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Lawrence-based medical device maker NxStage Medical Inc. is inking a $40 million deal with Japan-based Asahi Kasei Kuraray Medical in which NxStage will be providing dialyzer manufacturing expertise and capabilities.
NxStage (Nasdaq: NXTM) makes new dialysis products; Asahi is a major Asia renal products manufacturer. The $40 million is being delivered by way of a loan with a four-year term. Asahi’s $40 million loan is being offered with an 8 percent interest rate — NxStage’s current facility carries an 11 percent interest rate. Half of the loan’s interest is deferred to maturity and may be prepaid without penalty. NxStage will use the $40 million to pay off its entire debt obligation owed under the current credit facility.
Central to the agreement is that NxStage will make its dialyzers for Asahi under the Asahi brand at NxStage’s facilities in Germany. Asahi plans to sell the dialyzers exclusively in Asia and non-exclusively in the rest of world. Despite this, NxStage will retain all its rights in North America. NxStage also will license rights for its Streamline blood tubing set technology to Asahi. For its part, Asahi will supply its polysulfone hollow-fiber membrane to NxStage.
Moreover, if Asahi needs additional capacity from NxStage, it will pay for a new facility to provide both companies with additional dialyzer production resources. The new facility would be owned by Asahi but operated by NxStage; both companies believe this arrangement will result in cost savings.
Earlier this month, NxStage announced net revenue for the first quarter of 2009 of $33.7 million, an increase of 9 percent over last year’s first quarterly revenue of $31 million.
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