TORONTO, Nov. 13 /CNW/ - The CEO of Toronto-based Microbix Biosystems Inc. (TSX:MBX), William J. Gastle, held a series of meetings with high-ranking Chinese officials over the past week to formalize the licensing agreement for the Company's animal reproduction technology and to discuss other business opportunities in China.
As announced on June 18, 2007, the Animal Fine Breeding Station of Hebei Province has agreed to become the exclusive distributor of Microbix' proprietary Semen Sexing Technology(TM) (SST) in that country.
Gastle met with senior officials of the province including the Vice Governor of Hebei, Song En Hua, the Minister of Agriculture for Hebei, Liu Da Qun, and many other important dignitaries from the Chinese federal and provincial governments, along with representatives of the Canadian Embassy in China.
The Chinese demand for milk and beef is growing substantially and expectations are they will require 200 million tons of milk per year. The average production of milk from a cow is just under 10 tons per year. The current dairy herd in China is about 10 million cows so this needs to double to meet domestic demand.
Microbix' SST technology allows producers to determine the sex of livestock offspring resulting from artificial insemination. SST will allow Chinese dairy farmers to breed only female animals for their milking herds. Likewise, the technology will ensure that beef producers end up with only the required male animals for meat production. SST will allow China to expand its beef and dairy capacity at a much faster pace.
"China represents a significant growth opportunity for our technology," said Gastle. "We're pleased to be involved in this market, and we're delighted by the incredibly warm reception we've been given." Microbix was also honoured at a formal dinner event that was attended by over 200 people including many Chinese academic and agricultural associations, breeding stations of several other regions in China and various media representatives.
Last year, Microbix also signed non-exclusive agreements with a number of artificial insemination (AI) companies based in Europe, North America and Australasia. These companies will pay a 15% of sales royalty to Microbix and represent 13 per cent of the current $2.5 billion (expected to increase to over $4.3 billion with the commercialization of SST) global AI market in the commercial livestock industry.
About Microbix
Established in 1988, Microbix specializes in developing proprietary biological technologies and commercializing them through global partners. The Company currently has three large-market technologies at various stages in the product pipeline - its VIRUSMAX(TM)Technology which significantly boosts the yield of influenza virus from eggs; Urokinase, a thrombolytic biologic that can be used as a catheter clearing drug and has potential in new cancer drug combination; and the Semen Sexing Technology(TM).
Disclaimer
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. For instance, product development may not result in products that can be commercialized, savings by producers may not reach value estimates or at all and sales may not reach sales targets or be made at all. Not all suppliers of dairy semen may convert to a sexed semen product, term sheet agreements may not lead to definitive agreements between the parties. There is no guarantee that the Company will complete development of the technology and if it does that it will perform to the levels projected by the Company. While the Company is not aware of another technology on the market, or under development, that can provide the product at competitive pricing levels compared to Microbix' sexed semen, other technologies may emerge before SST enters the market. Royalty rates may change subject to the definitive agreement, the markets may not sustain the premium for sexed product should world economies shift significantly. Market utilization rates may not be reached. Market value of products may vary. Patents may not provide adequate protection of the Company's intellectual property and may be subject to challenge. 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.
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