Microbix Biosystems Inc. (MBX) Earnings Call Transcript & Summary

Good morning, everyone. Thanks for joining us for an exciting update with Microbix. With me, I have Cameron Groome CEO, Jim Currie, CFO; and Ken Hughes, COO. They're going to provide an update on Kinlytic after this week's exciting news release. As always, this presentation will contain forward-looking statements. If you'd like to know more about those, you can find them on the company's website on the presentation, which was recently updated, so feel free to check that out. And there will be a Q&A section. So feel free to enter your questions at the bottom of your screen or you can e-mail them to me, and I will get to those. Once we get an update with -- that out of the way, Cameron, why don't you kick things off for us?

Thank you, Deborah. That's great. Good morning, everyone. First, I just want to thank everyone for joining this Microbix webinar this morning. Your time is as valuable as your capital, and we appreciate you entrusting us with some of both. Much of our time this morning is going to be spent focused on Kinlytic urokinase. This is a clinically important clot buster drug that is owned by Microbix and a project that was conceived by our founder, Bill Gastle and its success today forms a further part of his legacy. So we do remember that, and I acknowledge it with gratitude. What we announced yesterday morning, was the reconfirmation of an agreement that provides full funding to bring Kinlytic back to the U.S. market. Now initially, that will be for the clinical indication of clearing blood clot blockages from indwelling venous catheters which I'll refer to as catheter clearance for shorthand. And that's a market by market reporting sources of over $350 million a year in the U.S. that's currently a monopoly. And there are supply issues with that as well as security of supply issues with that as well as pricing issues and convenience issues and a whole bunch of factors that lead us and our partners to believe that the reintroduction of Kinlytic initially for the catheter clearance indication will result in very meaningful market share in sales to Microbix and partners and provide some real clinical benefit that we can go into as well. Now one key point I want to make is, I say, bringing the product back to market. And that's exactly what we're referring to. It's important to recall that Kinlytic is an approved drug. It has existing biological licensing application approvals in the United States and Canada for the catheter clearance indication specifically and also for another use in the treatment of pulmonary embolisms and other very clinically important indication for the product. So what we are doing here with this program is we are validating the manufacturing of new drug substance and drug product and updating related systems and methods for the intervening time that the drug has been off market. So this does not have the traditional pathway of validating a newly discovered molecule and trying to take it through clinical trials to establish safety and efficacy. Safety and efficacy is already established with Kinlytic and the drug has been used to treat literally millions of patients. So we are validating new manufacturing and systems and sites in order to file a supplement to the existing approved BLA and reintroduce the product to market. And this puts us certainly in select company in having an approved drug, but we had for a long time an approved drug and know where to make it. And the funding required was outside of Microbix's reach to be able to bring it back. So bringing it back for all of the prior indications, pulmonary embolism and catheter clearance would have been an exercise well in excess of $100 million of investment. Bringing it back for catheter clearance still is an investment beyond the reach of Microbix and estimated spend before our partner sees revenues, where we see revenues will be inclusive of milestones to Microbix, approximately CAD 50 million, still far greater than what we would be able to commit. But we now have a partner who has done incredible levels of due diligence on the project and taking the decision to provide all of the funding for the work that needs to go into filing the supplemental BLA and get the drug back to market and then there upon Microbix will get a percentage royalty on those revenues as well as sales linked to milestone payments. So we are now a company that not only has a great diagnostics business that's growing and generating cash flow -- positive cash flows and profits but also a fully funded drug program that is advancing that can generate hundreds of millions in sales annually in its own right. For the deal structure, I referenced back to the disclosures of mid-May 2023, but we have structured a rather unique deal here. And I'll ask Jim in a few moments to speak to some of the related accounting treatments. But what we have is a situation that the current agreement is that provides a license to Kinlytic and the program and in exchange for full funding towards approval -- towards reapproval. Once reapproval has been secured then the ownership of the BLA will go over to our partner is that facilitates matters such as post-market surveillance and marketing compliance, et cetera, that otherwise would remain the responsibility of Microbix. But until such time, we continue to own the asset. And if at any point during the program, our partner stopped continuing to fund the Kinlytic program. Microbix retains ownership of the improved asset. So what we have structured is an agreement that provides tremendous benefits to Microbix shareholders without pulling away capital from our core business, but we're seeing our asset being improved and it will either return to us in the worst case situation, thereby improved or we will be generating likely on the order of $15 million to $25 million per year in royalties several years down the road from now. So as investors and analysts and so forth begin to look at this and see this is as real, which most certainly is we'll see that value ultimately reflected in Microbix shares, Microbix earnings and cash generation. So with that, maybe I can ask Jim to just make a few comments on the financial implications of this arrangement that has now been reconfirmed and specifically some of the treatments that we'll see as early as the fourth quarter of fiscal 2023, which is our September 30, 2023 fiscal year-end and our first quarter of fiscal 2024, which is the quarter ending December 31, 2023. Jim?

