Uscom agreement with CIIC Shanghai

Company News

Uscom (ASX:UCM), a revenue stage, cardiovascular and pulmonary health technology company, has executed an agreement with China International Intellectech Corporation (CIIC) which it says is targeting US$48.2m (A$65m) in sales from China over the next five years.

Shanghai CIIC Science and Technology Development Company specialises in importing medical devices into China and will assist with the China CFDA registration and distribution of the new Uscom BP+ and SpiroSonic devices.

The importation and wholesale agreement is designed to accelerate the path to the Chinese market for the Uscom BP+ and SpiroSonic series of devices and will include the establishment of an Uscom office in Shanghai.

The contracted sales targets are for US$48.2m over 5 years, following CFDA approval, with first revenues expected in Q1 FY17.

CIIC is a state-owned enterprise managed by the Chinese Central Government. The company is headquartered in Beijing, with 126 subsidiaries and branches focusing on international cooperation in the fields of economy, technology and talent in China and 76 countries.

It has previously partnered with Medtronic, Philips, Zoll and Covidien for the distribution of medical devices into China, and last year generated revenues in excess of A$340m USD.

According to NSW Health Minister, Jillian Skinner, “High quality, globally recognised Australian innovations, with export partnerships into high value international markets are a platform for success and the economic transformation of Australia. China is a market of the future for Australian business, and remains largely untapped. This partnership in health and technology confirms the feasibility and value of investing in China, something our Government actively advocates.”

Mr Wenan Zhu, General Manager for Shanghai CIIC Science and Technology Development said: “CIIC Science and Technology Development are the leaders in medical device distribution in China and are rapidly growing, while cardiovascular disease, asthma and COPD are becoming increasingly common health care challenges. Our focus is on distributing practice leading technologies to improve medical care of these diseases in China and the Uscom products fit our needs and growth strategy well. Uscom is an established brand with a reputation for scientific leadership and with this agreement we are planning to improve medical care and make Uscom a brand leader in China.”

Uscom CEO, Associate Professor Rob Phillips said: “This agreement is transformational forUscom and is a platform from which we can deliver profitability and reliable revenue growth to investors for the coming decade. China is a massive and rapidly growing market, but complex for foreigners. A relationship with a Chinese Government owned distributor with scale and credibility will ensure we achieve the market penetration and revenues our products deserve.

"We will now proceed to register and market the new Uscom BP+ central blood pressure monitor and the SpiroSonic series of pulmonary testing devices with CIIC. We will continue to support and grow our current successful USCOM 1A distribution channels, as we expand our China operations. We believe the CIIC agreement is the key to long term business development and revenue growth, and our joint business plans are based on access to the rapidly growing, and increasingly health care conscious Chinese market. We currently derive approximately $1m revenue from China and believe we can rapidly increase this ten-fold with our new China strategy and two new product lines.”