Large market pipeline starts to meet milestones; LumiSort(TM) agreements concluded
TORONTO, Aug. 12 /PRNewswire-FirstCall/ - Microbix Biosystems Inc. (MBX:TSX), 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 $1,184,761 compared to $1,391,435 for the same quarter in 2009. Revenue decreased for the nine-month period to $4,242,486 from $4,568,162 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 LumiSort(TM) (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 $2 million investment 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 $2.5 billion market for livestock artificial insemination.
William J. Gastle, Microbix' Chief Executive Officer, 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(TM), 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 U.S. and Canada for over 30 years, which had peak annual sales of $300 million in the past decade. Pharmacists and physicians in the U.S. regularly ask about Urokinase availability because they know it to be a safe and effective treatment.
Developments beginning early in 2010 accelerated Microbix' VIRUSMAX(TM) 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 United States immunize 35 to 40% of their population. The Hunan project is intended to raise immunization rates in the province to 20%.
For the third quarter ending June 30, 2010, Microbix reported a loss of $1,251,955 compared to a loss of $672,366 in the third quarter of 2009. For nine month period, the loss was $2,568,162 compared to a loss of $1,768,868 in 2009. Total expenses in the third quarter were $1,877,538 compared to $1,410,846 in the third quarter of 2009. For nine months total expenses were $5,004,821 compared to $4,393,782 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. specializes in the development of biological technologies and commercializing 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.
This press release contains forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements including the risks associated with failure to get regulatory approval, and release, of Kinlytic for distribution in Canada, the US and other regions of the world;; risks inherent in moving onto new markets or developing and launching new products or engaging new partners; risks associated with commercializing the technologies including sales may not reach sales targets or be made at all, there is no guarantee that the Company will complete development of any technology and if it does that it will perform to commercially exploitable levels, other technologies may emerge before any technology developed by the Company enters the market, royalty rates may not be achievable, markets may not sustain demand for any product should world economies shift significantly, market utilization rates may not be reached, market value of products may vary, product launch dates and market utilization timetables may not be met; risks associated with failure to develop and commercialize LumiSort; non-adoption of LumiSort; competition in Microbix' core business; general economic conditions; intellectual property risks including challenges to protecting the Company's intellectual property rights, patents may not provide adequate protection of the Company's intellectual property, may not be successfully prosecuted and may be subject to challenge and risks of infringement of third party rights; risks associated with financing the China joint venture, that includes obtaining all funds needed to launch or complete the project; risks affecting timely and cost effective construction and operation of the Microbix-Hunan facility; risks associated with operating in foreign jurisdictions, including operating in China with its evolving legal and economic infrastructure and the involvement of the Chinese government departments at national, state and local levels in business and economic matters; creating risks associated with various levels of political and economic conditions and other risks including but not limited to, currency exchange rates and restrictions on foreign exchange; high rates of inflation; renegotiation or nullification of existing licenses, permits and contracts; changes in taxation policies; risks associated with repatriation of profits and changing political conditions and governmental regulations; development of competing technologies in all of its business lines, and Microbix' ability to attract and retain qualified employees and management. These forward-looking statements represent the Company's judgment as of the date of this press release. The Company disclaims any intent or obligation to update these forward-looking statements.
Third quarter ended 9 months ended June 30 June 30 2010 2009 2010 2009 -------------------------------------------------- Revenue 1,184,761 1,391,435 4,242,486 4,568,163 Net loss (1,251,955) (672,366) (2,568,162) (1,168,868) Net loss per share (0.02) (0.01) (0.05) (0.03) Cash flow (676,131) (26,661) (489,589) (2,633,439)
SOURCE Microbix Biosystems Inc.