Thanks, Cameron. Yes, this is an exciting event. And as CFO always like to see USD 2 million come into our bank account. So it was a good week. As you will have seen in -- I'll step back a bit. I mean this is a license agreement and a purchase agreement at the same time, as Cameron had outlined. The first payment that we saw came in, in May, a $2 million upfront payment, $1 million was to be held back in case Sequel for some reason, decided not to move forward. So only $1 million of that was recognized back in our Q3 as revenues, and we deferred the other $1 million. As Cameron was outlining, we will see an additional impact in Q4 as we reverse the impairment we had on the Kinlytic asset that we had back in 2020, we impaired the asset. Now according to IFRS, the maximum that you can bring back as an asset on to your balance sheet is what the amount that you impaired, which was about CAD 3.1 million. And that will be amortized over the next 10 years. The next accounting treatment will be the $2 million that we just received this week. That will be recognized as revenue, that's USD 2 million along with the $1 million that was deferred back in May. So we will see USD 3 million in revenue or the better part of CAD 4 million recognized as revenue during the first quarter of 2024. Along with that, there will be an agency fee that we -- that gets paid to the firm that assisted us in moving this to this point where we have a partnership, and that will be USD 0.5 million that will be cost recognized in Q1 as well. So the net of all that is USD 2.5 million impact on the bottom line in Q1 of 2024. As we move forward with this, it continues to be a license, as Cameron identified until FDA approval and -- Ken and Cameron probably have a better idea in terms of timing of when that likely event. But I've always assumed it was a 3- to 4-year time frame for that to be the case with $1 million being recognized as a milestone payment. Again, all these numbers are in U.S. dollars at that time of FDA approval. And it's also at that time when the transfer of the BLA happens for the product. And along with that, we also have sales-based milestones.

I don't think we need to break down the exact numbers on the sales milestones, Jim, but certainly in -- there are multiple milestones in the aggregate number would be fine.

And along with the royalty payments as well that we will receive on net sales Sequel as we move forward. That forms accounting side of things for the or this great partnership that we've got with Sequel. And I'm looking forward to working with them as we gain FDA approval and start to see some sales of Kinlytic urokinase.

That's great. Thank you, Jim. Before we jump over to Ken, I might just mention who is our partner, Sequel Pharma, LLC. Sequel is a specialty pharma firm focused on achieving commercialization of specialty pharmaceuticals. It is led by a very experienced team of pharma executives. Mike Anderson is CEO who has been in the industry. I'm not going to embarrass him with how many years, but we're certainly talking about multiple decades and is well-known industry. And the name of the company is Sequel because this is literally a repeat of value that, that executive team has previously built fully backed by one of the largest life science private equity firms in the world. We're not -- we're asked not to disclose their name, but I'm sure there's -- there will be folks intrepid enough to dig up that background if they would want to. But that is a firm with tens of billions of dollars under management that is providing the backing for that. And a bit of our process since May has been moving forward in soliciting the renewed consultation with FDA developing with Sequel, the briefing package to FDA, securing a meeting time line and meeting responses, evaluating those responses. Sequel making a recommendation to its financial backers as to whether or not to proceed, those financial backers deciding whether or not to proceed, the financial backers providing the funds to Sequel and then Sequel being -- making the payment to us by way of the best form of confirmation of the decision to move forward. And that funds transfer happened on Wednesday evening, and we made our disclosure on Thursday morning, just to recap a little bit of time lines there. But Ken, why don't you weigh in on the work that's now ongoing? And anything else you want to cover?

