Trauwin, owned by Qian Fuqing, will invest $2.5 million in the collagen development company, and pay $1.5 million in a licensing agreement.
The share price of (TASE:) rose 28% by midday on the TASE today to NIS 0.42, after announcing a strategic investment and cooperation agreement with a Chinese company. CollPlant develops and produces medical products on the basis of human collagen.
Trauwin pty will invest $2.5 million in CollPlant for a 10% stake. The investment is at NIS 0.53 per share, 60% above yesterday's closing price. Trauwin is a private company owned by Qian Fuqing, a medical devices entrepreneur who sold one of his companies, Trauson, a developer of orthopedic devices, to Stryker Corporation (NYSE: SYK) earlier this year.
Under the agreement with CollPlant, by November 15, the parties will sign agreements for CollPlant to supply its human collagen product and for the licensing of the products in China (except for orthopedic products which are not part of the agreement).
CollPlant will receive an additional $1.5 million from Trauwin for the licensing agreement in milestone payments. This payment is not in exchange for shares in CollPlant. The first $500,000 milestone payment will be paid when the investment agreement comes into effect.
CollPlant will also be eligible for single-digit royalties on future sales of its products in China, as well as revenue from the sale of collagen to Trauwin at predetermined prices.
CollPlant will use the $4 million from the investment and licensing to develop its lines of orthopedic and wound treatment products, and for general business purposes, including establishing collaborations and conducting clinical trials.