Q2 2026 Microbix Biosystems Inc Earnings Call

May 14, 2026

Speaker #2: Microbix who just put out their Q2 numbers, this morning. So hopefully everyone's had a chance to review those. with me on the call I have Cameron Groom, CEO; Ken Hughes, COO; Jim Curry, COO.

Deborah Honig: Microbix, who just put out their Q2 numbers this morning. Hopefully everyone's had a chance to review those. With me on the call, I have Cameron Groome, CEO, Ken Hughes, COO, Jim Currie, CFO. I'm not sure if we're going to work off a presentation today, but as always, this session will contain forward-looking statements. If you'd like to know more about those, you can find them on the presentation on the company's website. There will be a Q&A section, feel free to enter any questions you have in the Q&A box. With that out of the way, I'd like to turn the mic over to Cameron. Hi, Cameron.

Speaker #2: I'm not sure if we're gonna work off of presentation today, but, as always this session will contain forward-looking statements. If you'd like to know more about those, you can find them on the presentation on the company's website.

Speaker #2: and there will be a Q&A section, so feel free to enter any questions you have in the Q&A box. And with that out of the way, I'd like to turn the mic over to Cameron.

Speaker #2: Hi, Cameron.

Speaker #3: Good morning, Deborah. Thank you so much. and good morning, Ken, and, and Jim. I just wanted to thank everybody on the call for joining us for this update call this morning.

Cameron Groome: Good morning, Deborah. Thank you so much. Good morning, Kenneth and James. I just want to thank everybody on the call for joining us for this update call this morning. As everybody will have seen from our results in Q2, it's not a particularly pretty quarter. The revenues were well below our engineered breakeven point, which is about CAD 5.5 million a quarter of revenues. Not unexpected to show a net loss, we are continuing to control our costs well. You know, net losses are not what we get dressed up in the morning for, you know, even if controlled.

Cameron Groome: Good morning, Deborah. Thank you so much. Good morning, Ken and Jim. I just want to thank everybody on the call for joining us for this update call this morning. As everybody will have seen from our results in Q2, it's not a particularly pretty quarter. The revenues were well below our engineered breakeven point, which is about CAD 5.5 million a quarter of revenues. Not unexpected to show a net loss, we are continuing to control our costs well. You know, net losses are not what we get dressed up in the morning for, you know, even if controlled.

Speaker #3: as everybody will have seen from our results in Q2, it's not a particularly pretty quarter. the revenues are, were well below our engineered break-even point, which is about 5.5 million a quarter of revenues.

Speaker #3: So, not unexpected to show a net loss, but we are continuing to control our costs well. But, you know, net losses are not what we get dressed up in the morning for, you know, even if controlled.

Speaker #3: some of that, and I'll ask Jim to speak to, to any specifics and address particular questions. But we have continued, of course, to see lower year-over-year sales into China, and that's a principal driver for the year-over-year, comparability.

Cameron Groome: Some of that, and I'll ask Jim to speak to any specifics and address particular questions, but we have continued, of course, to see lower year-over-year sales into China, and that's a principal driver for the year-over-year comparability. We also saw some, as we normally see in Q2, is not a strong quarter for our sales to the proficiency testing and external quality assessment agencies, so our QAPs products. We did see some antigen sales that we'd hoped to land in Q2 delayed until later in the year that weren't made up by QAPs programs just due to some continued client delays. It's a bit frustrating, and it doesn't reflect the level of effort and fine work that we're doing, exerting on now looking to secure new business.

Speaker #3: we also saw some, a-as we normally see in Q2, is not a strong quarter for our sales to the proficiency testing and external quality assessment agencies, our CAPS products.

Speaker #3: And, we did see some antigens sales, that we'd ex we'd aimed to land in, in Q2 delayed until later in the year that weren't made up by CAPS programs, just due to con some continued client delays.

Speaker #3: So it's a bit frustrating, and it doesn't reflect the level of effort and fine work that we're doing—exerting on now, looking to secure new business.

Speaker #3: So, you know, if, if I reflect on where we'd hope to, to be at this point, we're probably a, we're certainly well behind that level.

Cameron Groome: You know, if I reflect on where we'd hoped to be at this point, we're probably, we're certainly well behind that level. You know, it took decades to get this business to CAD 10 million in revenues. We've been adding to our capabilities considerably, and we're actually looking to bring back about CAD 10 million revenues within 12 months of a couple of major client fall-offs. It's a steep hill we're climbing, and I think we're climbing it very well. We started with building capabilities for our business and broadening those out, modernizing the antigen production, bringing in the skills and capabilities to create our quality test control products, our quality assessment products or QAPs. We worked successfully on building the capacity to produce those at scale.

Speaker #3: And, you know, it took decades to get this business to, to 10 million in revenues. and we've been adding to our capabilities considerably, and we're, we're actually looking to bring back about 10 million revenues within 12 months of a couple of major client falloffs.

Speaker #3: So it's a, it's a steep hill we're climbing, and I think we're climbing it very well. We started with building capabilities for our business and broadening those out, modernizing the antigen production, bringing in the, skills and capabilities to create our quality test control products, our quality assessment products, our CAPS.

Speaker #3: then we worked it worked successfully on building the capacity to, produce those at scale. And I think because of that, now we've really achieved the credibility as a result of both the capabilities and capacity we ha we have successfully built.

Cameron Groome: I think because of that, now we've really achieved the credibility as a result of both the capabilities and capacity we have successfully built. What we need to demonstrate, I think now to investors is the league that we're actually playing in. I'm very confident that over the coming months, we are going to be able to demonstrate that. There are opportunities that we're pursuing that are at a scale that's unprecedented for our business that we can absolutely deliver on, and our prospective customers know that we have both the skills and the capacity to execute on that. These are opportunities that really dwarf anything we've seen so far coming into our company, and we're very optimistic that we'll win that business now.

Speaker #3: So what we what we need to demonstrate, I think, now to investors is the league that we're actually playing in. And I'm very confident that over the coming months we are going to be able to demonstrate that.

Speaker #3: there are opportunities that we're pursuing that are on a scale that's unprecedented for our business that we can absolutely deliver on. And our perspective customers know that we have both the skills and the capacity to execute on that.

Speaker #3: So these are opportunities that really dwarf anything we've seen so far coming into our company. and we're very optimistic that we'll win that business now as we look forward.

Cameron Groome: As we look forward, we have to abide by our disclosure policies, which are, you know, we will only discuss specifics of opportunities when they are either secured by way of a firm, contract agreement or begin to realize, material revenues. We're really at the cusp of some of those developments, I believe, and that's definitely forward-looking information, so you know, you can't take that to the bank yet. These are the things we're working on and why we get up in the morning. We'll also talk about the ongoing work on our Kinlytic file as well, which is advancing well towards a supplemental, biologicals licensing application filing, and that is moving ahead as a value creator.

Speaker #3: We have to abide by our disclosure policies, which are, you know, we will only discuss specifics of opportunities when they are either secured by way of a firm contract agreement or begin to realize material revenues.

Speaker #3: And we're really at the cusp of some of those developments, I believe, and that's definitely forward-looking information. So you know, you can't take that to the bank yet.

Speaker #3: But these are the things we're working on, and why we get up in the morning. And we'll also talk about the ongoing work on our Kinolytic file as well, which is advancing well towards a supplemental Biologicals Licensing Application filing.

Speaker #3: and that is moving ahead as a value creator. So we continue to have our business on the diagnostic side, playing at the highest levels of industry now, and working with many multiple large companies.

Cameron Groome: We continue to have our business on the diagnostic side playing at the highest levels of industry now and working with many multiple large companies and driving value on that front, while we continue to, on a fully funded basis, advance a clinically and economically important therapeutics program. That's, you know, very much where we are. We are quite optimistic about what we're achieving, and we continue to have a strong balance sheet to be able to execute on that, notwithstanding the quarterly losses we've seen over the past few quarters. With that, maybe I can pass over to Jim to speak to any high points you'd like to call out about a quarter that's far from a high point.

Speaker #3: And driving value on that front while we continue to, on a fully funded basis, advance a clinically and economically important therapeutics program. So that's, you know, very much where we are.

Speaker #3: we are quite optimistic, about what we're achieving, and we continue to have a strong balance sheet to be able to execute on that, notwithstanding the quarterly losses we've seen over the past few quarters.

Speaker #3: So with that, maybe I can pass over to Jim to speak to any high points you'd like to call out about a quarter that's far from a high point.

