TORONTO, Sept. 30 /CNW/ - Microbix Biosystems Inc. (MBX:TSX) has acquired a proprietary sperm-sexing technology that will enable sex-selection of agricultural animals prior to conception. Microbix has obtained the technology through its announced acquisition of privately-held Sequent Biotechnologies Inc. Microbix and Sequent are not aware of any significant large commercial competition to this proprietary technology. The sperm-sexing technology (SST) is expected to be one of the most significant breakthroughs in the field of commercial animal production since the original introduction of artificial insemination (AI) almost 50 years ago. The technology was invented, and originating patents established, at the University of Guelph which will receive a royalty on sales once the product enters the marketplace. Sequent is the exclusive licensee of the technology. The technology is important because producers currently spend billions of dollars annually on artificial insemination, yet they can end up with animals unsuited to their particular industry's needs. For example, dairy farmers want female calves, yet half the time, males are born. Sequent's novel technology can separate male-producing sperm from female-producing sperm, thus ensuring the desired sex of offspring for use in commercial animal production. The technology does not involve genetic modification, is non-invasive, and the Company believes the technology should not require regulatory approval. Microbix estimates that this technology could save producers in OECD countries alone U.S. $5 billion a year. The Company's sales would be a percentage of this amount annually, based on double digit royalty agreements with global semen producers of the commercial animal breeding industry. The technology can be fully integrated into the existing distribution systems serving the AI markets. Microbix plans to license the technology to AI breeding companies in return for royalties based on their sales of sex- specific semen. The process has already been patented in the U.S. and Europe, and Microbix will continue to pursue patent protection in other countries, and over other elements of the technology. Microbix will fund further development of the technology, and says it will be able to do so without having to add new facilities. Sequent's key scientists will be joining Microbix. The Company expects to complete development and field trials over a three-year period, with a market launch in 2008. Under the terms of the acquisition agreement, Sequent shareholders will receive $3 million in common stock of Microbix for all of the outstanding shares of Sequent, payment being staged and contingent upon the achievement of certain development milestones that enable entry into the marketplace. "This technology fits well with our core expertise, which is developing high-value biologics," said William J. Gastle, President and CEO of Microbix. "SST has a very large market potential, with no regulatory barriers normally associated with biological therapeutics, a strong foundation of issued patents and a relatively short lead time to market." Microbix' existing products include biotherapeutic drugs, vaccines, and infectious disease diagnostics. Dr. Peter M. Blecher, CEO of Sequent, said he is delighted to be partnering with Microbix. "Microbix brings expertise in the field of development and manufacture of biological products, and has a well-established record of successful commercialization. This relationship ensures that substantially all the capital will be invested in scientific activities, not infrastructure and start-up costs. Development can progress immediately; this will significantly reduce our time-to-market." Blecher added: "Artificial insemination has been the gold standard for breeding in commercial agriculture for almost 50 years. Upon commercialization, SST could be the single-greatest breakthrough to this industry since the advent of commercial AI." 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 and field trials may proceed slowly or not at all and 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. 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. %SEDAR: 00004220E