Yes, obviously, we made our first announcement in May that we're working with Sequel and equity funders. And to be honest, the relationship is excellent and very sophisticated in both levels. We have been working together since then closely moving forward. And the first -- and it's probably important to mention once again that urokinase Kinlytic is part of an approved biologics license application. This is not a development process. There's absolutely no chance of clinical failure here. What we're doing is a comparability protocol and a site transfer updating some systems associated with the product, which is something we are very sophisticated ourselves in doing. And so there's really no risk associated with that. The outstanding on the FDA meeting was that we hadn't actually taken guidance from the FDA since 2017, although that guidance was very strong and supportive. And so one of the milestones, of course, was to go back and have another consultation with the FDA. After a highly satisfactory consultation where they provided similar guidance perhaps a little stronger perhaps, we've moved forward to where we are today. In the intervening time, we've been working closely with Sequel, their highly sophisticated VC backers in the technical area. And just this week, I was actually down in the U.S. visiting with a contract manufacturing organization. It has all the capabilities to execute this program and are very motivated to do so. We have a number of candidates in this regard, and we're working with -- closely with Sequel to execute that. So we haven't been inactive in the intervening time, and we're going to expedite this process going forward. But I would not think to restate there are lots of opportunities to bring this product back to market and the technical aspects are very well known to Microbix. We've been working on this particular molecule for a long time and Sequel and their backers are deeply involved with us, and we make a great team. So that's really what I want to say we're going to continue with that process to bring things back and relaunch urokinase into the marketplace to the benefit of patients to the marketplace that Cameron just talked about. That's what we're up to right now.

Thanks, Ken. That's really well said. And I think the clinical benefit to patients is something that really needs to be emphasized here. This is a very important drug clinically and cannot just alleviate drug shortages when they occur, but also has some very distinct advantages associated with the product as well that provide clinical benefits. Another point I'll mention just before we break into questions and then if we have time remaining, we can provide some broader operational updates as well. But it's important to note that Microbix has made urokinase in-house. We know how to do this. So -- but what we need is a partner that has all of the current licenses for drug production and also has a facility that is not like our facility is dedicated to growing human pathogens because we certainly would never expect to produce a human pharmaceutical in the same facility where we grow. However, safely, we do it different human pathogens that's just not done. And consequently, the fastest route to market rather than building or commissioning a new facility in our own right in the near term is working with contractors that already have validated sites, and that's why we're doing it. Not because we have to, but because it provides greater speed to get back to market with the product.

And we'll be working closely with Sequel going forward. And if we -- as we look to address new geographies and new bigger clinical indications, we may get more and more involved. We will be providing technical consultation to Sequel in our collaboration going forward. And there's lots of opportunities for us to part take in that as well.

Yes. It's certainly not, Ken is quite right. It's certainly not the question that as supply needs to scale beyond the catheter clearance indication that we might not become directly involved or even more directly involved in that respect. But again, respecting the requirements for investment and cash flow, we're committed to profitable growth, and that's a model we'll respect going forward. So with that, Deborah, maybe we can ask you to moderate some questions with regards to Kinlytic and see how our time management goes for broader updates as well.

For sure. So I had one question from the audience, which was why would bringing Kinlytic back for both catheter clearance and pulmonary embolism be so much more expensive if they're both approved clinical indications and it's only a manufacturing approval that needs to be addressed?

The scale of dosage is vast is the greatest difference there. It's a vastly different dosage for catheter clearance is a very small dose on the order of 5,000 to 10,000 international units of Kinlytic, whereas treating a pulmonary embolism can be as many as 10 vials of each of 250,000 international units of product. So literally 50 hundreds of times as much drug substance to treat blood clots. So consequently, the investment in manufacturing is larger. The other and the reason why we would look at that, we are only tweaking the manufacturing process now for the catheter clearance indication. But we would look to do a broader modernization of that manufacturing process to reduce the capital cost and improve the finesse of the manufacturing controls upon reintroducing pulmonary embolism. So the tip of the spear is catheter clearance and it can be broadened out much more effectively once in-dated product is back in the market and can be used for comparability purposes, if we're making greater changes to the process. I hope that's clear.

