A small Winnipeg medical-diagnostic company has finalized a deal with two Chinese companies that paves the way for the sale of up to $90 million worth of its non-invasive diabetes screening devices in China.
The definitive agreement between Miraculins Inc., medical-device importer Catalyn Medical Technologies Ltd., and Chinese distributor Cachet Pharmaceutical Co., Ltd., provides for an initial minimum guaranteed order for $15 million worth of Scout DS devices and for another $75 million worth of orders over the subsequent four years.
However, it could be another 11/2 years before the money starts to flow. Miraculins president and CEO Christopher Moreau said Miraculins still needs to obtain regulatory approval for the devices from the Chinese Food and Drug Administration. That process could take up to 18 months to complete, he said, and the first $15-million order doesn't kick in until approval has been granted.
Moreau expressed confidence the CFDA will give its blessing to the product because it's already been approved for use in Canada and Europe.
Once the money starts to flow, it'll mark the start of a new era for Miraculins.
"This is truly a transformative agreement for Miraculins and for the Scout DS device as a groundbreaking disease-screening technology," Moreau said, noting it represents a significant potential new revenue stream for the company.
"With Cachet Pharmaceutical appointed as our exclusive distributor for Mainland China, we are confident that we have the right partner in place to penetrate the marketplace and bring this new testing technology to millions of Chinese at risk and in need," he added.
Miraculins signed a letter of intent with Cachet last February, but they still needed to finalize the details and find a Chinese importer to bring the product into the country. That's where Catalyn comes in.
The Scout DS is a non-invasive test to measure diabetes-related biomarkers in the skin. It does not require a blood sample or fasting and generates a result in as little as 80 seconds.
Miraculins acquired the Scout technology last August from a struggling U.S. company. Moreau said China has the potential to be a major market for the device because diabetes is a growing problem there, but up to 70 per cent of the cases are going undiagnosed.
Because China doesn't have private medical clinics or retail pharmacies, Moreau said Cachet will be marketing the device to state-run hospitals where the Chinese go to receive medical care.
Pear Healthcare is the Canadian distributor for the Scout DS device, and Moreau said the hope is to have screening centres set up in pharmacies across Canada some time next year.