Admedus (ASX:AHZ) dealt its biologic patch business to LeMaitre Vascular (NSDQ:LMAT) in a deal worth up to $24.6 million to focus on the transcatheter aortic valve replacement market.

The A$36.2 million buyout of the CardioCel and VascuCel patches called for LeMaitre to put up $14.2 million up front, with another $1.4 million due in a pair of post-closing payments next year and at three years, plus $7.6 million in potential milestones, Burlington, Mass.-based LeMaitre said. Admedus, which is based in Brisbane, Australia, agreed to keep making the patches for up to three years while LeMaitre spools up its own manufacturing operation here. CardioCel and VascuCel put up sales of $7.1 million last year.

“This transaction is a transformational milestone for Admedus, realizing 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,” CEO Wayne Paterson said in prepared remarks. “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. LeMaitre’s sales infrastructure and scale will propel the clinical credibility and brand profile Admedus has already established for CardioCel and VascuCel. We anticipate LeMaitre’s channel will successfully expand the adoption of these products.”

“We are pleased to add this next-generation biologic patch to our product offerings and to build on the success of our largest product line, XenoSure,” added LeMaitre president Dave Roberts.

Paterson said first-in-human studies of the  single-piece 3D aortic valve component of its TAVR device are planned for next year.

Here’s how the companies structured their deal:

• $15.5 million (A$22.8 million) up front;
• $680,000 (A$1.0 million) 12 months after closing;
• $680,000 (A$1.0 million) 36 months after closing;
• $2.0 million (A$3.0 million) after achieving EU MDR approvals;
• $476,000 (A$0.7 million) after completion of testing & documentation extending shelf life from 36 months to at least 60 months;
• Up to $2.5 million (A$3.7 million) if CardioCel and VascuCel sales exceed $20.3 million (A$29.8 million) or $1.2 million (A$1.8 million) if sales exceed $15.2 (A$22.4 million) in the first 12 months;
• Up to $2.5 million (A$3.73 million) if sales exceed $30.4 million (A$44.7 million) or $1.2 million (A$1.8 million) if sales exceed $22.8 million (A$33.5 million) in the second 12 months;
• $136,000 (A$200,000) after completion of reporting procedures by Oct. 31.

($1 = A$1.471)