May 19, 2009
Asahi Kasei Kuraray Medical Co., Ltd.


Conclusion of multi-faceted business alliance
 
Asahi Kasei Kuraray Medical and NxStage Medical, Inc. (Nasdaq: NXTM) of the US have concluded an agreement for the establishment of a multi-faceted alliance in the field of hemodialysis products, including certain therapeutic apheresis products.

The alliance combines the complimentary strengths of the two partners in superior competitive technology, product development capability, and market presence, enabling both companies to accelerate their global growth strategy through mutual synergy. Notable developments provided for in the alliance include the utilization of NxStage Medical manufacturing facilities in Germany as a European base for the assembly of Asahi Kasei Kuraray Medical artificial kidneys (dialyzers), and access to a stable supply of high-performance polysulfone hollow-fiber membrane from Asahi Kasei Kuraray Medical as necessitated by the growth of NxStage Medical's in-center business in North America.

By advancing their mutual collaboration in a partnership encompassing the major world markets of Asia, the Americas, and Europe, the two companies will together play a leadership role in further innovation of hemodialysis technology, contributing to a better quality of life for patients around the globe.

With hollow-fiber spinning facilities in Miyazaki, Japan, and dialyzer assembly facilities in Oita and Miyazaki, Japan, and Hangzhou, China, Asahi Kasei Kuraray Medical had sought to heighten competitiveness in global markets and minimize exchange-rate risk through a further extension of its overseas production capability with a base for dialyzer assembly in Europe. The alliance announced today provides the optimum solution, enabling a combination of the dialyzer technologies of the two companies as well as the joint utilization of NxStage Medical's manufacturing facilities in Germany.

Having achieved rapid growth in North America with businesses in home dialysis systems, therapeutic systems for acute and chronic renal failure, and related disposable products based on proprietary technology innovations, NxStage Medical sought to secure a stable supply of high-performance hollow-fiber membrane as a key to product competitiveness in its strategy for further growth. The selection of Asahi Kasei Kuraray Medical as the ideal partner not only meets this need for hollow-fiber membrane, but also enables joint product development and market cultivation for the effective expansion of global markets for NxStage Medical's competitive technology by leveraging Asahi Kasei Kuraray Medical's leading market position in Japan and Asia.
 
Essentials of the alliance
 
Hollow-fiber membrane supply
  Asahi Kasei Kuraray Medical will supply polysulfone hollow-fiber membrane for dialyzers to NxStage Medical. NxStage Medical will use this hollow-fiber membrane in the manufacture of its name-branded dialyzers at its facilities in Germany, for sale in North America.
 
Dialyzer assembly
  Asahi Kasei Kuraray Medical will consign assembly of its name-branded dialyzers to NxStage Medical, which will perform assembly at its facilities in Germany. Asahi Kasei Kuraray Medical will sell the products thus assembled throughout the world except in North America. After a certain period of time, Asahi Kasei Kuraray Medical will make a new investment for an expansion of assembly capacity, holding ownership of the land, building, and equipment for new facilities located nearby under NxStage's management. This collaboration in dialyzer assembly will enable both parties to reduce costs through greater economies of scale.
 
Licensing
  NxStage Medical will license their dialyzer design and assembly patents and know-how, outside North America and exclusively in Asia, for production and sale by Asahi Kasei Kuraray Medical. Any IP improvements obtained through the combination of the technologies of the two companies are to be mutually cross-licensed. NxStage Medical will also license certain of its sales rights for advanced blood tubing sets and related products to Asahi Kasei Kuraray Medical under similar conditions.
 
Financial backing
  Asahi Kasei Kuraray Medical will provide a four-year loan of US$40 million to NxStage Medical.
 
Other collaboration
  Joint business development will be pursued in areas as mutually agreed upon following discussion between the two companies. Possible areas include the development of therapeutic apheresis systems and hemodialysis equipment and systems.
 
Corporate profile of NxStage Medical, Inc.
 
President: Jeffrey H. Burbank
Head office: Lawrence, Massachusetts, USA
Establishment: 1998 (NASDAQ listing in 2005)
Main business: Production and sale of home dialysis systems
Production sites: Germany, Mexico, and Italy
Employees: ≈1,300
Sales: US$129 million (2008)
 
Corporate profile of Asahi Kasei Kuraray Medical Co., Ltd.
 
President: Yasuyuki Yoshida
Head office: Tokyo, Japan
Establishment: July 1974
Main business: Development, production, and sale of dialyzers and therapeutic apheresis devices
Production sites: Nobeoka, Miyazaki, Japan; Oita, Japan; and Hangzhou, China
Employees: ≈2,000 (total with sister company Asahi Kasei Medical Co., Ltd.)
Sales: ¥53.0 billion (fiscal 2008 total with sister company Asahi Kasei Medical Co., Ltd.)
 
 
 
 

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