Mtph26 Feb 2019 12:12
Finalisation of Strategic Investment and Licence Agreement
Midatech Pharma (AIM: MTPH; Nasdaq: MTP), the R&D company focused on delivering innovative oncology and rare disease products to patients, is pleased to confirm that further to the announcement made by the Company on 29 January 2019 and following the approval at yesterday's general meeting by shareholders of the strategic investment by China Medical Systems Holdings Limited group ("CMS") and A&B (HK), the licence agreement entered into by the Company and CMS is now formally in force.
The strategic investment by CMS and A&B (HK), comprised an £8m subscription in Midatech, for in aggregate 207,792,206 Ordinary Shares at a price of 3.85 pence per share. The Subscription Shares were admitted to trading on AIM today alongside the Placing Shares and Open Offer Shares.
From a Midatech product perspective, as stipulated in the licence agreement, CMS has rights to develop and commercialize the Company's pipeline of products (including any products which are in or enter into pre-clinical or clinical development within a period of three years) in Greater China and certain South East Asian countries excluding Japan and South Korea (the "CMS Territory") in perpetuity. Subject to certain milestones being achieved, the Company will be entitled to receive regulatory and sales-based milestone payments as well as royalty payments.
From a Midatech technology platform perspective the licence agreement permits CMS to identify its own potential product opportunities and, if agreed by Midatech, CMS will be entitled to carry out such development in China with initial assistance from Midatech which will be funded by CMS through a technology transfer fee payable to the Company by CMS. If such products obtain approval, CMS will retain the rights specific to such developed products and will license the Company to commercialize them outside the CMS Territory in the rest of the world.
China Medical System Holdings Limited (HKG: 0867), is a well-established, innovation-driven specialty pharma with a focus on sales and marketing in China. CMS has established the diversified product introduction strategies to constantly provide competitive products and services to fulfil the unmet medical needs of the China market, as well as to sustain the momentum for its future development. CMS has a fully-covered nationwide promotional network, mainly focusing on academic promotion. As at 30 June 2018, CMS covered over 48,000 hospitals and medical institutions across China.
The collaboration provides Midatech with a key strategic partnership in China and South East Asia, access to the significant Chinese market, substantial investment and funds for Midatech's current key programs, as well as additional CMS funded opportunities for the Company's technology platforms Q-Sphera, MidaSolve, and MidaCore.
Dr Craig Cook, Chief Executive Office of Midatech Pharma, said: "We are delighted to finalise the licence agreemen
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