ITOCHU Enters into Capital and Business Alliance with Promed Medical Tech. (Suzhou) Co., Ltd., a Chinese Medical Device Manufacturer
－Selling in China and abroad and technology licensing－
March 31, 2010
ITOCHU Corporation (hereinafter “ITOCHU”) and Goodman Co., Ltd. (headquartered in Meito-ku, Nagoya; President: Takehito Yogo; hereinafter “Goodman”), together with ITOCHU (China) Holding Co., Ltd. (headquartered in Beijing, China; President: Nobuo Kuwayama; hereafter “ITOCHU China”), a 100% subsidiary of ITOCHU, will form an alliance with Promed Medical Tech. (Suzhou) Co., Ltd. (headquartered in Suzhou, Jiangsu, China; President: Liu Pei; hereafter “Promed”), a Chinese medical device manufacturer for cardiovascular intervention,in selling and licensing the technology of a PTCA (*1) balloon catheter and DES(*2), which are medical devices used to treat cardiovascular diseases. Under the agreement, ITOCHU will accept shares to be issued in a private placement by Promed to form a capital alliance. The total equity stake to be held by ITOCHU, Goodman and ITOCHU China will be 12.09%.
Promed is a medical device manufacturer established in 2006. It has strong development capabilities, backed by its alliance with Nanjing University, which boasts sophisticated technological expertise. In particular, it has pioneered and is actively pursuing the development of a next-generation DES (*3) that uses polymer and material that is highly effective in treatment and that reduces the burden on the human body. Promed started the development of a next-generation DES in 2006, and has completed 290 clinical trials, expecting to file a new medical device approval application in China in the near future.
Currently, the Chinese government is aiming to raise the level of healthcare in China, and has allocated 850 billion yuan (about 11 trillion yen) over a period of three years from April 2009 in its “New Medical System Reforms” to develop a healthcare insurance system and upgrade medical facilities and institutions. The reforms are expected to increase demand for DES and other sophisticated medical devices, expanding the medical device market at an annual rate of 30%.
Through the capital and business alliance with Promed, ITOCHU and Goodman will engage in the following business activities:
- Selling the Promed products outside China
ITOCHU will hold the exclusive right to sell Promed products in areas outside China. ITOCHU will use its global network and will commence distribution first in Asia and South America.
- Selling the Promed products in China
Goodman has a nationwide distribution network in China through its 100% subsidiary, Goodman International Medical Trading (Shanghai) Co.，Ltd. (headquartered in Shanghai, China; President: Linhai Lu; hereafter “Goodman Shanghai”). By using the network, it aims at expanding sales of Promed products, as well as Goodman products with an competitiveness in China.
- Technology licensing to Promed
Goodman has about a decade’s experience in manufacturing and developing PTCA balloon catheters, stents, etc. By providing its wealth of technical expertise to Promed, it aims to enhance the quality of Promed products and increase the competitive edge of Promed.
The medical device market in China is expected to continue to grow. ITOCHU and Goodman will enter the expanding Chinese market through a capital and business alliance with Promed and will strive to strengthen cooperative ties with medical device manufacturers that have increasing global competitiveness.
ITOCHU identifies healthcare as one of the key new business areas in its medium-term management plan Frontiere 2010. It will use the alliance as a stepping stone to pursue the establishment and expansion of new business in the healthcare area abroad. By positioning China as a strategic region in the healthcare field, ITOCHU aims at creating synergies with healthcare related subsidiaries in both Japan and abroad, as well as new businesses.
Goodman has over many years accumulated expertise in development, manufacture and sales in the medical device market in Japan, the world’s most demanding market. At the same time, it has also cultivated expertise in sales strategies in the medical device market in China.
Through the alliance, Goodman will provide support to Promed from both technical and sales aspects, with the aim of delivering safe, high-performance products to markets, as well as boosting the sales expansion strategies of Promed and the ITOCHU Group. With a view to launching joint development with Promed, Goodman is taking steps to strengthen and develop technical cooperation.
Percutaneous Transluminal Coronary Angioplasty
Drug Eluting Stent
- Next-generation DES
It is considered more effective than current the DES in treatment as its uses cobalt chrome alloy, which is powerful in supporting blood vessels, and biodegradable polymer that leaves no residue in the human body.
Profile of Promed Medical Tech. (Suzhou) Co., Ltd.
|Company||Promed Medical Tech. (Suzhou) Co., Ltd.|
|Address||No1326 Binhe Road, Suzhou New District, Suzhou, Jiangsu, China|
|Registered capital||US $5.2851 million (about 480 million yen)|
Beijing Yuehuahuitai Co. Ltd. 31.65%
Jiangsu Nandasoft Technology Company Limited 26.37%
Vascore Scientific Co., Ltd. 21,98%
Shanghai Bangan Investment Co.,Ltd. 7.91%
Goodman 3.00%ITOCHU China 2.27%
|Number of Employees||35|
|Business||Manufacturing, development and sales of medical devices|