Kensey Nash Q2 - Edited

Joseph Kaufmann

Our total revenue for the quarter of $21.9 million exceeded prior year by 7% and increased 10% sequentially. Total net sales of $15.1 million exceeded prior year by 12% and increased 14% sequentially. This growth was due to sports medicine, which increased 58% year-over-year and 9% sequentially; and our cardiology products, which are primarily Angio-Seal components, also increased 14% year-over-year and 3% sequentially.

As far as the Angio-Seal collagen sales, again, our third and fourth quarter collagen sales to St. Jude were very good. And we look at the comp compared to last year and our first quarter, it's primarily again due to timing. We expect our second quarter sales to St. Jude will reflect this and will show the improvement.........

It's products, it's quality, it's all that things that you think of every day, and that we think with hopefully some of the new products that we're brining to the marketplace, the biologic products, we believe are going to be a major factor in all of healthcare going forward. And Kensey Nash is going to be a major player in this space, not only in sports medicine, but also in general surgery and in other areas that we're very well positioned with the technology we have built here over the last five to 10 years or so within our organization....

Josh Jennings - Jefferies & Company

And then just last one just on the St. Jude supply agreement. Anymore color you could provide in terms of what happens? I know that's a tiered supply agreement for the component parts, but after 2011, it seems that that minimum 25% does that end in 2011 and you could renegotiate for 2012? And then lastly, is there any risk of the Angio-Seal royalty rate going away at some point?

Joseph Kaufmann

On the supply agreement, it's a two-year deal that starts at January 2011, so it goes out for '11 and '12. And then after that it will be determined whether it will be expanded, increased, decreased, or renewed, I don't know at this time.

As far as royalties are concerned, we are a royalty on Angio-Seal sales. As long as there is at least one claim on any patent, we're entitled to the full 6% royalty, there aren't any step-downs. So as long as there is patents in place that are being utilized, then that's when we continue to receive the royalty.

Kensey Nash Corporation F3Q09 (Qtr End 3/31/09)

Total revenues for the quarter were $20.6 million, or comparable to the prior year and as I mentioned earlier inline with our guidance for the quarter. When we look at our net sales for the quarter, sales of biomaterial products were $12.9 million. This represents an increase of 3% year-over-year. Within this biomaterial segment, we have cardiovascular products, which are primarily Angio-Seal component sales. These sales increased 6% year-over-year and our spine medicine products increased 11% year-over-year...........

Angio-Seal royalties were $5.3 million or flat year-over-year. Again, this is due to the negative impact of foreign exchange. If you exclude the negative impact, the actual estimate of royalties would have increased by approximately 7% year-over-year. Again unit sales were up year-over-year and I think that's important to keep in mind in looking at the performance of the Angio-Seal and the performance of St. Jude with these products in the marketplace and the ongoing strength and of the product as it continues to dominate in this sector...........

From the Q & A

Spencer Nam – Summer Street Research

Thanks for taking my questions. Excuse me, just couple of quick questions. First of all, on the Angio-Seal, I was wondering if you could give us any color on the competitive dynamics right now with the Angio-Seal evolution out there? And how definitions are comparing Angio-Seal versus some of the passive closure devices? Are you seeing any change in the – how physicians are preferring one part of another recognizing that Angio-Seal does have the super majority of the market at this point?

Joseph Kaufmann

I can only give you my view of this world. I certainly can’t speak for St. Jude. And I really don’t have a lot of information on Evolution. As far as the – how that product is doing specifically in the marketplace. But I can tell you in terms of what we see or hear in the marketplace is that, with a product like Angio-Seal and the reason why it continues to do so well and continue to dominate the market is, because quite frankly it’s a very good product. It has great, great clinical data, great labeling, it’s easy to use. The passive devices and always has been our position at Kensey Nash is they don’t work. They are – they become relatively expensive band-aids as opposed to doing the job that closure devices are intended to do. So, that’s why we think we have been able to or St. Jude has been able to command such great market share in a continuing large market share. So, I’m sure there is always going to be other competition that comes into the market and we will, - we could do well for either a short period of time or may somewhere down the road come up with a better idea, but I haven’t seen it yet.