Yes. That's clear to me. Can you break down the time line for sBLA submission approval, choice of CMO and then milestones to actual sales of the product?

Wow, okay, that's probably more time than we have today to break that down. But broadly speaking, we're looking at about a 3-year time line, 2.5- to 3-year time line to the sBLA filing. And then it will be a question, of course, of how quickly that's reviewed and then to -- for the product to be in the market. So depending on what you use as the finish line for the process, whether it's the filing or approval, you're looking at around 3 years.

Okay. I've got 2 questions that are similar. So I'm going to go with the longer format. So bear with me, Cameron. In the face of the significance of future cash flows needed to be paid by Sequel to Microbix and given the fact that execution risk keeps declining, what are you doing to prevent them or others from buying the whole company on the cheap?

Great question. And this is one of the reasons I'm here at investor conference is not that we are issuing shares or needing to raise new capital, but it's building awareness with investors of just what a gem we certainly feel Microbix is. If our shares continue to persist at a very low valuation, I think that's a very real risk for our shareholders that somebody buys Microbix out at a large premium but still relatively on the cheap and potentially the finance before we see the full benefit of this. But I know there are analysts and investors on this call that will be looking and considering, well, what is the value of Microbix at $0.30, what am I buying? And how does this compare with other investment opportunities. So hopefully, we see more eyes on the ball looking at Microbix and making their own recent evaluations of what is the value of our company. And we'll continue to do our best to showcase reality of what we're doing. It's not my style nor is it the style of our management team or our Board to jump around and do a lot of arm waving of promotion. We don't do that, but we certainly hope we're articulate and accurate in describing what we're really doing. And that's how we'll continue to approach it.

Okay. And I have something that's not so much a question, is a comment, which is the second part of this question, which is taking the lower end of your projections for Kinlytic royalties of USD 15 million to USD 25 million, so payments of $15 million, which doesn't account for any growth opportunity opportunities starting in 5 years from now discounted at 10% is worth almost USD 95 million today. This equals almost 4x your current EV alone. You don't have to comment on that. I just wanted to get that in there. My best calculations similar to what you modeled internally.

I'll defer.

Yes. Absolutely. We're well aware of that. It's very annoying.

We're well aware of it. Yes, we're in the process of our audit for -- and putting the asset back in even though it's -- it's obvious that the asset has more value than the CAD 3.1 million. I still have to put together a financial model to justify the asset. And yes, I'm using similar numbers, let's just say.

Okay. Great. I don't see any other questions related to Kinlytic. Do you think we could answer some questions about the company? Did you want to talk for a bit Cameron or just jump in for more questions?

