Mr. Cameron Groome reports

MICROBIX SECURES FUNDED DRUG COMMERCIALIZATION AGREEMENT

Microbix Biosystems Inc. has executed an agreement to return Kinlytic urokinase to market, initially for dissolving blood clots in venous catheters in the United States, and to be followed by other geographies and clinical indications. Its agreement is with Sequel Pharma LLC, a specialty pharma company with expertise in developing and commercializing drugs for the U.S. market that is financed by a leading private equity firm.

The agreement provides for Sequel to finance and undertake the necessary work to return Kinlytic to the U.S. for the clinical indication of venous catheter clearance, currently a $350-million (U.S.) per year market that is a monopoly. Long-term venous catheters are used to administer pharmaceuticals, nutrition or dialysis, often needing to remain in place for extended periods. About 25 per cent of such catheters become blocked with blood clots and, if not cleared, can require costly surgical replacement.

Microbix will receive a closing payment of $2-million (U.S.) under the agreement. Sequel and Microbix will now prepare for an updated consultation with the U.S. Food and Drug Administration (FDA) to confirm that prior regulatory guidance received by Microbix remains pertinent. Should FDA guidance be satisfactory, the parties will undertake the work needed to file a supplementary biologics licensing application (sBLA) filing, with financing for such work to be fully provided by Sequel.

Upon a satisfactory FDA consultation, Sequel will make a further $2-million (U.S.) payment to Microbix, followed by a $1-million (U.S.) milestone on U.S. reapproval via sBLA, sales-driven milestone payments of up to $30-million (U.S.), and continuing royalties targeted to be a double-digit percentage of net sales. Should the FDA consultation be unexpectedly negative, Sequel may terminate the agreement and recoup $1-million (U.S.) of the closing payment.

Mike Anderson, chief executive officer of Sequel, commented: "We've completed extensive technical and market diligence on Kinlytic, and are excited to partner with Microbix in bringing it back to market. It is important that safe, effective and economic drugs such as Kinlytic are available to address the needs of millions of patients."

Cameron Groome, chief executive officer and president of Microbix, also commented: "For many years, Microbix has sought to apply its expertise to restore availability of this clinically important cell-culture-derived biologic drug. Lack of capital has always been a principal constraint, which this agreement fully addresses. Additionally, Sequel and its backers provide tremendous expertise in helping to navigate the processes for U.S. drug approval, marketing and reimbursement, which are not core skills of Microbix. We are delighted to be working with Mike and the Sequel team to bring Kinlytic back into widespread clinical use."

About Sequel Pharma LLC

Sequel Pharma has been established as an affiliate of New American Therapeutics Inc. for the purpose of restoring Kinlytic to market. Sequel's management team has almost 100 years of life science experience and leadership, and has expertise in branded pharmaceutical products, generic pharmaceuticals, injectable products and devices. Sequel also has broad international experience.

About Microbix Biosystems Inc.

Microbix Biosystems creates proprietary biological products for human health, with over 100 skilled employees and annualized sales targeting $2-million per month. It makes a wide range of critical ingredients and devices for the global diagnostics industry, notably antigens for immunoassays and its laboratory quality assessment products (QAPs) that support clinical lab proficiency testing, enable assay development and validation, or help ensure the quality of clinical diagnostic workflows. Its antigens drive the antibody tests of approximately 100 diagnostics makers, while QAPs are sold to clinical lab accreditation organizations, diagnostics companies and clinical labs. Microbix QAPs are now available in over 30 countries, supported by a network of 10 international distributors. Microbix is ISO 9001 and 13485 accredited, U.S. FDA registered, Australian TGA (Therapeutic Goods Administration) registered, Health Canada establishment licensed, and provides CE-marked products.

Microbix also applies its biological expertise and infrastructure to develop other proprietary products and technologies, most notably viral transport medium (DxTM) to stabilize patient samples for lab-based molecular diagnostic testing and Kinlytic urokinase, a biologic thrombolytic drug used to treat blood clots. Microbix is traded on the Toronto Stock Exchange and OTCQX, and headquartered in Mississauga, Ont., Canada.

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