The Universal Biosensors, Inc. (ASX: UBI) share price is on the rise today after the company announced that it has signed a new deal with LifeScan.
During mid-morning trade, shares in the medical diagnostics company reached an intraday high of 46 cents. However, the Universal share price has since retreated to 41 cents, up 5.1%.
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Quick take on Universal
Universal is a specialist medical diagnostics company that focuses on the research, development, manufacture and commercialisation of diagnostic devices. Used by both consumers and professionals, these test systems can be adopted in an array of point-of-care (POC) settings.
According to Universal, the POC diagnostic market is worth US$15 billion a year.
What's driving the Universal share price higher?
According to its release, Universal advised that it entered in an exclusive licencing agreement with LifeScan Global Corporation. The agreement will see both parties work together to develop a device that is able to detect and monitor diabetes in animals.
Using LifeScan's technology, Universal aims to manufacture and sell a discrete single point measurement to monitor glucose. The device will include a biosensor, test strip and a meter for diabetes management.
Under the terms, standard customary conditions apply to both Universal and LifeScan. However, once the product is launched, if annual sales drop below US$10 million, the term of the contract will end.
Previously, LifeScan worked with Universal in commercialising and developing a diabetes strip and meter. To date, the company has sold more than 10 billion diabetes strips worldwide.
CEO commentary
Universal CEO Mr John Sharman spoke of the partnership, saying:
LifeScan paid UBI A$44.6 million in 2019 to buy out UBI's royalty stream which was based on the diabetes products developed using UBI technology. Our new deal with LifeScan means that we can use our existing know-how and combine it with the LifeScan technology to develop a new diabetes product for animals, which we will own.
Most if not all of the technology, know-how and manufacturing capability for diabetes strips and meters already exists at UBI and we expect to have a product available for sale within 18 – 24 months. Our ambition is to win a significant share of the animal diabetes market.