Speaker #3: And then, Ken, we'll, we'll then pass over to you for operations and then Deb, we can move into any questions from those on the line.

Cameron Groome: Ken, we'll then pass over to you for operations, and then Deb, we can move into any questions from those on the line.

Speaker #1: Great. Thanks, Cameron. Yeah, it was, as Cameron indicated, it was a disappointing quarter. I mean, it's, it's tough comparator to last year. I mean, we've been looking at our numbers, and last year last year's first half was actually a re excluding kinolytic license fees.

Jim Currie: Great. Thanks, Cameron. As Cameron's indicated, it was a disappointing quarter. I mean, it's a tough comparator to last year. I mean, we've been looking at our numbers, last year's H1 was actually. Excluding Kinlytic license fees, last year, the H1 was the record half. It's been a tough comparator this year against that. A lot of that record was created by the distribution into China. That reduction in revenues of about CAD 2 million a quarter had a significant impact on the business. Without that, we actually, in the Q2, grew the rest of our business, excluding our Chinese distribution, 13% during the quarter. There was some upside in terms of our performance to the quarter. Margins aren't where we want or targeting.

Speaker #1: Last year, the first half was the record half, so it's been a tough comparator this year against that. And a lot of that record was created by the distribution into China.

Speaker #1: So we've we that reduction in revenues of about 2 million a quarter, that has had a significant impact on the business. Without that, we actually in the second quarter, we actually grew the rest of our business, excluding our Chinese distribution, 13% during the quarter.

Speaker #1: So there was some upside in terms of, our performance to the quarter. margins aren't where we want our targeting. Like, our, our target has always been in this 60-ish percentage range.

Jim Currie: Our target has always been in the 60-ish% range, which we achieved last year in the quarter. This year, lower volumes. We've got fixed manufacturing costs that we're absorbing within our lower volumes, so that's leading to lower margins at this point in time, higher cost of sales. From a balance sheet perspective, still strong. Cash, CAD 8.1 million. Our cash burns during the quarter was about CAD 1 million. That's sort of where we see it over the next few quarters as well.

Speaker #1: which we achieved last, last year in the quarter. This year, lower volumes, we've got fixed manufacturing costs that we're absorbing within our lower volumes.

Speaker #1: So that's leading to, high, you know, lower margins at this point in time, higher costs of sales. from a balance sheet perspective, still strong.

Speaker #1: Cash: $8.1 million. Our cash burn during the quarter was about $1 million, and that's sort of where we see it over the next few quarters as well.

Speaker #2: Yeah. And that and that, Jim, I'll just mention that, K, you know, if we look at the traditional cash flow from operations or operating cash flows, about 300,000.

Cameron Groome: Yeah. That, Jim, I'll just mention that, you know, if we look at the traditional cash flow from operations or operating cash flow is about CAD 300,000. When we're talking about burn, we're also including capital investments activities and financial activities, including debt repayment and, you know, a prudent ongoing level of share buybacks.

Speaker #2: So when we're talking about burn, we're also including, capital investments, activities, and financial activities, including debt repayment and, you know, prudent ongoing level of share buybacks.

Speaker #3: Mm-hmm.

Speaker #1: Yeah. So we've got, while we on the cash front, I mean, while we have benefited from, interest re loans from, Fed Dev over the last number of years to support the growth of our business, we're now in a position where we've started during this quarter, started to repay that debt.

Jim Currie: Yeah. While we, on the cash front, while we've benefited from interest-free loans from FedDev over the last number of years to support the growth of our business, we're now in a position where we've started, during this quarter, to repay that debt. That's something new in terms of our cash spend that will occur over the next 5 years as we've got 5 years to repay that no interest loan. CapEx, as Cameron said, we're Not only our OpEx, but on our CapEx, we're trying to control spending, we're making investments in capital equipment where we need to. The nice to haves, we're delaying at this point in time. We're monitoring the spend.

Speaker #1: so that's, that's something new in terms of our cash spend, that we'll occur over the next five years as we go five years to pay repay that, no interest loan.

Speaker #1: CapEx, as Cameron said, we're—not only on our OpEx, but on our CapEx—we're trying to control spending. So we're making investments in capital equipment where we need to.

Speaker #1: the nice to haves, we're delaying at this point in time. so we're monitoring the spend. we're continuing to, spend on our NCIB, our year-to-date spend is about 1.0 we bought about 1.5 million shares at a cost of $361,000, I think we believe we're continuing that spend is important for the business.

Jim Currie: We're continuing to spend on our NCIB. Our year-to-date spend is about 1.5 million shares at a cost of CAD 361,000. I think we believe that continuing that spend is important for the business and to help maintain our stock price level during a weaker time.

Speaker #1: And to help maintain our, our stock, price level. During a weaker time.

Cameron Groome: Yeah. During an interval where we are rebuilding, we certainly don't want to see a situation where anybody starts to get abusive in share price. I think we'll certainly be, I'll be looking potentially at some further purchases personally, and that expresses, you know, our confidence in the business, not only individually, but collectively through the NCIB.

Speaker #2: Yeah, during, during an interval where, we are rebuilding, we certainly don't want to see a situation where anybody starts to get, abusive in share price.

Speaker #2: I think we'll certainly we'll be I'll be looking at, potentially at some, some further purchases personally. And, in that expresses, you know, our confidence in the business, not only individually, but collectively through the NCIB.

Speaker #1: Great. Just kind of summarizing where we are right now. I mean, as Cameron and I have both indicated, controlled spending, we're making sure we're investing our funds and spending our money in the right places.

Jim Currie: Great. Kind of summarizing where we are right now, I mean, as Cameron and I have both indicated, controlled spending. We're making sure we're investing our funds and spending our money in the right places. We have started to see some orders coming in from from China, that's a good sign. We had budgeted to see that. I think we had budgeted to see that happening a little sooner. However, it is starting to happen now, good outlook there. We're maintaining our capabilities. We wanna make sure that we keep the staff that we have today with a strong employee base, and we've got growth expectations that are gonna require people with these skill sets as we move forward. We've indicated we've got the strong balance sheet. We've got the cash.

Speaker #1: we have started to see some orders, coming in for, for China. so that's a good sign. we had budgeted to see that. I think we had budgeted to see that happening a little sooner.

Speaker #1: However, it is starting to happen now. So, good outlook there. we're maintaining our capabilities. We want to maintain make sure that we keep the staff that we have today, with a strong employee base.

Speaker #1: And we've got growth expectations that are going to require people with these skill sets, as we move forward. and we've indicated we've got the strong balance sheet.

Speaker #1: We've got the cash. We've had the cash to get us through in this, this hurdle at this point in time. And to invest as we move forward.

Jim Currie: We've had the cash to get us through this hurdle at this point in time and to invest as we move forward. Ken, do you have anything?

Speaker #1: Ken, you've got anything?

Ken Hughes: Sure. I've got plenty. Look, the group knows we've been building operations for a while here. Cameron alluded to the fact that we're building both capacity and capability. In terms of capabilities, we started from a position of classical virology and pathology. We've added synthetic virology and pathology and recombinant now capabilities here as well, which is a pretty unique portfolio capabilities from a capability perspective. From a capacity perspective, we've been building semi-automated and automated procedures, scalability left, right and center, really to give us the capacity and capabilities to support the growth going forward. That has not changed. Everything is being implemented and is operating extremely well.

Speaker #2: Sure. I've got plenty.

Speaker #1: Good.

Speaker #2: Look, the g the look, the group knows we've been building operations for a while here, and Cameron alluded to the fact that we're building both capacity and capability.

Speaker #2: So, in terms of capabilities—not that we've stopped, for we started from a position of a classical virology and pathology—we've added synthetic virology and pathology, and recombinant, now, capabilities here as well.

Speaker #2: Which is a pretty unique, portfolio of capabilities from a from a capability perspective. From a capacity perspective, we've been building, semi-automated and automated procedures, scalability left, right, and center, really to give us the capacity and capabilities to support the growth going forward.

Speaker #2: That has not changed. Everything has been implemented, and is operating extremely well. the and from an operational side, we continue to use operational excellence to increase yields in specific products, to, reduce costs, and, ultimately drive margins.

