Kensey Nash Announces New Collagen Supply Agreement With St. Jude Medical
EXTON, Pa., June 23 Kensey Nash Corporation (Nasdaq: KNSY), a regenerative medicine company, today announced that it entered into a new two-year Supply Agreement with St. Jude Medical, Inc. (NYSE: STJ) for the period from January 1, 2011 to December 31, 2012. The agreement provides for Kensey Nash to be the exclusive outside supplier of collagen plugs, one of the key resorbable components of the Angio-Seal(TM) Vascular Closure Device, the leading arterial puncture closure product in the world. The new agreement provides for calendar year 2011 minimum order levels equivalent to approximately 25% of current annual collagen plug sales.
Under the existing agreement that remains effective through December 31, 2010, Kensey Nash is the exclusive supplier of collagen plugs and a 30% supplier of polymer anchors. Under the new agreement, effective January 1, 2011, Kensey Nash will not supply any polymer anchors. In fiscal year 2010 (ending June 30, 2010), collagen plug sales to St. Jude Medical are expected to be approximately $17 million and polymer anchor sales $1.9 million. Royalties under the Angio-Seal license agreement between Kensey Nash and St. Jude Medical are not affected by the new supply agreement.
"We are pleased to continue as a supplier of this key Angio-Seal device component, a role we have successfully filled since the product's initial development," commented Joe Kaufmann, President and CEO of Kensey Nash. "With this agreement in place our revenue outlook for fiscal year 2011 becomes much clearer. Although at the minimum order level our Angio-Seal component sales would be approximately 45% lower in fiscal 2011 than in fiscal 2010, we anticipate that our total revenue for fiscal year 2011 will be between $81 million and $83 million. This range would exceed the total revenue of $80.2 million to $80.6 million that we currently expect for fiscal 2010. As we continue to execute our transition to regenerative medicine, our success in developing new products has enabled us to diversify our customer and product base. In fiscal year 2011, we expect to grow our revenue due to the recent FDA clearances and CE mark approval for our Extracellular Matrix products and the CE mark approval for our Cartilage Repair Device, as well as continued strength in our core Biomaterial business. Overall we expect to see substantial growth of approximately 20% to 25% in our Biomaterial business in fiscal year 2011, excluding cardiology products. We will provide detailed fiscal year 2011 revenue and earnings guidance with the release of our fiscal year 2010 results in August," he concluded.
Kensey Nash today also announced that its Board of Directors has approved a new stock repurchase program. The new program allows Kensey Nash to repurchase an additional $30 million of its issued and outstanding shares of Common Stock, and has no scheduled expiration. The program will be financed with available cash and liquid investments. Kensey Nash recently completed its February 2010 announced share repurchase program, under which it purchased 1.2 million shares at an average price of $22.90 per share. Over the last three years Kensey Nash has repurchased approximately 3.5 million shares of Common Stock, or approximately 30% of the outstanding shares at the start of the three-year period, at a total cost of approximately $85 million.
Kensey Nash plans to repurchase its shares for cash, from time to time in the open market, through block trades or otherwise. The repurchase program does not require Kensey Nash to purchase any specific dollar value or number of shares. Any purchases under the program will depend on market conditions and may be commenced or suspended at any time, or from time to time, without prior notice. As of May 31, 2010, Kensey Nash had 9,437,236 shares of Common Stock outstanding.
About Kensey Nash Corporation. Kensey Nash Corporation is a medical device company primarily focused on regenerative medicine utilizing its proprietary collagen and synthetic polymer technology. The Company is recognized as a leader for innovative product development and unique technology in the field of resorbable biomaterials. The Company has an extensive range of products, which are sold through strategic partners in multiple medical markets, including, the cardiology, orthopedic, sports medicine, spine, endovascular and general surgery markets.
Cautionary Note for Forward-Looking Statements. This press release contains forward-looking statements that reflect the current expectations of Kensey Nash Corporation (the Company) about its prospects and opportunities, including the statements regarding anticipated/expected total revenue for fiscal 2010 and fiscal 2011. The Company has tried to identify these forward looking statements by using words such as "expect," "anticipate," "estimate," "plan," "will," "would," "should," "forecast," "believe," "guidance," "projection," or similar expressions, but these words are not the exclusive means for identifying such statements. The Company cautions that a number of risks, uncertainties and other important factors could cause the Company's actual results to differ materially from those in the forward-looking statements including, without limitation, St. Jude Medical's success in selling the Angio-Seal device and the extent to which after December 31, 2010, St. Jude is able to and does in fact rely on their internal manufacturing to fulfill its needs to purchase collagen plugs for the Angio-Seal device in excess of the minimum it must purchase from the Company, the Company's current dependence on three major customers (St. Jude Medical, Arthrex and Orthovita) and their success in selling Kensey Nash related products in the marketplace, the impact of product recalls and other manufacturing issues, the Company's success in its research and development efforts in its cartilage repair and extracellular matrix technologies programs, Synthes' success in selling the Company's extracellular matrix products, the success of U.S. trials with respect to the Company's cartilage repair products and completion of additional clinical trials in both the U.S. and Europe to support regulatory approval of future generations of its products, competition from other technologies, the Company's success in distributing its products into the marketplace (including its initial success in selling its new cartilage repair product in Europe), risks associated with the Company's continued research and development efforts with respect to its endovascular products (including the risk that those efforts will not be successful and that some of the associated milestone payments will not be received) and Spectranetics' success in selling the endovascular products, as well as tax and other risks associated with healthcare reform, economic conditions and foreign currency fluctuations. For a detailed discussion of factors that could affect the Company's future operating results, please see the Company's SEC filings, including the disclosure under "Risk Factors" in those filings. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason.
SOURCE Kensey Nash Corporation
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