Miraculins Inc., a small Winnipeg medical diagnostic company, has made a deal with a Chinese company that could be worth $100 million or more for the distribution rights to sell its non-invasive diabetes screening test in China.
The term sheet Miraculins signed with Cachet Pharmaceutical Co. Ltd., whose shares trade on the Shenzhen Stock Exchange, calls for a first order of $15 million of Miraculins' diabetes screening test, called Scout DS.
It also calls for an additional minimum of $75 million in orders over the five-year term. Both sides have 90 days to complete a definitive deal detailing all the commercial terms and conditions.
"This is hopefully transformational for the company," said Christopher Moreau, Miraculins' president and CEO. "It is a validation of the technology. We have been working with Cachet for many months. I have made three trips to Beijing in four months. This will be fantastic for the Scout and for the people of China."
Mircaulins only acquired the Scout technology from a struggling U.S. company last August and Moreau said Cachet reached out to Miraculins almost as soon as the deal was done.
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. The Scout DS uses visible light to measure the optical signature of fluorescent biomarkers in the skin, the accumulation of which are accelerated by abnormal blood sugar levels and oxidative stress.
Part of the arrangement is Miraculins would be responsible for securing regulatory approval for the product from the China Food and Drug Administration. That will require significant testing in China, and Moreau said it is expected to take between 12 and 18 months to complete.
During that time, efforts will be made to introduce the technology to some of the leading hospitals in China with some of the key metabolic-disease doctors and diabetologists.
In China, diabetes is considered a big problem with little public awareness and as much as 70 per cent of it going undiagnosed.
Scout DS has already received regulatory clearance in Canada and throughout the European Union. Miraculins recently filed pre-submission documentation with the United States Food and Drug Administration.
This kind of distribution deal is a huge step for a tiny company like Miraculins, which has yet to generate any revenue.
In the past three or four years, it has raised about $12 million in the equity markets, has developed its own diagnostic technologies and acquired others.