MBX Biosciences, Inc. Common Stock Price & Performance (MBX)

Well, case in point, Deborah. I hope you're feeling better soon. And and maybe we'll get you into the lab and we can we can add to our viral seed banks.

Hey, yes, my bet is on RSV, but I thought I had it in December.

So, [indiscernible] Anyway, those were the more important things. Cameron, do you want to kick us off with the dialogue about the quarter?

Sure. Well, why don't I'll start with, a bit of a financial overview and ask Jim to expand on that. And then we can talk about some of the operational achievements I'll I'll lead in on those and ask Ken to expand on some of those achievements. It's a pretty long list and we could go we go well above the appointed time, but we'll try to keep everything concise. In short, it was an excellent quarter. We came in with revenues just over $6,000,000 and that is on the surface of it, down versus the prior year quarter, but the prior year quarter included $4,100,000 of non recurring milestone payments associated with our Kinolytic project, which is going extremely well and we'll talk about. So your relevant comparable is revenues of over $6,000,000 from recurring sales, recurring products recurring customers. Versus $4,300,000 in the prior year. We also had excellent progress in expanding gross margins. Which is reflective of excellent work from our teams, from From sales and marketing through engineering and operations. In rigor on the manufacturing side, in our gross margins, to 62% in this year versus 49% if we exclude the Kinlytics revenues in the prior year.

We also had very good control of operational expenditures with those being down year over year partly because of a lack of investment banking fees this year associated with the Kinlytics successful realization last year. And those led to a very strong net earnings of $856,000 rounded to $900,000 if you're rounding up. Or close to 15% gross margin on the quarter and I think we are very happy with that and hope that our shareholders are too. Jim, what would you want to speak to to expand upon that?

Well, I think we I mean, certainly, we did see really strong growth in our call let's call it our non recurring core businesses 40% growth and along with that, As you mentioned, Cameron, excellent margins. We're starting to see the benefits from the efforts that are being put into our manufacturing processes and they're achieving the margins that we have been hoping for and expecting for quite a while now. And so that's starting to produce a bottom line that is very strong as well. Also during the quarter, we continued to buy back shares and we continue to do that in January as well. So over the last first four months of the year, we've bought back about 2,500,000.0 shares We've also more recently, I guess, as a subsequent event in our notes on the financial statements, we noted the exercise of strong exercise of warrants that we saw in options in January. And so the combination of those two have brought an additional approximately just under $3,000,000 of cash in as well and a recognition from our shareholders and those that participated in the private placement five years ago that have been a really strong business right now and they wanted to exercise their warrants.

And management wanted to exercise their options too. So good quarter. Yes.

Thank you. Thank you, Jim.

Great points. Certainly, we are active in the normal course issuer bid, the share buyback program, as Jim indicated. And our strong financial ratios are after the impact of those purchases, which of course is a use of liquidity and reduces shareholder equity somewhat as we are buying back those shares. But we consider that to continue to be an excellent use of shareholder capital. In adding to the pro rata ownership of each shareholder. And cash position very strong The warrant and option exercises, of course, occurred principally subsequent to the quarter end for Q1 So those numbers are not reflected in our cash balances at the end of the quarter from December 31, So that's in fact on top of and in addition to And it's nice to see a little bit of recognition of the really great operational progress of the business that drives these financial results with the share price beginning to reflect a little bit of the fundamental, a little bit more the fundamental value of the company as we've seen the share price move up sharply from the lows at the October to Crest slightly over $0.52 on some of these announced and then consolidate a little bit in the high 40s currently.

So we're not the share price is the tail wagged by the fundamental dog rather than the other way around. And I'd remind everybody that in terms of our announcements, we announce things when they are done. We don't announce typically intentions and the only exception to that would be something that we discussed in January that I'll get to. The importance of. But during the quarter, we had some excellent milestones. In the fall, we achieved our IVDR accreditation for sales in the European Union. This is a big upgrade in the rigor of the in vitro medical device rules in the European Union moving from directives, softer and less rigorous controls on how medical devices are able to access that market to the regulations, so IVD D has disappeared and IVDR has come in. And many companies have had great difficulty in moving to that higher level of accreditation. We have done so successfully as we announced in the fall. We're also very conscious of expanding the total addressable market that Microbix can access. Of course, every day we're working to sell more products and services to current customers and we're looking to add customers, but we've also been working very hard to expand our total addressable markets.

And as evidence of that, I'll point to three things. One is, the first quality assessment product we fielded in the genetic testing market care genetic test with a partner in The UK We've also begun to fill products in oncology moving into caps on the Formalin Fix Paraffin Embedded Tissue Sample mimetics, very high end stuff and say that three times quickly, it's a lot of fun. But that drives us into the field of all specialty in infectious disease into being able to address genetic testing markets and oncology markets. So [indiscernible] bounded potential in terms of driving sales growth in that field. And another exciting area, and this is the sort of exception we make, we've made in terms of not disclosing projects until they're done. Because of the broader strategic significance of this. But this is starting our recombinant program. Microbix has been world leader in the production of native or natural antigen products as test ingredients, but had not moved into synthetic or recombinant antigen capabilities in production and we now have the resources both financial and people to do that without it being an insurmountable lift. And we announced that intention in January, which in turn expands massively the total addressable markets for our antigens business and we'll ensure that it continues to grow.

