February 16, 2012

Microbix Biosystems Inc. announced Wednesday (Feb 15) that the US Patent & Trademark Office (USPTO) has denied a request brought by US company Inguran LLC to re-examine fundamental claims in Microbix' patent for LumiSort^® technology in livestock artificial insemination.

 
LumiSort, the next-generation instrument-based (cytometric) technology, which is expected to enter the US$3-billion market for sexed semen in the second half of 2013, will provide livestock producers around the world with a three-fold increase in yield and a 10-fold increase in speed, Microbix said.

 
Microbix was granted patent protection for LumiSort technology from the USPTO in August of last year. In September, Inguran LLC, the parent of Sexing Technologies, which holds 100% of the market for sexed semen, requested that the USPTO re-examine the LumiSort patent claims. The Patent Office found that there was no basis for the re-examination of broad claims directed to the LumiSort method and system.  As a result, claims in Microbix's patent embracing aspects of this significant contribution to the field remain enforceable.

To further support its dominant patent estate, Microbix on Wednesday filed a new patent application for second-generation LumiSort technology representing significant advances in ease of use, construction, speed and accuracy of the instrument. 
 
Even before market introduction, Microbix has established agreements for licensing its LumiSort technology with more than one-third of the US livestock semen collection centres and also has agreements with collection centres in Canada, Australia, Europe, South America and China representing more than 40 million straws of the dairy semen sold annually and a market of US$900 million.

 
In January, Microbix signed additional agreements with four new semen collection companies representing an additional six million straws under license that could convert to LumiSort sexed semen. This could represent additional revenue of US$8 million annually within three years of launch.

 
The companies are located in northern and southern Europe, Southeast Asia and the US, giving LumiSort a presence in all corners of the world. All agreements include royalty payments to Microbix of 15% of sales of sexed semen and combined could represent more than US$100 million annually in revenues.

 
Eric Danzeisen, co-founder of a California artificial insemination organisation, Sierra Desert Breeders, said, "We partnered with Microbix because we are confident that this new technology is going to surpass the outdated sexing techniques currently available and will help our company grow into a global supplier. Because high quality sexed semen is the number one factor in growing our business, we're enthusiastic in our anticipation of the advances LumiSort will bring to the industry."

 
William J. Gastle, Chief Executive Officer, said "The current generation of instruments subjects delicate livestock sperm cells to rapid pressure changes, electrical charges, and high velocity impacts which ultimately impacts fertility rates. LumiSort overcomes these limitations. For this reason, we anticipate that LumiSort sexed semen will have much higher fertility rates than the currently available products and will become the market leader within three years of launch."

 
Microbix is in advanced discussions with a number of strategic partners to fund the final development and commercialisation steps of LumiSort technology, which has no regulatory barriers to market entry.