Australian-Singaporean medical technology company Osteopore Limited (ASX: OSX) has signed a non-binding term sheet with CellHeal Pty Ltd which has opened the door to opportunities in the large Chinese market.
CellHeal is a biopharmaceutical company focusing on Cell Gene Therapy (CGT) and the discovery and advancement of immunotherapeutic solutions for chronic infectious diseases and cancer.
The Term Sheet provides a framework to negotiate definitive agreements for the licensing of select Osteopore intellectual properties (IP) and technologies – 3D printed biomaterials for bone, cartilage and tissue regeneration – to CellHeal, a recognised partner that specialises in commercialising products for entry into the Chinese market.
Melbourne-based CellHeal is seeking to commercialise Osteopore’s regenerative medicine technology in both China and Macau. Although Osteopore’s products do not currently have regulatory approval in China or Macau, the Company’s products can be marketed and sold in Hong Kong and Taiwan.
Subject to the terms of this Term Sheet, CellHeal commits to raising approximately $10 million to strengthen Osteopore’s commercialisation efforts in China. Funds would be allocated to the setup of manufacturing facilities, clinical trials, attaining regulatory approvals and launching Osteopore’s products in China.
Osteopore will work towards negotiating a royalty with CellHeal for each product as a percentage of net sales, subject to due diligence and detailed market research. The percentage is expected to be within the range of 10-20%.
CellHeal would set up a Good Manufacturing Practice (GMP) manufacturing facility in China to manufacture Osteopore products, attain regulatory approvals and commercialise nose and dental applications relating to bone, cartilage and tissue regeneration.
Osteopore would provide CellHeal with a non-exclusive royalty-bearing licence to develop, manufacture and commercialise the Company’s groundbreaking technology across China and Macau. Osteopore would also provide equipment, consumables, management and consultation services to assist with manufacturing setup.
Upon the manufacturing facility being completed and meeting necessary requirements, Osteopore intends to order $600,000 worth of products manufactured from the facility each year from CellHeal, at Osteopore’s wholesale price with a 10% administration fee on each order. The period over which this order is fulfilled will depend on the number of products required by Osteopore.
We are thrilled to embark on this strategic partnership with CellHeal as it signifies an important step in Osteopore’s market penetration of China,” Osteopore Executive Chairman, Mark Leong, said.
“This also marks the first time Osteopore have added licensing and royalties to our commercialisation strategy. Together with CellHeal as a strategic partner, Osteopore is making a very significant step into entering the China market with the set up of manufacturing facilities to develop, manufacture and commercialise our groundbreaking implants.
“Leveraging the synergies of our expertise, resources and shared vision, we are confident this partnership will unlock opportunities to change lives and expand our footprint.”