Canadian biotech company Microbix Biosystems (Microbix Biosystems Stock Quote, Chart, News, Analysts, Financials TSX:MBX) has received a big target raise from iA Capital Markets analyst Chelsea Stellick on Wednesday after the analyst reviewed MBX\u2019s latest quarterly numbers. In a research report to clients, Stellick said further automation of its COVID-19 testing business makes up only a part of the company\u2019s compelling growth trajectory. Mississauga-based Microbix makes critical biological materials for the diagnostics industry including antigens for immunoassays and test quality assessment products (QAPs), and it also has a partnered asset in Kinlytic urokinase a clot-busting drug. Microbix on May 13 announced its second quarter fiscal 2021 results for the period ended March 31, 2021. The company\u2019s revenue was up 51 per cent year-over-year to a record $4.4 million, as sales of its QAPs rose 251 per cent to $1.5 million and accounted for 34 per cent of total sales, as the uptake of Microbix\u2019s COVID-19-related QAPs strengthened. Antigen revenue was up seven per cent year-over-year to $2.5 million. The company\u2019s new viral transport medium (VTM), branded DxTM, also contributed to the quarterly private-sector sales figures at $255,000. The company said it will keep growing sales over the rest of fiscal 2021 with expected positive results in net earnings, noting in particular the Province of Ontario\u2019s $4.3-million order for DxTM which will be delivered during the company\u2019s fiscal third and fourth quarters. \u201cFor the balance of fiscal 2021, Microbix will work to building sales across all of its three revenue-generating business lines, continue improving percentage gross margins and driving its bottom-line results. If Microbix achieves its budget targets, the company will generate meaningful net earnings for fiscal 2021. Additionally, work continues upon securing a partnership to advance its Kinlytic urokinase project,\u201d the company said in a press release. Microbix\u2019s share price had been flat for a number of years running up until this past September when it started climbing out of its $0.30 range and reached $0.60 by this past February. But Stellick sees much more upside, calling MBX a \u201cBuy\u201d (unchanged) with a 12-month target of $1.80 (previously $0.90). Stellick labelled MBX\u2019s fiscal Q2 a strong beat, with the $4.4-million topline beating the analyst\u2019s forecast of $3.8 million. Stellick noted the improved gross margin rising to 60 per cent due to growth in its QAP business, VTM sales, antigen sales and bioreactor production. Relatedly, MBX\u2019s operating expenses increased only by 17 per cent on the stronger Canadian dollar, Stellick said. \u201cMicrobix is gaining momentum with its efforts to support COVID-19 molecular testing already bearing fruit in QAPs and now in DxTM. MBX continues to execute, beating estimates and posting record revenue and net profit in Q2\/F21. MBX has a compelling growth trajectory, materially enhanced through automation and capacity expansion which is enabled by the recent equity raise. We have layered in the VTM segment based on well-justified optimism regarding MBX\u2019s broad-based growth and recent success, among other factors, and we increase our target price to $1.80\/share (previously $0.90\/share) according to our blended EV\/EBITDA and EV\/Revenue valuation,\u201d Stellick wrote. Microbix announced on Wednesday the closing of two private placements, one a bought deal offer of about 9.6 million shares at $0.60 per share for gross proceeds of $5.75 million including over-allotment and the other a non-brokered private placement of about 1.9 million share-and-half-a-warrant units for gross proceeds of $1.15 million including over-allotment. The company said the funds will go towards expanding capacity and automating production of VTM and QAPs, for digitizing quality control processes, upgrading and expanding facilities and developing new products and quality control testing. Stellick said MBX\u2019s currently high-flying VTM and QAP businesses likely won\u2019t be confined to the pandemic, however, arguing that diagnostic testing has long been overdue for an increased emphasis in healthcare systems worldwide, given its cost effectiveness and minimal budget impact. Moreover, COVID-19 has brought about large capital expenditures to scale diagnostic testing, with the increased molecular testing capacity to largely be maintained post-pandemic, Stellick said, as governments look to make use of their capacities for other tests. \u201cWe believe these fast-growing segments will continue to find demand post-pandemic as the testing capacity that has been built for COVID-19 is repurposed toward other diagnostic testing that will require QAPs and VTM. Therefore, we have added ongoing sales of VTM into the MBX valuation,\u201d Stellick wrote. After reassessing her forecast, Stellick is now calling for MBX to generate full fiscal 2021 revenue of $21.4 million (previously $18.3 million) and EBITDA of $5.6 million (previously $3.3 million). For fiscal 2022, she is estimating $35.5 million in revenue (previously $19.4 million) and $11.6 million in EBITDA (previously $3.4 million).