* JV with Hunan on hold pending contract renegotiation
* To return investors’ funds till renegotiations are over
* Says has involved various levels of govt to facilitate talks
* Says negotiations can take considerable time (Follows alerts)
June 27 (Reuters) - Microbix Biosystems said it was renegotiating terms of a joint venture it formed with Hunan Biopharmaceutical to manufacture influenza vaccines, sending shares of the Canadian biotech company down about 15 percent on Monday.
In 2008, Microbix had formed a 50:50 joint venture with China’s state-owned Hunan to build and operate the world’s third-largest vaccine facility. The Toronto-based company had formed a subsidiary -- Crucible International Biotechnologies -- to facilitate Phase 1 of the JV.
In January, Microbix said it closed Phase I financing for Crucible and began implementing the legal structure for the JV.
On Monday it said both companies had to sign some amendments to the original deal, but there was an impasse with Hunan.
Microbix said it has involved different levels of government to facilitate the talks.
The company, which expects the talks to take time, said it would stop project activity and return to investors the funds placed in Crucible until renegotiations were over.
Microbix shares were trading at 33 Canadian cents on Monday morning on the Toronto Exchange. (Reporting by Swetha Gopinath in Bangalore; Editing by Joyjeet Das)