Ekso Bionics, Inc. is to establish a joint venture to develop and serve the exoskeleton market in China and other Asian markets and to create a global exoskeleton manufacturing centre.
It will partner with Zhejiang Youchuang Venture Capital Investment Co., Ltd (ZYVC) and Zhejiang Silicon Paradise Asset Management Group.
The joint venture will develop, sell and support exoskeleton products into China, Hong Kong, Singapore, and Malaysia, and will be capitalized at greater than $100 million over its term.
Stroke is the leading cause of death in China, and about 2 million Chinese die of stroke-related illnesses every year.
There are currently 12 million stroke patients in the country and the number is expected to more than double to 30 million by 2030.
About 75% of the stroke patients have different degrees of disability, of which 40% are severely disabled.
In China today there are also more than 2 million spinal cord injury patients, a patient population that Ekso Bionics also serves, with an additional 100,000 to 140,000 spinal cord injuries occurring annually.
Ekso Bionics will license its manufacturing technology and contribute its relevant Chinese patent rights to the joint venture in exchange for a 20% ownership position, with the other partners committing over $90 million in cash.
As part of the agreement, subject to certain conditions, Ekso Bionics will receive royalties on the joint venture’s medical and industrial product sales in China, Hong Kong, Malaysia, and Singapore.
ZYVC and its related parties will also make an equity investment of $10 million in Ekso Bionics Holdings, Inc., of which $5 million is being invested now and the remaining $5 million will be invested after the joint venture begins shipping products.
A portion of the joint venture capital will be used to construct a manufacturing facility in Zhejiang, one of the most developed and enterprising regions in China with the highest concentration of privately-owned businesses in the country.
“Despite the significant impact that stroke has on the Chinese population, the stroke and spinal cord rehabilitation industry in China is not as developed as it is in the United States,” said Jack Peurach, President and Chief Executive Officer of Ekso Bionics.
“This joint venture is a transformative opportunity both for Ekso Bionics and for the millions of Chinese stroke and spinal cord injury patients who currently have limited access to advanced rehabilitation technologies.
“This joint venture positions us to become the leader in both medical and industrial exoskeletons in China.”
Gaining access to the world’s largest market for stroke rehabilitation services is expected to expand Ekso Bionics’ revenue opportunities while providing economics of scale that will accrue to its current markets and support profitable expansion into other developing markets.
The joint venture’s manufacturing facility will be purpose-built to manufacture the component parts of Ekso Bionics’ products at scale.