Minister unclear on whether government will get back $173M it gave to vaccine maker set to close

Innovation, Science and Industry Minister François-Philippe Champagne said Friday the government has legal options to recover $173 million it gave to soon-to-be defunct medical company Medicago for COVID-19 vaccine development. But he didn't say whether the government is looking to get its money back.

The government gave the money to the Quebec City-based company in October 2020 to support the development of the company's plant-based vaccine Covifenz, and expand production of the vaccine.

Covifenz is the first, and only, COVID vaccine developed in Canada that Health Canada has approved for use. The government funding came at a time of public anxiety about the government's ability to secure enough vaccine doses.

Mitsubishi Chemical Group, Medicago's owner, announced Thursday that it's shutting Medicago down.

Ottawa had an agreement with Medicago to buy up to 76 million doses of the vaccine.

In a news conference Friday, Champagne did not say whether the government would look to get the $173 million back.

"That's not the main focus today," Champagne said, adding that the government is more focused on looking for business partners to preserve the company's workforce, technology and intellectual property.

"We have a number of legal recourses, but the order of business [is to] preserve the jobs."

Champagne did not say what legal options the government has, or whether it would use them.

Osamu Shimizu, director of the corporate communications division at Mitsubishi Chemical Group, told CBC News that Medicago has about 400 employees in Canada — 360 in Quebec — and about 180 in the United States.

Quebec Economy Minister Pierre Fitzgibbon said Friday the Quebec government is prioritizing finding a buyer for the company over recouping the money it has loaned to Medicago.

Covifenz has not been distributed in Canada or internationally. The World Health Organization (WHO) rejected the vaccine for its COVID-19 Vaccines Global Access (COVAX) program in March 2022, citing cigarette manufacturer Philip Morris International's partial ownership of Medicago. Philip Morris divested its shares in Medicago late last year. 

In a statement about Medicago's closure, Mitsubishi Chemical Group cited "significant changes to the COVID-19 vaccine landscape since the approval of Covifenz" to explain its decision.

Champagne acknowledged that mRNA vaccine technology for COVID-19 vaccines has become dominant as it "seemed to be most effective," but said Medicago's plant-based vaccine is still "promising."

Champagne added that Medicago made commitments to the federal and provincial governments. He didn't say what they are.

"The company assured us that it would respect all their commitments [to] the Government of Quebec and the Government of Canada," he said.

Shimizu said Mitsubishi Chemical Group can't comment on any discussions it's having with government entities.