Maybe I'll speak for a bit then and we can talk about some of the operational matters. And certainly, Jim and Ken, maybe if either of you want to weigh in when I've sort of set the table before we jump to questions, absolutely. Broadly speaking, we're continuing to execute on what we said we'd do, very similar to advancing Kinlytic if it was possible in a way that did not pull capital away from Microbix but rather brought big incremental capital in, which is what we've done. So what we're seeing on the diagnostics side of our business is some very good successes. We have looked at our controls business, our QAPs business as a growth area for the company. And we've grown that as investors have seen from $1 million a year business in the proficiency testing and accreditation segment up to $5 million per year in -- over the past couple of years, and how we're breaking that out to higher levels. We've created some very unique products in the areas, for example, in lab-based -- clinical lab -- laboratory-based testing for human papillomavirus. It's been spoken about for decades that we have to move from the 1950s pathology looking for cancer cells on slides to using molecular diagnostic PCR technics to actually look for the viruses that cause those cancers. With that commercialization, that rollout of PCR-based cervical cancer screening has been held back by the lack of controls to validate the assays for the 14 subtypes of HPV that drive cancer formation. And by Microbix using our expertise and technologies to create this, we're now unlocking that potential for partners. And you've seen -- the Netherlands a leader in the European rollout of molecular cervical cancer screening using Microbix controls in conjunction with the Becton Dickinson assays in their core instrument. We've seen now Ireland using Roche cobas system, similarly adopting Microbix HPV controls. We're seeing partnerships such as we announced recently with Ulisse Biomed out of Italy adopting our controls. So we have companies either referencing our controls to be used alongside their systems or purchasing directly. And that's in the lab-based side of things. And each one of those new installs of instruments becomes a -- as those labs say, what am I going to do for my ongoing quality control needs. Those become annuity customers for Microbix. So these are building it step-by-step, brick-by-brick, but each of these becomes significant in tens of thousands, we believe, tens of thousands of dollars of product reorder per year per site. So again, building forward. On the point-of-care side, this is another important area for us and an area where the sales are more often directly to the diagnostic test makers rather than to the customers of the diagnostic test makers. There, we've made some good success as well in providing the in-kit control. So when there's a little toaster sized PCR test instrument takes cartridges that can run a PCR test in a nonlab setting such as a neighborhood clinic, a school, a nursing home, a cruise ship, a mine site, all of these sort of nontraditional pharmacies, all of these nontraditional areas. The FDA has said, listen, if you're a neighborhood pharmacy, you don't have a clinical lab director trained in there that's going to know what the calibration of this instrument is and your people are not being necessarily trained as thoroughly or retrained or tested the same way as a clinical lab. So how are we going to know if an instrument is breaking down or process is breaking down. And they've determined the only way that, that can be done is that every box of cartridges has a known positive control in there and the instructions every time you open a box of tests, take a cartridge at random in a box of 20 or 25, take a known positive the Microbix control, run a cartridge, make sure everything is working properly, then you can proceed to use the rest of the box. And that ties off a systemic error that can never persist more than a single box of cartridges before it's going to be caught and that's very important. So Microbix is providing the controls to go into those boxes of cartridges. And we announced in August 2022, we announced an alliance with a partner that understandably didn't want its name disclosed at that time, but it since opened up to that, the firm called QuidelOrtho, which is NASDAQ listed and the number -- about #5, fifth largest diagnostics firm in the world, I think the latest statistics are, and we are supporting the controls for all of their point-of-care molecular diagnostic tests. And they have had long delays in the FDA approval, which meant that we had delays in realizing those revenues, but we were able with their concurrence to announce in September the first set of orders from them that broke the 7-figure mark, which was a milestone for our company. And we're working with other firms as well in this area to advance the point of care side. So between our work in the clinical lab, with clinical laboratory based medicine and diagnostics and our working point-of-care-based diagnostics you see where that growth is coming. And some of it is more incremental growth. Some of it is more of a step function but all of these are driving revenue growth in our Diagnostics and controls business. And then we have, of course, our long-standing ingredients business, test ingredients, our antigens business, and we've seen a very big resumption of demand as COVID has -- we've exited sort of an acute phase of pandemic, and we're seeing the broader menu of clinical lab tests being used, being administered more frequently and demand has come back quite strongly in that side of our business as well. So our general outlook for revenues in 20 -- fiscal 2024, certainly, we're well into new records in terms of the annual revenues that we expect to be generating. And the profitability, we continue to look at how we optimize margins. And certainly, as our run sizes and some of our controls production increase, we reduce the relative weight of the setup, take down line clearance costs when you're doing manufacturing on a pilot level or a batch validation level is not the same as longer fully commercial production runs. So we do see that having a positive benefit. Jim and Ken, what would you want to supplement call out?

Just on -- go ahead, Ken.

I was going to say that the scale of the opportunity down the line and currently has been articulated by Cameron. And the group has heard me talk a lot about capacity building, both in terms of intellectual capital, personnel and also building out capabilities, new labs and building 3 is being built right now. Because we understand that we need to service this market as it advances. Where we can't legislate for the FDA and how QuidelOrtho or anybody else interacts with them, they're obviously very good at their job, but that we can't deal with that. What we have to be ready to do is supply those customers when they're ready to go, which is imminently. So we've been building a whole lot of capabilities along that lines. As disclosed and it's ready to go right now so we can meet that opportunity as it continues to advance to that. And the other thing we've been doing, I think that you're well aware of is upgrading our quality management system, the master control platform, which in itself is a description of the seriousness of the company. This is the type of technology that big companies look for companies like ours to have because it's a description of our scale and our scalability and seriousness of our quality management system. So that's what we've been doing in capacity building in the background and we're well set up to basically to meet the demand as it continues to grow in the next couple of years.

