Microbix Biosystems Inc T.MBX

MBX is not a COVID-only story

[RazeKreations]

T months agoBruce Krugel from KRC INSIGHTS statement from November 5th 2020
Timing is everything.
 So is an understanding of the levers that drive stock

Timing: this morning (Nov 5th 2020) we initiated coverage on Microbix Biosystems Inc. (MBX-T) with a $1.40 target. It's a Canadian biotech co. with exposure to infectious diseases (incl. COVID-19) though its antigen, quality assessment products (QAPs) and a new product line, viral transport media (VTM). VTM is the significant contributor to our forecast 3x increase in revenues from F2020E to F2022E.  MBX is not a COVID-only story. The core business (now ramping) under performed as MBX customers focused on COVID requirements, at the same time MBX increased its infectious disease portfolio (new COVID and STI products). Also, MBX signed a transformative agreement with the Government of Ontario: for a $1.45m grant to fund 50% of capacity expansion, MBX will supply Ontario VTM products (local sourcing). The new capacity allows for $198m of revs when commissioned. Assuming Ontario sources 25% of its needs from MBX = $16.8m in revs or 15.5% of plant capacity. VTM=COVID + molecular testing (e.g., PCR).