Microbix Biosystems (TSE:MBX) management said fiscal first-quarter results showed sequential improvement and early signs of a rebound following what CEO Cameron Groome described as a “down year” in 2025, driven by two events outside the company’s control. The company’s fiscal Q1 2026 covered the three months ended Dec. 31, 2025.
Revenue up sequentially, with gross margin pressured
Groome said revenue in the quarter was CAD 4.2 million, up 13% sequentially and “in line with our budget expectations,” as the company works to recover sales above what management described as its engineered break-even point.
Currie added that the company’s QAPs business (quality assessment products) was CAD 1.9 million, representing a 15% improvement versus last year, helping drive the combined CAD 4.2 million quarterly revenue figure.
On profitability, Groome said the company recorded a “controlled net loss” for the quarter and noted it used some of its cash reserves. (Management did not provide additional details on the net loss figure beyond what was stated on the call.) Currie said gross margins were “disappointing” compared with last year and expectations, primarily because lower sales volumes meant fixed overhead was spread across fewer products. He said management expects margins and profitability to improve as revenue rises toward its break-even level, which the company described as “in excess of CAD 5.5 million.”
Cash flow and working capital: receivables timing drove quarterly usage
Currie said most of the quarter’s cash consumption was tied to timing in accounts receivable rather than an ongoing burn rate. He explained that Microbix ended fiscal Q4 with low receivables and ended Q1 with higher receivables, which affected cash flow from operations. He also said that during January the company received CAD 3.3 million in payments, lifting the cash balance to CAD 10.6 million at the end of January, up CAD 1.5 million from the end of December.
In response to an investor question, management said the increase in receivables was not unusual and reflected shipment timing, with more product shipped late in December and collected after quarter-end. Currie also noted the company has historically experienced minimal bad-debt expense, maintaining a provision of roughly CAD 35,000.
On operating expenses, Currie said Q1 tends to be a lower spend quarter, partly due to fewer trade shows early in the fiscal year. He said operating expenses are expected to rise in Q2 and Q3 as trade show activity increases and as R&D spending moves higher, but he did not anticipate a dramatic jump and emphasized cost control while revenue rebuilds.
Commercial updates: new client programs and QAPs expansion
Groome highlighted multiple client-related disclosures made during and shortly after the quarter, emphasizing the company’s practice of disclosing projects only once they are “signed, sealed, and delivered.” He said Microbix announced new clients and programs in molecular pathology and point-of-care genetics, expanding its oncology and genetics testing exposure while maintaining its infectious disease expertise.
Groome pointed to two specific relationships disclosed in the fall:
- A U.S. relationship with SEKISUI supporting a point-of-care testing system.
- A relationship with Seegene in Mexico beginning with support for cervical cancer screening programs.
In February, Groome said the company disclosed progress in its QAPs business with PT/EQA providers (proficiency testing and external quality assessment agencies). He said work related to QAPs for molecular pathology was presented at Labquality Days in Finland. He also said Microbix was “very proud” to disclose that the College of American Pathologists (CAP) became a customer, describing CAP as the world’s largest PT/EQA program provider for clinical lab quality management.
Asked about revenue potential from CAP, management said it is expected to be “well into the six figures” for 2026, with Microbix targeting CAP to become a “meaningful seven-figure account” as additional programs roll out.
China distributor demand remains subdued
Management said it had not yet seen a meaningful resumption of sales through its distributor in China, describing the market as not highly transparent. Groome said the company continues to be told the situation relates to flu incidence and existing inventory consumption, but antigen drawdowns into China remain “at a very low level.”
On timing, Groome said if purchases resume for the next flu season, the company would typically expect to see that “over the late summer to early fall.” He also noted Microbix supports some Chinese manufacturers in respiratory and childhood disease testing, and described immunologic testing demand in China as tied in part to respiratory infections and local conditions. Management also discussed inventory dynamics, noting antigen ingredients stored at very low temperatures can have a long shelf life, while finished tests have defined expiration periods.
Recombinant antigens, urokinase regulatory path, and share repurchases
Groome provided an update on Microbix’s recombinant antigens initiative, describing it as a way to synthetically produce test ingredients in addition to the company’s established native antigen production. He said Microbix announced its first commercial product from this program in January: a SARS-CoV-2 viral capsid antigen, which he said is actively used in the company’s QAPs and strengthens the supply chain, improves margins, and is expected to be added to the company’s catalog for broader sales.
Management also addressed investor questions on its urokinase (Kinlytic/Abbokinase) program. Executives said replacing certain animal-derived components with plant-derived or recombinant alternatives has been expected since the outset and discussed with the FDA as part of modernization to contemporary standards. Regarding timing for an sBLA filing and approval, management said no submission has been filed yet and reiterated that a filing is not expected in 2026, with a target in the latter part of 2027, while emphasizing that timelines depend on FDA review speed.
Finally, the company discussed its normal course issuer bid (NCIB). Management said Microbix renewed the program in early December and has been repurchasing shares at a rate of 15,000 shares per day. Currie said the company bought back about 700,000 shares in Q1 for approximately CAD 175,000, and had repurchased roughly 1 million shares to date under the combined old and renewed NCIB. Management said it plans to continue repurchases at the current pace unless circumstances change, and noted the daily maximum allowed under the program was 20,339 shares.
Looking ahead, Groome said Microbix is seeking to rebuild toward quarterly revenue in the CAD 5.5 million to CAD 6 million range, which management described as around break-even. In response to a question about profitability by fiscal Q4, he said the company is targeting revenue recovery such that there “shouldn’t be a meaningful loss” in Q4, though he did not expect significant profitability based on current visibility, noting results could improve if additional business development projects convert into revenue.
About Microbix Biosystems (TSE:MBX)
Microbix develops proprietary biological technology solutions for human health and well-being, with about 90 skilled employees and sales growing from a base of over $1 million per month. It makes a wide range of critical biological materials for the global diagnostics industry, notably antigens for immunoassays and its laboratory quality assessment products that support clinical lab proficiency testing, assay development and validation, or clinical lab workflows.
