MONTHS after buying a 50 per cent stake in Chinese stent maker JW Medical Systems, Biosensors International said yesterday it intends to acquire the rest of the company for $173 million. Mr Lu: 'Through this acquisition, Biosensors will have immediate access to the large China market that will give us a strong platform to introduce future products.' Biosensors will meet the price by issuing new stock to JW Medical's other shareholder, Shandong Weigao Group Medical Polymer Co (Weigao).

Listed on Hong Kong's Growth Enterprise Market (GEM), Weigao owns 50 per cent of JW. 'Through this acquisition, Biosensors will have immediate access to the large China market that will give us a strong platform to introduce future products, including BioMatrix,' said Biosensors chairman and CEO Lu Yoh Chie. JW will come in useful as Biosensors prepares to commercialise BioMatrix, a proprietary drug eluting stent (DES) expected to gain regulatory approval in Europe this month. The group plans to seek approval for its products in China after that. Biosensors said JW is estimated to hold 30-35 per cent of China's DES market. It has achieved this in just two years, following the launch of its Excel DES in early 2006. For the nine months ended Sept 30, JW's net profit jumped almost three times to US$11.1 million, from US$3.8 million previously.

'We expect JW Medical not only to add sales to our top line but also to contribute positively to our profit line when its financial results are consolidated with ours,' said Mr Lu. The acquisition will be carried out in two steps. Biosensors will first issue 120 million new shares to Weigao at $1.08 each in exchange for 30 per cent of JW. Weigao then has a put option, exercisable by July 2009, to sell the remaining 20 per cent of JW for a further 40 million Biosensors shares. When the buyout is completed, Weigao will end up with a 13.2 per cent stake in Biosensors.

The Shandong-based medical devices group also has the right to buy up to 20 million new Biosensors shares in cash. If it takes up the offer, it could eventually own 14.6 per cent of Biosensors. Weigao chairman Chen Xue Li said the agreement with Biosensors will provide a launchpad for JW's entry into the rest of Asia, where Biosensors has an extensive distribution network. In particular, it is eyeing Indonesia, India, Japan and South Korea. 'As shareholders of Biosensors we can leverage on Biosensors' leadership in interventional cardiology and enable Weigao to become a leader in the medical device industry in Asia,' Mr Chen said. Weigao reported a 75.6 per cent surge in nine- month profit to 198.6 million yuan (S$38.7 million). For the year to September period, turnover went up 36.8 per cent to 777.4 million yuan. Biosensors, on the other hand, narrowed its six- month losses to US$3.04 million, from US$15.9 million earlier. For the six months ended September, revenue went up 45 per cent to US$23.6 million. Following yesterday's announcement, Biosensors shares rose 5.5 cents to close at 96 cents. Weigao last traded on Tuesday, when it closed at HK$16.80.