Universal Biosensors (ASX: UBI) announced today that it has agreed amendments to its arrangements with Siemens Healthcare Diagnostics Inc. The parties have agreed to shift the focus of their joint product development activities, provide prepayment of milestones to UBI and improved strip pricing to support Siemens’ entry into the point-of-care PT-INR testing market.
Under the Collaboration Agreement which commenced in September 2011, Universal Biosensors is developing three coagulation testing strips and associated reader products in collaboration with, and exclusively for, Siemens. In turn, Siemens contributes to the cost of development through a series of milestone payments. To date, UBI has been paid a total of US$8 million for five of the seven milestones under the Collaboration Agreement.
Siemens and UBI have agreed to cease development work on one of the two remaining strip products in order to focus resources on an alternative product that offers the potential for greater return on investment to both companies.
To reflect this change, one of the outstanding milestones has been redefined and an additional milestone with an associated payment of US$1.25 million has been added. At the same time, Siemens have agreed to prepay all outstanding milestone payments totalling US$3.75 million during FY2016, of which US$2.5 million will be paid during the second quarter.
Finally, as part of these amendments, UBI has agreed to a reduction in the transfer pricing of PT/INR strips manufactured and supplied to Siemens, applicable only to the sale of product at the lower volume tiers. This reduction in strip price will provide Siemens with greater flexibility during the early stages of product introduction.
Paul Wright, CEO of Universal Biosensors said: “This is another excellent example of UBI and Siemens working together in partnership for mutual benefit. The prepayment of milestones will provide UBI with additional cash resources in the short term, while the realignment of our development program with Siemens ensures we are working on projects that offer the greatest return on our collective investment in the longer term. In addition, we are able to support Siemens building customer momentum in the PT-INR testing market”.
A proposed Form 8-K to be filed with the United States SEC summarising the material terms of the letter agreement is enclosed with this announcement.
About Universal Biosensors
For additional information in relation to Universal Biosensors, refer to http://www.universalbiosensors.com/announcements.html.
Universal Biosensors is a specialist medical diagnostics company, founded in 2001, that is focused on the development, manufacture and commercialisation of a range of in vitro diagnostic tests for point-of-care use. These tests capitalise on a technology platform which uses a novel electrochemical cell that can be adapted for multiple analytes and provide for enhanced measurements in whole blood.
