Microbix, a developerof a patented technology that doubles the output of influenza vaccineproduction, announced today it has signed a joint venture agreement with theHunan Biopharmaceutical Co. Ltd. (a Hunan Province state-owned enterprise) forinitial financing to construct Asia's largest influenza vaccine productionfacility and the third largest vaccine plant in the world. The agreement forms an equal partnership joint venture to build andoperate a $200-million facility, located in Changsha National Biomedical Parknear Changsha City, the capital of Hunan Province, which will have thecapacity to produce more than 100 million doses of seasonal influenza vaccineannually, and up to 300 million doses of a pandemic influenza vaccine in theevent of an outbreak to immunize against a single strain of influenza. The facility, for which construction will begin in early 2010 and be fullyoperational by 2013, will be designed around Microbix VIRUSMAX(TM) vaccinetechnology. More than five years in development at Microbix, VIRUSMAX isdesigned to increase influenza vaccine yields and has demonstrated an averageyield increase of two-fold over current production methods. William J. Gastle, Microbix Chairman and CEO, said, "We're pleased thatour innovative VIRUSMAX influenza vaccine technology will contributesignificantly to seasonal and pandemic influenza preparedness in the future."This facility will make China a leader in the production of flu vaccine.Microbix will play a major role in meeting the public health needs in Chinawhere, due to limited vaccine production capacity, only two percent of thepopulation is immunized against flu, while the World Health Organizationrecommends that countries have the capacity to vaccinate at least 60 percentof their populations. Gastle added, "This facility will make China an important source ofinfluenza vaccine in the Asia region as well as offering significant capacityfor the Chinese market which is growing significantly. In five years, theChina market is expected to demand up to 500 million influenza vaccine dosesannually." The Microbix-Hunan project brings government ownership into the globalvaccine industry at a technological level not previously achieved in China. Asubstantial investment is being made by Hunan in transferring the land to thejoint venture and building the facility through the first phase of financing.As the project progresses, Hunan has agreed to provide additional fundingthrough debt and has guaranteed the purchase of 100 million influenza vaccinedoses. On all vaccine produced at the facility, Microbix will receive royaltypayments and hold exclusive marketing rights outside of China. The quality of the vaccine manufactured at the Microbix-Hunan facilitywill enable it to seek approval by the U.S. Food and Drug Administration andEuropean Medicines Agency. Mr. He Jihua, Deputy Mayor of Changsha Municipal Government, said, "Webelieve we have ensured the success of this important public health initiativeby choosing Microbix as our partner. They bring expertise in developingvaccine and virology technologies, manufacturing and product distribution. Theestablished collaboration that Microbix holds with world class biomedical andpublic health organizations will be invaluable." He also said that "the cooperation between the two countries, Canada andChina, and the two companies, Microbix and Hunan Biopharmaceutical in buildingthis vaccine facility will bring greater vaccine capacity and improved healthto China and other regions worldwide."