And as Jim indicated, its performance was extremely strong in Q1, and we expect that strength to continue as we do the growth in the quality assessment product business. And lastly, and I'll ask Ken to expand on these various points, the movements of caps and expanding that market, expanding the addressable markets in antigens, but also to speak to Kinlytic and without too much spoiler alerts, Ken. I think it's fair to say that our kinlytic biologic therapeutics program is progressing extremely well also. And that is a big value builder for microbics. It would have been far too heavy a spend for us to support as a small Canadian public company. But through partners, we're making it happen. And this is this is getting ever closer and is going to be something very transformative for microbics within the next couple of years. So not so far away now. And getting closer every day. So Ken, maybe you could expand on some of the successes that the teams have had and just cover the waterfront.

I mean, starting the core business, right, we mean, We've talked a lot about capacity building. And capacity building is not just square footage and headcount, it's also capabilities and time to [indiscernible] the market, how we're doing growth, but also we're building margin, by reducing costs through efficiencies using our card management system reducing the testing load to QC and also increasing yields and then really reducing to almost zero batch failures. These things happen, but reducing in reduction in batch failures has led to this margin increase. So we are deploying that capability in all aspects of our core business. That's why you see growth, and we have much more capacity than that. So we're ready to go and deploy that capacity going forward. Speaking of capacity, we're all scientists We are experts in synthetic as well as natmetically, and therefore the recombinant program with a bit of with a bit of power behind it is going to move quickly. You can expect to to see the first products coming out in the next few months. And certainly several both in prokaryotic and in bacterial expression eukaryotic and in mammalian human cell expression before the end of the fiscal year.

As Cameron quite correctly says, that addresses multiple new large and growing markets and also creates internal customers so we don't have to buy stuff in as well. So, you know, we're really setting this stall for rapid growth, as you already said, and you're already seeing the benefits of that. Now I'll switch to Klimtica. Nothing to say other than what I said last time, which is the relationship with SQL is fine. Everything is on schedule. There's no change to the timeline. We're moving forward nicely with the international [indiscernible] [indiscernible] CDMO, the contract manufacturer who will fill the finished product and package it. That's just being piped right now, and that's another multinational driving force company going forward. And also, we've had lots of discussions about, because we obviously were doing cathodic clearance right now, but we're not stopping there and we're already talking about the next indications, the next jurisdictions, looking at stroke, looking at heart attacks, and things of that nature. Pulmonary embolism and deep vein thromboast is the bigger indications to drive this franchise to multi billion dollar opportunities, and we have the technical capacity to do that. And we have the technical capacity to upgrade all these processes to code temporary standards to maximize the margins associated with that The top line and the bottom line get maximized by what we're doing.

So like I said last time, I haven't got much to tell you. Everything's on schedule.

Going nicely. I can't speak highly enough for the technical team and that Microbrix, the manufacturing, the R and D, the QC, the QA and everything else around it, the IT group, we're driving everything as it should as we said we would, and we're going to be successful.

I muted myself. It's amazing after all these years, we still do that. Ken makes some great points. I mean, the quality of the team that we have is just superlative and we can't say enough about them or be thankful enough. And we're moving we've I think created a very positive culture where people enjoy working at Microbics and the dynamic and the team spirit and, we're moving to even in our compensation systems to a higher proportion of variable compensation that's performance driven. By design. And that includes performance driven and KPI driven bonus systems. We have, of course, our ongoing option plan. Which embeds and incense really incense people to do their best and become eligible for those by moving up in the organization. And we're seeing the benefit of those [indiscernible] in that. I just learned yesterday at our senior management team called in another scientist who'd left MicrobiX is coming back. So we have people that do enjoy working with us and I just think we the culture that works and we're seeing the results of that as [indiscernible] And some of the other things I'll mention, just on Cutting Edge, for example, in January, we announced our speaking of synthetic biology, our work on H5N1 influenza, the bird flu that continues to simmer in dairy cattle, populations and in poultry populations.

And we have created a forward looking synthetic safe synthetic biology construct that can be used in a caps to check whether the existing flu tests, whether they're commercial FDA approved assays or lab developed tests can actually detect H5N1 flu, which is, of course, critical to managing any emerging viral outbreaks. So proud to be working on that with one of the global leaders in that field, American Proficiency Institute that has 20,000 clinical labs subscribed to its programs, Not all of those in the respiratory category but it just goes to show how we are very much at the forefront of this kind of innovative work in public health and in individual health, witness Deborah's difficulty in getting a definitive diagnosis in a timely manner for respiratory virus. I mean, this shouldn't happen in the twenty first century. It's bonkers. And we're taking very strong leadership role even in policy development. And