My comment was in support of what Cameron was saying about next year is our backlog today is its highest level ever. And so we're entering 2024 with good portion of our revenue projections already in the form of orders.

Yes. No, great points. And these systems investments that we've made and disclosed such as master control and digitizing our quality management system and NetSuite upgrading our enterprise resource planning software. All of these are things that are in our judgment required steps to be able to support a much larger scale of business and expected steps, quite frankly, from major customers that are going to rely on Microbix as a critical sole source supplier -- need to see and expect to see that we will have these -- the appropriate systems in place, the people, the access to capital, the equipment, all of these things and all of the accreditations, of course, whether there's our ISO 1345 that we continue to recertify successfully our MDEL with Health Canada. Our work to move to the heightened level of compliance moving from the IVD direct -- IVDD regulations in Europe to the IVDR regulations in Europe, that's something that's well in process as well.

Yes. By way of example, we've just been audited by Health Canada, and it wasn't a problem in this particular space. We've been building a QC and development laboratories, manufacturing spaces to build capacity, and we have the excellent team in place to address the needs going forward.

Yes. And exciting, really exciting opportunities for us. Kinlytic is fantastic and it's a great way to employ the expertise we have in cell culture and manufacturing and being able to do this and bring it back, and of course, some of the business work that we've done as well and we'll continue to do. And also capitalizing on the exciting developments in clinical medicine in the diagnostic space. Innovations that we see, whether it's HPV moving to molecular testing, the point-of-care innovations looking at multiplex testing where you don't just look -- could it be a single -- which pathogen it is and we'll test one and then maybe we'll test another later on that you can look for a whole panel of pathogens with one test isn't that great and then make the clinical decisions there. And likewise, in the bacterial space to be able to even look at antimicrobial resistance profiling immediately inform decisions about what antibiotic to prescribe or not with -- on the basis of certain knowledge rather than guess work or statistical probabilities. So these are all the sorts of things that we're supporting companies with, companies at the leading edge and we're delighted to do that. And in a way that it's not binary outcome situations, but high probability of success for Microbix and for Microbix shareholders.

Got a few questions on the NCIB. Maybe you could provide an update there.

Sure. We had an NCIB in place as the shareholders know -- and the NCIB was operating satisfactorily on a daily basis, but the investment dealer running or previously running our NCIB had a reluctance to transact in blocks of shares unless they were -- their firm was represented on both sides of that trade. And that was a very unusual perspective, certainly in our view. I've not heard it from any other investment dealers and it prevented us from being as active as we wanted to be and we might have otherwise been in the NCIB. We did buy back 2% of our shares outstanding over the past 12 months. which was the sort of minimum threshold of the NCIB. We wanted to have at least to offset the issuance of options through the stock option plan but to buy back even more. So we did make the decision to switch investment dealers to one that didn't have that perspective and constrained and that process is ongoing. But with all of the other things we have ongoing, unfortunately, we didn't quite line up that there was not a gap in the NCIB performance. And certainly, with -- as we've gotten NetSuite up and running and got Kinlytic over the line and a whole bunch of mission-critical things. We're looking to bring that back online. And Jim is even reminding me that I have some forms to sign that in relation to the NCIB that will help bring it over the line, and we'll be back active in the marketplace, hopefully towards the end of this month or a few weeks after.

What do you plan to do with the cash that you've got? You've got quite a significant cash balance now. Are you going to increase the NCIB? Do you have other uses of capital?

Certainly, we continue to have -- we continue to commit capital to enhancing our capacity and capabilities as Ken and Jim have outlined, but we are generating more cash than we're consuming and certainly getting another couple of million bucks US in the door doesn't hurt either. But to address the question, I think we'll be more active in the NCIB. But there is a value to having cash on the balance sheet. As large international companies look at us and say, gosh, are we going to -- are we going to give Microbix or award Microbix business that is critical to us, we have unique capabilities. Yes, but somebody always looks and has to look at the other side of the table and say, is this secure? If I'm making this a critical component, and I'm out of business if Microbix doesn't deliver, they want to see a certain amount of cash on the balance sheet. So loosely speaking, I'd like to see our cash stay at probably at the $10 million-plus mark on a general basis, not that there's any particular magic in that number but just as a ballpark guidance. And then if we were to look at any very small acquisitions perhaps we let that go as low as 5 on that basis. But right now with where our currency is, I certainly don't see us using shares to transact in anything unless we see some real upward revaluation in our stock price.

