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Microbix Signs $2 Million Partnership Agreement

23 July 2010

CANADA - Microbix Biosystems Inc. a biotechnology company, has announced that it has signed partnership agreements that will accelerate the development and commercialisation of LumiSort(TM), technology that will enable livestock breeders to pre-determine the sex of their herd prior to conception. LumiSort is expected to be introduced to the worldwide livestock market in early 2012.

The first agreement is between Microbix and one of the largest suppliers of livestock reproduction products and services in the world. In the agreement, Microbix' partner, which was not disclosed at this time, will make a $2 million investment in LumiSort in return for two years of regional exclusivity and a 10 per cent share of annual revenues. The partner will deliver to Microbix an up-front payment plus additional milestone payments, all expected within the next 18 months.

The second agreement is between Microbix and its LumiSort engineering partner, a global engineering firm and recognised leader in the cytometry industry, who will be responsible for the design, manufacture and service of LumiSort with an initial focus on proof-of-concept testing. Terms of the engineering agreement were not disclosed.

Prior to market introduction, Microbix has established agreements for LumiSort with companies located in the United States, Canada, Australia, Europe, South America, and China representing more than 25 per cent of the dairy semen collection centers and will enter a global animal health market for artificial insemination valued at more than $2.5 billion. All agreements include the same royalty payment to Microbix of 15 per cent of selling price.

LumiSort is protected by strong intellectual property rights and has no regulatory barriers to global markets. Microbix expects LumiSort will significantly increase livestock fertility rates compared with conventional technology making the dairy and cattle industries more efficient and improving producers' margins. Additionally, the technology has the potential to more than double the yield of sexed semen straws after processing, making LumiSort far more economical, leading to wider usage in the marketplace.

William J. Gastle, CEO of Microbix, said: "Microbix not only has a strategic investment partner to participate in the final phase of product development, but together we will join in their large distribution network to market LumiSort at launch. In addition, our engineering partner adds the best-in-class expertise, quality systems and manufacturing capacity to commercialise LumiSort. LumiSort is now moving through instrument development and field testing, and, without regulatory barriers, should move into the livestock reproductive market by early 2012.

"Microbix expects LumiSort will become the industry standard for livestock producers in the near future once fully deployed into the global market," Mr Gastle added.



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