Lombard Medical, MicroPort Scientific Corporation Forge Strategic Partnership

Lombard Medical Inc., a developer of endovascular aneurysm repair technology, and MicroPort Scientific Corporation, a global medtech manufacturer, are becoming strategic partners. This union will allow Lombard Medical to accelerate commercialization in key global markets with its two key products: Aorfix, the only stent graft to hold global approvals to treat abdominal aortic aneurysms (AAA) with aortic neck angles up to 90 degrees, and Altura, a highly innovative stent graft that offers a simple and predictable treatment option for standard AAA anatomy.
 
The agreement provides MicroPort the exclusive marketing rights for Lombard Medical’s Aorfix and Altura AAA stent graft product lines in China, as well as the right to a technology license to manufacture the products for the China market. Lombard Medical and MicroPort will also enter into a component supply manufacturing agreement whereby MicroPort will manufacture in its facilities in Shanghai certain components for the Aorfix and Altura product lines. Lastly, MicroPort will also have exclusive marketing rights for both Altura and Aorfix in Brazil.

“We are extremely pleased to be adding two highly differentiated products in Aorfix and Altura to our market-leading endovascular portfolio in both China and other emerging markets. We look forward to partnering with Lombard Medical to offer the premier portfolio of endovascular devices to treat patients requiring aortic artery aneurysm repair,” MicroPort Chairman and CEO Dr. Zhaohua Chang said.
 
In exchange, MicroPort has invested $15 million in a combination of Lombard Medical common stock and convertible debt. MicroPort purchased $5 million in common stock at 62 cents per share representing a 29 percent ownership stake in Lombard Medical based on common stock currently outstanding. MicroPort will have a pro rata purchase right on future equity offerings by Lombard Medical. In addition, MicroPort was issued a five-year $10 million unsecured promissory note bearing interest at a rate of six-month LIBOR plus 4 percent from Lombard Medical, which is convertible at any time prior to maturity by MicroPort into Lombard Medical common stock at a price of 90 cents per share. Lombard Medical will also appoint two representatives of MicroPort to serve on its board of five non-executive directors.
 
Following the transaction, Lombard Medical will have 27,950,785 shares of common stock outstanding. Lombard Medical plans to use the proceeds of this investment for general corporate purposes.
 
“The strategic partnership with MicroPort benefits all Lombard stakeholders, including physicians and their patients, our employees and, of course, our shareholders. The financing provides the necessary operating capital to fund our commercial and regulatory programs aimed at accelerating adoption and utilization across Europe where Aorfix is well accepted and Altura is generating significant interest among clinicians,” Lombard Medical CEO Simon Hubbert said. “The agreements will also provide the infrastructure, regulatory support and capital for launching our technologies into the fast-growing China endovascular market, where MicroPort has a strong track record for commercializing innovative vascular devices. In addition, we believe our planned component manufacturing collaboration will significantly reduce manufacturing costs and increase margins for both Aorfix and Altura product lines, which will ultimately improve our overall profitability.”
 
MicroPort Scientific Corporation maintains worldwide operations in a broad range of business segments including cardiovascular, orthopedic, electrophysiological, endovascular, neurovascular, surgical, diabetes care and endocrinal management, and others.
 
Lombard Medical is an Oxfordshire, United Kingdom-based company focused on the $1.8 billion market for minimally invasive treatment of abdominal aortic aneurysms. The company currently markets the Altura endograft system in Europe. Altura is an ultra-low profile endovascular stent graft that offers a simple and predictable solution for the treatment of more standard AAA anatomies.
 
Aorfix is an endovascular stent graft system for treating infra-renal aortic and aorto-iliac aneurysms, also known as abdominal aortic aneurysms (AAAs). When placed within the aneurysm, Aorfix creates an internal bypass of the aneurysm to reduce the risk of rupture. Aorfix is the first and only endovascular stent graft with global approvals for the treatment of patients with aortic neck angulations up to 90 degrees. Aorfix features an exclusive helical and circular design that allows it to conform to the natural contours of human anatomy, including aortic necks with high angulations and iliac arteries with extreme bends. Aorfix has been evaluated in three studies and used in more than 7,000 procedures worldwide. Aorfix has a CE Mark, Japan regulatory approval, and received U.S. Food and Drug Approval approval in 2013.
 
The Altura system represents a paradigm shift in endograft design that offers a simple and predictable treatment option for standard AAA anatomy. Delivered via an ultra-low profile 14F catheter, Altura allows for repositioning during deployment and accurate graft placement at each renal artery enabling physicians to utilize all of the available aortic neck. It also eliminates the need for cannulation that results in a simple, safe and consistent deployment with predictable, shorter procedure times. With six product sizes, the Altura system allows the majority of patients who present for EVAR repair to be treated quickly with minimal hospital stay and recovery times. The Altura system received CE Mark in 2015. Lombard launched the device in the United Kingdom and Germany in February 2016 with a broader international rollout currently underway.