If you are into your Canadian biotech plays, Microbix Biosystems TSX:MBX might be worth a look. The TSX-listed small cap life sciences specialist put in some very interesting numbers in mid-February. The stock is trading in the 40 cent zone at the moment, but up over 23% in the last six months.
Microbix Biosystems develops and commercialises proprietary biological and technological solutions for human health and wellbeing in North America, Europe, and internationally. It manufactures diagnostic-test products, such as test-controls under its QAPs brand and viral transport mediums for collection of patient samples to test for pathogens including virus causing COVID-19 disease.
Microbix also owns Kinlytic, a biologic thrombolytic drug used to treat blood clots; and antigen products. The company was founded in 1988 and is headquartered in Mississauga, Canada.
Microbix reports record revenues
What is possibly more exciting is that results for the first quarter of fiscal 2024 provided record revenues of C$8.4 million, an increase of 236% from C$ 2.5 million the prior year. In turn, Q1 net earnings of C$2.5 million also set a new record, compared with a prior year net loss. These results provide a strong start to fiscal 2024, which is targeted to achieve full-year records for both revenues and net earnings.
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These results were assisted by recognition of C$4.1 million in revenues from out-licensing of Kinlytic, ensuring the achievement of positive net earnings and adding to cash. Kinlytic is now quickly advancing to critical next steps, such as engaging a CDMO contractor to make new drug substance.
Microbix thinks Kinlytic is now on an optimal track for relaunch: “We must note that the next material program revenues will be upon its US re-approval in about three years,” the company told investors last month.
Beyond financial disclosures, Microbix currently expects to provide two to three event-driven updates about Kinlytic each year.
Strong product sales power revenue
Product sales were strong for Q1, with C$4.2 million being growth of 80% from the prior year. Each of the two main product categories grew strongly, with test ingredients (Antigens) up 95% to C$2.0 million and test controls (QAPs) up 69% to C$2.2 million. The company said that although sales growth will vary quarter-to-quarter, the outlook for both Antigens and QAPs is positive.
For Antigens Microbix says it has experienced a post-pandemic surge in demand across multiple SKUs. This seems related to resumption of broad-based testing for infectious diseases in western nations, along with recovery of newer Asian demand.
Sales of Antigens for fiscal 2024 are expected to exceed Microbix’s pre-pandemic record of C$12.0 million in a 12-month period. Consequently, Microbix says it will continue to invest in this line of business – to add to capacity, improve reliability, increase yields, and optimise pricing for its customers.
“It is Microbix’s objective to be able to provide our Antigen customers effectively unlimited supply, with unquestionable quality and reliability, and at pricing that is unmatched within our industry,” said Cameron Groome, CEO and President of the company.
Such investments of effort and capital should help enable Microbix’s Antigen sales to be doubled within a five year period.
Positive outlook for QAPs in US market
A quick note also on the outlook for sales of QAPs which Groome also says look very positive.
First, Microbix’s largest client for direct purchases of QAPs has received US FDA 510(k) approval for its point-of-care-test instrument and for a first assay on that system. Sales of those tests can now begin, with each box of 10 cartridges including one of the company’s QAPs for quality management support.
With Microbix developing QAPs to support each new test on that system, management expects sales growth as its American client places more Savanna systems and obtains more test approvals. “The prospects for all our PoCT clients are similarly positive, as each builds-up their sales,” said Groome.
