Admedus Limited (ASX:AHZ) confirms that LeMaitre Vascular Inc (NASDAQ:LMAT) has placed an order for about 12,500 units of CardioCel® and VascuCel® patches for the year ahead.
The quantity exceeds the company’s unit sales for the products over the previous 12 months.
Admedus sold distribution rights to its CardioCel® and VascuCel® patch business to LeMaitre on October 14 for A$22.8 million upfront, reflecting the A$21.2 million received on the completion date plus the proceeds to be paid by LeMaitre on delivery of stock ordered on completion of the transaction.
This will be followed by two deferred payments of $1 million each over the next 12 to 36 months while additionally, the company may receive up to $11.4 million in milestone payments.
Shares were up almost 8% to an intra-day high of 9.7 cents after reaching a new 12-month of 10.5 cents on November 19.
Under the sale agreement, Admedus retained exclusive manufacturing rights for up to three years to supply LeMaitre with products.
The manufacturing agreement ensures Admedus a 20% margin over cost.
Terms and conditions
The agreement terms provide earnout payments:
- Up to A$3.73 million if gross revenue from LeMaitre CardioCel® and VascuCel® product sales exceed $29.8 million in the first 12 months or $1.8 million if gross revenue from product sales exceed $22.4 million in the first 12 months;
- Up to $3.73 million if gross revenue from LeMaitre CardioCel® and VascuCel® product sales exceed $44.7 million in the second 12 months or $1.8 million if gross revenue from product sales exceed $33.5 million in the second 12 months;
- $3 million on obtaining certain regulatory approvals under European Medical Devices Directorate Regulation;
- $700,000 on Admedus completing all testing and documentation to extend the shelf life of the CardioCel® and VascuCel® products from 36 months to at least 60 months in the United States; and
- $200,000 for completion of reporting procedures by October 31.