Microbix Makes Significant Progress in Implementing Strategic Plan in Q2

    TORONTO, May 14 /CNW/ - Microbix Biosystems Inc. (TSX:MBX) today
announced results for the second quarter ended March 31, 2008, and outlined
steps that have been taken in implementing its strategic business plan.
    "We have made significant progress in moving VIRUSMAX(TM) and Urokinase
into the market since the first quarter, and we expect to reach important
milestones with SST(TM)in the coming months. Our base Virology business
continues to support our pipeline development activities with strong cash
flows from this division," said Microbix CEO William J. Gastle.

    Operating Highlights

    Virology Products

    -  The base virology business performed well, with sales up 9 per cent in
       the second quarter and up 27 per cent in the first six months of
       fiscal 2008 compared to the same periods a year earlier.

    -  Subsequent to the end of the second quarter, Microbix announced the
       purchase of a new plant in the Toronto area that will triple its
       manufacturing capacity, allow the Company to meet the steadily growing
       demand for its virology products, and facilitate further
       diversification into pharmaceutical grade water-based products and
       viral vaccine contract manufacturing.

    VIRUSMAX(TM)

    -  To date, Microbix has signed two letters of intent, is negotiating a
       definitive agreement with one, and is in discussions with two new
       companies regarding the licensing of its proprietary influenza vaccine
       yield enhancement technology.

    -  Further opportunities are anticipated in 2008 as countries around the
       world, most lacking the manufacturing capacity to meet domestic needs,
       become increasingly concerned about the risks of a pandemic.
       VIRUSMAX(TM) can enable manufacturers to at least double the amount of
       influenza vaccine they produce, reducing dependence on imported
       supplies.

    Urokinase

    -  Subsequent to the quarter's end, Microbix announced that it intends to
       transfer its Urokinase assets - including the manufacturing facilities
       and equipment, worldwide commercial rights to all Urokinase
       therapeutic indications, and the associated staff and management - to
       a new private company named Klarogen Biotherapeutics Inc. Microbix
       would retain a significant equity stake in the newly created company.

    -  Under the terms of a newly arranged letter of intent, Klarogen would
       purchase the Urokinase assets of ImaRx Therapeutics, Inc. of Tuscon,
       Arizona, (Nasdaq: IMRX). These assets would include ImaRx' remaining
       Urokinase inventory, the NDA (formerly known as Abbokinase(R), now
       known as Kinlytic(TM)) and the sales and marketing infrastructure. The
       Boards of Directors of both companies have approved a letter of intent
       to this effect.

    -  The Company is in the late stages of financing discussions and due
       diligence with its lead investor.

    -  The benefits of acquiring the Urokinase assets from ImaRx would
       include: Klarogen would become the sole commercial-scale manufacturer
       and supplier of Urokinase; it would be able to sell existing product,
       manufacture and ultimately substitute current inventory with its own
       product; it would be able to market directly to customers, which is
       far more profitable than through a partner; and working with an
       already FDA-approved product would accelerate the timeline to
       commercial scale production.

    SST(TM)

    -  The development of the Semen Sexing Technolog(TM) (SS(TM)) is moving
       forward as Microbix continues to expand the intellectual property in
       specific proteins that are determinative for X and Y chromosome-
       bearing sperm. The Company has now fully deployed its In Vitro
       Fertilization (IVF) capability, giving it the capacity to demonstrate
       sexed semen and evaluate performance. As well, new enabling
       technologies now installed are expected to accelerate the work that
       Microbix anticipates will lead to full characterization of all sex-
       specific proteins.

    Results of Operations

    For the three months ended March 31, 2008, the Company recorded a net
loss of $1,330,058 compared to a loss of $475,683 for the same period in
fiscal 2007. For the year to date, the current period loss was $2,342,788
compared to a loss of $957,179. Cash flow was negative for the quarter, but
positive for the year to date, reflecting the equity issue in the first
quarter.
    The expanded investment being made in SST development, licensing
activities associated with VIRUSMAX(TM), and financing activities of the base
business and Urokinase led to an expected loss in the second quarter and the
first half of 2008.

                                      Second
                                   Quarter Ended         6 months ended
                                      March 31               March 31
                                   -------------         --------------
                                  2008       2007        2008        2007
                                  ----       ----        ----        ----
                                   $          $           $           $
    -------------------------------------------------------------------------

    Sales                      1,179,771   1,077,895   2,216,622   1,750,379
    -------------------------------------------------------------------------

    Net Profit (loss)         (1,330,058)   (475,052) (2,342,788)   (957,179)
    -------------------------------------------------------------------------

    Net Profit (loss)
     per share                     (0.02)      (0.01)      (0.05)      (0.02)
    -------------------------------------------------------------------------

    Cash Flow                 (1,771,934)      7,795   3,831,239    (293,827)
    -------------------------------------------------------------------------

    Microbix 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,
without limitation, the risks associated with: failure of the parties
including Klarogen and ImaRx to enter into a definitive agreement, failure of
Klarogen to finance the acquisition from ImaRx, failure to develop and
commercialize Urokinase on a timely basis or at all, failure to complete due
diligence to the satisfaction of either or both parties; risks associated with
the ability to license Vaccine Technology to industry; risks associated with
failure to develop and commercialize SST; and intellectual property risks such
as failure to protect intellectual property rights or infringement of third
party intellectual property rights. These forward-looking statements represent
the Company's judgment as of the date of this press release. Additional risks
and uncertainties related to ImaRx can be found in its filings with the U.S.
Securities and Exchange Commission. The Company disclaims any intent or
obligation to update these forward-looking statements.

For further information: visit www.microbix.com or contact: William J.
Gastle, CEO, Microbix Biosystems Inc., (416) 234-1624 x 230; James Long, CFO,
Microbix Biosystems Inc., (416) 234-1624 x 265