That was the next question about M&A. So you've already beat me to at Cameron.

Okay thanks.

And I've got some questions going back to Kinlytic. So I think we should switch gears and go back to what the intention of the call was to discuss. So -- you had previously mentioned both Canada and the EU as geographic expansions for catheter clearance indications. Are you still thinking Canada will happen in parallel with the U.S. and that EU approval can happen on accelerated pathway? And is -- and to that -- I was going to say is the EU opportunity is similar in size to the U.S. and what about Asia?

Okay. Let me unwrap that a little bit. Certainly, Canada does have historic approvals for, as we've described for catheter clearance and pulmonary embolism. We have not engaged with Health Canada on this matter as we felt that the project needed to sink or swim on the basis of U.S. potential. So we do need to now start to engage with Health Canada and validate that their perspectives are similar to that, those of the FDA. If that is confirmed, then indeed candidate reintroduction could happen on a similar time line, I can't say perfectly parallel or handicap the speed of the regulators. But that would be potentially true. In Europe, it's a bit different. Kinlytic urokinase was never approved per se in Europe. There are -- there have been in some European countries different form of your urokinase approved that was historically extracted from human urine, pooled human urine from prisoners or soldiers and urokinase purified out of that, if you can call it purified, I guess. But it's a completely different product from a molecular weight point of view. But there was no cell culture-derived low molecular weight, high purity urokinase available in Europe. So that means a slightly different regulatory pathway to come through in Europe, and we're still elucidating that we have had outreach from the European Medicines Agency to Microbix saying, "Hey, don't forget about us. If you're bringing your urokinase back, you bring Kinlytic back we want to be -- we want to engage with you and see if it can be done in parallel with the United States pathway while respecting European regulations. So I think it's a wonderful thing to get a cold call from the regulator saying, "Hey, don't forget about us, please engage with us, and we'll be undertaking that engagement. But again, we're still clarifying a little bit pathways for Canada and for the EU, and I don't want to overstate what we can do there, but it's definitely on our radar. It's on Sequel's radar, and we understand the potentials. In Canada, marketwise, Canada would be the typical math of roughly 1/10 the market size in the U.S. And in Europe, it would be a similar market size in the U.S. We'd have to look at relative whether there's any -- to the extent which pricing in Canada and Europe might be somewhat lower than U.S. pricing as is typical in the drug industry, but we have to do those analyses as well.

And Asia?

Asia, I've had calls to me from companies in Asia, inquiring about the availability of urokinase for Asia. So definitely a need in those markets as well. Regulatory pathways, I couldn't begin to speak to it. Ken, any further comments if I misspoken at all there or...

No, no, that's right. And it was very interesting that we got the outreach from the European regulators. I mean, what we all know is that post COVID and with an aging population, generally blood clots are more of a thing. And there's only one meaningful incumbent in the marketplace, and that's where with Genentech's TPA in various different forms of that in different presentations. And they've already had some issues with regards to supply and the market is growing. So there's clearly a pull for what we're trying to achieve here. But that just means that people are motivated to get us through the process. That doesn't mean anybody is going to circumvent anything, but it means the pathway is pretty clear and it's worth pursuing. There are definitely opportunities in Europe as well because again, the only game in town is TPA. And if that game is gone, then there's nothing. So we should -- we're pursuing that with all with Sequel and the VC backers.

Great. Another question here. Given the time lines to market described here -- sorry, let me start over. Given the time lines to market described here, how is the state of play and need for the product likely to possibly evolve to facilitate earlier approval than the time line being worked to. So any possibility to fast track?

Yes, we certainly are looking at that. I think it gets a little bit into commercially sensitive matters as to describe precisely how that might occur. But certainly, that's been evaluated and that could potentially shave a year off the process, but it's not something that I commit to as a primary route at this stage.

Well, with the market pull we just discussed there's very little danger it elongating, put it that way.

