The deal opens the door to the global haemostat market, which is forecast to grow to $2.76bn by 2020.
Companies: Ergomed PLC
Ergomed (LON: ERGO) has announced today it has finalised a deal with South Korean company Boryung to commercialise its PeproStat and ReadyFlow haemostat products.
Haemostats are used for the control of bleeding during surgical procedures, and Ergomed estimates that PeproStat and ReadyFlow together have peak sales potential of more than $500 million.
Ergomed will receive an undisclosed upfront payment and a series of milestone payments, as well as "a double-digit share of all future product sales in this territory."
Executive VC of Ergomed Dr. Miroslav Reljanovic commented on the deal. saying:
"We are very pleased to sign our first commercialisation deal on the Haemostatix products. This partnership underlines the broad, global interest in novel, innovative haemostats, and endorses the Haemostatix platform, confirming its potential to generate significant future value to Ergomed and its shareholders. Korea is a rapidly growing market for haemostats and Boryung is an ideal partner with their marketing capability and experience with innovative drugs."
Shares in Ergomed spiked 9% to 193p per share with the announcement.
N+1 Singer put out a research note with their take on the deal, saying:
"PeproStat is on track to produce Phase IIb data in late October and, subject to positive data, could potentially reach the market in South Korea in 2021. We believe positive Phase IIb data will be a catalyst for Ergomed to establish a number of geographical deals for its Haemostatix products. We reiterate our highly positive stance on Ergomed."
Revenue growth for Ergomed has been steady in the five years to 2016, but profit margins have fluctuated, with share prices following these fluctuations.
Net profit margins are, however, forecast to improve significantly in FY17 and beyond, with today's Boryung deal only set to help these margins in the future.
