Admedus Ltd (ASX:AHZ) has made a "transformational" transaction by selling its CardioCel® and VascuCel® patch business to US-based LeMaitre Vascular Inc (NASDAQ:LMAT) for up to $A36.2 million in cash payments.
The sale includes an upfront payment of $A22.8 million plus two instalments of $A1 million each after 12 months and 36 months.
It also includes up to $A11.4 million on earn-out payments at the current $US0.67/$A1 rate, subject to achievement of certain milestones.
“Transformational milestone”
Chief executive officer Wayne Paterson said: “This transaction is a transformational milestone for Admedus, realising the value from its CardioCel® and VascuCel® products.
“Importantly the deal firmly positions the company for its next growth phase anchored by its ground-breaking TAVR program.
“This is what management set out to achieve for shareholders two years ago.
“The partnership strategy was possible only after we built a credible product profile over the past two years.
“We are pleased to transition CardioCel® and VascuCel® to LeMaitre, a bonafide leader in the cardiovascular space, and we anticipate Le Maitres channel will successfully expand the adoption of these products.”
Proprietary technology
The CardioCel® and VascuCel® products originated from the companys proprietary, regenerative bio-scaffold platform technology being used to address multiple cardiovascular procedures and repairs.
The CardioCel® product range is the only one to have achieved 10 years without calcification or degradation in man – a significant benefit to patients otherwise forced to undergo recurrent operations.
VascuCel® is used as a patch in great vessel repair, peripheral vascular reconstruction and suture line buttressing.
Earn-out payments
Under the agreement terms, the company may receive up to $11.4 million in earn-out payments as follows:
- 3 million on obtaining certain regulatory approvals under European Medical Devices Directorate Regulation;
- $700,000 on Admedus completing all testing and documentation to extend the shelf life of the CardioCel® and VascuCel® products from 36 months to at least 60 months in the United States;
- Up to $3.73 million if gross revenue from LeMaitre CardioCel® and VascuCel® product sales exceed $44.7 million in the second 12 months or $1.8 million if gross revenue from product sales exceed $33.5 million in the second 12 months; and
- $200,000 for completion of reporting procedures by October 31, 2019.
Paterson said: “The transaction provides a significant injection of non-dilutive capital and streamlines operations with cost reductions from a reduced headcount and operating expense."
ADAPT® IP retained
Admedus retains the entire IP portfolio for ADAPT®, enabling continuation of the product developmeRead More – Source
