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--Vascular Device Leader LeMaitre to Purchase Rights to Manufacture XenoSure Surgical Patch for US $4.6M----Neovasc will Continue to Supply Product During Transition and Will Redirect Freed-Up Manufacturing Capacity to Support Growing Sales to Transcatheter Heart Valve Customers----Proceeds from the Sale of Rights Will Help Fund Neovasc's Key Development Projects--VANCOUVER,
Oct. 2, 2012 /PRNewswire/ - Neovasc Inc. (TSXV: NVC) today announced that it has amended its agreement with LeMaitre Vascular, Inc. (Nasdaq: LMAT) 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
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
January 2, 2014, under a predetermined price mechanism. The new amendment allows LeMaitre to exercise its technology acquisition option 14 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
October 31, 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 XenoSure
® surgical 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
$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
TM transcatheter mitral valve and our Reducer
TM product for refractory angina at TCT 2012 later this month."
Mr. Marko continued, "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 specialized 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."