Airway Medix has finalised the sale of the rights to its innovative medical technology; the company has received the first tranche of over PLN 23 million.
As announced, a company from the Adiuvo Investments portfolio has closed the transaction involving the sale of the rights to the innovative CSS endotracheal cleaning device. The company acquired valuable know-how in connection with the monetisation of the developed technology, while the first tranche of the payment has significantly improved its financial position.
The account of Airway Medix was credited with the first payment for the innovative technology comprising a closed system designed to clear the endotracheal tubes of mechanically ventilated patients (the “CSS” - Closed Suction System). The buyer, a company that belongs to a global medical technologies consortium listed on the New York Stock Exchange, in compliance with the terms of the agreement, paid the first tranche amounting to the equivalent of almost PLN 23 million.
‘The first payment that we have just received will be sufficient to repay the entire debt of Airway Medix amounting to approximately PLN 7 million, and with the surplus estimated at as much as approximately PLN 10 million, we will have the equity required to fully commercialise our next two technologies. We estimate that the value of such technologies, in view of their market potential, is greater than in the case of the CSS technology. Moreover, we expect subsequent payments from the buyer of CSS.’, said Anna Aranowska-Bablok, Member of the Management Board of Airway Medix SA.
The total value of the transaction involving the sale of the CSS amounts to EUR 10.5 million (approximately PLN 45 million at the current EUR/PLN exchange rate). The first tranche, paid on the transaction closing date ( October 2017), amounts to 60% less the 15% kept by the buyer to secure any claims under the purchase agreement, which 15% is planned to be paid after 18 months. Consequently, Airway Medix has received over EUR 5.3 million (almost PLN 23 million), while over EUR 0.9 million (almost PLN 4 million) will be paid to the company no later than at the beginning of April 2019, provided that the buyer does not raise any claims under the purchase agreement. Within a maximum of four years after the closing of the transaction, i.e. at the beginning of October 2021, the buyer will decide whether it will continue to use the intellectual property rights related to the CSS. If the decision is negative, the buyer will not pay the second tranche of the payment (the first tranche will remain with Airway Medix) and will return the ownership titles, including patents, concerning the CSS to Airway Medix, and the company will be free to resell them. If the buyer’s decision is positive, the second tranche will be paid. In such case, Airway Medix will receive almost EUR 3.6 million (over PLN 15 million), and the remaining part of the second tranche (EUR 0.6 million or almost PLN 3 million) will be paid at the beginning of October 2022, provided that the buyer does not raise any claims under the purchase agreement.
The CSS technology sale transaction is a breakthrough for Airway Medix not only financially, but also businesswise.
‘The transaction with a top-level partner has had a positive impact on our recognition in the sector. We are considered to be a reliable partner that offers solutions that are sought after by medical personnel and that solve real patient needs. Such a position greatly facilitates negotiations aimed at selling other technologies in our portfolio. In addition, we have acquired practical knowledge on building transaction value.’, stressed Anna Aranowska-Bablok.
The CSS is the new close suction system that significantly improves the efficacy of endotracheal tubes cleaning throughout the period when a patient is ventilated using a respirator. Thanks to the CSS, the endotracheal tube is not only effectively cleared, but no air is removed from the patient’s lungs. It is important to note that the CSS is compatible with the currently applied devices and hospital procedures and its usability and advantages have been thoroughly tested during the development process.
Airway Medix anticipates that the monetisation of its next two technologies, which are currently entering the clinical marketing studies phase, will be completed within the next 12-24 months.
‘These technologies, as in the case of the CSS, are a response to real medical needs and present numerous competitive advantages. Their application, however, is broader compared to the first technology commercialised by Airway Medix, and this has increased interest in their purchase by industry players.’, said Anna Aranowska-Bablok.
At present, Airway Medix is carrying out an analysis of the market and the patent environment in connection with potentially expanding its portfolio to include new and complementary technologies to be developed in the course of its ongoing discussions and consultations with clinicians and representatives of the medical equipment distribution industry.