TORONTO, July 22 /CNW/ - Microbix Biosystems Inc. (MBX: TSX), a biotechnology company, today announced it has signed partnership agreements that will accelerate the development and commercialization of LumiSort(TM), Microbix' proprietary technology that will enable livestock breeders to pre-determine the sex of their herd prior to conception. LumiSort is expected to be introduced to the worldwide livestock market in early 2012.
The first agreement is between Microbix and one of the largest suppliers of livestock reproduction products and services in the world. In the agreement, Microbix' partner, which was not disclosed at this time, will make a $2 million investment in LumiSort in return for two years of regional exclusivity and a 10% share of annual revenues. The partner will deliver to Microbix an up-front payment plus additional milestone payments, all expected within the next 18 months.
The second agreement is between Microbix and its LumiSort engineering partner, a global engineering firm and recognized leader in the cytometry industry, who will be responsible for the design, manufacture and service of LumiSort with an initial focus on proof-of-concept testing. Terms of the engineering agreement were not disclosed.
Prior to market introduction, Microbix has established agreements for LumiSort with companies located in the United States, Canada, Australia, Europe, South America, and China representing more than 25% of the dairy semen collection centers and will enter a global animal health market for artificial insemination valued at more than $2.5 billion. All agreements include the same royalty payment to Microbix of 15% of selling price.
LumiSort is protected by strong intellectual property rights and has no regulatory barriers to global markets. Microbix expects LumiSort will significantly increase livestock fertility rates compared with conventional technology making the dairy and cattle industries more efficient and improving producers' margins. Additionally, the technology has the potential to more than double the yield of sexed semen straws after processing, making LumiSort far more economical, leading to wider usage in the marketplace.
William J. Gastle, CEO of Microbix, said: "Microbix not only has a strategic investment partner to participate in the final phase of product development, but together we will join in their large distribution network to market LumiSort at launch. In addition, our engineering partner adds the best-in-class expertise, quality systems and manufacturing capacity to commercialize LumiSort. LumiSort is now moving through instrument development and field testing, and, without regulatory barriers, should move into the livestock reproductive market by early 2012.
"Microbix expects LumiSort will become the industry standard for livestock producers in the near future once fully deployed into the global market," Gastle added.
Microbix Biosystems, Inc. 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.
LumiSort is Microbix' sperm sexing instrument that will enable the producers of dairy, swine and beef animals to predetermine the sex of offspring prior to conception, thereby maximizing productivity, profitability, and genetic potential. In virtually every sector of commercial animal breeding there is the clear preference for one sex over the other. Microbix' semen sexing technology, will enter an animal health market for artificial insemination valued at more than $2.5 billion. Even before launch, expected in early 2012, Microbix technology has drawn interest from livestock producers and other key stakeholders in the animal health and related markets. In fact, Microbix already has agreements in place with 25% of dairy semen collection centers to adopt its technology. Protected by strong intellectual property rights and having low development risk with no regulatory barriers to markets globally, Microbix' expects LumiSort will become the industry standard for livestock producers in the near future.
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 commercializing the technologies, including sales which 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 the ability to license Lumisort to industry; risks associated with failure to develop and commercialize Lumisort; non-adoption of Lumisort; competition in the animal health and related markets; reliance by Microbix on third parties for the development and manufacture of Lumisort instrument; general economic conditions; 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 countries with evolving legal and economic infrastructure; high rates of inflation; changes in taxation policies, 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.
For further information: 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