Neovasc has announced that it has amended its agreement with LeMaitre Vascular to allow LeMaitre to exercise its option to purchase certain specific rights to Neovasc’s biological vascular surgical patch product technology on an accelerated basis, at an agreed price of US$4.6 million.
Under the terms of the original January 2009 agreement, LeMaitre Vascular had the option to purchase rights to certain specific uses of the technology from Neovasc on or after 2 January 2014, under a predetermined price mechanism. The new amendment allows LeMaitre to exercise its technology acquisition option 15 months early. LeMaitre has agreed to complete customary due diligence, and upon successful completion of this due diligence, the parties will close the transaction on or before 31 October 2012. Under the terms of the amended agreement, Neovasc will receive US$4.255 million on closing, with the balance payable one year later.
After the technology transfer, Lemaitre’s right of use of the Neovasc biological vascular surgical patch technology will be limited to the manufacture of its Xenosuresurgical patch product line, which is currently manufactured by Neovasc and distributed by LeMaitre. Neovasc will retain rights to all other applications of its biological tissue technologies. In addition to and concurrent with this amended agreement, the companies entered into a new supply agreement under which Neovasc will continue to supply the Xenosure product to Lemaitre while Lemaitre develops its own manufacturing capacity and obtains required regulatory approvals.
“This amended agreement with LeMaitre for the early purchase of rights to use our biological vascular surgical patch technology for manufacturing the Xenosure product is a good deal for both companies,” said Alexei Marko, CEO of Neovasc. “The US$4.6 million in proceeds from this transaction will enable us to continue aggressively advancing our two promising pipeline projects, without the need for additional financing in 2013. We look forward to presenting data on both our Tiara transcatheter mitral valve and our Reducer product for refractory angina at TCT 2012 later this month.”
“The transfer of Xenosure patch manufacture to LeMaitre will allow Neovasc to continue to increase the focus of our biological products division on the supply of specialised tissue and manufacturing services to the transcatheter heart valve industry and other high margin applications. We anticipate that the capacity that is freed up as we wind down our production for Lemaitre will be absorbed by our increasing activities in these high growth areas, and we look forward to continued revenue growth in 2013.”
The XenoSure Biologic Vascular Patch distributed by LeMaitre is a high quality bovine pericardium patch used for precision endarterectomy and vascular reconstruction. Using the same tissue technology developed for heart valves, the patch is exceptionally strong, uniform and easy to handle and suture.
“We are pleased to have entered into this amended option agreement with Neovasc” commented David Roberts, president of LeMaitre Vascular. “The Xenosure product has been a very successful addition to the LeMaitre product portfolio, and we welcome the opportunity to move its manufacture in-house.”