Ken Hughes: From an operational side, we continue to use operational excellence to increase yield in specific products, to reduce costs and ultimately drive margins, and that's really what we've been doing, and we've been doing successfully. We're adding to our portfolio of QAPs. We're continuing to improve our antigens capabilities and going on from there. Our electronic quality management system is getting more and more sophisticated and more and more integrated, which is improving efficiencies and dovetailing nicely with our enterprise resource planning software. All the things we said we're gonna do from an operational perspective are being executed, where we have unique capabilities, I would say, and some global leadership in a number of areas, including QAPs and antigens and certain specific ones from within there, from within those portfolios.

Speaker #2: And that's really what that's what we've been doing. We've been doing successfully. We're adding to our portfolio of caps. We're continuing to improve our antigens capabilities, and going on from there.

Speaker #2: Our electronic quality management system is getting more and more sophisticated, and more and more integrated, which has improving efficiencies, and dovetailing nicely with our enterprise resource planning software.

Speaker #2: So all the things we've said we're going to do from an operational perspective have been executed. We're we have unique capabilities, I would say, glo and some global leadership in a number of areas, including caps and antigens in certain specific ones from within there.

Speaker #2: From within those portfolios. And we have plenty of capacity to scale as these new opportunities come online. So we're ready to go. I can't speak highly enough about the, staff we have here, the scientific, procedural manufacturing, quality control, quality assurance.

Ken Hughes: We have plenty of capacity to scale as these new opportunities come online. We're ready to go. I can't speak highly enough about the staff we have here, the scientific, the stage of manufacturing, quality control, quality assurance. Even the finance people are quite good. We're doing really well from an operational perspective. I should have mentioned IT as well. We're really doing very well and have nothing negative to say at all. We're ready to accept the opportunities as they come to us. That's great from an operational perspective. Perhaps a comment on Kinlytic as well. Kinlytic is moving forward as it should. Our relationship with Sequel continues to be strong. Scale-up and validation of drug substance manufacturing is underway.

Speaker #2: Even the finance people are quite good. So, we're doing we're doing really well from an operational perspective. I should have I should have mentioned IT as well.

Speaker #2: So we're really doing very well, and have nothing negative to say at all. We're ready to accept the opportunities as they come to us.

Speaker #2: So that's great from an operational perspective. Perhaps a comment on Kinetic as well. Kinetic is moving forward as it should. Our relationship with SQL continues to be strong.

Speaker #2: Scale up and validation of drug substance manufacturing is underway. We're working with the drug product CDMO now as well. And we're and the timelines have not changed.

Ken Hughes: We're working with the drug product CDMO now as well, and the timelines have not changed. We're moving forward. We expect, well, material events over the next little while and submissions in 2027, and building that market in 2028 as being disclosed. The relationship remains excellent. The scientific component is moving ahead and I think that's something that's very exciting for the future. Once we come back for the catheter clearance market, there are other markets to get involved with too, and we're talking to our partner Sequel about those indications as well and whether or not we could bring some manufacturing component to Canada. That's again, a forward-looking statement right now.

Speaker #2: We're moving forward. We expect, material, well, we're events over the next little while, and submissions in 2027. And building that market in 2028 has been disclosed.

Speaker #2: The relationship remains excellent. The scientific component is moving ahead, and I think that's something that's very exciting for the future. Once we come back for the catheter clearance market, there are other markets that get involved with too.

Speaker #2: And we're talking to our partner, SQL, about those indications as well, and whether or not we could bring some manufacturing component to Canada. But that's, again, a forward-looking statement right now.

Speaker #2: We're going to we're working towards getting the, sub, supplement to the BLA, filed. And then start building the market for catheter management in the US.

Ken Hughes: We're working towards getting the supplement to the BLA filed and then start building the market for catheter management in the US and then subsequently in the rest of the world. That project is on schedule and on course.

Speaker #2: And then subsequently in the rest of the world. And that project is on schedule and on course. Very good. No, thank you. Thank you, Ken.

Cameron Groome: Yeah. Very good. No, thank you. Thank you, Ken. I'll just re-emphasize, you know, this is, you know, major customers really need to see the capabilities and both the capabilities and the capacity. If they're going to rely on Microbix as a critical sole source supply chain partner, we have to demonstrate all this. You know, we have regular stream of major companies now coming in and doing multi-day quality systems audits of our capabilities and our capacity to ensure that they can trust us on these matters. We pass those with flying colors and now have access to a scale of opportunity that would've been unthinkable a few years ago.

Speaker #2: And I'll just re-emphasize, you know, this, this is, you know, major. Customers really need to see the, the capabilities and the, both the capabilities and the capacity, if they're going to rely on microbics as a critical sole source supply chain partner.

Speaker #2: we have to demonstrate all this. And, you know, we have regular stream of, of major companies now coming in and doing, multi-day quality systems audits.

Speaker #2: Of our, of our capabilities and our capacity to ensure that, they can trust us on these matters and we pass those with flying colors.

Speaker #2: and our now have access to, a scale of opportunity that would have been unthinkable a few years ago. So that's not to give assurance we'll win that business, but it gives us assurance, you know, we are, it's certainly in our view the best, partner for such companies.

Cameron Groome: That's not to give assurance we'll win that business, but it gives us assurance, you know, we are, it's certainly in our view, the best partner for such companies, and I think that's a view that they're coming to share more and more. You know, I'm increasingly optimistic that we'll be able to, when the time is ripe, make some very interesting business disclosures. Justified optimism. It's not naive optimism, but it's justified. Those of you who have visited us see both the human resource capabilities as well as the technology and the infrastructure we have, to be able to deliver on these opportunities. Certainly, there's no slowdown in the technical advancements in the global diagnostics industry, whether that's on molecular diagnostics, multiplex tests, point of care.

Speaker #2: And I think that's a view that they're coming to share more and more. So, you know, I'm increasingly optimistic that we'll be able to, at the when the time is ripe, make some very interesting, very interesting business disclosures.

Speaker #2: So, justified optimism. It's not naive optimism, but it's justified. And those of you who visited us, see both the human resource capabilities as well as the technology and the infrastructure we have, to be able to deliver on these opportunities.

Speaker #2: And certainly there's no slowdown in the, technical advancements and the global diagnostics industry, whether that's on molecular diagnostics, multiplex, tests, point of care, you know, all this is happening.

Cameron Groome: You know, all this is happening and being driven, and we're really very much at the heart of it. You know, you'll see my reference to the logo, our logo in the corporate presentation, where we're really at that intercept point between our customers and their target markets. That's never been more true than it is today. Thank you. You know, not a financial quarter that we're going to be putting into the record books by any means, but I think this is turning out to be a really fun year. I'm very optimistic for the H2 of this year from a fundamental developments and value creation point of view.

Speaker #2: And being driven and, and we're really, very much at the heart of it. You know, you'll see my reference to the low our logo in the corporate presentation where we're really at that intercept, point between our customers and their target markets.

Speaker #2: And that's never been more true than it is today. So, thank you. You know, not, not a, financial quarter that we're going to be, putting into the record books by any means.

Speaker #2: But I think this is a this is a re turning out to be a really fun year. And, I'm very optimistic for the second half of this year, from a fundamental developments and value creation point of view.

Speaker #2: So, I, I think that's a probably a, a great place to leave it, Deborah, and maybe we can move over to questions. I see a few in the queue.

Cameron Groome: I think that's probably a great place to leave it, Deborah, and maybe we can move over to questions. I see a few in the queue, and if you'd like to read those out, we'll do our level best to answer them.

Speaker #2: And if you'd, like to read those out, we'll do our level best to answer them.

Deborah Honig: Sure. I had some via email. I'll start with those ones.

Speaker #3: Sure. I, I had some via email. So I'll start with those ones.

Cameron Groome: Very good.

Speaker #2: Very good.

Speaker #3: so, so this antigen decrease was a result of a $2 million reduction in sales to the company's distributor for China, believed due to reduced incidence of respiratory diseases requiring testing and tighter test access and reimbursement policies.

Deborah Honig: This antigen decrease was a result of a CAD 2 million reduction in sales to the company's distributor for China, believed.

Deborah Honig: Due to reduced incidents of respiratory diseases requiring testing and tighter test access and reimbursement policies, I thought your sales to China for an entire year were CAD 2 million. Do they all historically come in, Q2?

Speaker #3: I thought your sales to China for an entire year were $2 million. Do they all historically come in Q2?

