Medigus Announces Extension Of Exclusive Distribution Agreement With Sinopharm In China
OMER, Israel, Jan. 15, 2015 - Medigus Ltd. (TASE: MDGS), a medical device company developing minimally invasive endosurgical tools and a leader in direct visualization technology, announced an extension of its 2013 agreement with Sinopharm (China National Pharmaceutical Group Corporation) which granted the Chinese pharmaceutical company exclusive rights to distribute the MUSE™ system in China. Sinopharm has been granted up to two years from the date of the extension of the agreement to gain all necessary regulatory approvals from the China Food and Drug Administration (CFDA). The agreement extends Sinopharm's exclusivity to distribute the MUSE system from two to four years following receipt of such regulatory approvals, and Sinopharm has also committed to purchasing a minimum of $17.6 million worth of MUSE and related products over the course of four years, from the date of CFDA approval.
Medigus will receive an upfront deposit of $350,000 towards initial purchase of MUSE systems, which will be returned by Medigus (less any amounts for products ordered) if the regulatory approval is not achieved during the timeframe specified in the agreement. The agreement also provides Sinopharm with the discretionary right to appoint Golden Grand Medical (Shanghai Golden Grand-Medical Instruments Ltd.), a Chinese company specializing in the distribution of medical devices, as its exclusive sub-distributor in China. Under the agreement, Golden will manage sales and customer service, marketing and training, and recording of clinical trials, following submittal of non-compete clauses and intellectual property protection, and other, similar restrictions, while Sinopharm remains solely responsible towards Medigus under the agreement.
"Effective, minimally invasive treatments that can positively improve the quality of life of GERD patients while also delivering cost savings to the health system is a growing need in this underserved market. This amended agreement reflects Sinopharm's belief in the commercial potential of the MUSE system and its ability to meet this need, as well as of its commitment to Medigus by quadrupling the value of the original contract and potentially the quantity of units ordered", said Chris Rowland, CEO of Medigus. "The selection of Golden, one of China's leading companies in compliance, marketing and commercialization of advanced medical devices, further strengthens that commitment. We are proud of this partnership, and look forward to further developing our presence in key markets like China, the U.S and Europe", he added.
China National Pharmaceutical Group Corporation, SINOPHARM, is the largest pharmaceutical and healthcare group under State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) in China. The group has 22 wholly-owned subsidiaries and holding companies, one H-share listed company, Sinopharm Group Co., Ltd., and three A-share listed companies, Beijing Tiantan Biological Products Corporation Limited (BTBP), China National Medicines Co., Ltd. (CNCM) and Shenzhen Accord Pharmaceutical Co., Ltd.. In 2009, the group's sale revenue had reached 65 billion Yuan. Among the 129 enterprises under SASAC, SINOPHARM is ranked 50th and 38th in terms of sales revenue and total profit respectively.