MEDIGARD SET TO RAISE $10M

Written on the 9 August 2010

MEDIGARD SET TO RAISE $10M

LISTED medical technology company Medigard (MGZ) is seeking to raise up to $10 million after signing a manufacturing and distribution deal for its innovative blood collection device (BCD) in the US.

CEO Peter Emery says the capital could be raised via a rights issue and attached options with existing shareholders, a placement with sophisticated investors and a potential cornerstone US investor.

“We are looking to diversify our investors. Part of what we want to do is increase our liquidity.”

Emery is confident the company can double its investor base, but conceded it could be up to two years before significant earnings are realised for its device.

A recent deal with distributor Outcome Solutions and an undisclosed manufacturer, could be worth $40 million annually within five years.

The initial agreement is to supply a minimum 10 per cent of 700 million BCDs consumed by the US market per year. Four other Medigard products will also be put into production under the agreement.

Emery says the US manufacturer has asked to remain anonymous given its contract to several other large medical technology companies.

“We have seen their operations a number of times and they are very much regarded as problem solvers,” says Emery.

The company chose the US over Asian export markets to ensure the quality of the products is maintained.

“Through selecting the right manufacturer, we will be able to deliver a price competitive product that is also of the highest quality, which will be of key importance to our success in the US market,” he says.

“These two key agreements we have been working towards for some time and are the culmination of months of negotiation, personal visits and the necessity of building key relationships.

“Both of our partners are commercially savvy and experienced operators and we look forward to working with them not only on the BCD, but also in development and production of our pipeline of products starting next with our 3mL syringe.”

 

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