Microbix Biosystems (TSE:MBX) reported 17% year-over-year sales growth in its fiscal third quarter ended June 30, 2026, as gains in its antigen and quality assessment product businesses helped the company recover from client setbacks experienced in mid-2025.
Chief Executive Officer Cameron Groome said antigen sales rose 20% from a year earlier, while sales of quality assessment products, or QAPs, increased 13%. The remaining revenue contribution came from inbound royalties. Groome said the quarterly performance put the company closer to its stated target of at least 20% annual sales growth.
Margins Reflect Product Mix and Efficiency Efforts
Chief Financial Officer Jim Currie said the gross-margin improvement reflected a combination of product mix, higher revenue absorption of fixed manufacturing costs and lower costs relative to the prior year. He said individual antigen products can have materially different margin profiles based on their production processes.
“A good portion of it was related to the product mix,” Currie said, adding that operational efficiencies are also beginning to contribute. He noted that Microbix has approximately doubled yield for one key antigen product over the past two years.
During the question-and-answer session, Currie said the company recorded a quarterly loss of approximately CAD$800,000. Management said its focus remains on increasing revenue rather than reducing its way to profitability through deeper cuts.
Groome said Microbix has allowed some employee attrition without replacing positions as it realizes efficiencies, but has sought to retain the capabilities needed to compete for major projects. The company previously identified an engineered quarterly break-even revenue level of about CAD$5.5 million, although management did not provide an updated figure during the call.
Currie said Microbix ended the quarter with CAD$7.2 million in cash. The company repurchased 796,000 shares for CAD$209,000 during the quarter under its normal course issuer bid. For the fiscal year to date, it repurchased 2.3 million shares for about CAD$571,000.
QAPs Pipeline Includes Major Diagnostics Companies
Management said it is working with multiple international diagnostics companies on QAPs projects intended to support new assays on existing and new testing platforms. Groome described several discussions as potentially material in scale, though he cautioned that timing depends substantially on customers and their development schedules.
The company expects the initial disclosures of some new projects could begin during the remainder of calendar 2026, although customer confidentiality agreements may limit the level of detail Microbix can provide.
Groome outlined a typical development cycle for QAPs projects with test makers: feasibility samples in the first stage, validation or clinical lots in the second stage, and broader commercial rollout in the third year. He said several large diagnostic companies are currently evaluating feasibility samples from Microbix.
Microbix already has QAPs incorporated in some commercial-stage assays, according to Groome. The company is seeking opportunities involving assay launches on instrument platforms with thousands or tens of thousands of installed units, particularly in the point-of-care market.
The company also highlighted its QUANTDx reference-material product line, which launched last summer. Groome said the line remains in the six-figure revenue range but has shown early progress and provides a strategic entry point with companies developing new assays.
Sales directly to clinical laboratories are becoming a larger part of the QAPs business, management said. Currie reported a 35% quarter-over-quarter increase in business-to-consumer sales, while Groome said the Microbix-branded product franchise has grown into a revenue stream exceeding CAD$1 million.
RNA Controls and Kinlytic Development Advance
At the European Society for Clinical Microbiology and Infectious Diseases’ ESCMID Global conference, Microbix presented data on synthetic controls for RNA-based organisms, including RNA viruses. Groome said the technology broadens the company’s ability to provide safe controls for diagnostic test developers.
Chief Operating Officer Ken Hughes said the company’s RNA controls are encapsulated rather than “naked” RNA. He said the design is intended to mimic a patient specimen and test the full workflow of molecular diagnostic assays, including extraction.
Management also provided an update on Kinlytic, Microbix’s therapeutic asset being advanced with licensee Sequel Pharma. Hughes said work on both drug substance and drug product is progressing, including engineering batches ahead of good manufacturing practice production batches.
Hughes said process-development breakthroughs have increased yields and are expected to improve margins. Microbix and Sequel are developing comparability protocols intended to demonstrate to the U.S. Food and Drug Administration that the updated Kinlytic production process is the same as or better than the historical process for Abbokinase.
The companies expect to meet with the FDA before the end of calendar 2026 to discuss their comparability approach, Hughes said. Management expects to file a supplemental biologics license application, or sBLA, next year.
China Sales Begin to Recover
Groome said China revenue, which historically had represented roughly CAD$2 million to CAD$3 million annually before surging in 2024 and through mid-2025, has returned to the six-figure range this year after a sharp decline. He said Microbix is targeting a return to the seven-figure range in fiscal 2027, though management is still assessing the extent to which recent activity reflects inventory drawdowns by end users.
Looking ahead, Groome said Microbix expects fourth-quarter revenue to improve both year over year and sequentially from the third quarter. He said the company aims to continue moving toward break-even and, ultimately, profitability as it converts development discussions into formal commercial agreements.
About Microbix Biosystems (TSE:MBX)
Microbix Biosystems Inc creates proprietary biological products for human health, with over 120 skilled employees and revenues of C$ 18.6 million in its last reported fiscal year (2025). It enables the worldwide commercialization of diagnostic assays by making a wide range of critical ingredients and devices for the global diagnostics industry, notably antigens for immunoassays and its laboratory quality assessment products (QAPs ¿ ) and reference materials (QUANTDx ¿ ) that support clinical lab proficiency testing, enable assay development and validation, or help ensure the quality of clinical diagnostic workflows.