Cameron Groome: No. Our sales in China in 2025 fiscal were closer to Sorry, 2024 fiscal, I should say. Thank you. I could see Jim's brow starting to furrow as he began to correct me. For fiscal 2024, we did about CAD 7 million into China in fiscal 2024, we were on track to do north of that. We're at CAD 8 million plus run rate through the H1 of 2025, that really fell off quite abruptly. I think we're you know, certainly speaking to our partner or that distributes into China for us, they're not exiting the market, they don't see it as gone.

Speaker #2: No, our sales in China in the 2025 fiscal were closer to—sorry, 2024 fiscal, I should say. Thank you. I can see Jim's brow starting to furrow as he began to correct me.

Speaker #2: for fiscal '24, we did about, $7 million into China in fiscal 2024. And we were on track to do north of that. And we're at, $8 million, plus run rate through the first half of 2025.

Speaker #2: And that really fell off quite abruptly. I think we're, you know, certainly speaking to our partner in our that distributes into China for us.

Speaker #2: They're not exiting the market. And they don't see it as gone. there was just a very abrupt slowdown in the incidence of walking pneumonia or white lung, as they called it in, in China.

Cameron Groome: There was just a very abrupt slowdown in the incidents of walking pneumonia or white lung, as they called it in China, coupled with restrictions on people going to multiple hospitals or clinics and being tested multiple times. It's just, you know, as greater trust perhaps is being developed in that market, people were wanting to make sure the test they got was actually working and accurate and doing tests, retesting. We've got a bit of a double whammy there along with the normal cost control pressures that we see all around the world. That slowed things down, but we see as end users there work through their inventories, we see reorders happening, and we're already starting to see that, but it's not been at that high level.

Speaker #2: Coupled with, restrictions on people going to multiple hospitals or clinics and having being tested multiple times. It's just, you know, as greater trust, perhaps, is being developed in that market, people were wanting to make sure the test they got was actually working and accurate and doing tests retesting.

Speaker #2: And so we've got a bit of a double whammy there along with the normal cost control pressures that we see, all around the world.

Speaker #2: So that slowed things down. But we see, as, as, end users there, work through their inventories, we see reorders happening. And we're already starting to see that.

Speaker #2: But it's not been at that high level. So we were budgeting a little over $1 million into China this year. I think we're below that level so far in terms of the— I know we're below that level in terms of the run rate so far.

Cameron Groome: We were budgeting a little over CAD 1 million into China this year. I know we're below that level in terms of the run rate so far, but we'll see when that comes back. It could snap back as early as the fall, or that could push out a little bit more. But where the new normal becomes in China is the question. You know, do we look for CAD 1 million, CAD 2 million, CAD 4 million? You know, these are the questions we're trying to benchmark with our partners now. Is there another outbreak and it snaps back to a much higher level than that? Either way, we're ready for it.

Speaker #2: but we'll see when that comes back. And it could snap back as early as the fall. or that could push out a little bit more.

Speaker #2: but where we where the new normal becomes in China is the question, you know, do we look for a million dollars, 2 million, 4 million, you know, these are the questions we're trying to benchmark with our partners now.

Speaker #2: Or is there another outbreak and it snaps back to a much higher level than that? Either way, we're ready for it. We can deliver on the volumes, as may be required.

Cameron Groome: We can deliver on the volumes as may be required, but we're not counting on that as the big growth driver. Our big growth driver remains QAPs in the nearer term and Kinlytic going out to that 2028 timeframe that Kenneth indicated. Jim, did you wanna speak further on that question? Debra, do you feel we've answered it?

Speaker #2: But we're not counting on that as the big growth driver. Our big growth driver remains caps in the near term, nearer term, and kinolytic, going out of that 2028 timeframe that, Kenneth indicated.

Speaker #2: Jim, did you want to speak further on that on that question? Deborah, did you feel we've answered it?

Speaker #3: Yeah. I had a follow-up that, Jim, you have extra color. Feel free.

Deborah Honig: Yeah, I had a follow-up, but if you have extra color, feel free.

Jim Currie: No, no, I didn't have any. I think, Cameron, you covered it correctly. I mean, I think we were seeing a CAD 2 million a quarter for a period of, I guess, 6 quarters. That was not historically the level that we'd seen in terms of revenues from China. There's no question. I mean, they really came up quite substantially in fiscal 2024. Prior to that, sales were probably in the, you know, CAD 2 to 4 million annualized with our Chinese distributors. We did see an uptick in 2024 and 2025, the H1 of 2025.

Speaker #4: No, no. I didn't have any. I think Cameron, you covered it correctly. I mean, I think we've we were seeing a 2 million a quarter, for a period of, I guess, six quarters.

Speaker #4: Now, that was not historically the level that we'd seen in terms of revenues from China. There's no question. I mean, it they really came up quite substantially in fiscal 2024.

Speaker #4: Prior to that, sales were probably in the, you know, 2 to 4 million annualized. with our Chinese distributor. So we did see an uptick in '24 and '25, the first half of '25.

Speaker #2: Yeah. And that was not evident to either us, our partners, or the manufacturers in China that that was going to be a temporary issue.

Cameron Groome: Yeah. That was not evident to either us or our partners or the manufacturers in China that that was gonna be a temporary issue. It looked like there was an ongoing need for that testing, and nobody saw that slowing down as abruptly as it did.

Speaker #2: It, it looked like there was a, an ongoing need for that testing. And nobody saw that, slowing down as abruptly as it did.

Speaker #3: And is there seasonality in that, typically?

Deborah Honig: Is there seasonality in that typically?

Speaker #2: there, there is some seasonality. in, in respiratory infections generally, it tends to be winter months. but that's a tendency. It's not a hard line.

Cameron Groome: There is some seasonality in respiratory infections generally. It tends to be winter months, but that's a tendency. It's not a hard line. You know, sometimes you'll see, for example, COVID, now more of a fall incidence as there's a bit more of a back to school driver necessarily than a winter one. You know, we see some of the gastrointestinal infections occurring in more in the spring and summertime, you know, food spoilage and camping and so forth. There's all these interlocking waves, and as we continue to grow our business, we're seeing different sources of that volatility. That, you know, we see that also evening out as we add additional large clients.

Speaker #2: You know, sometimes you'll see, for example, COVID, has more of, now more of a fall incidence as there's a bit more of a back-to-school driver necessarily than a winter one.

Speaker #2: you know, we see some of the, gastrointestinal, infections occurring in more in the spring and summertime, you know, food spoilage and camping and so forth.

Speaker #2: So, there's all these interlocking waves in as we continue to grow our business. We're seeing different sources of that volatility, and we see that also evening out as we add additional large clients.

Speaker #3: And, the issue of tighter tests across or, sorry, tighter test access and reimbursement, what has the bigger impact? That or reduced respiratory diseases?

Deborah Honig: The issue of titer test access and reimbursement, what has the bigger impact, that or reduced respiratory diseases?

Speaker #2: Tough to know exactly. I, I believe for us, it is the incidence of respiratory disease more. But we've also seen we're also told there's been a consolidation of the number of test manufacturers has been reduced, in China, with a number of the more marginal players falling away.

Cameron Groome: Tough to know exactly. I believe for us it is the incidence of respiratory disease more, but we're also told there's been a consolidation of the number of test manufacturers has been reduced in China with a number of the more marginal players falling away.

Speaker #3: And then a follow-up question to that: given the tight access and reimbursement policies, does that mean that even if respiratory disease does rebound, sales to China will be substantially lower than in years before the drawdown?

Deborah Honig: A follow-up question to that, given the tight access and reimbursement policies, does that mean that even if respiratory diseases rebound, sales to China will be substantially lower than in years before the drawdown?

Speaker #2: Tough, tough to know. You know, the products we're selling into China are, are quite unique. you know, we, we are the global leader in the manufacture of, of those antigen products.

Cameron Groome: Tough to know. You know, the products we're selling into China are quite unique. You know, we are the global leader in the manufacture of those antigen products. You know, there's always a question, you know, is there a domestic manufacturer? I don't think there's anybody that has either the purity, the capacity, or the economics that we have. We're not, you know, we don't have marble fountains in the courtyard and gold-plated washrooms. You know, we do run a frugal cost base in our organization even though our science is excellent, as is our quality. I don't think there's a real ability to undercut it or to deliver the same quality of product.

Speaker #2: so, you know, there, there's always a question, you know, is there a domestic manufacturer? I don't think there's anybody that has either the, the purity, the capacity, or the economics, that, that we have.

Speaker #2: And we're not, you know, we're not we don't have marble fountains in the courtyard and gold-plated washrooms. You know, we, we do run a frugal, cost base in our organization, even though our sci-science is, is excellent.

