Osprey Medical Inc (ASX:OSP) has signed an independent sales agency (ISA) agreement with BioCore Inc., a sales group which specialises in selling cardiac surgery, electrophysiology and cath lab products.
Under the agreement, BioCore’s sales representatives will be strategically deployed across eight new states in the US in regions which are currently outside of Osprey’s existing direct sales force coverage.
ISA agreements are a part of Osprey’s cost-efficient sales expansion strategy with additional distributor agreements in the pipeline.
“Excited to partner with BioCore”
Osprey Medical CEO Mike McCormick said: “We are excited to partner with BioCore as part of our US expansion strategy.
“BioCore has over 20 years of experience selling heart-related technologies and has a strong presence in many hospitals in the North-eastern US.
“While we have a strong presence and continue to grow sales in the regions where our direct sales force operates, our partnership with BioCore will help strengthen our market presence in the north-eastern states in which we currently do not have a presence.
“It can be a costly process to enter new areas, especially during COVID-19 and the introduction of the ISA model will enable us to expand across the US in the most cost-effective and sustainable way.
“I look forward to adding more ISAs in other regions as we continue to expand while managing our cash burn closely.”
Increasing geographic coverage
The addition of the ISAs forms part of Osprey’s broader vision to increase its geographic coverage whilst at the same time focus on maintaining a leaner business model following COVID-19.
The strategy provides Osprey with a dual-pronged sales approach across the US, via both distributors and direct sales reps and the agreement has been structured to leverage the key advantages of both the distributor and direct sales strategy.
Osprey’s direct sales representatives will continue to focus on the regions in which they operate, however they will also work closely with the ISAs to help convert potential customers in new regions.
Under the agreement, Osprey will ship to and invoice hospitals in the ISA’s area and pay commissions to the ISA based on total revenues.
The agreement is for a 2-year term with escalating quarterly sales targets.
Osprey is in active discussions with a number of ISAs at this stage and hopes to continue to expand its geographic coverage in the near-term.