Burn rate significantly reduced and Semen Sexing Technology achieves
TORONTO, Aug. 6 /CNW/ - For nine months ended June 30, 2009, Microbix
Biosystems Inc. (TSX:MBX) announced strong sales and a significantly reduced
burn rate. The third quarter had a small sales retraction that was related to
timing of orders and changing exchange rates. The forecast is for continued
growth in sales.
"The 22% sales growth achieved in the nine months ending June 30, 2009 is
a trend we expect to continue in fiscal 2010. Our new manufacturing facility
is fully operational, cash flow is improving and the opportunity to create
shareholder value is still available in all three pipeline products albeit
delayed," said William J. Gastle, CEO of Microbix.
Third Quarter Highlights
In the third quarter, sales declined 7% compared to the very strong third
quarter in 2008. "Fourth quarter sales are expected to be steady but the
overall outlook is that demand for virology products is forecasted to continue
to increase in fiscal 2010," Mr. Gastle added.
"A new product line is being launched late in 2009 that will generate
revenue in the following six months. We see the growth trend in product volume
enjoyed in 2009 continuing into 2010 although currency fluctuation may
challenge near term sales objectives. The expanded capabilities of the Watline
facility are allowing us to enter related biological markets that have the
potential to grow our opportunity base significantly over our traditional
Influenza Vaccine Business
"Influenza vaccine has been in the news since the emergence of the H1N1
virus in April, a virus that met the WHO criteria of a pandemic strain," said
Mr. Gastle. "There is a global capacity shortage of vaccine supply as H1N1
vaccine production has only produced 25 to 50% of the yields obtained for
seasonal virus strains. Several large global influenza vaccine manufacturers
have reported low H1N1 yields, and Microbix' VIRUSMAX could assist these
companies to improve their yields," he added.
"This represents an opportunity to widen access of VIRUSMAX to the
increasing number of new influenza vaccine manufacturers globally. The Company
continues to demonstrate the efficacy of the technology through collaborations
with partners," Mr. Gastle said. "The Company is engaged in three activities
including performance testing with H1N1 yield enhancement, completing
financing for the influenza vaccine manufacturing facility in Hunan China, and
the scale up of the VIRUSMAX technology under commercial conditions. Microbix
expects to see more companies begin to work with the technology over the next
The Company recently met with officials from Changsha National Biomedical
Industrial Park in China to discuss financing and construction plans for the
influenza vaccine manufacturing facility. The Hunan group have proposed to
self-finance Phase I and begin construction by the second quarter of 2010. The
advantage of this plan is to remove the need for the first round of financing,
allowing the program to be initiated at a critical time.
Semen Sexing Technology (SST)
In this third quarter, Microbix focused on strengthening its SST
intellectual property position. "This was an important milestone following a
significant discovery," he continued. "Microbix' recent discoveries should
provide a more cost-effective platform for semen sexing and significantly
improve yields and quality of the sperm produced compared to the current
commercial sexing technology. With this new technological advantage, the
Company is entering discussions with interested third parties for
co-development and licensing. The presence of a multi-billion dollar
unregulated market for companies in the animal health field or livestock
industries is attractive to many commercial players. The Microbix technology
has the potential to provide a new entry company with full IP exclusivity. As
previously reported term sheet agreements have already been signed with
artificial insemination companies worldwide."
The Company acquired all Urokinase assets from ImaRx Therapeutics, Inc.
of Tucson, Arizona, (Nasdaq: IMRX) in September 2008. These assets included
ImaRx' remaining Urokinase inventory as well as the regulatory file for the
product (formerly known as Abbokinase(R), now rebranded as Kinlytic(R)), key
raw materials for Urokinase manufacturing, and the corresponding sales and
"The results of our Urokinase investment have been disappointing," Mr.
Gastle said. "The US FDA has not yet released the inventory of Kinlytic we
acquired in September 2008. We purchased the Urokinase inventory on the
premise that it was stable and releasable under an FDA approvable letter.
While the FDA has conceded the data we presented has merit, at a recent
meeting of appeal the FDA requested yet more stability data before they will
reconsider our request. No clinical trials have been requested in order to
obtain inventory release for labeled indications. The Company is currently
evaluating all options for the inventory."
Microbix is one of many drug companies that are experiencing delays at
the FDA today and continues to press matters with the agency," Mr. Gastle
said. "We remain optimistic that we will reach the market."
The Company has reduced its overhead as we transitioned virology
manufacturing into the new facility. A major corporate objective is to be
profitable and cash flow positive in 2010. With the additional capacity we
expect to expand sales in 2010 and to see continued financial improvement for
For the quarter ended June 30, 2009, the Company recorded a net loss of
$672,366 or one cent a share compared to a loss of $945,111 or three cents a
share in the same period in fiscal 2008. The company's negative cash position
improved by 99.9% to $ 26,661 for the third quarter 2009 compared to negative
cash flow $ 1,079,492 in the same period in 2008.
A lower loss for the third quarter compared to 2008 reflected
restructuring activities, the reduction in product pipeline expenditures and
stable revenues compared to the same period in 2008. Losses associated with
research and development will decline as development activities will be
contributed by licensing partners.
Capital expenditures will decline as major investments are completed.
Pipeline projects are going to be financed through non dilutive agreements
with partners. Microbix continues its corporate restructuring to conserve cash
and eliminate its burn rate in order to ensure its pipeline products reach
their full potential. The growth in sales in the next 12 months is expected to
be accretive to the Company's projected positive cash flows.
Three Months Ended Nine months ended
June 30 June 30
2009 2008 2009 2008
---- ---- ---- ----
$ $ $ $
Sales 1,391,435 1,517,150 4,568,163 3,733,773
Net Profit (loss) -672,366 -945,111 -1,768,868 -3,227,795
Net Profit (loss) per share -0.01 -0.02 -0.03 -0.06
Cash Flow -26,661 -1,079,492 -2,633,439 2,751,746
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
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 authorization to release Kinlytic for
distribution in the US from the FDA, inability to complete financing for the
Hunan China project currently the subject of financing; risks associated with
commercializing the pipeline technologies; risks associated with failure to
develop and commercialize SST; non-adoption of SST; risks associated with
currency exchange rates which may exaggerate or reduce the actual financial
performance of the Company. 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.
For further information:
For further information: visit www.microbix.com or contact William J.
Gastle, CEO, Microbix Biosystems Inc., (416) 234-1624 x 230; or James Long,
CFO, Microbix Biosystems Inc., (416) 234-1624 x 265