Speaker #2: As is our quality. So I don't think there's a, a real, ability to, to undercut, or to deliver the same quality of product. And, and people in medical devices manufacturing, you know, by definition, should be conscious of quality as well.

Cameron Groome: People in medical devices manufacturing, you know, by definition should be conscious of quality as well.

Speaker #3: And what, when will you know if your Chinese distribution partner will want to resume buying antigens for this year's, respiratory?

Deborah Honig: When will you know if your Chinese distribution partner will want to resume buying antigens for this year's response?

Speaker #2: They, they, they already have, but at a lower level.

Cameron Groome: They already have, but at a lower level.

Speaker #3: Okay. And.

Deborah Honig: Okay.

Speaker #2: So, you know, it's, it's a question of inventory at three levels. There's inventory at the end-user level. There's inventory at the distributor level. And there's inventory at the microbics level.

Cameron Groome: You know, it's a question of inventory at three levels. There's inventory at the end user level, there's inventory at the distributor level, and there's inventory at the Microbix level. You know, as we see the latter two, the end user and the distributor inventory deplete, that's when our inventory gets pulled out.

Speaker #2: So, you know, we as we see the, the latter two, the end-user and the distributor inventories deplete, that's when our inventory gets pulled out.

Speaker #3: And you've seen orders at both Q2 and Q3?

Deborah Honig: You've seen orders in both Q2 and Q3?

Speaker #2: in Q Jim, when have we booked those orders? I'm just losing track here. the clear ones are Q3. Yeah. Yeah. Thank you.

Cameron Groome: Jim, when have we booked those orders? I am just losing track here. The current ones are.

Deborah Honig: Q3.

Jim Currie: Q3.

Cameron Groome: Q3, yeah.

Deborah Honig: Q3.

Cameron Groome: Yeah. Thank you.

Speaker #3: moving on to, caps. Have any of your large caps clients recently commercially launched their assays or are soon to launch their assays? And what's the expected revenue impact for microbics if these launches this year and beyond?

Deborah Honig: Moving on to QAPs. Have any of your large QAPs clients recently commercially launched their assays or are soon to launch their assays? What's the expected revenue impact for Microbix of these launches this year and beyond?

Speaker #2: that's a little more specific forward-looking than I want to get into. we have customers with current assays that we're supporting, and oftentimes that comes into the onboard kits where we're supporting the, validation of new sites.

Cameron Groome: That's a little more specific forward-looking than I wanna get into. We have customers with current assays that we're supporting, and oftentimes that comes into the onboard kits where we're supporting the validation at new sites and training of operators at new sites. That's for an existing assay, if we're not already in the cartridge or in the kit, that's I think where we're winning good business and business prospects there. For assays that are now being developed, that's where we have the opportunity to either be included in the boxes of test cartridges as an external control, the swab, for example, or be included in the cartridge itself as some of the critical biological materials in the cartridge. Both of those are moving forward.

Speaker #2: And training of operators at new sites. And that's, for an existing assay, if we're not already in the cartridge or in the kit, that's, I think, where we're winning good business and business prospects there.

Speaker #2: And for assays that are now being developed, that's where we have the opportunity to either be included in the boxes of test cartridges as an external control to swab, for example, or be included in the cartridges itself as some of the critical biological materials in cartridge.

Speaker #2: And both of those are, are moving forward. the, the, onboard kits opportunities typically, those are six-figure opportunities. But over time, they move into seven figures across multiple assays, with clients.

Cameron Groome: The onboard kits opportunities, typically those are six-figure opportunities, but over time, they move into seven figures across multiple assays with clients. Some of the other opportunities range from six figure to seven figure to even some eight-figure opportunities that we're looking at. Those don't go from zero to a hundred all at once and, you know, this is where there may be disclosures whereby we're talking about a large project, but that may involve development revenues in the first year, validation lots and pre-launch stocking in year two, and full and growing commercial sales from year three forward. These are, you know, these are big projects, and big projects don't happen, you know, don't go from zero to a hundred overnight.

Speaker #2: And some of the other opportunities range from six-figure to seven-figure to even some eight-figure opportunities that we're looking at. Now, those don't go from 0 to 100 all at once.

Speaker #2: And, you know, this is where there may be, disclosures, whereby we're talking about a large project. But that may involve development revenues in the first year, validation lots and, and pre-launch stocking in, in year two.

Speaker #2: And full and growing commercial sales from year three, four. So these are, you know, these are big projects. And big projects don't happen, you know, don't go from 0 to 100 overnight.

Speaker #3: And have you seen any cancellations on the cap side? In terms of.

Deborah Honig: Have you seen any cancellations on the QAPs side?

Cameron Groome: No.

Speaker #2: No.

Deborah Honig: Um, and then pre-caps re-

Speaker #3: and then big caps.

Speaker #2: That's what I, I like that answer. That's a quick answer. No.

Cameron Groome: I like that answer. That's a quick answer. No.

Speaker #3: It's a good answer.

Deborah Honig: It's a good answer.

Speaker #2: Yeah.

Cameron Groome: Yeah.

Deborah Honig: Previously, QAPs revenues were about CAD 1.6 million a quarter. This quarter, CAD 0.6 million. Will this be normalized level moving forward, or do you expect things to normalize back up to around CAD 1.6? What's the track of that?

Speaker #3: previously, caps revenues were about 1.6 million a quarter. This quarter, 0.6 million. Will this be normalized level moving forward, or do you expect things to normalize back up to around 1.6?

Speaker #3: And what's the time for that?

Jim Currie: Yeah, no, don't know whether you call it seasonality or not, one of our largest customers in the proficiency testing side has 3 events a year, it happens in our Q1, Q3, and Q4, but nothing in Q2. Those events are anywhere from CAD 1 million to CAD 1.3 million. That's the reason why there was that dip in Q2.

Speaker #2: Yeah. No, that's if you don't know whether you call it seasonality or not, but we've got a one of our largest customers in the proficiency testing side, has three events a year.

Speaker #2: And it just, it happens in our Q1, Q3, and Q4, but nothing in Q2. And those events are anywhere from $1 million to $1.3 million.

Speaker #2: So it, it that's the reason why there was that dip in the second quarter. It will, but it'll definitely bounce back up in Q3 and Q4.

Cameron Groome: Yeah.

Jim Currie: It'll definitely bounce back up into Q3 and Q4.

Speaker #3: Absolutely. Yes. the, the way some of these proficiency or, or testing or external quality assessment schemes work is that the clinical labs will receive a box of blinded samples.

Cameron Groome: Absolutely. Yes. The way some of these proficiency or testing or external quality assessment schemes work is that the clinical labs will receive a box of blinded samples in a disease area, 3 times a year and not 4 times a year. We're shipping to our client, the agency running those schemes 3 times in the calendar year. As Jim indicated, that happens to land in revenues for us in Q1, Q3, and Q4. Now, you know, as we gain additional clients in that category that may have different timing of shipments, we increase our sales to the test, major test manufacturers in the QAPs category. We increase our sales at the B2C level with the clinical labs. Those don't have that sort of periodicity associated with the 3 shipments per year.

Speaker #3: And a disease area, three times a year. And, not four times a year. So we're shipping to the, the our client, the agency running those schemes, three times in the calendar year.

Speaker #3: And as Jim indicated, that happens to land in Q revenues for us in Q1, Q3, and Q4. now, you know, as we gain additional clients in that category that may have different timing of shipments, and we increase our sales to the test major test manufacturers, in the caps category, and we increase our sales at the, B2C level with the clinical labs, those don't have that sort of periodicity associated with the, three shipments per year.

Speaker #3: It's—it's more regular, so that starts to smooth. Got it. And then, were your supporting CAPS customers with onboard kits and validation at new sites? Are these assays approved, or still in development?

Cameron Groome: It's more regular. That starts to smooth.

Deborah Honig: Got it. Where you're supporting QAPs customers with onboard kits and validation at new sites, are these assays approved or still in development? If approved, does this represent recurring revenue?

Speaker #3: And if approved, does this represent recurring revenue?

Speaker #2: those would be for approved assays by, by definition because they're rolling out at clinical sites that need that training, valida you know, new, new onboarding or validation.

