Toronto biotech remains on track for cash-flow positive year in 2010
TORONTO, Feb. 16 /CNW/ - Microbix Biosystems Inc. (MBX:TSX), a biotechnology company focused on virology and biological technologies, improved its cash flow by $2 million in the first quarter of fiscal 2010, moving from a negative cash flow of $2.4 million in the first quarter of fiscal 2009 to a negative $467,388 in the most recent quarter.
The improvement was due to two major developments: First, a decrease in funds to support the company's new manufacturing facility, which is now fully operational; and second, lower costs to advance its pipeline products whose final development and commercialization will be supported by the company's business partners.
"Due to the timing of sales and additional partnership revenue, we expect a stronger second quarter and second half of the year. We remain on track to meet our sales projections and expect to move to a positive cash-flow position later this year," said William J. Gastle, Microbix CEO.
"Our three major near-term pipeline products are all approaching value milestones where their final steps to market will be supported by our business partners. We expect these innovative products will have a significant impact on our financial performance in 2010 and beyond," Gastle added.
First Quarter Highlights
Microbix expects its business development activities will lead to monetary milestones for all three of its near-term-pipeline products. Following are the first-quarter steps Microbix took to move its pipeline businesses closer to market:
- After signing the financing agreement for the new influenza vaccine
plant in China, Microbix has initiated the process leading to the
formation of the Joint Venture Company including selection of the key
senior management team and acquiring the necessary business license
that will enable Microbix' foreign investment into China.
- Microbix is in licensing discussions with several biopharmaceutical
companies on Urokinase, the blood-clot busting therapy Microbix has
branded as Kinlytic(TM). There is growing interest in branded
biological products because of the accelerating loss of market
exclusivity for many branded drugs in the next few years.
- Partnership discussions were held with respect to Lumisort(TM),
Microbix' new proprietary instrument for semen sexing technology
(SST). The company continues to review interested partners and will
select the company that offers the best expertise, technology,
quality systems and manufacturing capacity to commercialize the
product. The Lumisort program already has the support of more than
25% of dairy semen collection centers in North America.
First Quarter Financials
For the first quarter ending December 31, 2009, Microbix reported sales of $1,226,538, a decline of $376,985 from sales of $1,606,523 in the comparative period last year. This decline was due to a combination of factors: a stronger Canadian dollar, the timing of customer orders, and the fact that Microbix experienced record sales in the first quarter of fiscal 2009. For the quarter, the company reported a loss of $740,031 compared with a loss of $583,668 in the same quarter last year
Microbix cash flow position improved significantly during the quarter to negative $467,388 compared to negative $2,362,069 for the same period last year. The reduction came from lower spending on Microbix' new manufacturing facility and from decreased investment in the pipeline projects which do not require continuing development funds because they will be commercialized by business partners. The manufacturing facility that was under construction in fiscal 2008 is now fully operational, expanding the volume of existing products and supporting the launch of new diagnostic and research products.
Subsequent to the quarter the Company completed a private placement financing for $ 1.3 million. The placement was for 3,714,286 Common Shares at $0.35 cents for a total of $1,300,000, with 211,000 finder warrants.
Quarter Ended December 31
Revenue $ 1,226,538 1,606,523
Net Income (loss) $ (740,031) (583,668)
Net Income (loss) per share $ (0.01) (0.01)
Cash Flow $ (467,388) (2,362,069)
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 the risks associated with failure to get regulatory approval, and release, of KINLYTIC(TM) for distribution in Canada and other regions of the world; inability to close financing for the Microbix-Hunan project; 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 SST; non-adoption of SST; competition in Microbix' core business; general economic conditions; risks affecting timely and cost effective construction and operation of the Microbix-Hunan facility; 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 of 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.
SOURCE Microbix Biosystems Inc.
For further information: For further information: Visit www.microbix.com or contact: William J. Gastle, CEO, (416) 234-1624 x 265; James Long, CFO, (416) 234-1624 x 230