Medicago refunds Ottawa $40 million from ‘irrelevant’ vaccine contract

Alex Dhaliwal
  |   December 12, 2023

The top dog at Medicago said they never delivered COVID jabs to Canada because newer variants of the disease made their vaccine "irrelevant."

On December 11, Toshifumi Tada, president and CEO of Medicago, testified to the House of Commons health committee amid a parliamentary inquiry into their $323 million vaccine contract that delivered no doses. Of that amount, $40 million will be returned to government coffers.

"We started to work on it, and our experts believed we would be able to fix it, but we knew it would take time," said Tada. 

Medicago aimed to deliver the first doses by the end of 2022, although an initial delivery of 20 million doses was expected for the end of 2021, reported the Epoch Times.

"While we worked [on] our internal challenges, we started to observe [the] market evolving a lot, because we started to see a lot of new variants arising that made our vaccine irrelevant," he added.

The news comes after Conservative, Bloc and NDP MPs on the House of Commons health committee grilled the public works department over the seven vaccine deals they made during the pandemic.

In October 2020, the Trudeau Liberals signed a "non-refundable" advance purchase agreement with Medicago despite no reassurances that Health Canada would approve the vaccine for consumption.

Including Medicago, the feds signed agreements with Moderna (up to 44 million doses), Pfizer-BioNTech (up to 51 million), Johnson and Johnson (up to 38 million), Novovax (up to 76 million), Sanofi-GlaxoSmithKline (up to 72 million), and AstraZeneca (20 million) at a cost of $8 billion.

Health Minister Mark Holland justified the $150 million advance purchase agreement, claiming Canadians needed a quick vaccine supply. 

Tada told MPs his company used the money to manufacture the "at risk" vaccine, purchasing raw materials and hiring some 400 staff to oversee their operations in Québec City. 

After Health Canada approved the Covifenz vaccine in February 2022, comparable COVID jabs had already saturated the market for over a year. 

At the time, the respiratory virus had since mutated, clinical trials for Covifenz demonstrated a 71% efficacy against infection from the original strain. It proved ineffective at stopping infection from the Omicron variant.

"Vaccine effectiveness against infection, symptomatic disease, and transmission with two doses was initially ~<50 to 60% but waned over time to near zero after six months," penned Health Canada in a February 28, 2022, document.

"The other vaccines that were available meant that the Medicago [...] doses were not required," Holland told the health committee on December 6.

Industry Canada also provided the company $173 million to build a factory, but Medicago ceased their operations in February, citing “significant changes to the COVID-19 vaccine landscape.” 

As part of the $40 million refund, the federal government will permit the company’s former employees to purchase the factory under a new Québec company called Aramis Biotechnologies.

The taxpayer-funded research and development assets, including intellectual property and equipment will be transferred from Mitsubishi to Aramis, reported the CBC. 

"Today's announcement presents a unique opportunity to capitalize on the original government investment in Medicago and retain key domestic assets into the Canadian ecosystem," reads a government statement.

Ottawa and Medicago agreed to terminate the $323 million contract in June by mutual consent — with the former unlikely to see funds returned from the advanced purchase agreement.

Alex Dhaliwal

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