Cameron Groome: Those would be for approved assays by definition, because they are rolling out at clinical sites that need that training, you know, new onboarding or validation. There are two categories in the onboard kits. For new sites, that is, one-time business. For the regular retraining that needs to happen and for training new technicians due to the turnover that inevitably happens in any industry, staff turnover, those are recurring revenues. There's both.

Speaker #2: So there are two categories in the onboard kits. for new sites, that is, one-time business. But for the regular retraining that needs to happen and for training new technicians due to the turnover that inevitably happens in any industry, staff turnover, those are recurring revenues.

Speaker #2: So there's both.

Speaker #3: Okay. I've got one last audience question here. just going back to kinetic. So I understood that revenues from kinetic would start in 2027. And now hearing 2028.

Deborah Honig: Okay. I've got one last audience question here. Just going back to Kinlytic. I understood that revenues from Kinlytic would start in 2027, and now hearing 2028, what's caused the delay?

Speaker #3: What's caused the delay?

Speaker #2: I don't think there's a, a delay per se on this. We've spoken to a filing in the second half of 2027, followed by an FDA review, and then you know, the product, launch should happen in 2028, exactly where in 2027 and where in 2028 is where there's some flex in timelines.

Cameron Groome: I don't think there's a delay per se on this. We've spoken to a filing in the H2 2027, followed by an FDA review, and then, you know, the product launch should happen in 2028. Exactly where in 2027 and where in 2028 is where there's some flex in timelines. You know, part of that too is, you know, what is the exact timing of the BLA filing and how fast does the FDA review it? Ken, I don't know if you want to add to that.

Speaker #2: And, you know, part of that too is, you know, what is the exact timing of the BLA filing? And how fast does the FDA review it?

Speaker #2: Ken, I don't know if you want to add something.

Speaker #3: Yeah. Yeah. I it may well be the case that those revenues in 2027. But, at the end at the end of the day, I'll preface the my comments by reminding the group that we do have an approved regulatory file with the FDA.

Ken Hughes: It may well be the case that there's revenues in 2027. At the end of the day, I'll preface my comments by reminding the group that we do have an approved regulatory file with the FDA, and we have no chance of clinical failure with a product that has been successfully used in the clinic for decades. Notwithstanding that, it's a non-trivial activity to set up new manufacturing, both for the drug substance and the finished drug product and all the analytics that go with that. All of those different areas are being done at contract manufacturing organizations with our partner, Sequel. It's all moving forward as it should. You know, there's a level of complexity that we have to manage.

Speaker #3: And we d and, and we have no chance of clinical failure with a product that has been, successfully used in the clinic for decades.

Speaker #3: Notwithstanding that, it's a non-trivial, activity to set up new manufacturing both for the drug substance and the finished drug product and all the analytics that go with that.

Speaker #3: And all of those, different areas are being done at contract manufacturing organizations with our partner Sequel. It's all moving forward as it should. And then, and, you know, but there, there's a level of complexity that we have to manage.

Speaker #3: The timeline hasn't changed. And then, of course, when we make the regulatory file, then we have the vagaries of the FDA. Maybe there'll be expeditious.

Ken Hughes: The timeline hasn't changed. Of course, when we make the regulatory file, then we have the vagaries of the FDA. Maybe they'll be expeditious, maybe they won't. Notwithstanding it, as we're targeting for that approval time to be at the back end of 2027. Now, obviously, we can't build up, even though we've had discussions with user groups in the dialysis clinics and things like that, and the regulatory agencies in Europe who have a big pull for this particular product, they want this product. Till we have it, we can't start marketing it. The building of the market will start in 2028. The work will happen in 2027 as previously described. There may be little vagaries associated with the CDMOs and the complexity of the product and the FDA.

Speaker #3: Maybe they won't. But notwithstanding it, that we're targeting for that, that approval time to be at, at the back end of 2027. Now, obviously, we can't build a or even though we've had discussions with a user groups in the dial dialysis clinics and things like that, and the regulatory agencies in Europe have a big pull for this particular product.

Speaker #3: They want this product until we have it. We can't start marketing it, so the building of the market will start in 2028. The work will happen in 2027, as previously described.

Speaker #3: There may be a little vagaries associated with the CDMOs and the complexity of the product and the and the and the FDA, but right now, there's nothing on the horizon.

Ken Hughes: Right now, there's nothing on the horizon. We're just moving forward as we said we would.

Speaker #3: We're just moving it forward, as we said we would.

Speaker #2: Yeah. And it might, you know, in my view from what I've seen, this is a market that is neither fully satisfied at present in terms of the quantities of product needed, nor is it satisfied in terms of the service that it's receiving by the incumbent.

Cameron Groome: Yeah. You know, in my view from what I've seen, this is a market that is neither fully satisfied at present, in terms of the quantities of product needed, nor is it satisfied in terms of the service that it's receiving by the incumbent. I'm optimistic we're going to see some pretty big switching happening quickly.

Speaker #2: So I'm optimistic we're going to see some pretty big switching happening, quickly. And, you know, it's, it's not a question of grinding out, you know, small client by small client.

Ken Hughes: Yeah.

Cameron Groome: You know, it's not a question of grinding out, you know, small client by small client. It's a question of moving big users over to our product quickly to give them, you know, better product, security of supply, some price relief. There's a lot of reasons why customers for Kinlytic would consider quickly adopting this product in their, in their clinical settings. Whether that's, you know, hospital, hospitals, chemotherapy, parenteral nutrition, dialysis, there's a lot of use cases for Kinlytic that are very compelling, in my view.

Speaker #2: It's a question of moving big users over to our product quickly to give them you know, better product, security of supply, some price relief.

Speaker #2: There are a lot of reasons why customers for Kinetic would consider quickly adopting this product in their clinical settings. And whether that's, you know, hospitals, chemotherapy, enteral nutrition, dialysis—there are a lot of use cases for Kinetic that are very compelling, in my view.

Speaker #3: Yeah. That's a huge that's a huge pull for this product. There's only one incumbent in the marketplace, and they have supply issues. So we'll be we'll be, securing supply with the frankly, a superior product.

Deborah Honig: And-

Ken Hughes: Yeah, there's a huge pull for this product. There's only one incumbent in the marketplace, and they have supply issues. We'll be securing supply with, frankly, a superior product.

Speaker #4: And are you seeing any indication that, Sequel is pursuing any of, like, approvals beyond the first indication?

Deborah Honig: Are you seeing any indication that, Sequel is pursuing any of, like, approvals beyond the first indication?

Speaker #2: Not, not as yet. We're, we're all very cognizant of it. The, the current production methodologies are extremely well-suited for satisfying the catheter clearance indication, which is less hungry for active ingredient.

Cameron Groome: Not as yet. We're all very cognizant of it. The current production methodologies are extremely well-suited for satisfying the catheter clearance indication, which is less hungry for active ingredient. It uses, you know, 1/50th or less of the amount of drug active for a catheter clearance treatment than it would for a pulmonary embolism, for example. You know, one of the things that certainly we're going to continue to pursue aggressively with our partner is Microbix taking a role in redeveloping the upstream to be more efficient, the upstream API or drug substance manufacture to be more efficient. That's just the exact kind of work we've proven our ability to deliver upon with our antigen products and rubella specifically.

Speaker #2: It's, it uses, you know, 150th or less of the amount of drug active for a catheter clearance treatment than it would for a pulmonary embolism, for example.

Speaker #2: So, you know, we're one of the things that certainly we're going to continue to pursue aggressively with our partner. is microbics taking a taking a role in redeveloping the upstream to be more efficient, the upstream, API or drug substance manufacturer to be more efficient.

Speaker #2: And that's just the exact kind of work we've proven our ability to deliver upon with our antigen products, and Ruvela specifically. You know, we've gone through a very steep learning curve successfully on that and really have, I think, unrivaled expertise in how to do that.

Cameron Groome: You know, we've gone through a very steep learning curve successfully on that and really I think have unrivaled expertise in how to do that. That's something that will come, you can't demonstrate comparability until you have in-dated product. Once we have acceptable drug product for and drug substance and drug product for the catheter clearance indication, then we have something to benchmark against on redeveloping the upstream for pulmonary embolism and the many other systemic applications for which Kinlytic has been successfully used. Ken, am I misspeaking?

Speaker #2: So that, that's something that will come. But you, you you can't demonstrate comparability until you have in-dated product. So once we have acceptable drug product for, and drug substance and drug product for the catheter clearance indication, then we have something to benchmark against on redeveloping the upstream for pulmonary embolism and the many other, systemic applications for which kinetic has been successfully used.

