Sharps Technology Signs 5-Year, $200 Million Syringe Sales Agreement and Amendment to Asset Purchase Agreement to Begin Producing Prefillable Specialty Copolymer Syringes in the U.S.

Rhea-AI Summary

Sharps Technology has signed a $200 million, 5-year syringe sales agreement with Nephron Pharmaceuticals and an asset purchase agreement (APA) to acquire InjectEZ's syringe manufacturing assets for $35 million. This acquisition, expected to close within 60 days, will establish a dedicated prefillable syringe manufacturing plant in West Columbia, SC. The facility aims to start production by Q2 2025, projecting $37 million in revenue in the first 12 months. This deal expands Sharps' manufacturing capacity in the U.S. and Europe and positions the company for growth in the copolymer prefillable syringe market.

Positive

• Sharps signed a $200 million, 5-year sales agreement with Nephron Pharmaceuticals.
• The acquisition of InjectEZ's manufacturing assets for $35 million is expected to close within 60 days.
• The new facility will be dedicated to producing copolymer prefillable syringes, a rapidly growing market segment.
• Projected revenue of $37 million in the first 12 months of production starting late Q2 2025.
• Establishment of a state-of-the-art manufacturing facility in West Columbia, SC.
• Expansion of Sharps' manufacturing operations in both the U.S. and Europe.

Negative

• The $35 million acquisition includes assuming liabilities up to $4 million.
• There is no assurance that the acquisition will be completed.
• The commencement of product deliveries is contingent on the completion of plant startup requirements.

Insights

Financial Analyst

The $200 million Sales Agreement over the next five years signifies a substantial revenue guarantee, offering reliable cash flows and diminishing forecasting risk. This agreement directly correlates to Sharps Technology’s strategic aim to scale up their operations and market presence in the specialized syringe industry. The expected revenue of $37 million in the first 12 months following the commencement of sales is a positive indicator for the company's financial health. This revenue influx aligns with their acquisition of manufacturing assets valued at $35 million, indicating a strategic investment to bolster their production capabilities. Such agreements are beneficial for ensuring a steady revenue stream, which could potentially lead to increased investor confidence and an upward movement in the stock price in the mid to long term. However, investors should be aware of the potential risks if the acquisition does not close, as the sales agreement is contingent upon it.

Market Research Analyst

The move to produce specialized cyclic olefin copolymer (COC) prefillable syringes positions Sharps Technology in a rapidly growing market segment. COC syringes are known for their superior barrier properties, chemical resistance and clarity, making them a preferred choice for high-value pharmaceuticals. The U.S. market is particularly attractive due to rising demand for prefillable syringes, driven by increased biologic drug approvals and a focus on reducing medication errors. Establishing North America's only dedicated COC prefillable syringe manufacturing plant could give Sharps a competitive edge, potentially attracting more pharmaceutical companies looking for reliable syringe solutions. The strategic positioning could lead to significant market share capture and long-term revenue growth.

Tech Expert

The planned automated manufacturing facility in West Columbia, South Carolina, underscores Sharps Technology’s commitment to innovation. Automation in manufacturing not only increases efficiency but also ensures consistency in product quality, which is critical in the medical device industry. The facility's capability to produce high-demand, specialty syringe systems may enhance operational scalability and margin expansion. Moreover, automated systems can reduce labor costs and minimize human error, leading to potentially higher profitability. Investors should view this as a forward-thinking move that aligns with industry trends towards automation and smart manufacturing technologies.

Sharps will strengthen its manufacturing capacity with a $35 million acquisition of assets, establishing the Company’s position in the specialized copolymer prefillable syringe (PFS) system industry in the U.S. 

Through the syringe Sales Agreement and the closing of the APA, Sharps will secure product orders totaling over $200 million for the first five years of operation

Sharps is negotiating additional pharma-segment PFS purchase commitments for orders over the next 3 years, with shipments expected to begin by Q2 of 2025

NEW YORK and WEST COLUMBIA, S.C., May 30, 2024 (GLOBE NEWSWIRE) -- Sharps Technology, Inc. (the “Company”) (NASDAQ: “STSS” and “STSSW”), an innovative medical device and pharmaceutical packaging company offering patented, best-in-class syringe products, announces the signing of a 5-year, $200 million syringe Sales Agreement (SA) with Nephron Pharmaceuticals to complement the Company’s Asset Purchase Agreement (APA) to acquire the InjectEZ specialty syringe manufacturing assets in West Columbia, South Carolina. The facility will be the only fully dedicated, specialized COC (cyclic olefin copolymer) prefillable syringe manufacturing plant in North America and was designed with innovative manufacturing capabilities to produce high-demand, specialty syringe systems. Product delivery is scheduled to begin late in the second quarter of 2025, with projected revenue totaling approximately $37 million for the first 12 months of sales.

