Allium, a subsidiary of Allium Medical Solutions, has signed a strategic distribution agreement in Brazil with Meizler UCB Biopharma. The agreement is exclusive for a period of five years commencing from the receipt of regulatory approvals for sale in Brazil. Under the terms of the agreement, the distributor committed to purchase a minimum of NIS 44 million (US$12 million) worth of Allium's urological stents over a period of five years, in accordance with minimum purchase requirements set forth in the agreement. The company estimates that the distributor will commence sales under the agreement between the second half of 2014 and the first half of 2015, subject to obtaining the necessary regulatory approvals necessary. The agreement includes, among others, provisions related to the company's ability to terminate the agreement in the event of merger or acquisition, which results in change of control in Allium.
Under the provisions of the agreement, the distributor has committed to obtain the regulatory approvals required for sale in Brazil, bear all registration costs, implement marketing activities in accordance with an annual programme that will be coordinated with the company and will conduct training workshops for physicians who will use the company's products. The agreement includes provisions with respect to the protection of intellectual property rights of the company, confidentiality, indemnification, limitation of liability as well as other standard provisions in medical devices distribution agreements. In the event that the distributor meets all contractual undertakings, the agreement will be extended for additional three year periods.
In the event the distributor will not meet the minimum purchase requirements stipulated for each year, the company may terminate the distribution agreement or cancel the exclusivity to the company's products, in accordance with the conditions of the distribution agreement.
The collaboration with Meizler UCB Biopharma may serve as an anchor to expand commercial activities in other key markets in South America.