Speaker #2: Ken, am I misspeaking?

Ken Hughes: Yeah, I mean, Sequel has stated many times that they have interest in all indications in all jurisdictions. The way in we get a share of that action, of course. But the place to start is the catheter management indications, where the amount of active is much more and is readily made in CDMOs, so we can satisfy a CAD 0.5 billion market in North America, then the equivalent in Europe, before we actually start looking at these bigger indications, which are bigger markets, but require 50 to 100-fold more active. I think that's really the I think Sequel quite correctly is saying, Let's get that foot in the door and then we'll build from there. Now, the technologies are related.

Speaker #3: Yeah. I mean, Sequel Sequel has stated and, and, many times that they, they have a interest in all indications in all jurisdictions. And so the way in we in we get a share of that action, of course.

Speaker #3: But the but the, the, the place to start is the catheter management is indications where the amount of active is much smaller and is readily made in CDMOs.

Speaker #3: So we can satisfy a half-billion-dollar market in North America, then the equivalent in Europe, before we actually start looking at these bigger indications, which are, which are bigger markets.

Speaker #3: But require 50- to 100-fold more active. And so, I think that's really the— I think Se-Sequel quite correctly is saying, "Let's get that foot in the door, and then we'll build from there." Now, the technologies are related.

Ken Hughes: It's just scalable, and I think the group knows that Microbix is excellent at scaling things. We are set up ready to do that, and we'll bring that online at the appropriate time. You never know, maybe we'll be doing some of the manufacturing in Canada. You never know.

Speaker #3: It's just scalable. And I think the group knows that microbics is excellent at scaling.

Speaker #2: Scaling.

Speaker #3: And so we have set re set up ready to do that. And we'll bring that online at the appropriate time. And you never know.

Speaker #3: Maybe we'll be doing some of the manufacturing in Canada. You never know.

Cameron Groome: It sure would be nice.

Speaker #2: It sure would be nice.

Speaker #3: It would be nice.

Ken Hughes: It would be nice.

Speaker #4: And just a follow-up question to the assay question I asked maybe 10 minutes ago. So why one-time business, once a client assay is launched, are caps, controls, not needed on a repeat regular basis?

Deborah Honig: Just a follow-up question to the assay question I asked maybe 10 minutes ago. Why one-time business? Once a client assay is launched, are QAPs controls not needed on a repeat regular basis?

Cameron Groome: QAPs controls, QAPs are needed on a regular repeat basis. It depends on the context we're looking at. In a clinical setting, ongoing quality management and external quality assessment is part of the laboratory ISO 15189 standard. There is recurring business associated with that. Use of a kit to validate a site, you know, at the start of use, you've sold new equipment to that site. You're going to use an onboard kit to train the staff the first time to use the equipment. You're gonna use onboard kits on regular intervals to retrain, you know, refresh training, and train new staff. You're also going to use controls on, at regular intervals as part of your quality management system to challenge the tests and make sure there aren't any systemic errors.

Speaker #2: caps, controls, caps are needed on a regular repeat basis. It depends on the context we're looking at. In a clinical setting, ongoing quality management and external quality assessment is part of the laboratory ISO 15189 standard.

Speaker #2: So there is recurring business associated with that. Use of a kit to validate a site, you know, at the start of use, you've sold new equipment to that site.

Speaker #2: You're going to use an onboard kit to train the staff the first time to use the equipment. Then you're going to use onboard kits.

Speaker #2: And regular intervals to retrain you know, refresh training, train new staff. But then you're also going to use controls on at regular intervals as part of your quality management system, to challenge the, the tests and make sure there aren't any systemic errors.

Speaker #2: And then caps are also going to be used provided by the PT EQA scheme providers, the third-party accreditation groups. As a part of their sort of audit challenges of the labs, to truly make sure they know what they're doing.

Cameron Groome: QAPs are also going to be used, provided by the PT/EQA scheme providers, the third-party accreditation groups, as a part of their sort of audit challenges of the labs to truly make sure they know what they're doing. There's at least four instances where QAPs are used on an external basis, and then there are instances where QAPs materials may be used either as in cartridge reagents or may be used as part of the manufacturing process. For example, our QUANTDx products that are quantitated materials may be used as part of the manufacturing QC release criteria for test manufacture, and that's an area we're building as well, where we're selling the QUANTDx products to people that are either developing a test or manufacturing a test.

Speaker #2: So there's at least four instances where caps are used on an external basis and then there are instances where caps, cap the caps materials may be used either as incartridge reagents or may be used as, part of the manufacturing process, for example, our quant DX products that are quantitated, materials may be used as part of the manufacturing QC release criteria for, test manufacturer.

Speaker #2: And that's an area where building as well, where we're selling the quant DX products to people that either are developing a test or manufacturing a test.

Cameron Groome: That's a valuable touch point with customers as well, and we're already generating material sales and building up, making sure we have validated manufacturing for a growing range of catalog numbers in the QUANTDx line. Jim kind of furrows his brow a little bit seeing our growth in inventory as we grow the number of seeds and cell bank materials and raw materials that we need to provide the range of capabilities our customers need. If somebody wants a 15-plex, you know, control for materials, we've got to have every biological target in that material, and we've got to have that banked and validated internally to be able to manufacture that, transfer it to manufacturing.

Speaker #2: And, that's a valuable touchpoint with customers as well. And we're already generating material sales and building up, making sure we have validated manufacturing for, for a, a growing range of catalog numbers in the quant DX line.

Speaker #2: Jim, Jim kind of furrows his brow a little bit, seeing our growth in inventory. As we grow, the number of, seeds and cell bank materials and raw materials that we need to provide the, the, the range of capabilities our customers need.

Speaker #2: If somebody wants, say, 15 plex, you know, control for materials, we've got to have every biological target in that material. And we've got to have that banked and validated internally to be able to manufacture that, transfer it to manufacturing.

Speaker #2: So you know, whether it's our, our product management and business development group, whether it's our R&D group, whether it's manufacturing, QC, QA, you know, finance, you name it.

Cameron Groome: you know, whether it's our product management and business development group, whether it's our R&D group, whether it's manufacturing, QC, QA, you know, finance, you name it, everybody's hopping to deliver on these pending and WIP projects.

Speaker #2: Everybody's hopping to deliver on these pending and WIP projects.

Speaker #4: And if they're validated on your caps, will it be your caps they use as regular controls?

Deborah Honig: If they're validated on your QAPs, will it be your QAPs they use as regular controls?

Speaker #2: Sorry. Could you repeat that question?

Cameron Groome: Sorry, could you repeat that question?

Deborah Honig: Sorry, I was just going back to the, I think it's a follow-up to the same question. If they're validated on your QAPs, will it be your QAPs that they use as regular controls? I'm just trying to.

Speaker #4: Sorry. I was just going back to the I think it's a follow-up to the same question. So if they're validated on your caps, will it be your caps that they use as regular controls?

Speaker #4: I'm assuming. Yes. Okay. And I think that's all I have for questions, gentlemen. any final thoughts? Anything we didn't cover today that you wanted to discuss?

Cameron Groome: Yes.

Deborah Honig: Yes. Okay.

Cameron Groome: Yeah.

Deborah Honig: I think that's all I have for questions, gentlemen. Any final thoughts? Anything we didn't cover today that you wanted to discuss?

Speaker #2: Well, you know, I, I, I think I would circle back to the, the concept of capabilities, capacity, and credibility. And, you know, we built all three of these.

Cameron Groome: Well, you know, I think I would circle back to the concept of capabilities, capacity, and credibility. You know, we built all three of these, and we're now, you know, engaged with, you know, leading companies in our industry for, you know, large business opportunities because we've done that. You know, we're not arm-waving, you know, stock promoters here. We're very much running and building an operating business and delivering on those opportunities. That applies to, you know, what we've done in hardening and strengthening systems, improving yields on, you know, antigen products and capability to deliver there, creating the whole range of QAPs and QUANTDx products, and driving forward with a very real drug development opportunity with Kinlytic.

Speaker #2: And we're now, you know, engaged with, you know, leading companies in our industry for, you know, large business opportunities because we've done that. And, you know, we're not—we're not arm-waving, you know, stock promoters here.

Speaker #2: We're very much running and building and operating business and, and delivering on those opportunities. And that applies to, you know, what we've done in, in, hardening and strengthening systems, improving yields on, you know, antigen products and capabilities to deliver there, creating the whole range of caps and quant DX products, and driving forward with a very real drug development opportunity with Kinalytics.

