Belluscura shares soared in early trade on Wednesday after the medical device developer said they had entered into a ‘groundbreaking’ license and royalty agreement with Chinese partner InnoMax.
The agreement will provide InnoMax with exclusive rights to distribute Belluscura’s portable oxygen concentrator devices in China, Hong Kong, Macau and Singapore and is subject to a minimum of $55m in royalties over the life of the agreement.
Belluscura shares were 21% higher at 50p at the time of writing on Wednesday.
“I am very excited to build and strengthen our relationship with InnoMax,” said Bob Rauker, Chief Executive Officer, Belluscura.
“An estimated 100 million people suffer from COPD in China alone, approximately six times the number of patients in the US, demonstrating the need for oxygen therapy in China and associated Territories. This agreement provides the basis for an extremely financially beneficial partnership for both companies as we jointly broaden the reach of Belluscura’s next-generation technology.”
The agreement runs for a total of 10 years with the option for both parties to mutually agree for the agreement to become non-exclusive after 5 years.
There are minimum royalties attached to the agreement including $27.5m if the license is converted to non-exclusive from year 6 and up to $55m in royalties if the license remains exclusive for the entire term.
After announcing orders for 6,500 units earlier this month for around $15m, today’s announcement is another landmark development for Belluscura which now has clear revenue generation visibility over multiple years.