Mr. Andy Sheldon reports

MEDICAGO ANNOUNCES 2007 RESULTS

Medicago Inc. has released its operational and financial results for the fiscal year ended Dec. 31, 2007.

"Two thousand seven was a year of great technical and product advancement for Medicago. We worked diligently to raise the necessary funds to lead us to the successful attainment of many value creating milestones for our shareholders," said Andy Sheldon, president and chief executive officer of Medicago.

"Foremost of these milestones was our successful development of a H5N1 influenza virus vaccine, otherwise known as an avian flu vaccine. Our vaccine is comprised of highly immunogenic particles known as virus-like particles (VLPs). VLPs have significant advantages over conventional vaccines as they are known to broaden immunity and therefore increase protection against disease. We believe that our competitive advantage lies in the speed with which we can produce vaccines using our patented, plant-based production technology. From our preclinical test results, Medicago has established that its candidate vaccine has the potential to protect against three of the deadliest strains of pandemic H5N1 influenza viruses circulating today.

"The value of our technology was, in our opinion, further validated in 2007 and in early 2008, through the signing of two important collaboration agreements with a Fortune 100 company. Since signing, we have received four non-dilutive upfront or milestone-based payments from our partner totalling $2.5-million.

"To strengthen our balance sheet, we completed a private placement of $2.0-million for four million units of common shares in May, 2007. Furthermore, we completed a subsequent private placement of $2.6-million in March, 2008.

"In the coming year, we plan to continue the development of our H5N1 vaccine with the goal of completing a successful phase I trial. We will also begin a program to develop a seasonal influenza vaccine. In addition, we will continue to work with our partners to bring further financing to our company and advance our technology closer to commercialization," concluded Mr. Sheldon.

Financials

Revenues from research agreements in 2007 were $74,000, down from $156,000 in 2006. Medicago's work in 2008 to 2009 on its pandemic and seasonal vaccines will lead to the company's first investigational new drug and phase 1 in 2009 on its H5N1 vaccine.

Research and development expenses totalled $3,041,000 in 2007, a reduction of $1,228,000 from $4,269,000 in 2006. Research and development expenses were consistently lower in 2007 compared with 2006, resulting from the company's focus on targeted and promising research and development projects, principally with the company's new pandemic Influenza vaccine program.

Investment tax credits were at $932,000 for the year 2007, $29,000 higher than the year 2006. On April 1, 2007, the company completed a corporate reorganization resulting in the creation of new entities to perform all of its research and development activities and thus maximizing its federal investment tax credits. Lower research and development expenses in the year 2007 have reduced the absolute amounts of allowable research and development expenses claimed for investment tax credits but the tax reorganization has increased the combined tax rate from April 1, 2007.

General and administrative, business development and intellectual property expenses decreased by $265,000, or 10 per cent, to $2,429,000 in 2007 from $2,694,000 in 2006.

Consolidated loss for the year 2007 was $6,273,000, or 32 cents per basic and diluted share, compared with a loss of $7,758,000, or 68 cents per basic and diluted share, in 2006.

The company had cash and cash equivalents and short-term deposits totalling $224,000 at Dec. 31, 2007, a decrease of $1.4-million from Dec. 31, 2006. The company had a negative working capital of $400,000 as at Dec. 31, 2007, a decrease of $1.7-million compared with 2006.

Total consolidated assets were $6.7-million as of Dec. 31, 2007, a decrease of $1.9-million from $8.6-million as of Dec. 31, 2006. The variation is mainly due to a decrease of $1.4-million in the total of cash and cash equivalents and short-term deposit.

At Dec. 31, 2007, the company's long-term debt amounted to $14.5-million, an increase of $500,000 from the balance as of Dec. 31, 2006, because of the capitalization of interest expense on the Bio-Levier debt.

Additional information about the company, including the management report and financial statements, may be found on SEDAR.

Amendment to the stock option plan

Medicago directors have approved proposed amendments to the company's stock option plan in order to increase the number of common shares available for option grants under said plan from 1.71 million to 4.5 million, to amend the automatic vesting periods and provide that should the company becomes an issuer whose common shares are listed on the Toronto Stock Exchange or becomes a Tier 1 issuer under the policies of the TSX Venture Exchange, all options granted after such time may have a maximum exercise period of 10 years from five years currently. These proposed amendments will be submitted to the shareholders for approval at the meeting of shareholders of the company to be held on May 27, 2008.