Through the partnership, MicroPort will manufacture certain components for Lombard’s Aorfix and Altura product lines at its Shanghai facilities, slated to begin in the 2nd half of this year.
“This strategic partnership begins to establish the foundation for improved gross margins for Lombard by significantly reducing the manufacturing costs of both Aorfix and Altura devices which, in turn, will allow Lombard to be competitive in all of our markets. Moreover, given MicroPort’s exceptional market reach, we have laid the groundwork for the Lombard products to enter the fast-growing China endovascular market,” Lombard CEO Simon Hubbert said in a prepared statement.
MicroPort will gain exclusive marketing rights for the Lombard product portfolio in China and Brazil, as well as maintaining a technology license to manufacture the devices for the Chinese market. The company is hoping to launch the Aorfix in the 2nd half of 2018, contingent on gaining approval from the China Food & Drug administration.
“Completing the agreements to the strategic partnership represents an important milestone achieved for both companies so that we can now focus our efforts on the regulatory and operational steps necessary to launch these exciting products in China. We have already been working collaboratively to generate manufacturing synergies and to improve manufacturing efficiency, thereby benefitting the full range of stakeholders in our respective companies. We look forward to bringing the exciting potential of Aorfix and Altura devices to the China endovascular market,” MicroPort chair & CEO Dr. Zhaohua Chang said in a press release.
The deal was originally announced last December and included a $15 million investment from MicroPort.
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.
Last 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.