In the presence of Mr. Sam Hamad, Minister of Natural Resources, Wildlife and Parks and Minister responsible for the Capitale-Nationale region, Medicago Inc. today announced that it has signed financing agreements with various partners, including Avenir Luzerne, a Groupe Viridis subsidiary from the Champagne region of France,
SGF Santé, Innovatech Québec Chaudière-Appalaches, and Investissement Québec.

Medicago uses alfalfa to produce proteins for the pharmaceutical and nutraceutical markets and develops its own products. A new business plan of $34 million has been approved. This new development program spread over
more than three years allows for better synergy with the French partner. It will also lead to the creation of up to 15 high tech jobs, in addition to the company’s 45 existing positions.

Viridis is a group that produces alfalfa in the Champagne region of France and develops alfalfa-derived products for animal and human consumption. This group was one of Medicago’s first investors, recognizing its potential for
competitive new products. As Viridis president Damien Levesque indicates, “The synergy between our group’s technical know-how and Medicago’s development of high-value-added products will result in the emergence of
competitive products in the medium term that meet growing health needs.

This innovative diversification strategy should sustain the alfalfa industry at a time of serious challenges, essentially of a regulatory nature.”

The therapeutic protein market is booming, and this class of medicines is among the most costly to produce using fermentation technology. The technology initially developed by Agriculture Canada, Laval University, and Héma-Québec and now exploited exclusively by Medicago uses alfalfa as a molecular factory to produce high-value-added proteins. The three-year program announced today will allow Medicago Inc. to maximize its potential
in this sector, given that using alfalfa as a molecular factory can significantly reduce the production costs of protein medicines.

“Medicago is a great example of a business in the Capitale-Nationale region whose research and development have resulted in an international partnership,” noted the minister, Sam Hamad, who sees its positioning as very beneficial to the region.

The financing deal initiated in September 2002 culminated in a $24 million contribution in capital in late July that involved Avenir Luzerne, Viridis, SGF, and Innovatech Québec Chaudière Appalaches, as well as a Biolevier equity
loan from Investissement Québec. The rest of the financing will be ensured through certain contracts and R&D tax credits.

Medicago chairman François Gilbert stated he was “extremely satisfied with the outcome of this agreement, which benefited from the cooperation and persistence of Medicago business partners and staff.” He was especially delighted with the confidence partners showed in the scientific team, which, under the leadership of Dr. Louis P. Vézina, has made Medicago a world leader in its field.

Medicago is also delighted to announce the appointment of Mr. Andy Sheldon as its new president and CEO and looks forward to benefiting from his large experience in the pharmaceutical industry. Until recently, Mr. Sheldon was the vice president of sales and marketing at Shire Biologics, a position he assumed after a long career in marketing at major pharmaceutical firms like SmithKline Beecham, Rhone Merieux Canada and Biochem Pharma.