D Medical Industries Ltd. (Nasdaq: DMED); TASE:DMDC) has signed a manufacturing agreement with US United Plastics Group Inc. subsidiary UPG (Suzhou) EPZ Co. Ltd. D Medical's share prices rose 1.8% by midday, after rising 3.4% at the opening, on the TASE to NIS 22.21. The share closed at $5.90 on Nasdaq yesterday.
UPG will manufacture and supply the consumable components of D Medical's Adi durable insulin pump, its universal infusion sets and, when available, its insulin patch pump. UPG will be a non-exclusive supplier. It will supply the products at the products at agreed upon prices per unit, and D. Medical has agreed to purchase certain minimum quantities of the products. The three-year contract has a two-year option to extend.
D Medical is a holding company that owns 94.2% of Nilimedix Ltd., which has developed an insulin pump; 92% of G Sense Ltd., which is developing a continuous glucose monitor; 90.1% of Medx-Set Ltd., which is developing components for insulin pumps; and a stake in Sindolor Medical Ltd. through a 58.2% holding in NextGen Biomed Ltd., which is developing a painless needle
UPG is a full service contract manufacturer in the medical, consumer, automotive and electronics market segments.
D Medical currently manufactures the Adi insulin pump, its related consumables, and the universal infusion sets at the company's plant in Tirat Carmel. The company believes that purchasing products manufactured by UPG in China, it will be able to substantially increase its production volumes and reduce production cost per unit.
D Medical CEO Efri Argaman said, “We are already starting to harvest the fruits from D Medical’s US IPO. After raising additional capital in the market earlier this month, we are now proceeding to mass production with the help of UPG. We expect that the funds raised will help us to successfully execute our business plan by expanding manufacturing quantities, reducing production costs and eventually, increasing sales volumes."
Published by Globes [online], Israel business news - www.globes-online.com - on August 18, 2010
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