Hearing tech scale-up Audeara secures China foothold in deal with Eastech

The partnership teams Audeara – a Brisbane-based company with a market capitalisation of about $5 million – with a $560 million group that is a leading provider of high-tech solutions across several industries.

Eastern Asia Technology is a subsidiary of Taiwan Stock Exchange-listed audio equipment developer Eastech Holding, which already has a strong presence in China.

The agreement with Audeara represents an expansion for Eastech into medical audio device solutions that Audeara says provides a gateway to growth for its innovative healthy hearing technology into the Chinese medical device market.

The announcement led to a boost in Audeara shares today, with the stock trading 22 per cent higher at 4.4c per share at 11.49am (AEST).

Under the terms of the deal, Audeara will provide services and license its proprietary technology to Eastech to enable the development of innovative hearing devices to be licensed in China under Eastech’s National Medical Products Administration (NMPA) certification.

"This partnership with Audeara aligns perfectly with our mission to bring advanced medical technologies to China,” says Eastech executive director Tony Chang.

“We look forward to working closely with Audeara to ensure the successful introduction of this groundbreaking product into the Chinese market."

Audeara, which was founded in 2015 by Dr James Fielding, Dr Chris Jeffery and Alex Afflick, has already made inroads into international markets with its products stocked in Europe, the US and Asia.

The company currently has partnerships with three top-tier global audiology brands Amplifon, Demant and WS Audiology.

Audeara’s push into Taiwan in FY23 was led by a launch in Taiwan's largest audiology clinic Clinico, which entered into an R&D agreement with Audeara to develop an in-ear earbud device.

Audeara’s technology uses a hearing profile algorithm that personalises the sound output to the needs of the individual, allowing its headphone hardware to adapt to the hearing capabilities of the user.

Earlier this year, the company received a purchase order from US-based musical instrument manufacturer Avedis Zildjian for $2.1 million in the first of the company’s white-labelled product design and manufacturing deals outside of the health sector.

Fielding, the Audeara CEO, says the binding agreement secured with Eastech represents a “significant milestone in the company’s expansion into the Asia Pacific region, alongside a leading industry partner”.

“As Eastech pushes further into the healthcare market, Audeara is very confident it can add considerable value through its access to potential customers and product development and services expertise,” says Fielding.

“Both parties have already commenced work which has included Audeara personnel advancing product design, in line with Eastech’s specification for the rapidly growing Chinese market.

“We look forward to continuing to collaborate with Eastech on a range of innovative healthy hearing products, which will deliver substantial value to healthcare professionals, patients and our shareholders.”

Audeara says the deal will see its products marketed under brands with “strong market recognition in China” as it targets the rapidly growing Chinese healthcare sector.

Audeara says data from 2019 revealed an estimated 426.5 million people in China suffered from hearing loss – about 95 million of them with moderate-to-complete hearing loss.

The company sees the Eastech agreement paving the way for a “robust pipeline of opportunities” in the China market.

“The nature of this agreement is such that it is not subject to term or termination and the specific financial impact of each implementation of the technology will be subject to the terms of a product specific licensing or services agreement,” says Audeara.

Audeara posted a net loss of $1.6 million in FY24, down sharply from a $3.7 million loss a year earlier. Revenue of $3.2 million in FY24 was up 10 per cent year on year, while operating cash outflow fell sharply by 56 per cent to $1.3 million.