Microbix Biosystems Inc. Announces Third Quarter Results

TORONTO, Aug. 14 /PRNewswire-FirstCall/ - Microbix Biosystems Inc. today announced its third quarter results for fiscal 2007. The Company showed solid progress in all areas of the business, with its potential blockbuster products achieving several important milestones and its core virology business experiencing strong growth.

"We continue to invest in our three major biotechnology products as we move them closer to market, and we continue to support this pipeline development with the cash flow, in-house expertise, and facilities of our core business," said Microbix CEO William J. Gastle.

Highlights of the three months ended June 30, 2007, included: Vaccine Technology

The Company's vaccine yield enhancement discovery and proprietary technology, now trademarked VIRUSMAX(TM), was featured in Vaccine, an international, peer-reviewed scientific journal. Also during the quarter, the U.S. Patent and Trademark Office indicated that it would allow a patent on the process. Patents in Canada and India have already been allowed. Subsequent to the end of the quarter, Australia also indicated that it would issue a patent.

Microbix is in licensing discussions with potential partners, and there is good industry interest in the technology. The Company conservatively estimates that the world market for VIRUSMAX(TM) could be more than $100 million a year.

Semen Sexing Technology

Microbix announced during the third quarter that it had made a major discovery - the ability to identify the specific proteins that allow female-producing and male-producing sperm cells to be separated. This is the first time ever that sex-specific proteins have been positively identified. Microbix is currently filing patent applications in all major markets.

The discovery, as well as the development of monoclonal antibodies to be used in the process, is an important breakthrough in commercializing the Company's Semen Sexing TechnologyTM (SSTTM).

Late in the third quarter, the Company announced that it entered into an agreement to license SSTTM to a major commercial breeder in China. Microbix received the first milestone payment from the breeder in August.

A number of artificial insemination (AI) companies, representing 13 per cent of the $2.5 billion global AI market, have already agreed to participate in field trials, and the launch of the product is expected to occur in late 2008 or early 2009. The worldwide AI market is now $2.5 billion, and Microbix estimates that sexed semen will garner a premium price of approximately 2 1/2 times the price of the unsexed product. Microbix will receive a royalty of 15 per cent of sales in addition to fees for the SSTTM components.


Microbix expects to conclude due diligence and close a financing agreement soon. The funds will be used to conduct clinical trials and proceed to commercialization.

The market potential for a new specific Urokinase-based thrombolytic drug is in excess of $100 million annually. At the same time, the development risk is relatively low as other Urokinase products have been on the market for many years.

Core Business

The core business continued to perform well during the quarter, growing 15% over the year-earlier period. Microbix is now planning to expand the manufacturing facility in order to accommodate increased demand for virology products, water-based products and viral vaccine contract manufacturing.

Results of Operations

For the three months ended June 30, 2007, the Company recorded a net loss of $940,629 compared to a loss of $707,683 for the same period in fiscal 2006. For the year to date, the current period loss was $1,897,809 compared to a loss of $1,392,048 in the previous fiscal year. Cash flow was positive for both the quarter and nine month periods compared to fiscal 2006.

Third Quarter Ended 9 Months Ended June 30 June 30 2007 2006 2007 2006 ------------------------------------------------------------------------- Sales 1,126,716 978,582 2,877,095 2,968,736 ------------------------------------------------------------------------- Net Profit (loss) (940,629) (707,683) (1,897,809) (1,392,048) ------------------------------------------------------------------------- Net Profit (loss) per share (0.02) (0.02) (0.05) (0.02) ------------------------------------------------------------------------- Cash Flow 440,075 (493,205) 146,203 (188,835) -------------------------------------------------------------------------

"The spend was within our expectations as we continue to push our major products through the pipeline and work to build long-term value for our shareholders," said Gastle.

Microbix is a company specializing 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 develop and commercialize urokinase, inability to complete financing, non adoption of the catheter clearing product, non adoption of the drug combination, resistance to business model for commercialization and implementation; risks associated with commercializing the technologies; and risks associated with the efficacy of the drug combination in cancer treatment or catheter clearance product; risks associated with the ability to license Vaccine Technology to industry, risks associated with failure to develop and commercialize SST; non adoption of SST. 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.

Microbix Biosystems Inc.

CONTACT: visit www.microbix.com or contact: William J. Gastle, Chairmanand CEO, (416) 234-1624 x 230; Robert Stephens, PR POST, (416) 777-0368

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