Microbix licenses its animal reproduction technology in China



    TORONTO, June 27 /CNW/ - Toronto-based Microbix Biosystems Inc. (TSX:MBX)
announced today that it has entered into an agreement to license its
proprietary Semen Sexing Technology(TM) (SST) to a major commercial breeder in
China.
    The Chinese company - the Animal Fine Breeding Station of Hebei Province
- is one of the leading suppliers to the livestock industry and will become
the exclusive distributor of SST in that country.
    The demand for milk and beef in China is increasing dramatically as
poultry is in decline due to the spread of avian flu and diets in that country
are becoming more westernized. The price of milk, for example, has risen 60
per cent over the past year in China. A new priority for the Chinese is the
rapid development of their beef and dairy herds.
    Microbix' technology allows producers to determine the sex of livestock
offspring resulting from artificial insemination. SST will allow Chinese dairy
farmers to breed only female animals for their milking herds. Likewise, the
technology will ensure that beef producers end up with only the required male
animals for meat production. SST will allow China to expand its beef and dairy
capacity at a much faster pace.
    "The Animal Fine Breeding Station sees SST as the key to its success, and
it was very keen on entering into this relationship in order to have access to
our technology," said William J. Gastle, CEO of Microbix." We expect to sign
additional distribution agreements closer to commercialization."
    Microbix is charging up-front licensing fees for exclusive distribution
rights based on the relative size of each market so as not to exclude the
smaller players. "While the Chinese market is underdeveloped, it represents a
significant growth opportunity," said Gastle. The royalty rate of 15% and all
other terms remain the same as previously announced non-exclusive agreements.
    Last year, Microbix signed non-exclusive agreements with a number of
artificial insemination (AI) companies based in Europe, North America and
Australasia. These companies represent 13 per cent of the $2.5 billion global
AI market in the commercial livestock industry.
    Today, the average price for unsexed dairy semen is about $20. Microbix
estimates that sexed semen will demand a premium price of approximately 2 1/2
times the price of the unsexed product.
    "On a commercial scale, the market for SST would be considered a
blockbuster by traditional biotech or pharmaceutical standards. Unlike
biopharmaceutical drug development, however, there is no regulatory process
required to bring a semen sexing product to market. The product will readily
integrate into established AI facilities and procedures," explained Gastle.
    Microbix announced earlier this month that the Company has been able to
identify specific proteins that allow female-producing and male-producing
sperm cells to be separated and that it has also developed the monoclonal
antibodies that will be used to commercialize this process. This is the first
time that sex-specific proteins have been positively identified. Microbix has
filed a provisional patent on this discovery.

    About Microbix

    Established in 1988, Microbix specializes in developing proprietary
biological technologies and commercializing them through global partners. The
Company currently has three large-market technologies at various stages in the
product pipeline - its VIRUSMAX(TM)Technology which significantly boosts the
yield of influenza virus from eggs; Urokinase, a thrombolytic biologic that
can be used as a catheter clearing drug and has potential in new cancer drug
combination; and the Semen Sexing Technology(TM).

    Disclaimer

    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. For
instance, product development may not result in products that can be
commercialized, savings by producers may not reach value estimates or at all
and sales may not reach sales targets or be made at all. Not all suppliers of
dairy semen may convert to a sexed semen product, term sheet agreements may
not lead to definitive agreements between the parties. There is no guarantee
that the Company will complete development of the technology and if it does
that it will perform to the levels projected by the Company. While the Company
is not aware of another technology on the market, or under development, that
can provide the product at competitive pricing levels compared to Microbix'
sexed semen, other technologies may emerge before SST enters the market.
Royalty rates may change subject to the definitive agreement, the markets may
not sustain the premium for sexed product should world economies shift
significantly. Market utilization rates may not be reached. Market value of
products may vary. Patents may not provide adequate protection of the
Company's intellectual property and may be subject to challenge. 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.

    %SEDAR: 00004220E




For further information:

For further information: visit www.microbix.com or contact: William J.
Gastle, CEO, Microbix Biosystems Inc., (416) 234-1624 x 230; Dena Fehir, PR
POST, (416) 777-0368

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