MicroPort and Sorin Partner to Grab Share of China’s CRM Market

A new joint venture of two international medtech companies is going after the growing cardiovascular medical device market in China. MicroPort Scientific Corp. and the Sorin Group have formed a joint venture to market and develop cardiac rhythm management (CRM) devices (implantable pacemakers, defibrillators, cardiac resynchronization devices and related devices) in China.

MicroPort will hold a 51 percent stake, while Sorin will hold the remaining 49 percent interest. In accordance with the agreement, MicroPort and Sorin will make initial capital contributions of, respectively, $10.2 million and $9.8 million in cash in the joint-venture company called MicroPort Sorin CRM Co. Ltd.

The company is to be located in Shanghai and is scheduled to start operations in the first half of this year. Under the agreement, the two companies will collaborate on the import, sale and service of Sorin’s CRM devices in China and, in accelerating the development of locally manufactured CRM products for the Chinese market.

“Significant engineering and development resources” from both parties will transition to the joint venture immediately, the companies reported. According to data cited by the Sorin Group, the Chinese CRM market remains under-penetrated and is estimated to be approximately $500 million, growing approximately 10 percent per year in the next five years.

“This agreement represents a key milestone in MicroPort’s strategy, enabling us to enter in the rapidly growing Chinese CRM market and expanding our high-end medical device product portfolio. We recognize Sorin as an innovative player in the CRM field and we are looking forward to supporting the commercialization of Sorin’s devices and ultimately realizing our goal to develop locally manufactured devices which are specifically designed for China and fit the needs of the growing demand in our country,” said Zhaohua Chang, chairman and CEO of MicroPort Scientific Corporation.

“This is an important milestone in our strategy to build a local presence in China. Access to CRM therapies in China is expected to expand rapidly and the market should grow at double-digit rates in the foreseeable future. Expanding our footprint in China in CRM is key to our long-term growth strategy,” said André-Michel Ballester, CEO of Sorin Group. “MicroPort, whose strong reputation, broad distribution network and talented management team is recognized by its customers, is the ideal CRM partner for Sorin in China.”

The transaction is subject to customary closing conditions, including receipt of regulatory clearances.

MicroPort Scientific Corp. is a China-based medical device company. The firm maintains operations in the cardiovascular, orthopedics, electrophysiological, endovascular, neurovascular, surgical management, diabetes care, and endocrinal management markets.

Most recently, MicroPort made headlines for its acquisition of the large-joint (hips and knees) business of Wright Medical Technology Inc. The company’s new orthopedic arm is located in Arlington, Tenn.

The Milan, Italy-based Sorin Group makes medical technologies for cardiac surgery and for the treatment of cardiac rhythm disorders. With 3,750 employees worldwide, the company focuses on two major therapeutic areas: cardiac surgery (cardiopulmonary products for open heart surgery and heart valve repair or replacement products) and cardiac rhythm management (pacemakers, defibrillators, cardiac resynchronization devices).