Cytori, Lorem Vascular partner in Asia-Pacific
Cytori Therapeutics and Lorem Vascular, a Beijing-based provider of cardiovascular care, have announced a partnership to commercialize Cytori Cell Therapy for the cardiovascular, renal and diabetes markets in China, Hong Kong, Malaysia, Singapore and Australia. Cytori Cell Therapy is derived from the company's Celution System, which enables access to a patient's own adipose-derived regenerative cells (ADRCs) at the point of care.
Lorem Vascular will pay up to $500 million in fees for a 30-year exclusive license to Cytori Cell Therapy for all indications except alopecia and aesthetics, in the licensed territories in the form of revenue milestones. Lorem Vascular agrees to purchase the Cytori Celution System and consumables under a product supply agreement. Cytori will receive $24 million in exchange for eight million shares of Cytori common stock at $3 per share.
Equity purchased will be closed in two installments: a $12 million payment that will be paid within seven days and a second $12 million payment that will be made within 60 days. In addition, Lorem Vascular will order $7 million in Celution devices and consumables with a $2 million order placed immediately and a $5 million order to be placed following regulatory approval in China. Lorem and Cytori have implemented a regulatory plan in China and anticipate approval in 2014. One board seat will be granted to Mr. K.T. Lim, chairman of Lorem Vascular.
"Cytori Cell Therapy will transform the way healthcare addresses the most costly and insidious diseases impacting healthcare today and well into the future," said Lim. "This therapy represents a front-line treatment modality that will serve as the centerpiece of our cardiovascular, renal and diabetes commercial activities across the region. Lorem Vascular will initiate an immediate launch in Hong Kong, Singapore and Australia. A subsequent launch in China and Malaysia is planned in 2014, pending regulatory approvals."
More than 230 million Chinese have a form of cardiovascular disease (CVD) which is the country's leading cause of death, accounting for more than 40% of all deaths, or three million people per year. This translates to one death every 10 seconds from CVD in China. According to recent estimates, due to population growth and aging, the number of annual CVD events in China is projected to increase by more than 50% during the next 15 years. The growing worldwide prevalence of diabetes is one of the contributing factors to increasing rates of vascular diseases, as they are common co-morbidities of diabetes.
"Expanding in emerging markets throughout the world is critical to our mission and growth and partnerships such as this are a key driver of our approach," said David Oxley, vice president for emerging markets at Cytori. "China is one of the three largest and highest value medical markets in the world. A market penetration of less than 5% of the cardiovascular market alone represents millions of patients treated in the next thirty years, a multiple of billions in cost savings to the People's Republic of China and a transformation in the quality and standard of care."