Business
Microbix licenses its animal reproduction technology in China
Microbix licenses its animal reproduction technology in China.
About this update from Microbix Biosystems Inc.
[{"type":"text","content":"\n\n\n\nTORONTO, June 27 /CNW/ - Toronto-based Microbix Biosystems Inc. (TSX:MBX)\nannounced today that it has entered into an agreement to license its\nproprietary Semen Sexing Technology(TM) (SST) to a major commercial breeder in\nChina.\n\n\nThe Chinese company - the Animal Fine Breeding Station of Hebei Province\n- is one of the leading suppliers to the livestock industry and will become\nthe exclusive distributor of SST in that country.\n\n\nThe demand for milk and beef in China is increasing dramatically as\npoultry is in decline due to the spread of avian flu and diets in that country\nare becoming more westernized. The price of milk, for example, has risen 60\nper cent over the past year in China. A new priority for the Chinese is the\nrapid development of their beef and dairy herds.\n\n\nMicrobix' technology allows producers to determine the sex of livestock\noffspring resulting from artificial insemination. SST will allow Chinese dairy\nfarmers to breed only female animals for their milking herds. Likewise, the\ntechnology will ensure that beef producers end up with only the required male\nanimals for meat production. SST will allow China to expand its beef and dairy\ncapacity at a much faster pace.\n\n\n"The Animal Fine Breeding Station sees SST as the key to its success, and\nit was very keen on entering into this relationship in order to have access to\nour technology," said William J. Gastle, CEO of Microbix." We expect to sign\nadditional distribution agreements closer to commercialization."\n\n\nMicrobix is charging up-front licensing fees for exclusive distribution\nrights based on the relative size of each market so as not to exclude the\nsmaller players. "While the Chinese market is underdeveloped, it represents a\nsignificant growth opportunity," said Gastle. The royalty rate of 15% and all\nother terms remain the same as previously announced non-exclusive agreements.\n\n\nLast year, Microbix signed non-exclusive agreements with a number of\nartificial insemination (AI) companies based in Europe, North America and\nAustralasia. These companies represent 13 per cent of the $2.5 billion global\nAI market in the commercial livestock industry.\n\n\nToday, the average price for unsexed dairy semen is about $20. Microbix\nestimates that sexed semen will demand a premium price of approx...