Benzinga | Jan 26, 2021 06:36AM EST

Myomo Forms Joint Venture To Manufacture And Sell Co.'s Products In China; Signs Definitive Agreement With Beijing Ryzur Medical Investment Co To Own 19.9% Stake In JV, Myomo To Receive $2.5M Upfront Fee And JV Will Enter $10.75M+ Purchase Commitment

Joint Venture intends to enter into technology agreement with upfront license fee and minimum purchase requirements

Myomo, Inc. (NYSE:MYO) ("Myomo" or the "Company"), a wearable medical robotics company that offers increased functionality for those suffering from neurological disorders and upper limb paralysis, announces the signing of a definitive agreement (the "JV Agreement") with Beijing Ryzur Medical Investment Co., Ltd. ("Ryzur Medical") to form a joint venture (the "JV") to manufacture and sell the Company's current and future products in greater China, including Hong Kong, Macau and Taiwan.

Majority ownership in the JV, to be named Jiangxi Myomo Medical Assistive Appliance Co., Ltd., will be held by Ryzur Medical, a successful and growing medical device manufacturer based in Beijing, and Chinaleaf Capital Management Co., Ltd., a private fund based in Shanghai that invests in growth opportunities in new technologies. Myomo will own a minimum 19.9% stake in the JV. Ryzur Medical and its partners have committed to invest a minimum of $8.0 million and up to $20 million in the JV over five years, and when established, the JV intends to enter into a 10-year agreement (the "License Agreement") to license Myomo's intellectual property and purchase MyoPro Control System units, a core component containing the product's firmware and software, from the Company. Under the License Agreement, Myomo would be entitled to receive an upfront license fee of $2.5 million, and the JV would enter into an escalating purchase commitment for a minimum of $10.75 million in MyoPro Control System Units during the next 10 years, subject to receipt of regulatory approvals necessary to permit sales of the product in the greater China territory. Payment of the license fee and transfer of technology requires the completion of certain milestones by the parties to the JV, which are expected to be completed before the end of 2021. The JV will work together with Ryzur Medical and Myomo to develop enhanced technologies and new devices based on the current Myomo technology for the Chinese market.

With a population of approximately 1.4 billion, China represents the largest market for MyoPro's powered arm braces. There are an estimated 14 million people in China with chronic arm paralysis due to stroke, spinal cord injuries and other neurological causes, and with approximately 2.5 million strokes in China each year, hundreds of thousands of people will be left permanently disabled. Many of these are candidates for the Company's powered arm braces.

"With this joint venture we can begin addressing the large unmet need in China, which cannot be done effectively without a local partner. Myomo is now positioned to provide our devices in the world's three largest markets, namely the U.S., Europe and China," said Paul R. Gudonis, Chairman and CEO of Myomo. "We are very fortunate to partner with such an established medical device and rehabilitation services company and investor to bring our life-changing technology to these patients and improve their healthcare outcomes and quality of life. This joint venture is another step toward our ultimate goal of becoming the worldwide standard of care for upper extremity paralysis."

"Myomo offers a unique and proven technology that is much-needed in China, and fits very well with our existing offering of medical products and services," said David Ren, General Manager of Ryzur Medical. "Ryzur intends to use its sales and distribution channels to help the joint venture to bring the MyoPro product line to patients and hospitals across China. We look forward to offering the benefits of Myomo's products to Chinese patients as quickly as possible."