ThermoGenesis has signed an amended distribution and license agreement with Asahi Kasei Kuraray Medical, an exclusive CryoSeal distributor for Japan and certain Asian Pacific Rim countries including China. The agreement is a part of ThermoGenesis continuing efforts to divest or exit the CryoSeal fibrin sealant system, wound care product line.
Under the amended agreement, Asahi will pay ThermoGenesis $1m in cash on or before June 30, 2010 and ThermoGenesis will continue to provide Asahi CryoSeal products and clinical support services until Asahi plans to manufacture the product line in Japan.
Reportedly, over the next 30 months, Asahi anticipates to develop CryoSeal manufacturing capabilities and achieve regulatory approval for sale of the products in Japan.
ThermoGenesis expects to receive royalty payments on CryoSeal products manufactured by Asahi thereafter. As part of the $1m payment, ThermoGenesis granted Asahi an option to acquire the CryoSeal product line, including patent rights, which may be exercised over the next five years.
Melville Engle, chief executive officer of ThermoGenesis, said: “We expect the cash provided by this transaction will offset our ongoing costs to support the agreement. We have sufficient CryoSeal disposable inventory to meet the anticipated demand from Asahi and our other customers during this 30-month period. As a result, we do not believe we will be required to engage in any meaningful manufacturing activity to support this agreement going forward.”
Yasuyuki Yoshida, president and CEO of Asahi Kasei Kuraray Medical, said: “We believe that this unique CryoSeal technology enables us to accelerate our blood-related business expansion in Japan.”
The foregoing description of the agreement with Asahi does not purport to be complete and is qualified in its entirety by reference to the complete text of the agreement, which is filed as an Exhibit to the company’s Form 8-K filed with the Securities and Exchange Commission.