By Meg Flippin Benzinga
DETROIT, MICHIGAN - February 25, 2025 (NEWMEDIAWIRE) - NewGenIvf Group Ltd. (NASDAQ: NIVF), the fertility services provider in Asia helping couples and individuals obtain the fertility treatments they need, recently inked a $5 million deal to acquire MicroSort, a proprietary sperm-sorting technology company, bolstering the services it can offer its fertility patients.
Under the terms of the cash and stock deal, NewGenIVF is paying $750,000 in cash and issuing 125,000 ordinary shares at $34 per share. As part of the transaction, NewGen will assume MicroSort’s existing licensing agreements which the company says will give it an immediate additional revenue stream via licensing fees from current users.
Balancing Families, Preventing Genetic Diseases
MicroSort’s technology enables the separation of X and Y chromosome-bearing sperm cells prior to in vitro fertilization, which can help couples who want to balance the makeup of their families and people looking to prevent certain genetic diseases that are X-linked.
Some couples want to balance their families with an equal number of male and female children, but it’s a wild card when getting pregnant on their own. With sperm sorting prior to in vitro fertilization the sperm of the desired gender is identified and used in the IVF process.
Semen samples typically contain equal amounts of sperm carrying X chromosome which will produce a boy and sperm carrying Y chromosome which will produce a girl. With MicroSort’s process the sperm cells are separated based on the amount of DNA they are carrying. The process, reports MicroSort, results in a sample containing significantly increased percentages of sperm that carry the desired X or Y chromosome. The samples processed by MicroSort can be used in a wide variety of artificial reproduction techniques from Intrauterine Insemination (IUI) to a full IVF cycle. While sperm sorting for gender selection is not legal in the U.S., there are no rules against it in several countries including Thailand, Japan, Cambodia and Mexico where MicroSort has licenses.
X-linked disorders are genetic conditions caused by changes in the X chromosome. In males, who only have one X chromosome, a mutation in the gene causes the condition while in females who have two X chromosomes, mutation has to occur on both X chromosomes to be affected. Some X-linked disorders include hemophilia A, a blood disorder in which blood doesn’t clot properly, red-green color blindness and Duchene muscular dystrophy, which causes severe muscle weakness leading to respiratory failure and death. All told there are more than 533 X-linked disorders.
Bolstering Its Business
“This acquisition represents a significant milestone in our growth strategy and enhances our ability to provide advanced fertility solutions to our clients,” said Siu Wing Fung Alfred, Founder, Chairman, and CEO of NewGen. “Beyond the strategic value of expanding our service offerings, this transaction is structured to strengthen our balance sheet through the issuance of equity at a premium to market price. We believe this enhancement to shareholders' equity may support our ongoing efforts to meet Nasdaq Capital Market continued listing requirements.”
The deal, which is expected to boost the company’s shareholders’ equity by $4.25 million at the time of completion, not only optimizes NewGen’s capital allocation, but adds more technological capabilities to its service portfolio, reports the company. It also gives it a way to expand its business in China, which severely restricts the use of IVF. As it stands, only married couples are allowed to use IVF, and one acceptable use case for IVF is to prevent X-linked chromosomal disorders.
China is a potentially big market for NewGen given IVF treatments in the country are projected to reach more than $11 billion by 2033. The growth is being driven by an increasing rate of infertility in China which is leading to population declines. As of 2023, China is no longer the most populous country, falling to second place behind India. To increase the birth rate, China announced in 2023 that it would offer free IVF through its national insurance scheme. There is also talk that China could allow single women to access IVF to address declining birth rates.
“The integration of this technology into our existing service platform will strengthen our market position in the rapidly growing Asian fertility services market,” noted Alfred. “MicroSort provides options for families looking to prevent certain genetic disorders, an application which will allow us to expand these services into countries like China and other burgeoning markets in Asia. We are thrilled to be able to offer new options for our customers, and we are optimistic about the impact our acquisition of MicroSort will have on our clients and our company.”
Featured photo by Suhyeon Choi on Unsplash.
This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice.
This content was originally published on Benzinga. Read further disclosures here.
View the original release on www.newmediawire.com
