Pathfinder Partners' Fund: Microbix Biosystems Inc.

Michael Rudd, CFA | President, CEO and Portfolio Manager

Jared Fehr | Analyst

We continue our discussion of individual companies in our mandates. Given all the geopolitics as of late, we have been writing about “macro” which refers to broad themes, theses or data points that describe something in aggregate. While the macro situation impacts all companies, it is investments in individual businesses (i.e. the micro) that actually make up the portfolios at Pathfinder. Macro is stubbornly difficult to predict on a consistent basis, but we all pay attention to it as part of the investment process. However, focusing on a specific company that we can invest in can provide an opportunity for us to get an “edge”, either through better information or adopting an investment thesis that other investors do not value in the same way. For example, there are companies who have actually seen accelerated demand for their products as a result of the pandemic, Microbix Biosystems is one of those companies.

  • Microbix Biosystems Inc. (TSX:MBX) develops and sells biological and technology solutions – including diagnostic products for various pathogens (viruses, bacteria) and quality assessment and proficiency testing products (QAPs). When coronavirus was emerging as a global threat, MBX predicted the inherent need for the world to have access to accurate testing and quality control products. This need is especially acute, given that companies with minimal to no commercial experience have been given expedited regulatory approval to develop tests.
  • Along with Microbix, we recognized early on the near and long-term growth potential of this segment beyond COVID-19 and added to our position in MBX. Since our add, MBX has developed their COVID-19 QAPs and it has been approved by the FDA, Health Canada and Europe (CE), and signed distribution agreements in 22 countries including most of Europe, the USA, and New Zealand.  While COVID-19 QAP’s were the catalyst to launch the segment, the emerging QAPs business and distribution markets will see Microbix’s full suite of additional products (HPV, Influenza, Rotavirus, and more).  The world is now very aware of the consequences of inaccurate testing and the share price of MBX has positively responded.

“This means that” throughout Q1-2020 we found opportunities to increase our position in MBX and support a Canadian company developing products with the potential to improve the quality of health care provided across the globe and beyond the COVID-19 pandemic.

Pathfinder Asset Management Ltd. | Equally Invested™
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Sources: Pathfinder Asset Management Limited

National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit for full disclosures.

*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Pathfinder Real Fund are presented based on the masters series of each fund. The Pathfinder North American Equity Portfolio and The Pathfinder North American Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder North American Equity Portfolio (January 2011), Pathfinder North American High-Income Portfolio (October 2012) Pathfinder Partners’ Fund (April 2011), Pathfinder Real Fund (April, 2013), and Pathfinder International Fund (November 2014).

Pathfinder Asset Management Limited (PAML) and its affiliates may collectively beneficially own in excess of 10% of one or more classes of the issued and outstanding equity securities mentioned in this newsletter. This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor PAML can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your portfolio manager, who can assess all relevant particulars of any proposed investment or transaction. PAML and the author accept no liability of any kind whatsoever or any damages or losses incurred by you as a result of reliance upon or use of this publication.