Lombard Medical Technologies (NSDQ:EVAR) said today that China’s MicroPort Orthopedics invested $15 million as part of a partnership deal between the 2 companies.
Through the partnership, Lombard will seek to accelerate commercialization of its Aorfix and Altura stent grafts for treating abdominal aortic aneurysms. Microport will gain exclusive marketing rights for both products in China and Brazil, as well as a license to manufacture the products for the Chinese market.
As part of the deal, Microport and Lombard said they entered a component supply manufacturing deal, with Microport manufacturing components for the Altura and Aorfix at its Shanghai facilities.
“We are extremely pleased to be adding two highly differentiated products in Aorfix and Altura to our market-leading endovascular portfolio in both China and other emerging markets. We look forward to partnering with Lombard Medical to offer the premier portfolio of endovascular devices to treat patients requiring aortic artery aneurysm repair,” MicroPort chair & CEO Dr. Zhaohua Chang said in prepared remarks.
The $15 million investment came through a $5 million purchase of common stock at 62¢ per share, which represents a 29% ownership stake, as well as a 5-year, $10 million unsecured promissory note convertible prior to maturity at 90¢ per share. Two MicroPort reps will also join Lombard’s board of non-executive directors.
“The strategic partnership with MicroPort benefits all Lombard stakeholders, including physicians and their patients, our employees and, of course, our shareholders. The financing provides the necessary operating capital to fund our commercial and regulatory programs aimed at accelerating adoption and utilization across Europe where Aorfix is well accepted and Altura is generating significant interest among clinicians. The agreements will also provide the infrastructure, regulatory support and capital for launching our technologies into the fast-growing China endovascular market, where MicroPort has a strong track record for commercializing innovative vascular devices. In addition, we believe our planned component manufacturing collaboration will significantly reduce manufacturing costs and increase margins for both Aorfix and Altura product lines, which will ultimately improve our overall profitability,” Lombard CEO Simon Hubbert said in a press release.
In August, Lombard said it was bailing out of the U.S. market after receiving an FDA decision requiring a 50-patient clinical study of its Intelliflex low-profile delivery system for the Aorfix stent graft.
Lombard said it eliminated its U.S. sales force and moved most of its commercial operations to its U.K. facility, significantly reducing its cash burn.
Irvine, Calif.-based Lombard said it plans to focus exclusively on the European Union, Japan and other “key” international markets. The company in June won CE Mark approval in the European Union for the IntelliFlex device.
