Microbix Biosystems Inc.

Microbix Biosystems Inc.

December 31, 2015 18:31 ET

Microbix Reports Fiscal 2015 Results Continued Profitability and Revenue Growth

Updates on LumiSort™ and Kinlytic® Partnering Discussions Provided

TORONTO, ONTARIO--(Marketwired - Dec. 31, 2015) - Microbix Biosystems Inc. (TSX:MBX), an innovator of biological products and technologies, reports financial results for its fourth quarter and fiscal year ending September 30, 2015 and corporate updates about its operations.

Full Year Financial Results

Microbix reports total revenue of $8,873,912 for fiscal 2015 compared to $8,396,796 in fiscal 2014, for an increase of 6%. Virology products revenue was $8,191,720 in 2015 compared to $8,258,175 in 2014, or a decrease of 1%, due to a large customer rescheduling shipments from the fourth quarter of 2015 into the first half of fiscal 2016. Licensing revenue in 2015 was $413,895, compared to zero in 2014 following the recognition of non-refundable deferred revenue received from a prospective distributor of the Company's LumiSort technology. Royalty revenue in 2015 was $268,297 compared to $108,369 in 2014, due to higher royalties from the Company's rabies virus technology. Total expenses were $5,490,589 in 2015 compared to $4,035,877 in 2014, an increase of 34% that was driven primarily by higher legal costs related to the Virusmax litigation in the U.S. and Europe.

Net Income was $613,984 in 2015 compared to $168,979 in 2014 - an increase of 263%. Net cash flow was $443,176 negative in 2015, compared to $287,308 positive in 2014. Cash generated from operations in 2015 was $595,402 compared to $1,170,842 of cash used in operations in 2014. Cash used in investing activities was $4,842,022 compared to $3,130,190 in 2014, due to completion of the LumiSort prototype and development of the new automation process for manufacturing of Virology products. Cash generated from financing activities in 2015 was $3,803,444 compared to $4,588,340 in 2014, due to the exercising of common share warrants of $1,738,433 and stock options of $901,830, as well as the receipt of net proceeds from additional equipment loans of $1,340,000 offset partially by debt payments of $176,820.

Fourth Quarter Financial Results

Total revenue in the fourth quarter was $2,114,160, compared to $2,355,879 in 2014, or a decline of 10%. Virology sales were $1,612,895 compared to $2,355,879 in 2014 or a decline of 32% due to the revised order flow by a large customer that was previously described herein. Licensing revenue was $413,895 compared to zero in 2014 due to previously noted recognition of deferred revenue from a prospective distributor of the Company's LumiSort technology.

Net income in the fourth quarter was $403,116 compared to a net loss of $351,621 in the fourth quarter of 2014 - an improvement of $754,737.Cash generated from operations was $84,394 compared to $979,616 used in operations in the fourth quarter last year. Cash used in investing activities was $499,512 compared to $962,746 in 2014 reflecting completion of the LumiSort prototype in the previous quarter and the ongoing development of the new bioreactor process for manufacturing Virology products. Cash provided by financing activities was $541,624 primarily from equipment loans and credit facilities. In summary, the fourth quarter's net cash flow was $125,865 positive compared to $95,409 positive in 2014.

Vaughn Embro-Pantalony, President and Chief Executive Officer remarked, "I am pleased that we experienced continued profitability and revenue growth in 2015. The year was also highlighted by major investments across the Company in support of our strategic plan; building the LumiSort prototype instrument, upgrading our Virology products manufacturing process, and litigating to protect our VIRUSMAX patent rights."

Financial Highlights

3 months ended Sept 30 12 months ended Sept 30
2015 2014 2015 2014
Revenue $ 2,114,160 2,355,879 8,873,912 8,396,796
Operating income (loss) before income taxes $ 24,327 (302,963 ) 348,984 475,624
Net income (loss) $ 403,116 (351,621 ) 613,984 168,979
Net income (loss) per share $ 0.005 (0.005 ) 0.008 0.002
Cash Flow $ 125,865 95,409 (443,176 ) 287,308

Corporate Update

Virology Products

The Company reports that it remains on track to phase-in its new bioreactor manufacturing process for Virology products, beginning in early calendar 2016. More than a year under development, Microbix' state-of-the-art bioreactor manufacturing process will generate significant improvements in cost efficiency and production capacity, while maintaining or improving upon the product attributes achieved through its former production process.

Mr. Embro-Pantalony commented, "In addition to strengthening the competitive position of our core Virology products business, once the new process is fully operational in fiscal 2017, we expect to achieve additional profit contribution of up to $2 million annually."


The Company also announced that advanced discussions continue with parties interested in working with Microbix to re-launch Kinlytic in the U.S. and Canadian markets.

Mr. Embro-Pantalony commented, "I remain optimistic that we will be successful in securing the right partners to help develop and commercialize Kinlytic®. At the same time, I am pleased to report that we have also begun to attract additional expressions of interest from various non-dilutive funding sources that would provide the necessary financial resources to return this life saving therapeutic to market."


Finally, Microbix reported that it continues to evaluate proposals from interested parties that would help complete the commercialization of its transformative LumiSort™ technology.

Mr. Embro-Pantalony said, "While the complexity of the LumiSort™ partnership discussions, combined with the number of potential parties involved, has resulted in a lengthier negotiation process than we originally anticipated, we are moving closer to a deal that we believe will provide the most beneficial terms for Microbix while unlocking maximum value for our shareholders. We will, of course, provide updates as developments materialize."

Other Business

The company has arranged a short-term credit facility of $200,000 with two insiders of the corporation that can be drawn upon to enhance its working capital. The facility is unsecured and carries an interest rate of 10% and a maximum term of one year. The facility is non-dilutive involving no securities of the Company.

About Microbix Biosystems

Microbix Biosystems Inc. specializes in the research and development of biological solutions, including products for human health applications, namely in the vaccine, therapeutic and diagnostic markets, as well as animal reproductive markets worldwide. The Company manufactures and distributes a wide range of infectious disease antigens to a worldwide customer base. The Company's pipeline of innovative technologies and products includes LumiSort semen sexing technology for the livestock industries, Kinlytic, a thrombolytic drug with several approved and potential applications including the treatment of life-threatening blood clots, and VIRUSMAX, a proprietary technology for increasing virus yields in the manufacture of influenza vaccine. Established in 1988, Microbix is a publicly traded company, listed on the Toronto Stock Exchange, and headquartered in Mississauga, Ontario.

Forward-Looking Information

This news release includes "forward-looking information", as such term is defined in applicable securities laws. Forward-looking information includes, without limitation, the risks associated with its revenue business, development projects, operations in foreign jurisdictions, engineering and construction generally, production (including control over costs, quality, quantity and timeliness of delivery of products), foreign currency and exchange rates, maintaining adequate working capital and raising further capital on acceptable terms or at all, and other similar statements concerning anticipated future events, conditions or results that are not historical facts. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward looking information is inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company's control. Accordingly, actual future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. All statements are made as of the date of this news release and represent the Company's judgement as of the date of this new release, and the Company is under no obligation to update or alter any forward-looking information.

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