Speaker #2: So this is all reality stuff. And, you know, we're committed to, to building real sustained value within the business. And I think we're, we're building that.

Cameron Groome: This is all reality stuff and, you know, we're committed to building real sustained value within the business, and I think we're building that. You know, notwithstanding the vagaries of, you know, quarter by quarter and different, you know, individual customers and markets, the big picture shouldn't be lost of the value that we're creating within this business.

Speaker #2: you know, notwithstanding the vagaries of, you know, quarter by quarter and different, you know, individual customers and markets, the big picture shouldn't be lost of the value that we're creating within this business.

Deborah Honig: Got it. Okay.

Speaker #4: Got it. Okay. Well, thank you very much for your time. Sorry, Ken, did you have something?

Cameron Groome: Yeah.

Deborah Honig: Well, thank you very much for your time. Sorry, Ken, did you have something to add?

Ken Hughes: Yeah, I was gonna.

Speaker #3: Yeah. I was going to just supplement that a little bit. I mean, we're getting audits. We're getting big, bigger and bigger clients present clients, future clients, and potential future clients coming in for audits.

Cameron Groome: Yeah

Ken Hughes: supplement that a little bit. I mean, we're getting audits. We're getting big, bigger and bigger clients, present clients, future clients, and potential future clients coming in for audits and seeing what we do at Microbix. I know a number of the group have already too at Microbix, and we never have a problem. We always pass audits with flying colors because we're very serious about what we do from an operational perspective. Cameron also talked about the inventory side, 'cause we, you know, we're making a lot of seeds, a lot of products. You make a lot of products, you need a lot of seeds, and we're very good at doing that and managing that going forward. People who come in to see what we do are impressed by that.

Speaker #3: And seeing what we do at Microbix and I know a number of the group have already too at Microbix. And we never have a problem.

Speaker #3: We always pass audits with flying colors because we're very serious about what we do from an operational perspective. Come and also talk about the inventory side, because we are, you know, we're making a lot of seeds, a lot of products.

Speaker #3: You make a lot of products, you need a lot of seeds. And, we're very good at doing that and managing that going forward. And people who come in to see what we do are impressed by that.

Speaker #3: We have a broad portfolio of, of, of scientific and technical capabilities that are scalable and are directly applicable to what we do. And I think everybody's starting to recognize that.

Ken Hughes: We have a broad portfolio of scientific and technical capabilities that are scalable and are directly applicable to what we do, and I think everybody's starting to recognize that, and hopefully we'll reap the benefit of that going forward, plus Kinlytic on the side.

Speaker #3: And hopefully, we'll reap the benefit of that going forward. Plus, Kinalytic on the side.

Speaker #2: Yeah, and I think I'll just clarify two things. One, we're talking about quality system audits—customers wanting to know that if they're incorporating our products within theirs, or as a companion to theirs, that we can deliver on every aspect of quality, consistency, reliability. And I think barely a month goes by now that we don't have such a visit.

Cameron Groome: Yeah. I think I'll just clarify two things. One, we're talking about quality system audits, customers wanting to know that if they're incorporating our products within theirs, or as a companion to theirs, that we can deliver on every aspect of quality, consistency, and reliability. I think barely a month goes by now that we don't have such a visit, so the activity level is very high. Then I'm just gonna, Ken said inventory, not infantry, just in the case anybody was confused there.

Speaker #2: so the activity level's very high. And then I'm just going to, Ken said inventory, not infantry, just in the case anybody was confused there.

Ken Hughes: Strange accent this guy's got. I don't know.

Speaker #3: Stay in your accent. This guy's going under now.

Speaker #2: So, lots of lots of good things happening. And, you know, we'll continue to communicate that. And just, just as we have with regards to, some of the scientific congresses, that we discuss, whether it's Eurogen, whether it's ESCMID, passive, these congresses at which Microbix data is presented, sometimes by Microbix and sometimes by Microbix customers or prospective customers, these are not lost on the industry.

Cameron Groome: Lots of good things happening and, you know, we'll continue to communicate that. Just as we have with regards to some of the scientific congresses that we discuss, whether it's EUROGIN, whether it's ESCMID, PASSIVE, these congresses at which Microbix data is presented, sometimes by Microbix and sometimes by Microbix customers or prospective customers, these are not lost on the industry. I know that can be a little bit technical, but I do urge people to read between the lines a little bit about this, you know, to whom is that targeted? It's sure it's part of our continuous disclosure and it's great for everybody as investors, but that's also not lost on customers.

Speaker #2: And I know that can be a little bit—a little bit technical—but I do, I do urge people to read between the lines a little bit about this.

Speaker #2: You know, to, to whom is that targeted? It's sure it's, it's part of our continuous disclosure. And it's great for everybody's investors. But that's also not lost on, on customers.

Speaker #2: And, you know, we recently presented at ESCMID some data on some very innovative work around, RNA test controls you know, presenting in the last hours of the last day of a conference.

Cameron Groome: You know, we recently presented at ESCMID some data on some very innovative work around RNA test controls, you know, presenting in the last hours of the last day of a conference and, you know, we had 35 people lined up to discuss our poster. This is very impactful within the industry. Our news releases aren't just intended for investors, but they're also very widely read by industry and impactful for industry. Multiple constituencies, and you see some of the touch points as well. The podcast series, for example, gives us visibility with policymakers, and it gives us great touch points with leading experts in the field and makes it that much easier to win new business when somebody says, Well, who's Microbix?

Speaker #2: And, you know, we had 35 people lined up to discuss our poster, so this is very impactful within the industry. And our news releases aren't just intended for investors, but they're also very widely read by industry.

Speaker #2: And impactful for industry. So multiple constituencies. And you see some of the touch points as well. the podcast series, for example, gives us visibility with policymakers and it gives us great touch points with leading experts in the field.

Speaker #2: And makes it that much easier to, to win new business when somebody says, "Well, who's Microbix? Maybe I hadn't heard of them." And they go on and they see the technical excellence that we're delivering.

Cameron Groome: Maybe I hadn't heard of them. They go on and they see the technical excellence that we're delivering the companies and thought leaders we're rubbing shoulders with. This again is that driving real value creation for our business and value creation that I'm dead certain we're gonna see realized.

Speaker #2: The, companies and, and thought leaders we're rubbing shoulders with, this again is that driving real value creation for our business. And value creation that I'm dead certain we're going to see realized.

Deborah Honig: Great. Well, you've made good progress. Sounds like you got a lot of irons in the fire. I don't see any additional questions. We're coming up on the hour, so I think we can leave it there. If anyone does have any follow-up questions or would like a meeting, please feel free to reach out. Thank you to the audience for your participation and your questions, and thank you Jim, Cam, Ken and Cameron for making yourselves available.

Speaker #4: Great. Well, you've made good progress. Sounds like you've got a lot of irons in the fire. I don't see any additional questions. We're coming up on the hour.

Speaker #4: So I think we can leave it there. If anyone does have any follow-up questions or would like a meeting, please feel free to reach out.

Speaker #4: Thank you to the audience for your participation and your questions. And thank you, Jim, Ken, Ken, and Cameron for making yourselves available.

Speaker #2: Thank you so much, Deborah.

Cameron Groome: Thank you so much, Deborah.

Speaker #3: Thanks.

Ken Hughes: Thank you.

Cameron Groome: It's always a pleasure. Again, you know, we couldn't do this without the ongoing support of our many shareholders, thank each and every one of you for your support of our work. We really do appreciate it.

Speaker #2: Always a pleasure. And again, you know, we couldn't do this out without the ongoing support of our, our many shareholders. So thank, thank, thank each and every one of you for your support of our, our work.

Speaker #2: We really do appreciate it. Take care. Okay. Thanks, everyone.

Speaker #4: Thanks, everyone. Bye.

Ken Hughes: Thanks, everyone.

Deborah Honig: Thanks, everyone.

Jim Currie: Thanks, everyone.

Cameron Groome: Okay. Thanks, everyone.

Deborah Honig: Take care.

Jim Currie: Take care.

Ken Hughes: Bye-bye.

Deborah Honig: Bye.

Jim Currie: Bye.

Operator: Goodbye.

More MBX earnings call transcripts

Browse all earnings call transcripts

Q2 2026 Microbix Biosystems Inc Earnings Call

Request TrialDemo

Microbix Biosystems

Earnings