Osprey Medical secures deal with GE Healthcare
Osprey Medical Inc has struck a partnership with GE Healthcare under which the US giant will exclusively distribute the Australian device maker's technology for reducing Acute Kidney Injury associated with coronary procedures.
The alliance covers exclusively distribution of Osprey’s products in Europe, Russia, Middle East, Africa, Central Asia and Turkey.
GE Healthcare is the world’s leading manufacturer of contrast dye for coronary procedures and the agreement will be welcome news for long suffering shareholders such as Brandon Capital's Medical Research Commercialisation Fund and Allan Gray which combined control over 50 per cent of the company.
Osprey Medical CEO Mike McCormick does not see any need to raise more money in the near term despite impacts from COVID-19. Supplied
They've seen the share price dive from 84¢ five years ago to just 4¢. Osprey listed on the ASX in 2012 at 40¢ per share. By 1230 AEDT Thursday the stock was up 6.7 per cent to 4.8¢.
Osprey's core technologies originated from research by Dr David Kaye at Melbourne’s Baker Institute. The DyeVert contrast minimisation devices are designed to help physicians minimise dye usage and monitor the dose of dye in real time in angiographic imaging procedures where they are taking pictures of the arteries in the brain, heart, and kidneys.
Osprey's Minnesota-based chief executive Mike McCormick told The Australian Financial Review it is "a huge endorsement" given GE is the largest manufacturer of dye, and allows the company to move into a new region: Europe.
"This gigantic agreement will allow us to fulfil our mission of protecting patients from the harmful effects of dye," he said. "The better we do this, better serve the patients and hospitals and physicians the more value we create for shareholders."
Mr McCormick said there might be the possibility to expand into the Pacific region, including Australia/NZ and China, down the track. He added that Osprey retains direct sales in the key US market.
AKI is sudden damage to the kidneys that causes them to not work properly. It can range from minor loss of kidney function to complete kidney failure. Patients with impaired kidneys are at a significantly increased risk for negative outcomes and for longer hospital stays.
Under the four-year agreement, GE Healthcare will commercialise Osprey’s DyeVert portfolio which reduces the amount of contrast that reaches the kidney with no compromise in image quality. Osprey’s technology is the only FDA cleared medical device that is indicated for reducing patient contrast exposure.
The contract value of the GE Healthcare deal is expected to add materially to Osprey’s revenue and drive double digit growth next year. Minimum purchase levels of Osprey products increase each year over the term of the contract.
In the last quarter of 2020, Osprey raised $12.8 million in new equity and $1.9 million from US government pandemic recovery loan. It ended the year with a cash balance of $14 million.
Mr McCormick said there is no need to raise more capital in the coming year - despite the pressures from COVID-19 - since the company cut costs. He pointed to an additional $15 million available via an attached option issue to the new shares raised - but only if all options are exercised ahead of February's expiry date.
"This will help fuel the growth we expect in the US, and in Europe with our new partnership with GE," he said.