MICROBIX RECOVERS RIGHTS TO RABIES VACCINE July 17/98 from a press release TORONTO -- Microbix Biosystems Inc. (TSE:MBX) today announced that it has negotiated repatriation of the development program for its proprietary rabies vaccine from Schering-Plough Animal Health (SPAH"). SPAH acquired the program when it purchased Microbix' original partner, Mallinckrodt Veterinary, Inc., in June 1997 and after evaluation concluded that Microbix' recombinant rabies vaccine did not fit into its core business. As part of the settlement, Microbix retains all rights and will be paid for two outstanding milestones. According to William J. Gastle, President and CEO of Microbix, The rabies vaccine, based on our proprietary adenovirus technology, has demonstrated highly promising results during exploratory research trials in dogs and cats, suggesting efficacy superior to that of existing products. Our relationship with Mallinckrodt led to significant advances in the status of this product and we are now using these advances as a base to license this product to a new partner." The growing market for the protection of companion animals, and a renewed emphasis on prevention of livestock diseases, are creating a demand for safer and more effective second generation vaccines. The Company estimates the rabies vaccine market to be in excess of US$200 million worldwide. Microbix is in discussions with a number of leading veterinary product companies to license the rabies vaccine program and hopes to conclude an agreement by the end of the year. In addition to the advances made on the rabies vaccine program itself, the company believes the successful development to date also confirms the utility of the adenovirus platform technology in animals. This presents the potential to develop a variety of veterinary vaccines and Microbix is seeking other partners interested in such development programs using its proprietary adenovirus technology.