Ann: PeriCoach China joint venture, page-2

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Analytica Announces Expansion of PeriCoach®
Pelvic Health Solution into China
30th March 2021, Brisbane, Australia
• PeriCoach will be distributed through extensive network of postpartum care centres, hospitals,
pharmacy chains, and online platforms serviced by the JV partners.
• Agreement builds upon existing Middle East distribution partnership in 10 countries to facilitate
growth and manufacturing of PeriCoach in international markets.
• Clinical trial confirms unsupervised PeriCoach treatment is on par with in-clinic pelvic floor
physical therapy for treating stress urinary incontinence, at much lower cost overall.
• PeriCoach provides cost-effective solution to improve quality of life and ease burden of care in
postpartum as well as aging populations and eliminating the daily cost of diapers.
Analytica Limited (ASX:ALT), the Australian manufacturer of the PeriCoach pelvic floor exercise system
for the treatment of stress urinary incontinence, has entered into a joint venture (JV) agreement to
manufacture, distribute and market the system in China, Macau, Hong Kong and Taiwan. The JV
partners with Hebei NACOL Bio-Technology Co., Ltd (Nacol) and Shijiazhuang Biosphere Pty Ltd
(Biosphere), Peoples Republic China (PRC) companies based in Hebei Province.
Nacol key shareholders includes two highly experienced Chinese medical manufacturing and distribution
companies, Heibei Aineng Biological Technology Co., Ltd and Shijiazhuang YST Medical Supplies Co. Ltd.
The JV will register PeriCoach with the Chinese Food and Drug Administration (CFDA) as a class II medical
device. With CFDA clearance, PeriCoach can become a prescription treatment, initially covering the
hospital network in the North China area.
Expansion into China will support the distribution of PeriCoach to both the rapidly growing postpartum
rehabilitation market and the early-stage preventative senior market, as one in three women worldwide
suffer from stress urinary incontinence. The agreement furthers Analytica’s strategy to bring PeriCoach
into global markets, building upon growth in the Middle East with partner Motion Egypt LLC, and pursuit
of other partners in North America, Europe and Southeast Asia outside of China.
PeriCoach is comprised of a medical device, smartphone app and the PeriVault, the largest pelvic floor
muscle exercise database in the world. PeriCoach includes biofeedback technique guidance technology
that helps women correctly perform pelvic floor exercises, also known as “Kegel” exercises, while the
device and app are being used. Real-world data from PeriCoach patients1 shows that majority of women
do not know how to engage these hidden muscles when they first use the device. PeriCoach technique
guidance means “Kegels” can be done correctly and confidently by any woman in the privacy of her own
home. PeriCoach is the only device which actually measures the muscle strength in the pelvic floor.
A recent independent, peer-reviewed, randomized controlled clinical trial2,3 performed at the University
of New Mexico and published in the Journal of Female Pelvic Medicine & Reconstructive Surgery
concluded that the PeriCoach biofeedback system, with no formal instruction, is non-inferior and on
parwith in-clinic pelvic floor physical therapy in a pelvic floor centre of excellence, making this system
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the most cost-effective4 form of treatment for stress and mixed urinary incontinence..
Currently manufactured in Australia, the new PeriCoach manufacturing line for the Chinese market only
is located in the Shijiazhuang National New and High Technology Development Zone and will be listed as
one of the major projects in the free trade zone and high technology zone.
PeriCoach will be distributed through the existing extensive network of hospitals and postpartum
organisations serviced by the JV partners. The JV partners have collaborated with a leading postpartum
care service platform in China with coverage of 100 cities and more than 30,000 clinical professionals.
In China, 15 million babies are born each year.5 With the rapid development of the modern economy, the
postpartum rehabilitation industry has grown to 3.95bn yuan pa (US$608M) in 2018, with a compound
annual growth rate of 43.9%.6
Furthermore, China, as with Western countries, has an aging population among which 31% of older
women experience urinary incontinence, but only 25% of those currently seek medical assistance.7 The
JV sees a large public health opportunity for conservative treatment of incontinence in women aged 50-
70 years, reducing the quality-of-life impact along with the longer-term economic burden of aged-care.
