Discomposed Nuheara announces HP branding deal
Rough waters for Nuheara could ease on proximity to household name; FDA regs
Mentioned
KEY POINTS
- High-impact household name may bring good exposure to Nuheara, but HP will take its cut
- In April last year, share price sat just below 5cps, now at 1.4cps
- Australian hearing technology player mints branding deal with Hewlett-Packard (“HP”) after rough year
Nuheara Limited (ASX:NUH), an ASX-listed developer of hearing aid technology hardware, has announced this week it has executed a branding agreement with household name tech giant Hewlett-Packard.
Nuheara has had a hard time on the markets in the second year of covid, with a fall of over 3cps in the company’s share price since April 2021.
However, the company has now entered into a global Trademark Licence Agreement which will allow it to develop, manufacture and market its hearing aid products under leading HP brand iconography.
Company eyeing US FDA over-the-counter hearing aid rule
At this time, the United States Food and Drug Administration (FDA) is tipped to pass a regulation, FDA 800.30, that will allow companies in the US to sell hearing aid technology over the counter in American retail pharmacy outlets.
Nuheara, on the back of its new branding agreement with HP, is hoping it can expand into the international market with the assistance of a high-value name associated with its product.
Should the FDA pass the new hearing aid rules as expected, the commercial potential of the new branding strategy is fairly obvious: consumers will likely gravitate to a brand name they recognise—so long as the price is cheap.
Branding agreement to end of 2027; HP will take a royalty
HP has awarded Nuheara the rights to use its logo, but Nuheara competitors may be able to do the same thing in the US and elsewhere as FDA rules change in ways beneficial to the hearing aid market.
HP has, however, awarded Nuheara its branding agreement on a terminable exclusivity clause, so long as Nuheara meets all conditions and continues to pay HP its royalties.
The former must give Nuheara 60 days’ notice before cancelling the agreement “for a very significant force majeure.”
Nuheara must, in turn, give HP 90 days’ notice should the deal not work out.
Nuheara will also make an upfront fee to HP to officiate the trademark agreement process. HP also retains the right to cancel the worldwide trademark agreement in any jurisdiction where legal liability may become an issue upon delivery of written notice to Nuheara.
Nuheara's charts for the last year, including volumes
