Mercer Group licences technology to US firm
The stainless steel manufacturer, Mercer Group, has licensed its "breakthrough sterilisation" technology to a large American corporation in the medical sector, which it is not naming.
Mercer, headquartered in Christchurch and controlled by businessman Humphy Rolelston, said given the size of the United States market and the partner Mercer has signed with, "the transaction is likely to be material to the value of the company".
The shares rose 2 cents to 21c in early trading today.
"The S-Clave technology is a breakthrough sterilisation process that allows items to be sterilised inside a non-porous bag and then sealed so that the items can be stored safely without contamination," the company said.
The deal should result in Mercer receiving an average royalty of at least 5 per cent from the S-Clave equipment and the bag sales in North America.
However, sales are three to four years away and dependent on regulatory approvals in the US, the company said.
Mercer will receive an upfront payment of $800,000 net, plus further payments of up to at least US$1 million (NZ$1.2m) after three years. Milestones were in place for the agreement to remain exclusive.
Mercer said the licence agreement, exclusive for the North American market in the medical and laboratory fields, provided exclusive use of the technology in North America and that could include manufacturing of it.