A Medical Device Daily

GE (Fairfield, Connecticut) and two Russian companies signed a framework agreement to form joint ventures that will help modernize the country's healthcare and power generation sectors by localizing technology, manufacturing and expertise.

Under the framework agreement, GE, state corporation Russian Technologies (Rostekhnologii) and Inter RAO UES (IRU) intend to form a joint venture to manufacture, assemble, sell and service energy-efficient heavy-duty gas-fired power-generation turbines in Russia. GE and Russian Technologies also intend to form a joint venture to manufacture, assemble, sell and service high-tech medical diagnostic equipment in Russia. Financial details of the transactions were not disclosed.

The framework agreement — signed in Moscow by GE International president/CEO Ferdinando Beccalli-Falco, IRU management board chairman Boris Kovalchuk and Russian Technologies' deputy general director Dmitry Shugayev and witnessed by Russian Prime Minister Vladimir Putin — supports the Russian government's priorities of attracting foreign investment, enhancing the country's aging energy infrastructure and modernizing its healthcare system. These initiatives are aligned with GE's and its partners' core industrial capabilities. Until local production of components can be established in Russia, they will be imported from other GE locations or qualified suppliers.

“These strategic partnerships are the latest examples of GE's long-term commitment to Russia and our 'company to country' strategy, in which we work directly with governments to satisfy their needs in rapidly developing markets,“ said Beccalli-Falco. “We are working with our Russian partners to bring technology to Russia and develop it locally. By harnessing GE's wide range of products and services in strategic growth sectors, we and our partners can help to diversify Russia's economy beyond natural resources and increase energy efficiency. In addition, we can apply innovative technology to help Russia reduce costs, increase access and improve quality in healthcare.“

Building on a memorandum of understanding the parties signed June 4, the agreement reflects GE's deepening commitment to Russia, a major growth market for the company. The framework agreement envisions production of GE's energy and medical equipment in Russia, as well as technology transfer, which will facilitate the development of a local supply chain and later, production in Russia of component parts for the joint ventures.

The healthcare joint venture is expected to start with production of CT scanners, then expand to other diagnostic equipment such as angiographs, MRI, ultrasound, digital X-ray, PET, gamma cameras and medical devices. The joint venture may use the recently established joint GE Healthcare-Medical Technologies CT scanner assembly facility in Moscow. In May 2010, GE Healthcare installed in a Moscow hospital the first Russian-assembled 16-slice CT scanner, and through the end of November, it had been used to perform more than 2,000 exams.

Healthcare components initially will be sourced from GE, shifting later to local production by qualified Russian suppliers in keeping with GE's requirements for quality, cost-effectiveness, design specifications and intellectual property protection.

The government plans to spend more than $15 billion from 2011-2013 on healthcare. GE estimates Russian demand today for CT scanners alone at 3,000 units.

In energy, GE agreed with Russian Technologies and IRU to form a jointly owned entity to develop GE's 6FA gas turbines at a factory to be built in the vicinity of the Russian city of Rybinsk. The turbines will address a growing need in Russia for high-performance, mid-sized power blocks in combined heat and power applications.

Russian Technologies and IRU will each hold a 25% stake in the energy joint venture. Russian Technologies will also hold a 50% stake in the healthcare joint venture. GE will hold 50% of each joint venture. GE will exercise operational control over the joint ventures, with joint decisions by the partners on strategic matters.

Bonovo closes on $10M Series C financing

Bonovo Orthopedics (Beijing) a provider of orthopedic products to the Chinese healthcare market, reported that it closed a $10 million Series C preferred stock financing. The financing was led by OrbiMed Asia Partners and was participated in by Legend Capital and Bonovo's existing shareholders. The Series C round brings Bonovo's total capital raised to $16.5 million. Uses of the Series C funds include further expanding Bonovo's Chinese sales platform and accelerating the company's robust product development programs.

Bonovo manufactures orthopedic implants and other orthopedic products for the Chinese healthcare market. The company was formed in July 2008 through the merger of three China-based companies with more than 15 years of experience in manufacturing and sales of orthopedic products. With two ISO-certified manufacturing facilities and offices located throughout China, Bonovo has quickly become a leading medical device company in the Chinese healthcare market, it said.

Bonovo's product line includes spinal implants, artificial joints, pain management and minimally invasive surgical solutions. The company distributes proprietary products under such brand names as ALPS, Great Wall®and Novoplasty, and serves as the exclusive China distribution partner for international orthopedic companies, such as NuVasive, Pioneer Surgical Technologies and Japan Medical Materials.

According to Peter Slate, CEO of Bonovo Orthopedics, “OrbiMed and Legend have brought a wealth of global resources to Bonovo. We will benefit from their deep understanding of the healthcare market and strong China experience.“

Chip Bao, PhD, president of Bonovo Asia, said that, “The Series C capital raise provides Bonovo with 'scale-up' capital to continue our growth in China and throughout Asia.“

Dr. Jonathan Wang, senior managing director of OrbiMed Asia, has joined Bonovo's board of directors with the completion of this funding round.