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A few months after laying off dozens of employees at its manufacturing facility in Research Triangle Park, Canadian vaccine developer Medicago is ceasing operations.
The Mitsubishi Chemical Group (OTCMKTS: MTLHF), the sole shareholder of Medicago, has determined it will not make further investments in the biopharmaceutical company, which based its U.S. operations in RTP. This Triangle facility played a key role in producing a plant-based Covid-19 vaccine that failed to gain widespread regulatory approval.
Medicago – which employed 180 workers in Durham – began preparing for commercial production of its vaccine, Covifenz, after obtaining regulatory approval in Canada early last year. However, "significant changes to the Covid-19 vaccine landscape" led the Mitsubishi Chemical Group to decide against pursuing commercialization of Covifenz. This came after "a comprehensive review of the current global demand and market environment for Covid-19 vaccines," the group said in a statement. The group also says Medicago faced challenges in transitioning to commercial-scale production.
Demand for Covid-19 vaccines has fallen dramatically in the United States, leaving many states with large vaccine stockpiles.
Rather than solely shut down its Covifenz efforts, the Mitsubishi Chemical Group "judged that it was not viable" to continue investing in Medicago and instead decided to cease all operations at the biopharma company. The groups says it will proceed with an orderly wind up of Medicago's business and operations in Canada and in the U.S.
Through an email, a spokesperson for the Mitsubishi Chemical Group said all employees at the Durham facility will be terminated as part of this winding up process. As for the group's plans for the facility, the spokesperson said that "appropriate arrangements will be considered in the winding up process."
Medicago in October informed North Carolina Department of Commerce of layoffs affecting 62 employees in RTP. This includes 60 employees who worked in various roles at the company's facility, as well as two remote employees. In its notice to N.C. Commerce, Medicago said the layoffs were the result of the company "restructuring its workforce to align with its changing business needs."
This restructuring followed Canadian regulators approving Covifenz in February 2022. The country's government committed to purchasing 20 million doses of the vaccine, with an option to purchase 56 million more – the majority of which would be produced in Durham.
However, no other country followed suit. Various national media outlets reported that the World Health Organization would not review the vaccine because of Medicago's connection to Philip Morris (NYSE: PM). The tobacco giant was a minority shareholder in the biotech, before divesting all of its shares late last year.
Medicago's facility in RTP is owned by California-based Alexandria Real Estate Equities. The biotech built out the 103,000-square-foot facility through a 2010 partnership with the U.S. Defense Advanced Research Projects Agency, which included $21 million in funding from the federal agency. The facility features greenhouse space and an automated extraction and purification system.
Last year, Medicago signed a multi-year lease renewal.
