On October 12, Mgi Tech Co.,Ltd. (MGI, stock code: 688114.SH) announced a strategically significant technology licensing partnership with Swiss company Swiss Rockets AG (hereinafter referred to as Swiss Rockets). The company will exclusively license its CoolMPS sequencing technology-related patents, trademarks, proprietary technology, and software to Swiss Rockets for development, production, and commercialization of related products in global markets excluding the Asia-Pacific and Greater China regions. According to the agreement, upon normal fulfillment of the contract through the exclusive licensing period, Mgi Tech Co.,Ltd. will receive a total of no less than $120 million in upfront payments, milestone payments, and tiered sales revenue sharing based on net sales during the agreement period.
This collaboration marks a new step in Mgi Tech Co.,Ltd.'s globalization strategy, achieving maximum value from proprietary technology through a "technology export" strategic cooperation model. As a leading enterprise in China's gene sequencing equipment sector, this "license-out" transaction by Mgi Tech Co.,Ltd. has become the first benchmark case for Chinese scientific instrument IP going global, not only opening new growth pathways for the company's future sustainable development but also creating a new overseas expansion model for Chinese scientific instrument manufacturers.
**Strategic Move for Financial Improvement and Global Layout**
The core subject of this transaction is the global exclusive licensing of Mgi Tech Co.,Ltd.'s CoolMPS sequencing technology-related patents and proprietary technology (excluding regions retained by Mgi Tech Co.,Ltd.), specifically targeting mainstream markets such as Europe and America. From a regional perspective, Mgi Tech Co.,Ltd. has retained autonomous operating rights in Greater China, Asia-Pacific, and some Pacific islands, ensuring that control over core markets remains unaffected. This arrangement ensures absolute control over advantageous markets while leveraging partners to unlock potential incremental value in global markets.
In terms of financial arrangements, the transaction adopts the industry-standard model of "upfront payment + milestone payments + ongoing royalty fees." Swiss Rockets will pay a one-time upfront payment of $20 million and milestone payments of $20 million respectively. The $40 million in guaranteed revenue will directly improve Mgi Tech Co.,Ltd.'s cash flow without bearing the R&D, registration, and commercialization costs of CoolMPS technology in European and American markets, significantly reducing operational burden. More importantly, the transaction includes guaranteed annual royalty fees at a certain percentage starting from Swiss Rockets' first commercial sales in the licensed regions, exchanging specific regional operating rights for global market penetration and long-term cash flow, achieving efficient release of technology value.
From a strategic perspective, this technology licensing cooperation enables Mgi Tech Co.,Ltd. to leverage Swiss Rockets' local advantages, bypassing potential investments in channel development, qualification applications, and market education required for independent expansion of CoolMPS technology in European and American markets, achieving technology globalization at lower cost and higher efficiency. Through this transaction, while focusing on global promotion of StandardMPS sequencing technology, the company adds tools and channels for global market expansion, achieving optimal resource allocation of "defending the base while attacking incremental markets."
Meanwhile, Mgi Tech Co.,Ltd.'s overseas market strategy is particularly clear in this transaction: focusing on core technologies and key assets while activating non-core resources. The licensed CoolMPS sequencing technology overlaps with the company's current focus on StandardMPS core R&D direction and is limited by qualification application and technology switching costs. By granting exclusive licensing to Swiss Rockets, the company can realize technology value without additional R&D and productization resource investment. Since the global sequencing market features competition among multiple technology routes, having Swiss Rockets operate CoolMPS can open incremental markets in subdivided sectors, forming synergistic complementarity with main product lines.
**Value Verification and Growth Logic of Technology Export Model**
Public information shows that Swiss Rockets is an innovative comprehensive enterprise that brings together multiple leading biotechnology companies in subdivided fields, with several business segments achieving significant progress in clinical development and commercial partnerships. Its subsidiary Torqur AG's skin precancerous lesion drug bimiralisib has demonstrated excellent efficacy in Phase II clinical trials, with a clearance rate of up to 92% for early lesions. Subsidiary Rocketvax's COVID-19 vaccine development project has received support from the National Institutes of Health. Additionally, Swiss Rockets recently reached strategic cooperation with U.S. public health company Emergent BioSolutions, with Emergent leading the production and commercialization of four candidate drugs from Rocketvax's pipeline targeting infectious diseases, cancer, and autoimmune diseases in the United States. For one of these candidate drugs, Rocketvax has signed a letter of intent with the National Institutes of Health.
The reasonable value of this technology licensing can be verified from both industry practices and agreement design perspectives. First, "upfront + revenue sharing" is the standard business model in the technology licensing field, ensuring upfront returns for licensors while sharing long-term commercialization benefits through ongoing revenue sharing. Similar structures have been adopted in deals like Hengrui Medicine's $1.97 billion Lp(a) inhibitor licensing with Merck and Kelun-Biotech's ADC drug cooperation, with the core logic being maximizing technology value through long-term revenue sharing.
According to an independent assessment report, the value of Mgi Tech Co.,Ltd.'s CoolMPS-related intangible assets was $106.32 million as of the assessment base date. From regional distribution, North America and Europe were assessed at $51.35 million and $25.80 million respectively. The assessment results provide fair value reference for this licensing transaction pricing from a professional perspective, indicating that the transaction design matches the intrinsic value of assets, with overall pricing within a reasonable range.
As China's biopharmaceutical BD wave rises, this transaction resonates with industry trends, marking Chinese life science enterprises' upgrade from "product export" to "technology export." Mgi Tech Co.,Ltd. has extended this model to the gene sequencing equipment field, with this licensing cooperation further demonstrating the commercialization potential of its proprietary patent technology, as the asset-light model offers greater flexibility and controllable risks.
This "borrowing ship" overseas expansion model not only brings direct financial benefits to Mgi Tech Co.,Ltd. but more importantly validates the international competitiveness of its technology platform. As the global gene sequencing market continues expanding and technology keeps iterating, Mgi Tech Co.,Ltd. has established a new business model through this licensing cooperation, constructing a long-term revenue channel that strengthens its voice in the global sequencing technology ecosystem, potentially bringing sustained growth momentum and value reassessment.
Mgi Tech Co.,Ltd. stated in its announcement that it expects the signing of this licensing agreement to have a positive impact on the company's future performance, helping to enhance global commercialization and profitability capabilities. The licensing agreement will take effect after being reviewed and approved by the shareholders' meeting.
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