Transenterix, a US-based medical device company that builds surgical robotics to improve minimally invasive surgery, has announced that it has entered into an agreement with China’s Great Belief International Limited (GBIL), to advance the SurgiBot System towards global commercialization. The SurgiBot System is the single-port, robotically enhanced laparoscopic surgical platform developed by TransEnterix.
This agreement transfers ownership of the SurgiBot System assets, while the Company retains the option to distribute or co-distribute the SurgiBot System outside of China. Upon completion of the transfer of all SurgiBot System assets, GBIL will have the System manufactured in China and obtain Chinese regulatory clearance from the China Food and Drug Administration (“CFDA”), while entering into a nationwide distribution agreement with China National Scientific and Instruments and Materials Company (CSIMC) for the Chinese market. Being the largest medical device distribution company in China, CSIMC will help GBIL maximize the commercial potential of the SurgiBot System in the Chinese market, and optimize post-sale services to Chinese hospitals. The Company retains the right to commercialize the SurgiBot System outside of China after manufacturing has been established and the necessary regulatory approvals have been obtained.
The agreement provides the Company with proceeds of at least $29 million, of which $7.5 million is expected to be received by the end of December 2017 and $7.5 million is expected to be received by March 31, 2018, which includes a $3.0 million equity investment in TransEnterix common stock at $2.33 per share, a 10% premium to the closing price on the date which the agreement was executed. The remaining $14 million, representing minimum royalties, will be paid beginning on the earlier of receipt of Chinese regulatory approval or five years.
“The relationship announced today with GBIL will allow us to advance the SurgiBot System toward global commercialization while significantly reducing our required investment and simultaneously leveraging ‘in-country’ manufacturing in the world’s most populous country,” said Todd M. Pope, President and CEO at TransEnterix. “This is a strong validation of the value of the SurgiBot platform, the world’s only abdominal surgical robot that allows surgeons to remain in the sterile field. We believe this relationship provides us with a significant opportunity to expand our product offerings of robotic solutions for hospitals and patients around the world.”
“We see a tremendous commercial opportunity for the SurgiBot System in China and are extremely enthusiastic to work with TransEnterix to bring this product to China along with the rest of the world,” said Gary Wang, President of GBIL. “The SurgiBot is unique in so many ways; we believe it can be transformational for our healthcare system.”
China Medical Device think this collaboration is a “smart move” that should accelerate surgical robot commercialization in China. Furthermore, we are seeing the rising trend of this type of partnership being forged between oversees medical device companies and Chinese local firms that could help bring their technology to China with faster local market development.
