07:00 EST Monday, December 14, 2009

/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

QUEBEC CITY, Dec. 14 /CNW/ - Medicago Inc. ("Medicago" or the "Company") (TSX-V: MDG), a biotechnology company focused on developing highly effective and affordable vaccines based on proprietary manufacturing technologies and Virus-Like Particles, today announced that as at the close of business today, the subscription receipts (the "Subscription Receipts", MDG.R), will be converted into common shares (the "Common Shares") and Common Share purchase warrants (the "Warrants") of the Company and delisted from the TSX Venture Exchange.

As the Subscription Receipts traded in the "Book-Entry" System and no individual certificates were issued, holders of Subscription Receipts do not need to take any action in order to receive the Common Shares and the Warrants of the Company to which they are entitled. Common Shares of the Company underlying the Subscription Receipts and that may be issued upon exercise of the Warrants will automatically be listed on the TSX Venture Exchange.

The 16,100,000 Subscription Receipts issued on November 27, 2009 will be converted today as at 17:00 (Montreal Time) into a total of 16,100,000 units (each, a "Unit"). Each Unit consists of one Common Share in the share capital of Medicago and one half of one Common Share purchase Warrant. Each whole Warrant will be exercisable at a price of C$1.00 until 5:00 p.m. on November 26, 2010.

Philip Morris Participation B.V. ("PMP") has elected not to exercise its preemptive right under the Representation Right and Preemptive Right Agreement dated October 21, 2008 as described in Medicago's short form prospectus dated November 19, 2009 available on SEDAR (www.sedar.com). Following the conversion of the Subscription Receipts into Common Shares and Warrants, PMP will hold, directly or indirectly through its affiliates, an interest representing 39.35% of the then outstanding Common shares of Medicago and 50.3% of the Common Share purchase Warrants on a fully diluted basis.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

About Medicago

Medicago is committed to provide highly effective and affordable vaccines based on proprietary Virus-Like Particle (VLP) and manufacturing technologies. Medicago is developing VLP vaccines to protect against H5N1 pandemic influenza, using a transient expression system which produces recombinant vaccine antigens in non-transgenic plants. This technology has potential to offer advantages of speed and cost over competitive technologies. It could deliver a vaccine for testing in about a month after the identification and reception of genetic sequences from a pandemic strain. This production time frame has the potential to allow vaccination of the population before the first wave of a pandemic strikes and to supply large volumes of vaccine antigens to the world market. Additional information about Medicago is available at www.medicago.com.

Forward Looking Statements

This news release includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with Medicago's business and the environment in which the Company operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to Medicago or its management. The forward-looking statements are not historical facts, but reflect Medicago's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks Factors and Uncertainties" in Medicago's Annual Information Form filed on March 25, 2009 with the regulatory authorities. Medicago assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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For further information: Medicago Inc., Andy Sheldon, President and Chief Executive Officer, (418) 658-9393; Medicago Inc., Arianna Vanin, Director, Investor Relations, (514) 796-3993

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