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"We continue to invest in our three major biotechnology products as wemove them closer to market, and we continue to support this pipelinedevelopment with the cash flow, in-house expertise, and facilities of our corebusiness," said Microbix CEO William J. Gastle.
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The Company's vaccine yield enhancement discovery and proprietarytechnology, now trademarked VIRUSMAX(TM), was featured in Vaccine, aninternational, peer-reviewed scientific journal. Also during the quarter, theU.S. Patent and Trademark Office indicated that it would allow a patent on theprocess. Patents in Canada and India have already been allowed. Subsequent tothe end of the quarter, Australia also indicated that it would issue a patent.
Microbix is in licensing discussions with potential partners, and there isgood industry interest in the technology. The Company conservatively estimatesthat the world market for VIRUSMAX(TM) could be more than $100 million a year.
Semen Sexing Technology
Microbix announced during the third quarter that it had made a majordiscovery - the ability to identify the specific proteins that allowfemale-producing and male-producing sperm cells to be separated. This is thefirst time ever that sex-specific proteins have been positively identified.Microbix is currently filing patent applications in all major markets.
The discovery, as well as the development of monoclonal antibodies to beused in the process, is an important breakthrough in commercializing theCompany's Semen Sexing TechnologyTM (SSTTM).
Late in the third quarter, the Company announced that it entered into anagreement to license SSTTM to a major commercial breeder in China. Microbixreceived the first milestone payment from the breeder in August.
A number of artificial insemination (AI) companies, representing 13 percent of the $2.5 billion global AI market, have already agreed to participatein field trials, and the launch of the product is expected to occur in late2008 or early 2009. The worldwide AI market is now $2.5 billion, and Microbixestimates that sexed semen will garner a premium price of approximately 2 1/2times the price of the unsexed product. Microbix will receive a royalty of 15per cent of sales in addition to fees for the SSTTM components.
Urokinase
Microbix expects to conclude due diligence and close a financing agreementsoon. The funds will be used to conduct clinical trials and proceed tocommercialization.
The market potential for a new specific Urokinase-based thrombolytic drugis in excess of $100 million annually. At the same time, the development riskis relatively low as other Urokinase products have been on the market for manyyears.
Core Business
The core business continued to perform well during the quarter, growing15% over the year-earlier period. Microbix is now planning to expand themanufacturing facility in order to accommodate increased demand for virologyproducts, water-based products and viral vaccine contract manufacturing.
Results of Operations
For the three months ended June 30, 2007, the Company recorded a net lossof $940,629 compared to a loss of $707,683 for the same period in fiscal 2006.For the year to date, the current period loss was $1,897,809 compared to aloss of $1,392,048 in the previous fiscal year. Cash flow was positive forboth the quarter and nine month periods compared to fiscal 2006.
"The spend was within our expectations as we continue to push our majorproducts through the pipeline and work to build long-
