The federal government said it has recovered $40 million from Quebec-based vaccine developer Medicago, and the intellectual property will remain in Canada under the supervision of a new company.

The government had granted Medicago $173 million in the early days of the Covid-19 pandemic to develop a plant-based vaccine in Quebec City.

The Japanese parent company of Medicago, Mitsubishi Chemical Group, shut down Medicago operations in February due to decreased global demand for the vaccine.

Although Medicago's vaccine was approved for use in Canada, it was not approved by the World Health Organization due to its association with the tobacco company Philip Morris.

Under an agreement between Canada and Mitsubishi Chemical Group, the research, intellectual property, and other equipment will be transferred to a new company, Aramis Biotechnologies.

Aramis Biotechnologies is also headquartered in Quebec City and is run by former Medicago employees.