2023-07-20

Acotec and Boston Scientific Sign Master Collaboration Agreement and Master Service Agreement

Acotec Scientific Holdings Limited (“Acotec”, stock code: 6669.HK) today announced that it has signed a Master Collaboration Agreement and a Master Service Agreement with Boston Scientific Corporation ("Boston Scientific", stock code: NYSE: BSX) . These Framework Agreements primarily embody the collaboration between Acotec and Boston Scientific in product commercialization, manufacturing services and product development.

Boston Scientific is a global developer, manufacturer and marketer of medical devices, specializing in the fields of Cardiology, Peripheral Interventions, Endoscopy, Urology and Neuromodulation. The company is committed to advancing science for life by providing a broad range of high performance solutions that address unmet patient needs and reduce the cost of healthcare globally. In 2022, Boston Scientific achieved revenue of over $12 billion, and invested approximately $1 billion in research and development (“R&D”).

Acotec is dedicated to addressing unmet clinical needs with trusted innovative technologies. With a solid foundation in R&D, Acotec has established a comprehensive pipeline layout in Peripheral Interventions, Cardiology, Nephrology, Neurology, and Andrology. Notably, Acotec took the lead by launching AcoArt Orchid® & Dhalia®, the first peripheral drug-coated balloon (DCB) in China, four years ahead of its competitors. Moreover, its below the knee drug-coated balloon (BTK DCB) has set a remarkable precedent by demonstrating superior clinical outcomes on a global scale, earning the designation of "Breakthrough Device" by the U.S. Food and Drug Administration (FDA). With remarkable success in the domestic market and a gradual expansion of its pipelines, Acotec possesses significant market potential. Additionally, Acotec's upstream supply chain integration empowers its product development and manufacturing, ensuring a consistent advantage.

After Boston Scientific became the controlling shareholder of Acotec through a partial tender offer completed in February 2023, both companies have been proactively exploring business collaboration opportunities in R&D, manufacturing, and commercialization. The signing of the Master Collaboration Agreement and Master Service Agreement will further propel the realization of synergistic value, ensuring the collaboration materializes effectively.

According to the Master Collaboration Agreement, in the domestic market, cross-selling activities will be conducted. By distributing each other's products, both parties can reach new customers while strengthening existing relationships. In certain overseas markets, Boston Scientific enjoys exclusive distribution rights for selected Acotec products, including those with peripheral DCB indications, peripheral aspiration system, radiofrequency ablation system and coronary PTCA (Percutaneous Transluminal Coronary Angioplasty) balloon, etc., facilitating Acotec's entry into a wider global market and allowing them to reach more patients through the extensive sales network of Boston Scientific. The annual caps for sale of the Boston Scientific Products to the Acotec will be $2 million each year from 2023 to 2025. Conversely, the annual cap for the sale of Acotec Products by Boston Scientific will be $20 million, $50 million and $110 million, respectively.

With advanced production facilities situated in Beijing and Shenzhen, Acotec possesses cutting-edge capabilities in manufacturing precision catheter raw materials and is progressively expanding its production capacity. This enables Acotec to provide professional manufacturing services to Boston Scientific to address their cost optimization requirements. The annual caps for provision of manufacturing services by Acotec to Boston Scientific will be $5 million, $8 million, and $10 million, respectively, from 2023 to 2025.

The Master Services Agreement mainly encompasses the specific collaboration in R&D supporting service and Contract Sales Organization (CSO) services between the two parties.

Both parties may engage in close collaboration, providing R&D supporting services and sharing innovative resources. On one hand, Acotec can leverage Boston Scientific's established and comprehensive global R&D network to enhance its R&D capabilities. On the other hand, Boston Scientific can benefit from Acotec's R&D expertise to improve efficiency. Additionally, both parties may provide CSO services to each other, further expanding the scope of collaboration. From 2023 to 2025, the annual caps for the provision of R&D supporting and CSO services by Boston Scientific to Acotec will be $50 million, $90 million, and $120 million respectively. Conversely, the annual caps for the provision of R&D supporting and CSO services by Acotec to Boston Scientific will be $60 million, $110 million, and $145 million, respectively.

We sincerely invite investors to closely follow the progress of this important collaboration. For specific details, please refer to Announcement we published on July, 20, 2023. It is important to note that the aforementioned collaboration still need to obtain the approval from the Independent Shareholders.

Commenting on this milestone, Ms. Jing LI, CEO of Acotec, emphasized the significance of the Master Collaboration Agreement and a Master Service Agreement:

"The signing of these two framework agreements holds immense strategic importance and delivers substantial commercial value for both Acotec and Boston Scientific. Firstly, our comprehensive product portfolio will enable us to seize vast sales opportunities globally and elevate our brand influence. Secondly, the manufacturing services will assist Boston Scientific in cost reduction and optimizing their product supply capabilities. Furthermore, our collaborative R&D efforts will drive technological advancements and facilitate continuous product innovation. The aforementioned business collaboration will broaden Acotec's revenue sources, enhance profitability, and promote the steady development of the company. In the future, Acotec and Boston Scientific will embark on a new journey together, providing cutting-edge product solutions for global patients."

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Acotec and Boston Scientific Sign Master Collaboration Agreement and Master Service Agreement