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Misonix in $11 million China licensing deal; news boosts stock

Misonix headquarters on New Highway in Farmingdale, Dec.

Misonix headquarters on New Highway in Farmingdale, Dec. 19, 2016. Credit: Steve Pfost

Misonix Inc., a Farmingdale-based maker of ultrasonic medical devices, announced Friday that it has entered into a license and manufacturing deal with a Chinese company in exchange for payments of at least $11 million.

Shares of Misonix climbed 6.8 percent to close Friday at $10.15.

Under the licensing deal, Hunan Xing Hang Rui Kang Bio-technologies Co. Ltd. will get manufacturing and distribution rights for Misonix’s SonaStar product line in China, Hong Kong and Macau.

SonaStar is an ultrasonic device with a variety of tips and a control panel used in a variety of surgical applications.

Stavros Vizirgianakis, president and chief executive of Misonix, said the company hopes the deal will “establish our SonaStar technology throughout the People’s Republic of China, Hong Kong and Macau.”

Misonix posted 2016 sales of $27.1 million, a 2.3 percent increase over the prior year.

The new agreement calls for upfront technology license fees and stocking orders of $5 million; minimum royalty payments from the sale of SonaStar products of $2 million per year in 2019, 2020, and 2021, and additional royalty payments based on product sales through August 2027.

In May, Vizirgianakis said the company would focus its foreign operations in 12 to 15 markets instead of spreading them in 48 countries and will put primary emphasis on the United States.

In September 2016, Misonix alerted the Securities and Exchange Commission and the Department of Justice about possible violations of the Foreign Corrupt Practices Act related to a previous distributor in China.

That law bars Americans from bribing foreign government officials to obtain or retain business and requires publicly traded companies to maintain accounting standards that would reveal compliance with anti-bribery provisions.

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