DxTech signs Product Development & Licensing Agreement with Nicholas Piramal
30 April 2008
XL TechGroup (AIM: XLT), the creator of companies that solve identified, global unmet market needs, is pleased to announce the signing of a long-term Product Development and Licensing Agreement ("PDLA") between XL TechGroup's 83.5% owned company DxTech LLC ("DxTech") and Nicholas Piramal India Limited ("NPIL"), one of the largest pharmaceutical and healthcare companies in India. This PDLA is part of a long-term strategic alliance, which also includes a Distribution Agreement and the establishment of a joint venture sales and marketing company in India.
DxTech is developing the fully-integrated Vantix(TM) point-of-care ("POC") diagnostics platform based on proprietary, electrochemical sensor technology that has unparalleled sensitivity and dynamic range. This combination will allow DxTech to bring two points of differentiation to the POC market that cannot be realized by any other POC technology currently available: the capability to conduct simultaneous diagnostic immunoassays and general chemistries on a single cartridge delivering a uniquely broad range of tests.
In addition to its core focus on the US$48 billion routine diagnostic market in the US, DxTech's Vantix(TM) platform also has the added potential to transform diagnostic testing in a range of other emerging markets, including Asia, parts of Europe and Central and Latin America. In these markets, the Vantix(TM) platform could reduce or eliminate the need for expensive, centralised laboratory infrastructures and replace them with equally accurate testing that has a more favourable cost profile, distributed across each POC.
The Vantix(TM) platform is designed to meet or exceed the performance levels established by US reference laboratories, to provide a complete solution from sample collection through claims processing, to be CLIA ("Clinical Laboratory Improvement Amendments") waivable, to provide a strong gross margin in the US market and, at the same time, to be commercially attractive in developing countries. In the US market, demand for the Vantix(TM) platform is expected to result from providing the physician with reference laboratory quality results, increased practice efficiency and significant additional income from reimbursements that would otherwise be paid to reference laboratories.
The PDLA gives NPIL an exclusive license to DxTech's Vantix(TM) platform in India, Pakistan, Bangladesh, Sri Lanka, Nepal and Bhutan. In return, DxTech has received a multi-million dollar up-front fee and will receive three further product development fees, based on specific milestones over the next 18-36 months, each for at least one million dollars. DxTech will also receive long-term royalties based on gross sales in India, as well as its share of profits made by the joint venture. Nicholas Piramal will allocate dedicated employees to this relationship and will be investing additional funds for the joint venture's marketing and distribution costs.
DxTech anticipates receiving clearance for the Vantix(TM) system from both the US FDA (510k) and the Indian regulatory authorities before the end of 2009. Initial product launches are then expected, featuring Free T4 and TSH thyroid assays where DxTech is already achieving results that match the gold standards set by reference laboratories in the US.
With a population of over 1 billion, India is the fourth largest market for in-vitro diagnostic testing in the world. According to the G2 Report in August 2006, this market is growing at over 20% per annum, more than double the annual growth rate of the world IVD market. The majority of tests performed are centred on key urban cities, primarily Mumbai (Bombay), Delhi, Chennai (Madras), Bangalore and Kolkata (Calcutta) which have a combined total population of over 38 million. It is estimated that 78 million people have thyroid disorders in India, compared to 21 million in the US.
NPIL is one of India's largest pharmaceutical and healthcare companies, having grown over the last 20 years through an aggressive strategy of successfully managed acquisitions, mergers and alliances. NPIL's core strengths include its 3,200 strong field force, successful brand building, state-of-the-art manufacturing plants, and an ability to successfully manage partnerships in its core businesses. In the field of diagnostics, NPIL's customers are independent laboratories, hospitals, doctors and patients, and they provide comprehensive product and customer support through a network of engineers and scientists.
Dr. Swati Piramal, Director - Strategic Alliances & Communications, NPIL, said: "This alliance is a significant step in our pursuit of launching innovative diagnostic platforms, by which physicians can diagnose diseases and decide the course of treatment for faster and better outcomes. This will herald a paradigm shift in the way diagnostic tests are currently conducted in our country."
John Scott, CEO of XL TechGroup, said: "DxTech's Vantix(TM) platform, which will provide quick, accurate diagnostic results directly in the community, will allow India to bypass and overtake the inefficient centralised reference laboratory models of healthcare systems in other countries. NPIL has a stated commitment to making a difference to the quality of life in India by reducing the burden of disease and we are very pleased that together we will be able to work towards this important goal."
For further information:
| XL TechGroup | |
| John Scott / Harold Gubnitsky | Tel: +1 321 409 7403 |
| hgubnitsky@xltg.com | |
| Chris Munden, Director of Investor Relations | Tel: +44 (0) 20 7398 7720 |
| cmunden@xltg.com | www.xltechgroup.com |
| Nomura Code Securities | |
| Richard Potts, Corporate Finance | Tel: +44 (0) 20 7776 1200 |
| www.nomuracode.com |
XL TechGroup media enquiries:
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| Heather Salmond | Tel: +44 (0) 20 7398 7704 |
| heather.salmond@abchurch-group.com | |
| Gareth Mead | Tel: +44 (0) 20 7398 7710 |
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| Piramal Group | ` |
| Vijay Sathye, President - Investor Relations | Tel: +91 (0) 22 3046 6412 |
| vijay.sathye@piramal.com | |
| Sagar Gokani, Manager - Investor Relations | Tel: +91 (0) 22 3046 6474 |
| sagar.gokani@piramal.com |
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