TORONTO (Reuters) – Canada’s reliance on supply contracts to secure COVID-19 vaccines from drugmakers like Pfizer Inc has put daily life for Canadians, and prospects for the economy over the next year, in the hands of a few foreign companies facing overwhelming global demand.

Medicago employees harvest Nicotiana benthamiana plants to extract virus-like particles (VLP) in Medicago’s Durham Facility in Durham, North Carolina, U.S. in an undated photograph. Medicago/Handout via REUTERS.

As other governments pour hundreds of millions or billions into vaccine development, Canada has earmarked C$1 billion ($761 million) to buy doses abroad. Meanwhile, Quebec-based Medicago has worked with a shoestring budget on its home-grown, plant-based vaccine.

Medicago, owned by Japan’s Mitsubishi Tanabe Pharma and tobacco company Philip Morris, reported promising early trial data this week and said on Thursday it plans to begin large-scale studies. The vaccine uses an efficacy booster from GlaxoSmithKline called an adjuvant.

If pivotal trials go well, Medicago could bring the first local vaccine to market, making mass vaccination more likely.

But Canada’s biggest bet is that it will able to quickly import vaccines under six purchase agreements announced earlier this year.

Ottawa announced plans to support Medicago’s effort in March without saying how much it would contribute. In April, Medicago said it was hopeful the funding would be sorted out within weeks.

Instead a deal came in October, as a C$173 million purchase agreement, about 5% of what the U.S. government promised Moderna Inc to develop its vaccine.

The funding arrived just in time to organize large-scale trials, after C$7 million from the province of Quebec helped Medicago through a long due diligence process, Chief Executive Bruce Clark told Reuters.

“To pivot our development plans to take on COVID almost exclusively was a huge burn on the organization,” Clark said. For the 30,000-subject late-stage studies, “we need financial help.”

“As it happens, the timing is just right. But there certainly was a lot of angst in getting to that point,” he said.

The Medicago vaccine uses a cousin of the tobacco plant to provide proteins called virus-like particles (VLPs) that mimic the structure of the coronavirus to provoke an immune response. The VLP approach has been used successfully in other vaccines.

If it works, Medicago could produce up to 100 million doses by the end of 2021, and Canada would be first in line to receive them, Clark confirmed.

Canada’s innovation ministry said in a statement that it is “committed to working on all possible fronts” on vaccines and treatments.

“These efforts include investments in scaling up Canadian vaccine manufacturing capabilities, funding support to Canadian vaccine candidates as part of Canada’s contribution to the global effort to find a vaccine, and partnering with the most promising international candidates,” said the ministry.

Other governments placed bigger bets and moved earlier than Canada, even on relatively untested technology.

The vaccine from Pfizer and Germany’s BioNTech that boosted spirits and financial markets worldwide with data showing it to be more than 90% effective uses previously unproven messenger RNA (mRNA) technology, as does Moderna’s.

BioNTech’s effort was supported in part by a 100 million euro ($118 million) loan in June from the European Investment Bank, and by Germany’s research ministry, which provided 375 million euros in September.

The U.S.-sponsored Operation Warp Speed program poured billions into relatively untested companies. Novavax Inc won $1.6 billion and Moderna $2.5 billion to finish trials, ramp up production and provide 100 million doses each.

Canada has more experimental COVID-19 vaccines in development than any country aside from the United States and China, according to a recent study by the Center for Global Development, though most are in early stages.

But developing and manufacturing vaccines takes very deep pockets, costs that are tough for smaller countries.

“In the U.S. … you have 10 times the population of Canada,” said Michael Mullette, managing director of Moderna’s new Canadian subsidiary. “When the government decides to make investments in pandemic vaccine preparedness, they’re able to do so at scale.”

Even so, Clark said, if some plan had been in place before the pandemic hit based on prior health crises, his company might have been able to move more quickly.

“It’s hard to fault anyone,” he said. “Whatever we’ve learned in this one, let’s hope that we don’t have to rebuild the process again.”

($1 = 1.3074 Canadian dollars)

($1 = 0.8492 euros)

Additional reporting by Allison Lampert in Montreal; Editing by Denny Thomas and Bill Berkrot

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