Management Comments: 
“Sharps will now have manufacturing operations in Europe and the United States, and this deal will generate significant short and long-term revenue for the Company. This transaction enables Sharps to enter the highly profitable copolymer prefillable syringe market segment, which is showing the greatest growth rate in the syringe marketplace. With the associated $200 million Sales Agreement in place for copolymer prefillable syringes, we will substantially accelerate Sharps’ revenue growth allowing the Company to create a new level of revenue and performance,” commented Robert Hayes, Sharps Technology CEO. “Together, these landmark transactions will undeniably position the Company for future growth, providing meaningful benefits to both patients and shareholders.” 

5-Year Sales Agreement: 
In concert with the proposed acquisition of the syringe facility, Nephron has agreed to a 5-year agreement to purchase Sharps’ next-generation copolymer prefillable 10 mL and 50 mL syringes as well as 10 mL SoloGard polypropylene syringes, with minimum orders totalling over $200 million during the period. Upon the completion of the plant startup requirements, Sharps is planning for product deliveries to begin late in the second quarter of 2025 with revenue expected to total more than $35 million for the first twelve months of sales.

InjectEZ Acquisition: 
The acquisition of manufacturing assets in the U.S. will enable Sharps to commercialize innovative copolymer prefillable syringe systems to the healthcare market beginning in the second quarter of 2025. The asset acquisition price is $35 million and the will be an assumption of certain related liabilities of up to $4 million. The plant is a new state-of-the-art facility with fully automated syringe system manufacturing, packaging, and distribution in West Columbia, South Carolina. Once complete, this advanced facility will be the only fully dedicated COC prefillable syringe manufacturing plant in North America, designed with innovative manufacturing capabilities to produce specialty syringe systems. The closing of the acquisition has been approved by BlackRock, the seller’s senior lender. It will also be supported through a major investment from a strategic partner, and is expected to close within the next 60 days. However, there can be no assurance that the acquisition will be completed, and the Sales Agreement is subject to the closing of the acquisition of the assets.

About Sharps Technology: 
Sharps Technology is an innovative medical device and pharmaceutical packaging company offering patented, best-in-class smart-safety syringe products to the healthcare industry. The Company’s product lines focus on providing ultra-low waste capabilities, that incorporate syringe technologies that use both passive and active safety features. Sharps also offers products that are designed with specialized copolymer technology to support the prefillable syringe market segment. The Company has a manufacturing facility in Hungary and has partnered with Nephron Pharmaceuticals to expand its manufacturing capacity in the U.S. For additional information, please visit www.sharpstechnology.com.

About Nephron Pharmaceuticals: 
Based in West Columbia, S.C., Nephron develops and produces safe, affordable sterile pharmaceutical products in a state-of-the-art GMP-compliant manufacturing facility. The company also operates an industry-leading 503B Outsourcing Facility division which produces pre-filled sterile syringes, luer-lock vials, IV bottles and IV bags for hospitals across the U.S., in an effort to alleviate drug shortage needs. For more information, please visit www.nephronpharm.com.

Forward-Looking Statements: 
This press release contains “forward-looking statements”. Forward-looking statements reflect our current view about future events. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” “poised” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements, include, but are not limited to, statements contained in this press release relating to our business strategy, our future operating results and liquidity, and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, our ability to raise capital to fund continuing operations; our ability to protect our intellectual property rights; the impact of any infringement actions or other litigation brought against us; competition from other providers and products; our ability to develop and commercialize products and services; changes in government regulation; our ability to complete capital raising transactions; and other factors relating to our industry, our operations and results of operations. Actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance, or achievements. The Company assumes no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release. 

Investor Relations:
Dave Gentry
RedChip Companies, Inc.
1-800-RED-CHIP (733-2447)
Or 407-491-4498
STSS@redchip.com

FAQ

What is the value of the sales agreement signed by Sharps Technology?

Sharps Technology signed a 5-year, $200 million sales agreement with Nephron Pharmaceuticals.

What is the cost of the asset purchase agreement Sharps Technology entered into?

Sharps Technology entered into a $35 million asset purchase agreement to acquire InjectEZ's manufacturing assets.

When is Sharps Technology expected to begin product deliveries from the new facility?

Sharps Technology is expected to begin product deliveries from the new facility by late Q2 2025.

What is the projected revenue for Sharps Technology in the first 12 months of production?

Sharps Technology projects $37 million in revenue in the first 12 months of production.

Where is the new Sharps Technology manufacturing facility located?

The new Sharps Technology manufacturing facility is located in West Columbia, South Carolina.

What types of syringes will Sharps Technology produce under the new agreement?

Sharps Technology will produce copolymer prefillable 10 mL and 50 mL syringes and 10 mL SoloGard polypropylene syringes.