Yes. Great point.

Can you summarize previous breakdown on the U.S. catheter clearance market? What percentage of that market you're expecting to capture and the opportunities? We already discussed geographies. Other indications, I think we've covered some of those. And any color on the FDA meeting held this week?

That's -- sorry, let me just clarify that misconception. There was no FDA meeting held this week. Interactions with the FDA have been ongoing between May and now. The trigger point for our disclosure was the receipt of the funds as the best possible confirmation of the go ahead of our partner. So just to clarify that. With respect to -- what was the other part of the question?

So the first -- I think we just deal with the first part. So previous breakdown on U.S. catheter clearance market and what percentage you're expected to capture?

The U.S. catheter clearance market is split largely into 2 major segments. One is the hospital-based usage which is people that have an indwelling catheter that becomes blocked off the central venous catheter for administering a biologic therapy, chemotherapy, sometimes parenteral intravenous nutrition, et cetera, those catheters getting blocked from blood clots that are then treated in the hospital setting where Kinlytic would be infused into the catheter left for up to 90 minutes and then the nurse practitioner will see if the clot can be drawn out of the catheter safely, if it's dissolved enough to be able to safely remove that blockage. So that's the hospital-based usage. The other major usage is in dialysis clinics where patients undergoing intravenous dialysis will have a lock, long-term and dwelling dialysis lock that is put on that can also become blocked and then it would be practitioners in the dialysis clinics seeing with an installation of Kinlytic can the clot be safely drawn out. And those are the 2 major segments of the U.S. market. And the latest data we have is it's about the reported usage. And again, only the incumbent knows exactly what its sales numbers are, but the numbers that are reported to the tracking organizations that provide market research data is around a $375 million reported sales number. We've used $350 million in our disclosures but that may be understated by as much as a third on the recent belief of professionals in the industry who say that hospitals and dialysis clinics aren't the best reporting their usage numbers into that system so that it may be significantly understated. And we'd be looking to get about 1/3 of the dollar value of that market with a blend of unit numbers and pricing, but that would be something that we could reasonably penetrate and that market has been growing on a percentage basis year-by-year.

Right. That wraps up the questions, I think that's a pretty thorough overview. Is there anything that you wanted to express today or discuss that we didn't get around to?

Well, I think for shareholders, what we've got is a very strong company. We have -- I would represent a great team, and you're just seeing a small portion of it on the call today. So we've got a great team of professionals working hard every day at building value. We're doing it on a highly professional basis within our company, locking in huge industry partners, whether it's private equity backers and companies like Sequel. Whether it's major international diagnostics companies recommending Microbix products or purchasing them directly. All of these are great things that are driven by the innovation in product creation, manufacturing of unique products and creating that value-added proprietary opportunities. And we've got a very strong balance sheet position and financial position as well to continue to move the company forward on this basis. And we remain committed to building real lasting value within Microbix and I hope Kinlytic is further -- the Kinlytic achievement that we've announced is further evidence of the very strategic and measured approach that we take to doing it and creating that real value for shareholders. So Jim and Ken, anything you'd want to conclude with.

No, I don't think -- I haven't got anything else, Cameron. You've -- I think we've covered things off fairly well in terms of Kinlytic and the excitement that we have around Kinlytic and the rest of our business.

Just to your point Cameron, we're a very real company. That's what we see we're going to do. We're a manufacturing group and a developer proprietary technology, we have a great team to do that. We're not a blue sky and hand waving, we actually make stuff and deliver what we say we're going to do.

Yes. That's a great way to end it off. And I just want to thank everybody on the call today for your support of our company and the trust you place in us, and I'd also like to thank everyone on the Microbix team and that includes you, Deborah. But everybody on the Microbix team for all the great work that they're doing every day to make these things happen, and we're just -- we're not the lion, we're just called to make the roars. So thank you so much.

Yes. Thanks, everyone, for participating. Thanks to the management team for the update. If anyone has any additional questions or wants a one-on-one call, just feel free to reach out, and I can get that arranged for you. And yes, it's Friday. So have a good weekend, everyone.

We'll be working.

Indeed. Take care guys.

Thanks everyone.

Okay. Take care.