THE CANADIAN PRESS

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QUEBEC CITY, Que. - Medicago Inc. (TSXV:MDG) cited higher research and development expenses in reporting an increase in its third-quarter loss on Friday.

The Quebec-based biotechnology company said it lost of $3.1 million in the quarter ended Sept. 30 compared with $2.7 million in the year-ago period. However, the per share loss was lower, at three cents, compared with seven cents in the 2008 quarter.

The company reported no revenues in the quarter.

Research and development expenses totalled $2 million in the third quarter of 2009 compared to $1.1 million in the third quarter of 2008.

The company says expenses were higher as a result of increased activities related to the production of clinical materials and start of the Phase I trial of its H5N1 pandemic influenza vaccine.

As of Sept. 30, the company had consolidated assets of $15.3 million, compared with consolidated assets of $20.6 million as of Dec. 31.

Medicago is focused on developing effective and affordable vaccines based on proprietary manufacturing technologies.

Its shares dropped two cents or almost three per cent to 68 cents Friday on the TSX Venture Exchange.