Lombard Medical and MicroPort announce strategic partnership and investment agreement

696

Lombard Medical and MicroPort Scientific Corporation have announced a strategic partnership and a significant infusion of capital into Lombard Medical by MicroPort. According to a company press release, this partnership will allow Lombard Medical to accelerate commercialisation in key global markets with its two key products: Aorfix, “the only stent graft to hold global approvals to treat abdominal aortic aneurysms with aortic neck angles up to 90 degrees”, and Altura, a “highly innovative stent graft that offers a simple and predictable treatment option for standard abdominal aortic aneurysm anatomy”.

The agreement provides MicroPort the exclusive marketing rights for Lombard Medical’s Aorfix and Altura stent graft product lines in China, as well as the right to a technology license to manufacture the products for the Chinese market. Lombard Medical and MicroPort will also enter into a component supply manufacturing agreement whereby MicroPort will manufacture certain components for the Aorfix and Altura product lines in its facilities in Shanghai. Lastly, MicroPort will also have exclusive marketing rights for both Altura and Aorfix in Brazil.

In exchange, MicroPort has invested US$15 million in a combination of Lombard Medical common stock and convertible debt. MicroPort purchased US$5 million in common stock at US$0.62 per share representing a 29% ownership stake in Lombard Medical based on common stock currently outstanding. MicroPort will have a pro rata purchase right on future equity offerings by Lombard Medical. In addition, MicroPort was issued a five-year US$10 million unsecured promissory note bearing interest at a rate of six-month LIBOR plus 4% from Lombard Medical which is convertible at any time prior to maturity by MicroPort into Lombard Medical common stock at a price of US$0.90 per share. Lombard Medical will also appoint two representatives of MicroPort to serve on its board of five non-executive directors.

Following the transaction, Lombard Medical will have 27,950,785 shares of common stock outstanding. Lombard Medical plans to use the proceeds of this investment for general corporate purposes.

“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 utilisation across Europe where Aorfix is well accepted and Altura is generating significant interest among clinicians,” Lombard Medical chief executive officer Simon Hubbert commented. “The agreements will also provide the infrastructure, regulatory support and capital for launching our technologies into the fast-growing Chinese endovascular market, where MicroPort has a strong track record for commercialising 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.”

MicroPort chairman and chief executive officer Zhaohua Chang stated, “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.”