August 16, 2010

 

Microbix reports 11% growth in product volume for nine months

 

Microbix Biosystems Inc., a biotechnology company focused on virology and biological technologies, reported sales volume grew by 11% for the first nine months of fiscal 2010, compared to the same period in 2009.

 

Double digit sales growth was, however, offset by the impact on revenue of strongly negative currency exchange rates.

 

Revenue for the third quarter ended June 30, 2010 was CAD1,184,761 (US$1.14 million) compared to CAD1,391,435 (US$1.34 million) for the same quarter in 2009. Revenue decreased for the nine-month period to CAD4,242,486 (US$4.07 million) from CAD4,568,162 (US$4.39 million) in the previous year. The strong Canadian dollar contributed a 14% reduction in revenue compared to 2009.

 

In the third quarter, Microbix moved its three late-stage pipeline programs closer to completion with significant upside potential for investors. Subsequent to the quarter Microbix announced a development agreement for LumiSortâ„¢ (its semen sexing technology for livestock) with one of the largest suppliers of livestock reproduction products and services in the world. In the agreement, the partner will make a CAD2 million investment (US$1.92 million) in LumiSort in return for two years of regional exclusivity and a 10% share of annual LumiSort revenues. The partner has made an up-front payment to Microbix and will deliver additional milestone payments within the next 18 months, when LumiSort is expected to enter the CAD2.5 billion (US$2.4 billion) market for livestock artificial insemination.

 

William J. Gastle, Microbix' CEO, said, "With the LumiSort announcement, Microbix reaches a major milestone for one of its three pipeline products. But, unlike other biotechnology companies who have 'bet the company' on one major product or even a single disease area, Microbix' business model is to advance a diverse pipeline of products, without the fear of risking it all on one potential blockbuster. We took a number of years to reach the point where we are now developing three promising technologies that could be worth hundreds of millions of dollars to shareholders."

 

Microbix' pursuit of partnering opportunities for Kinlytic â„¢, Microbix' brand name for Urokinase, a former market leader for clot-busting therapies, is beginning to pay off. Discussions with many interested companies has led to due diligence with serious potential partners during the third quarter, with a number of companies visiting Toronto to meet with the Urokinase team, inspect the facility and review documents. Microbix expects to report important commercial outcomes in the near future.

 

These potential partners are all interested in a therapy that has been used on millions of patients and approved in the US and Canada for over 30 years, which had peak annual sales of CAD300 million (US$288 million) in the past decade. Pharmacists and physicians in the US regularly ask about Urokinase availability because they know it to be a safe and effective treatment.

 

Developments beginning early in 2010 accelerated Microbix' VIRUSMAXâ„¢ influenza vaccine manufacturing project in China. The financing of the Hunan project was initiated in January with the selection of Dundee Securities Corporation as the lead financial advisor which commenced marketing the offering to potential investors. Microbix is now in advanced discussions with several potential investors that are interested in China's large and growing vaccine market with a significant influenza vaccine manufacturing capacity deficit.

 

China produces only 30 million doses annually for its domestic population, or 2% of the population. By contrast, Canada and the US immunise 35-40% of their population.

 

The Hunan project is intended to raise immunisation rates in the province to 20%. For the third quarter ending June 30, 2010, Microbix reported a loss of CAD1,251,955 (US$1.2 million) compared to a loss of CAD672,366 (US$645,630) in the third quarter of 2009. For nine month period, the loss was CAD2,568,162 (US$2.47 million) compared to a loss of CAD1,768,868 (US$1.7 million) in 2009. Total expenses in the third quarter were CAD1,877,538 (US$1.8 million) compared to CAD1,410,846 (US$1.35 million) in the third quarter of 2009. For nine months, total expenses were CAD5,004,821 (US$4.81 million) compared to CAD4,393,782 (US$4.22 million) in 2009. The increased loss resulted from higher expenses required to conclude agreements for Urokinase, the Influenza Vaccine Joint Venture in Hunan China, and for LumiSort. Microbix has applied significant resources to support these pipeline product opportunities because of their high-potential return on investment.

 

Microbix Biosystems Inc. specialises in the development of biological technologies and commercialising them through global partners. The company has intellectual property in large market biotherapeutic drugs, vaccine technologies and animal reproduction technologies. Established in 1988, Microbix is headquartered in Toronto.