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Nephros Announces Strategic License and Supply Agreement with Medica S.p.A for Ultrafiltration Products

Monday, April 23, 2012 8:30 AM

RIVER EDGE, N.J., April 23, 2012 /PRNewswire/ -- Nephros, Inc. (OTC Bulletin Board: NEPH), a medical device company developing and marketing filtration products for therapeutic applications, infection control, and advanced water purification solutions, today announced that the company has entered into a strategic license and supply agreement with Medica S.p.A.  That agreement, which is effective April 23, 2012, grants Nephros exclusive global rights, with specific exceptions, to market products based on Medica's proprietary Medisulfone ultrafiltration technology.

MEDICA S.p.A is located in Medolla, Italy, the largest European center for developing and manufacturing of medical products.  MEDICA manufactures and sells a complete range of medical devices in the areas of Chronic and Acute Dialysis, Gastroenterology, Urology, Oncology, Cardiology and microbiological water purification for use in the hospital sector.  The Medica Water Division, based in Iglesias, Italy, manufactures a proprietary hollow fiber polysulfone synthetic membrane for blood and water purification in medical and industrial applications.  For more information about MEDICA, please visit www.medicasrl.com

"Medica and Nephros have a long history of collaboration, and I am pleased to formalize our relationship via today's agreement which positively addresses the interests of both companies," said Luciano Fecondini, CEO of Medica.

"We are excited to solidify our relationship with Medica through this agreement," said Dr. Paul Mieyal. "The Medisulfone technology is a differentiated component of ultrafiltration applications. This agreement consolidates the ultrafiltration products and intellectual property of Nephros and Medica into a comprehensive product line and enables Nephros to market these products on an exclusive basis globally."

Summary of Terms

Under the terms of the agreement, Medica will provide an exclusive license to Nephros for its ultrafiltration technology on a worldwide basis for the period April 23, 2012 to December 31, 2022.  Medica will retain certain product and marketing rights for Italy for the period from April 23, 2012 to April 23, 2015, at which time Nephros will have the option to transition Italy into the global exclusive license for no additional consideration. In exchange for the license, Nephros will pay to Medica 1.5 million euro in two installments: 500,000 euro on April 23, 2012 and 1,000,000 euro on January 25, 2013.  As part of the agreement, Nephros has granted to Medica 300,000 options to purchase Nephros common stock which will vest over the first three years of the agreement.  For the period April 23, 2014 through December 31, 2022, Nephros will pay to Medica a royalty of 3% of net sales.

Nephros Ultrafiltration Products

The Association for the Advancement of Medical Instruments' (AAMI) adoption of more stringent water purity standards for dialysis applications combined with significant observational studies showing a substantial reduction in required erythropoietin dosing when the Nephros DSU is utilized during dialysis therapy has led to significantly increased interest in Nephros ultrafiltration products.


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