MICROBIX
BIOSYSTEMS INC
Annual General Meeting 2013
Disclaimer
The material contained herein is for information purposes only and is not and is
under no circumstances intended to constitute an offer to sell or a solicitation to
buy any securities or a recommendation as to the purchase of any securities. The
information contained herein has been obtained from publicly available sources
and is believed to be accurate. Although reasonable efforts have been made to
compile this data with care, neither Microbix, its employees, officers or directors
guarantees the accuracy or completeness thereof, nor shall any of them be liable
to the user or to any other person, firm or corporation whatsoever for any
inaccuracies, errors or omissions contained herein nor for any damages arising
there from or occasioned thereby.
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ANNUAL GENERAL MEETING - 2013
 2013



Priorities
Sustainable Cash Flow and Profitability
Kinlytic pre-approval meeting with US FDA
Advance LumiSort and Vaccine ventures
 Creating
shareholder value in 2013
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2013 PRIORITIES – SUSTAINABLE CASH
FLOW AND PROFITABILITY
2005
2006
2007
2008
2009
2010
2011
2012
Sales
$4.4 M
$3.6 M
$4.0 M
$5.0 M
$6.1 M
$6.5 M
$6.0 M
$6.7 M
Profit(Loss)
$0.1 M
$(2.1) M
$(2.7) M
$(3.7) M
$(2.3) M
$(2.5) M
$(2.6) M
$(2.6) M
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2013 PRIORITIES – SUSTAINABLE CASH
FLOW AND PROFITABILITY
 2008 – “The Perfect Storm”
1) $6 M investment financed with debt
• New virology facility
• Acquire Kinlytic assets
• .80 cent dollar
2) Global recession; strong Canadian dollar
3) Tough capital markets
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2013 PRIORITIES – SUSTAINABLE CASH
FLOW AND PROFITABILITY

Financial Impact:
Virology sales volume
Debt service
Pipeline investment
Currency erosion
$2.4 M
($0.6 M)
($1.9 M)
($2.5 M)
Operating Loss
($2.6 M)
Cash Burn
($1.5 M)
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2013 PRIORITIES – SUSTAINABLE CASH
FLOW AND PROFITABILITY

Further Impact:
50% shareholder dilution
 Raise funds in tough capital markets
 LumiSort development stalled

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2013 PRIORITIES – SUSTAINABLE CASH
FLOW AND PROFITABILITY
 Restoring







Profitability:
Zydus service agreement
Reduced working capital
Downsized organization
Divested WFI business
Increased prices
Rolled back salaries
Renegotiated supply costs
Annual Savings
($0.8 M)
($0.6 M)
($0.3 M)
($0.3 M)
($0.2 M)
($0.1 M)
($0.1 M)
($2.4 M)
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2013 PRIORITIES - KINLYTIC®
 BACKGROUND:




Approved drug in US
Reduced risk:
 Safety and efficacy
 Regulatory - “Site Transfer”
 High technical barrier to entry
Licensed to Zydus in 2012
Zydus commits $30 M investment
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2013 PRIORITIES - KINLYTIC®
 Who





Is Zydus Cadila?
$1 B Sales growing to $3 B by 2015
25% CAGR since 2007
15,000+ employees
19 Biosimilars in development
Zydus US • 10th largest generic company (scripts)
• Among top 3 in 9 of 10 top selling drugs
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2013 PRIORITIES - KINLYTIC®
 PROJECT MILESTONES:
Aug
Oct
Nov
Jan
Mar
Oct
Oct
2012 2012 2012 2013 2013 2013 2015 -
License agreement signed
Project team established
Quintiles Group engaged
Project plan completed
Training begins in Toronto
Pre-approval meeting with FDA
Site Transfer Approval
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2013 PRIORITIES - KINLYTIC®
ERESEARCH CORPORATION – AUG 2012
“We believe the value to Microbix of the Urokinase
franchise, under terms of the Licensing Agreement with
Zydus, and under the forecasted revenue assumptions,
should be worth between $28 million and $67 million. On
a per share basis this translates into $0.43 a share at the
conservative end, up to $1.05 a share at the higher end.”
* eResearch is an independent investment research company
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2013 PRIORITIES – VIRUSMAXTM
 RELOCATE VACCINE PLANT TO NEW COUNTRY
 Partner
Criteria:
 WHO target country
 Good investment climate
 Fully serviced site
 Possible equity investment
 Microbix Benefits:
 Management services agreement
 5% royalty
 20% equity position
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2013 PRIORITIES – VIRUSMAXTM
STATE OF THE ART FACILITY
 Facility
Cost - $250 M
 International
quality
 Phase
I - 20 million doses
 Phase
II - 100 million doses
 Turnkey
operation
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2013 PRIORITIES – VIRUSMAXTM
 CRUCIBLE LEADERSHIP TEAM
 Dr.
Jacques Martin, Chairman
 Chris
Baron, CEO
 Dave
McDowell, Project Leader
 Senior
Manager, Site Director
 Dr. Jean Claude Vincent
Advisory Board Chairman
Falquet,
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2013 PRIORITIES
LIVESTOCK SEMEN SEXING
Background  By
2050 global population will need 100% more protein
 70% of increase must come from technology
 LumiSort could double AI market to $3B
 No regulatory barriers
 Strong, expanding patent estate
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2013 PRIORITIES
HIGH PERFORMANCE INSTRUMENT
 Novel
combination of proven technologies
 Higher fertility rates
 Higher productivity
 Higher yield
 Producers will achieve higher profits
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2013 PRIORITIES
NEXT STEP
 Phase
1 - “Confirm biological performance”
Investment - $1.2 M
Timeframe - 9 - 12 months
Milestones - (1) Prove laser can sort sperm
(2) Prove higher productivity and
fertility
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2013 PRIORITIES
FUTURE STEPS

Phase 2 - “Build Prototype”
– $10 M

18 months
Phase 3 - “Conduct Field Trials”
– $2 M
6 months
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Creating Shareholder value in 2013
STRONG CULTURE OF INNOVATION

Highly skilled professionals
 5 PhD’s; 8 MSc’s
 20 BSc’s and technologists
 30 patents approved or pending worldwide
 Trade secrets, NDA and future indications
for Urokinase
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Creating Shareholder value in 2013
“Patent Wars – The Battle for Wealth”
“Wright Brothers Defend Flying Machine Patent Against US
Aviators”
“Google Bids $900 Million for Nortel’s Telecom Patents”
“Google Seeks $4 Billion From Microsoft in Patent Dispute”
“Cardium Defends Gene Therapy Patent Against Boston
Scientific”
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Creating Shareholder value in 2013
MICROBIX OWNS VALUABLE
PATENTS…
“Microbix Defends LumiSort ® Patent Against Sexing
Technologies”
“Novartis Challenges Microbix’ VIRUSMAXTM Patent”
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Creating Shareholder value in 2013
Virology Products
Eliminate cash burn and turn profitable
Kinlytic®
Zydus license agreement
Pre-approval meeting with FDA
VIRUSMAXTM
Vaccine facility agreement
Ongoing patent disputes
LumiSortTM
Phase 1 biological milestone
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“STRENGTHENING OUR ABILITY TO
EXECUTE”
Thank You
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