UPDATE 2-Microbix to build flu vaccine plant in China

(Adds details, updates stock price)

By Leah Schnurr

TORONTO, June 23 (Reuters) - Microbix Biosystems Inc (MBX.TO: Quote, Profile, Research, Stock Buzz) plans to build and operate a new influenza vaccine plant in China, which will be one of the largest facilities in the world, the Canadian biotechnology firm said on Monday.

The tiny Toronto-based company said its joint venture with the Hunan provincial government should be operational in 2013 and will be able to produce 100 million doses of flu vaccine a year, a huge boost to the world's current capacity of fewer than 500 million doses.

The C$200 million ($197 million) plant will be built in China's central Hunan province. The provincial government has committed C$100 million to the project and has committed to an initial 100 million doses. The remainder of the funding will be raised by Microbix through licensing partners.

The company will receive management fees during the design, development and commission of the project and will receive royalty payments on sales of the vaccine. Microbix also has exclusive marketing rights outside of China.

The amounts of the fees and royalties were undisclosed.

Phil Casselli, president of Microbix, said revenue from the venture, as well as any proceeds from licensing agreements, could help lift the company to profitability in the long run.

Microbix reported a net loss for fiscal 2007, hurt in part by higher costs.