitzgibbon said he was not in a position to say what the extent of government financial support might be. "I don't know the answer because Medicago has ambitious plans to expand their operations. There are possibly other projects they want to do."

Medicago is in the process of finalizing its business plan which will be presented to Mitsubishi, he added. The provincial government may provide assistance for the purchase of the Philip Morris stake or for "possible" expansion projects. The details have yet to be determined.

"When it's done, we'll sit down with Mitsubishi and say what we're prepared to do," Fitzgibbon said.

-- This report by The Canadian Press was first published in French on June 20, 2022.