CMS entered into a framework asset transfer agreement for PoNS

Company News

China Medical System Holdings Limited (the “Company”, together with its subsidiaries, the “Group”) is pleased to announce that the Group through its wholly-owned subsidiary (the “CMS Subsidiary”) entered into a framework asset transfer agreement (the “Agreement”) with A&B (HK) Company Limited (“A&B”) relating to the portable neurostimulation devices developed by or for the Helius Medical Technologies group (“Helius”) (the “Products”). A&B is a company wholly owned by Mr. Lam Kong, a controlling shareholder (as such term is defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”)) of the Company. According to the Agreement, the Group has agreed to acquire from A&B all assets related to the Products (the “Assets”) in China (including Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan) (the “Territory”) (the “Transaction”).

The Assets were originally purchased by A&B from Helius. The Product refers to the portable neurostimulation devices (whether under the name of PoNS Devices or otherwise) developed by or for Helius, together with any subsequent improvements and replacements for such devices developed by or for Helius or subsequently acquired by Helius. The Assets include without limitation: (i) regulatory approvals for the Product in the Territory; (ⅱ) the right to manufacture the Product for the Territory as well as the manufacturing technology of the Product exclusively related to the Territory; (ⅲ) intellectual property rights related to the Product in the Territory; and (ⅳ) copies of all data, books, records, commercial information, medical information and other information which are related exclusively to and necessary for the manufacture and commercialization of the Product for the Territory. In addition, pursuant to the Agreement, the Group will also acquire all the necessary licenses related to, among other things, the commercialization of the Product.

Traumatic Brain Injury (TBI), also known as brain damage or head injury, is brain tissue damage caused by trauma. PoNS, Portable Neuromodulation Stimulator, a class II medical device, is the only tongue-delivered stimulator which stimulates the cranial nerves (trigeminal and facial nerves) by acting on the tongue. PoNS is a non-invasive device with a compact design. It is ready-to-wear and has the characteristic of safety, easy to use and patient personalization. PoNS is a patented product. In August 2017, Helius has completed the registrational clinical trial of PoNS for the marketing and is planning to submit 510(K) application to FDA in the third quarter of 2018.

There is a large unmet treatment need for rehabilitation of TBI prognostic balance disorders. However, no drugs or methods are approved to solve this treatment difficulty in domestic and overseas currently. PoNS has shown a good healing efficacy in the registered clinical trial. Therefore, once approved, PoNS will provide patients with a new treatment mode to improve the balance disorders, self-care ability and quality of life, and greatly reduce the financial burden for patients and their families.

Moreover, except for the treatment of TBI, further clinical researches of PoNS for sequelae of stroke and cerebral palsy are also actively progressing, based on the mechanism and approach of it. Considering the huge patient population of TBI, stroke and cerebral palsy in China, PoNS will have a fairly broad market prospect.

Helius Medical Technologies is a neurotech company focused on neurological wellness. Its purpose is to develop, license and acquire unique and non-invasive platform technologies that amplify the brain’s ability to heal itself. Helius is a publicly traded company listed on the Toronto Stock Exchange (TSX:HSM) in Canada and the NASDAQ (OTCQB:HSDT) in the United States.

This cooperation will further enrich the Group’s patented innovative pipeline products and the Group believes that the Product will have broad market prospects after being commercialized in the Territory.