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Public hospitals in many regions of China can only purchase Triageproducts through the on-line bidding system operated by Haihong, and theHaihong system was one of the most important distribution channels for Triageproducts in China. Chinmax had been properly listed as the proper maintenancecompany for Triage products on the Haihong system for the past 8 years.
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On March 15, 2010, David Teitel, CFO of Inverness Medical Innovations,Inc., wrote a letter to Haihong, purporting to "cancel Chinmax MedicalSystems, Inc. as the maintenance company for data submission with HaihongCompany" and "to entrust Inverness Medical Beijing Co., Ltd as the exclusivemaintenance company for data submission with Haihong Company." On March 30,Haihong informed Chinmax of the letter from David Teitel.
In response, Chinmax took decisive actions immediately. On March 31,Chinmax management held a meeting with representatives of Haihong, and counselfor Chinmax sent an official letter to Haihong requesting that Haihong notchange the status quo before the court adjudicates the dispute between Chinmaxand IMB. On April 1, 2010, Haihong decided to deny Inverness's improperrequest, and to suspend all government bidding for Biosite's Triage productspending the resolution of the lawsuit between Chinmax and IMB, until court'sfinal judgement.
Chinmax Medical Systems, Inc. is a leading distributor of clinicaldiagnostics in China. Since 1999, Chinmax is the exclusive distributor ofdiagnostics products manufactured by Biosite Incorporated, a worldwide pioneercompany in cardiac biomarkers based in San Diego, California, USA. Biosite wasacquired by Inverness Medical Innovations, Inc. (NYSE: IMA) in June 2007. OnJanuary 28, 2010, Chinmax filed suit in Shanghai regional district courtagainst Inverness Medical Beijing (IMB), the Chinese subsidiary of InvernessMedical Innovations, claiming IMB's infringing Chinmax's exclusivedistribution rights in China.
SOURCE Chinmax Medical Systems, Inc.
