PLC Systems, Edwards amend Optiwave deal
This article was originally published in Clinica
PLC Systems could gain up to $3.2m as a result of an amendment to an agreement with Edwards Lifesciences for the commercialisation of the latter's Optiwave 980 cardiac laser ablation technology.
The two companies had entered into the Optiwave 980 agreement in February 2004. Under the terms of the original contract, PLC Systems agreed to take on the ongoing development and manufacture of both the Optiwave 980 laser systems as well as the disposable components, while Edwards would be responsible for the worldwide distribution of the products.
With this recent amendment, PLC will transfer to Edwards manufacturing and development rights for the system's disposable handpiece. In return, the Franklin, Massachusetts firm will receive from Edwards an upfront payment of $1.5m and royalties of up to $1.7m from future sales of the disposable components. PLC will retain exclusive manufacturing rights for the current-generation Optiwave 980 laser systems and have the right of first refusal to develop and manufacture the next-generation technology.
Mark Tauscher, PLC's president and CEO, said that the financial gains from the restructuring of the agreement put the company in a stronger economic position overall. He added that the new arrangement also means the firm no longer needs to ramp up and devote substantial manufacturing and engineering resources for Optiwave 980 disposables.
Edwards is already global distributor of PLC's CO2 Heart Laser systems, designed to perform CO2 transmyocardial revascularisation (TMR) to alleviate symptoms of severe angina. For 2005, PLC recorded flat growth in revenue ($7.64m compared to $7.57m in 2004) and the company is expecting the Optiwave 980 deal to help take it beyond the TMR market.
The FDA-cleared Optiwave 980 system is designed to treat atrial fibrillation, a condition that affects over 2.2 million individuals in the US, where it is responsible for 15% of all strokes. The device is used to ablate precise points in the cardiac tissue, and the lesions created in this process then blocks the delivery of wrong electrical messages to the heart - which would otherwise lead to atrial fibrillation.