Microbix Reports Wider Q2 2026 Loss as China Antigen Sales Drop Sharply
Microbix Reports Wider Q2 2026 Loss as China Antigen Sales Drop Sharply
Microbix Biosystems Inc. reported weaker financial results for the second quarter and first half of fiscal 2026, as a sharp decline in antigen sales to China weighed heavily on revenue, margins, and profitability.
The Canadian life sciences company said Q2 revenue fell to C$3.38 million, down 37% from C$5.32 million in the same quarter last year. The main reason was a major reduction in orders from its China distributor, which the company linked to lower respiratory disease testing demand and tighter access and reimbursement policies.
Q2 Revenue Falls 37%
Microbix’s antigen revenue dropped 40% year over year to C$2.58 million. Management said sales to the China distributor were lower by about C$2 million, creating the biggest drag on quarterly performance. However, antigen sales to customers outside that distributor rose 13%, showing that demand in other markets remained more stable.
Revenue from the company’s quality assessment products, known as QAPs, was C$620,593, down 28% from last year. Microbix said this decline was mainly related to shipment timing for some key customers, rather than a broad loss of demand. Royalty revenue improved to C$172,563, compared with C$143,012 a year earlier.
Margins Pressured by Lower Production Volume
Gross margin fell to 48% in Q2 2026, compared with 60% in Q2 2025. The company explained that lower product sales forced fixed manufacturing costs to be spread across fewer units, reducing efficiency and profitability.
As a result, Microbix recorded an operating and net loss of C$1.43 million for the quarter. In the same quarter last year, the company reported a small profit of C$20,664. Basic and diluted earnings per share were both negative C$0.010.
First-Half Results Also Decline
For the first six months of fiscal 2026, revenue was C$7.60 million, down 33% from C$11.37 million in the prior-year period. Antigen revenue for the first half dropped 45%, mainly because sales to the China distributor declined by more than C$4 million. Excluding that distributor, antigen sales increased 6%.
QAPs revenue for the first half was nearly flat at C$2.50 million, while royalty revenue rose to C$340,840. Even so, lower antigen revenue pushed first-half gross margin down to 44%, compared with 61% in the previous year.
Cash Position and Balance Sheet
Microbix ended the first half with C$8.13 million in cash, down from C$12.11 million at the end of September 2025. Total current assets stood at C$22.04 million, while total current liabilities were C$4.12 million. The company reported a current ratio of 5.35, suggesting it still has a solid short-term liquidity position.
Management Focuses on Recovery
Microbix said it is working to rebuild sales after two client-related setbacks in 2025. Management expects new client programs, expanded capabilities, and a broader product portfolio to support future growth. The company also said it remains focused on returning revenue above its break-even level.
The company’s business includes antigens for diagnostic tests, QAPs and reference materials for laboratory quality control, and the Kinlytic urokinase drug program. Microbix said its QAPs are available in more than 30 countries, while its antigens are used by about 100 diagnostics manufacturers.
Outlook
Although the Q2 report showed clear pressure from lower China-related sales, Microbix pointed to growth outside that distributor as a positive sign. The company’s near-term challenge is to replace lost revenue, improve production leverage, and protect margins while it adds new customers.
Investors will likely watch whether Microbix can turn its existing product base, global diagnostics relationships, and quality-control portfolio into stronger sales during the second half of fiscal 2026.
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