The CEO of Aineng, Dr LanJu Xu, will lead the JV and comments: “We have strong confidence in
Analytica’s R&D capabilities and do believe that Analytica and NACOL can take advantage of each parties’
strengths from this Joint Venture and achieve a win-win situation. Bringing together Analytica’s leading
technology and NACOL’s extensive industry resources in China, we are looking forward to witnessing
PeriCoach enter this huge market.”
Mr Xu has a strong background in medical devices and materials, including a track record of 17 class II
medical device approvals and completed clinical trials of two class III medical devices. He is also the
Team Lead for Key Research & Development (R&D) Program of the Ministry of Science and Technology
in China, which is operated by four leading universities and one of the top three hospitals in China.
Additionally, Mr Xu is the lead of the medical material R&D Center in Nankai University.
Analytica Chairman, Dr Michael Monsour, comments: “Entering the China market with such
nimble, experienced operators is a major milestone for Analytica. China is leading the world in recognising
the need for effective postpartum care and is facing the challenge of caring for its large aging population
by using the PeriCoach system to assist women with managing incontinence. PeriCoach is a proven costeffective solution that will dramatically improve quality of life and burden of care for women including
the use of costly diapers. We look forward to the continued exploration of our strategic options to expand
the availability of PeriCoach globally.”
Analytica has recently moved its Australian manufacturing operations and is looking to online sales in the
US, UK/Ireland, Australia and New Zealand in the near future. PeriCoach has USFDA 510(k) clearance,
Australian ARTG registration, and CE-marking.
The joint venture interests are Heibei NACOL (65%), Analytica (20%) and Biosphere (15%). The joint venture
agreement contains mechanisms to assist Analytica maintain its 20% shareholding until Heibei NACOL has made
a total share contribution of RMB 10 million cash.
Analytica's shareholding in the joint venture company confers on it voting rights and rights to share in any
surplus on liquidation. As Analytica is entitled to a 15% royalty income from joint venture sales, it is not entitled
to share further in the joint venture dividends, which will be distributed to the other joint venture parties in
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proportion to their shareholdings.
Under the joint venture, Nacol is responsible for the registration of the joint venture company, obtaining the
necessary PRC regulatory approvals (including a business license and product approval licence), manufacturing,
distribution and marketing of the PeriCoach®.
It is also responsible for providing all the necessary funding for the future development of PeriCoach® (including
by way of shareholder loans of not less than five years maturity at interest rates in the PRC) and ensuring that
products manufactured by the joint venture company meet ISO standards.
Analytica will retain ownership of the PeriCoach® intellectual property and be entitled to continue to develop it
and exploit it independently outside the agreed territories. Any PRC product approvals (for example medical
device registration or medical device filing) will be held in the name of Analytica. Joint improvements to the
intellectual property will be jointly owned by the joint venture company and Analytica.
Analytica will have 2 board seats out of a total of 5 on the joint venture company. The chairman will be a Nacol
director nominee. Shareholder decisions will be made by majority vote except for a number of reserved matters
which require the approval of Analytica and Nacol as well as a majority of shareholders holding at least two
thirds of the registered capital of the joint venture company. These include decisions relating to the issue of new
shares, distributions of net profit, approval of the annual business plan and budget, material capital expenditure
and KPI setting each year.
The technology licence agreement contains commercial provisions which are commonly found in manufacturing
and distribution licenses relating to the protection and use of licensed intellectual property for the manufacture,
marketing and distribution of products manufactured under licence; compliance with quality assurance
standards; reporting of manufacturing costs, production records, historical and sales forecasts; setting KPIs for
marketing spend and sales targets each contract year; the auditing of sales to verify royalties; and non-compete
and non-solicitation obligations by the joint venture parties.
Authorised for release by the Board.
Dr Michael Monsour