TORONTO, May 14 /PRNewswire-FirstCall/ - Microbix Biosystems Inc. announced today robust double digit growth in sales, improved cash flow, and reduced operating losses for the second quarter ended March 31, 2009.
In a news release today, William J. Gastle, CEO of Microbix said “Our 43% growth in the first half of 2009 coupled with the strong growth over the past three years indicates the potential for our base business. The new manufacturing facility is now fully operational, cash flow is increasing and the shareholder value creation opportunity is still available in all three pipeline products albeit somewhat delayed.”
First Quarter Highlights
Core Business
In the second quarter, sales improved over 30% per cent compared to the same quarter last year. “We exceeded our sales target again in the second quarter,” Mr. Gastle continued “and we are on a path to meet or exceed projections for this fiscal year. Subsequent to the second quarter, the new core business manufacturing facility opened with significantly improved capacity. Microbix fortunately operates in a major market with an ongoing strong demand for virology products.”
Influenza Vaccine Business
The Hunan China manufacturing joint venture continues making progress as internal milestones are met by both partners. Microbix and Hunan are completing the pre-conditions that have been set for financing. Both levels of government in China are involved in the project. Recent events resulting from the emergence of the H1N1 virus strain that spread globally in April has increased the level of urgency of this project in China. The Feasibility Study has determined the capital required for this project. The Hunan Liuyang Biomedical Park under the supervision of Microbix financed the Study. A potential investor has agreed in principle to lead the fundraising efforts subject to finalization of the deal structure.
Semen Sexing Technology (SST)
In the SST program, Microbix focused on strengthening its intellectual property position. “We concluded the research phase of the program in the second quarter,” said Mr. Gastle. “The results led to a conclusion which brings the market opportunity closer with more certainty and also provides a significant competitive advantage over existing technology. It will give the Company a strong patent position in a $ 3 billion artificial insemination market which has no regulatory barrier to entry.” The Company is currently evaluating non-dilutive ways to advance the product.
Urokinase
The Company acquired all Urokinase assets from ImaRx Therapeutics, Inc. of Tucson, Arizona, 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 anticipated launch of the drug Kinlytic has been delayed due to the ongoing review by the FDA of the Company’s request for the release of this Urokinase product for distribution in the US market. The company is preparing to file an appeal that will be submitted in the third quarter. “There are no problems with the safety and efficacy of this drug. Concerned physicians are asking for Urokinase supply on a daily basis,” Mr. Gastle explained. Microbix is one of many drug companies that are experiencing delays at the FDA today and continues to press matters with the agency,” said Mr. Gastle. “We are optimistic that ultimately we will reach the market” he said.
Other Highlights
“The Company has reduced its overhead as we transitioned into the new manufacturing facility and we expect to be profitable in 2010. With the additional capacity, we expect to expand sales in 2010 and to see continued financial improvement for the Company.”
Financial Results
For the quarter ended March 31, 2009, the Company recorded a net loss of $512,834 or one cent a share compared to a loss of $1,337,698 or two cents a share in the same period in fiscal 2008. The company’s negative cash position improved by 86% to $ 244,708 for the second quarter 2009 compared to negative cash flow $ 1,771,934 in the same period in 2008.
The loss for the quarter was lower due to the reduction in expenditures on pipeline projects and the increase in revenues. However, research and development expenditures for SST and the development expenditures for Kinlytic contributed to the loss. Research and development expenditures as a whole will be substantially lowered in the second half. Also, capital expenditures will be substantially reduced in the third quarter as the last of those expenditures for the new manufacturing facility will be made. Pipeline projects, now completed, are going to be financed through non-dilutive agreements with partners. Microbix continues its corporate restructuring to conserve cash and lower its burn rate in order to ensure its pipeline products reach their full potential.
“Given the unusually difficult market conditions, Microbix is controlling its cash flow prudently”, said James A. Long, CFO. “We remain confident in our ability to operate the business using existing cash flow from our core business.” The growth in sales in the next 12 months will be accretive to the Company’s projected positive cash flows.
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 technologies; 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.
CONTACT: visit www.microbix.com or contact: William J. Gastle, CEO,
Microbix Biosystems Inc., (416) 234-1624 x 230; James Long, CFO, Microbix
Biosystems Inc., (416) 234-1624 x 265
