Microbix Enters into Joint Venture in China to Build and Operate One of the Largest Influenza Vaccine Manufacturing Facilities in the World
TORONTO, June 23 /CNW/ - Canadian company Microbix Biosystems Inc. (TSX:MBX), located in Toronto, announced today that it has entered into a definitive agreement with the Hunan Provincial Government to establish a manufacturing facility in China that will produce influenza vaccine using Microbix' VIRUSMAX(TM: 95.90, -1.95, -1.99%) technology.
Jointly owned by Microbix and the Hunan Provincial Government, the $200-million facility will be one of the largest influenza vaccine plants in the world. It is expected to be operational in 2013 and will have a capacity to produce 100 million doses of flu vaccine a year.
The manufacturing plant will be located in the Hunan Liuyang Biomedical Industrial Park in Hunan Province, population 70 million, near the capital city of Changsha. The facility will incorporate Microbix' proprietary VIRUSMAX(TM: 95.90, -1.95, -1.99%) technology.
The signing of the agreement was the centerpiece announcement at the 2008 National Bioindustry Convention in Changsha this past weekend. William J. Gastle, CEO of Microbix, was accompanied by a delegation of Canadian and Chinese Government officials.
Mr. Gastle also announced at the event that, as a token of goodwill and friendship, Microbix will be making a gift to the Chinese people. The company will commission a full-scale replica of Dr. Norman Bethune's childhood home in Gravenhurst, Ontario. The house will be erected on the grounds of the vaccine facility in Changsha. Dr. Bethune is revered in China for saving the lives of thousands of its citizens through his personal sacrifice, innovation and leadership in medicine.
China is one of the largest countries in the world that currently does not have domestic manufacturing capacity to supply its population with seasonal and pandemic influenza vaccines. Mr. Chen Zhaoxiong, Vice Governor of Hunan, explained that "currently, only about 2 per cent of the age group most susceptible to influenza is able to get vaccine in China - compared to 20 per cent in advanced countries."
Access to VIRUSMAX(TM: 95.90, -1.95, -1.99%) is therefore of enormous benefit, especially in the event of a pandemic, since the technology will enable the new facility to produce more vaccine in shorter periods of time.
Dr. Marie-Paule Kieny, Director of the World Health Organization's Initiative for Vaccine Research, stated that "the establishment of this new state-of-the-art production facility in China is excellent news, as it will contribute significantly to pandemic vaccine preparedness, both at the global level and for the Asian region."
Microbix will lead a team of globally-recognized experts in the industry to design, construct, and operate the facility. It will receive management fees during the design, development and commissioning phases of the project, and then will receive royalty payments on sales of vaccine. The company also has exclusive marketing rights outside China.
Sarah Kutulakos, Executive Director of the Canada China Business Council, noted that "this is not simply a technology transfer. Microbix will be at the forefront of this project in all of the stages. This agreement is a model for other Canadian companies as they look for ways to be more deeply involved in China."
The joint venture has received a commitment for an initial 100 million doses from the Province of Hunan. The Hunan Government has also committed $100 million of the required funding. The balance of the funding is being raised by Microbix through licensing partners.
Robert Wright, Canadian Ambassador to China, said the two countries "share a long-lasting historic friendship that has its roots in the medical field in the story of Dr. Norman Bethune." He added that "with the fast and continuous improvement of living standards in China, people's awareness of and demand for influenza vaccine will continue to rise, which will provide a good environment for the joint venture's influenza vaccine business to grow."
"This new vaccine production facility in China is great news", said Tony Clement, Canada's Minister of Health. "This partnership between Microbix and Hunan province will contribute to global pandemic preparedness, and will strengthen the bonds of friendship between Canada and China."
The State Intellectual Property Office of the People's Republic of China recently granted Microbix a patent on it VIRUSMAX(TM: 95.90, -1.95, -1.99%) technology. Similar patents are already held in Canada, the U.S., India and Australia, and a number of other patent applications in major markets are currently pending.
"We've been working for a number of years to bring our technology to market, so today we're delighted to be partnering with the Province of Hunan in building and ultimately operating the most modern and efficient flu vaccine manufacturing facility on the planet," said Mr. Gastle. "This will make China a leader in the production of flu vaccines, and VIRUSMAX(TM: 95.90, -1.95, -1.99%) the technology of choice in helping other manufacturers in other countries expand their capacity to meet the needs of their populations."
Microbix specializes in the development of biological technologies and commercializing them through global partners. The Company has intellectual property in large market biotherapeutic drugs, vaccine technologies and animal reproduction technologies. Established in 1988, Microbix is headquartered in Toronto.
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, including risks generally associated with commercializing and producing the vaccine in China; and risks associated with various levels of political and economic conditions and other risks including but not limited to, currency exchange rates and restrictions on foreign exchange; high rates of inflation; renegotiation or nullification of existing licenses, permits and contracts; changes in taxation policies; risks associated with repatriation of profits and governmental regulations. These forward-looking statements represent the judgment of Microbix as of the date of this press release. This press release is as of June 23, 2008 and Microbix disclaims any intent or obligation to update these forward-looking statements.