Feds Won’t Immediately Prioritize Recovering $170 Million in Funding on Closed Vaccine Factory: Minister

Innovation, Science, and Industry Minister Francois-Philippe Champagne responds to a question during Question Period in Ottawa on Nov. 16, 2022. Adrian Wyld/The Canadian Press

The federal government will not immediately prioritize recovering over $170 million in funding spent on a Quebec-based COVID-19 vaccine manufacturing factory that was recently shut down by its parent company, says Industry and Innovation Minister François-Philippe Champagne.

Medicago Inc., the manufacturer of the plant-based COVID vaccine, Covifenz, announced on Feb. 3 that it will be closing after its parent company, Mitsubishi Chemical Group (MCG), cut all future investments in the company.

“The first order of business is really to try to find a partner who can help us preserve the jobs, preserve the technology, and the intellectual property,” Champagne said in reference to the closure of Medicago while speaking with reporters in Ottawa on Feb. 3, as first reported by Blacklock’s Reporter.

The federal government announced in October 2020 that it would invest up to $173 million in Medicago, part of which would go toward building the company’s Quebec City vaccine factory, as a way of supporting “Canada’s response to COVID-19 and future preparedness.”

When asked by reporters if Ottawa would be looking to recover the funds now that Medicago will be halting operations, Champagne said, “that’s not the main focus today.”

“We have a number of legal [recourses], but the order of business [is to] preserve the jobs,” he said.

Champagne added that he has consulted with the federal Health Minister Jean-Yves Duclos and the Quebec government to prepare to find “an industrial partner who could take the business forward” since MCG will be pulling its Medicago investments.

“It’s really about finding solutions now,” he said, adding that the company has assured the federal government it will respect its prior commitments to both Ottawa and the Quebec government.

Medicago

The federal government also previously signed an agreement with Medicago to obtain up to 76 million doses of what was then its COVID-19 vaccine candidate, which would’ve been enough to vaccinate 38 million people.

Prime Minister Justin Trudeau said the investment, which came through Ottawa’s Strategic Innovation Fund, was “a testament to Canada’s commitment to evidence-based solutions” for COVID.

At the same time, the federal government also invested up to $18.2 million in a Vancouver-based biotech company called Precision NanoSystems Incorporated (PNI), which was developing its own COVID vaccine.

Ottawa said the investments in Medicago and PNI would “help create and maintain approximately 440 full-time jobs.”

Health Canada approved Medicago’s plant-based Covifenz vaccine in February 2022 for individuals aged between 18 and 64, but the World Health Organization (WHO) rejected Medicago’s vaccine application for emergency use a month later due to the company’s ties to tobacco companies.