Burn rate significantly reduced and Semen Sexing Technology achieves milestone
TORONTO, Aug. 6 /PRNewswire-FirstCall/ - 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 Core Business
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 markets."
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 few months."
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 marketing infrastructure.
"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 the Company."
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 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 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.
|SOURCE Microbix Biosystems Inc.|
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