Source: Seeking Alpha

Kensey Nash Corporation F2Q09 (Qtr End 12/31/08) - Edited

..........Our Angio-Seal royalties were $5.4 million. These royalties were adversely impacted by approximately $200,000 in the quarter due to the unfavorable foreign exchange impact. If we were to exclude the negative impact of the foreign exchange, our total royalties would have been in line or at the high range of our guidance and our total revenue would have exceeded the high end of our guidance. Our total revenue of $20.8 million came in at $200,000 below the high end of our guidance of $20.9 million with the $200,000 impact we would have actually have exceeded total revenue guidance.
Biomaterial sales of $13.1 million increased 14% year-over-year and 3% sequentially. Cardiology products, which primarily are Angio-Seal components that we sell to St. Jude, increased 48% year-over-year. This was anticipated in our quarterly results based on the ordering patterns that we have received or appeals that we have received from St. Jude. Now, it also reflects two things; one, the ordering pattern, but also again the good unit growth that we are seeing in the Angio-Seal product line...........
Sean Bevick – SIG
Good morning, guys. I got a couple questions about St. Jude. Can you describe a little bit your relationship with them? And I believe they are locked up through 2010 with you guys. Is there any way that they can get out of that contract for the Angio-Seal component?
Joe Kaufmann
No, there is a – we do have a contract for a supply contract with St. Jude that expires in December 2010, and that’s for an exclusive arrangement for 100% of the collagen and for a smaller portion of the anchors. And no, we are not aware of any reason or certainly there aren’t any provisions that allow for that contract to be terminated other than non-performance by Kensey Nash. But we have been a great vendor, a great partner. We have supplied – the only person – only company that supplied collagen for this particular device since its existence. So we’re feeling pretty good about the contract and we certainly are aware of the fact that St. Jude made an acquisition this past summer. But again, with our technology and our position in the collagen world, we feel pretty good about our capabilities and hopefully that contract will continue beyond 2010.......
James Sidoti – Sidoti and Company
Could you remind me when you (inaudible) got the approval for the Angio-Seal collagen, what was the product that fills, your PMA or 510(k)?
Joe Kaufmann
That’s PMA product.
James Sidoti – Sidoti and Company
And how long was the follow-up on that? Would you do the initial studies?
Joe Kaufmann
On the follow-up on the patients for the PMA, I am looking at Doug right now. It’s a long time ago, but not quite sure, Jim, how long the follow-up was on those patients.
James Sidoti – Sidoti and Company
But you would think for St. Jude that if they were to find a replacement source, it would require a similar type of group of process and a considerable amount of time to get to their process.
Joe Kaufmann
Well, I don’t know what their expectations are or how they – how if they plan to, what they plan to do on that aspect of the business at this time. So I really can’t comment on what their thought process is or the amount of time they think it would take in order to, number one, develop a collagen that would work with an Angio-Seal type product and also the regulatory path and deal any potential performance issues. So, again, we are very well known I think in the biomaterials world as one of the leading experts in collagen, and I feel that we’re very confident that we state that obviously with our history, with the Angio-Seal and with collagen and developing that collagen specifically for that project – or that product that I don’t think anybody knows more about that type of collage and the collagen that’s in that product and the people here at Kensey Nash.
James Sidoti – Sidoti and Company
And I just want to clarify. You said unit growth for Angio-Seal in the quarter was around 5%, is that right?
Joe Kaufmann
I said that our royalty dollars would have been up 5% if we added back the impact of the foreign exchange, which was $200,000. I would comment and say that if you look at the unit growth, which we typically don’t disclose, but I would say it’s in the mid-single digit, that sort of thing, which I think is very good in terms of the overall market and actually has been doing very well in the marketplace overall. So we don’t actually disclose the unit numbers because St. Jude doesn’t disclose those.......

Source: Seekingalpha

St. Jude Medical Inc. Q4 2008 - Edited Highlights

Total sales of cardiovascular products for the fourth quarter of 2008 were $219 million, up 7% over the fourth quarter of 2007 including $3 million of unfavorable foreign currency translations. Total cardiovascular product sales for the full year 2008 were $862 million, up 9% over 2007, including $34 million of an increase due to favorable foreign currency translation.
Within this category of products, sales of vascular closure products in the fourth quarter of 2008 were $92 million, a 1% increase over the fourth quarter of 2007. Total vascular closure product sales for 2008 were $368 million, up 4% over 2007.
Sales of heart valve products in the fourth quarter of 2008 were $79 million, a 7% increase over the fourth quarter of 2007. Total sales of heart valve products for 2008 were $322 million, up 11% over 2007. For the first quarter of 2009, we expect cardiovascular product sales to be in the range of $230 million to $245 million.
We expect full year 2009 cardiovascular product sales to be in the range of $970 million to $1 billion. As a reminder, this guidance includes sales of Radi Medical Systems AB, which is being integrated into our Cardiovascular division........
The geographic breakdown of St. Jude Medical sales in the fourth quarter of 2008 was 54% US versus 46% outside the United States or OUS. This compares to 53% US and 47% OUS in the fourth quarter of 2007. A detailed geographic breakdown of this quarter's sales by product shows high-voltage at $249 million US; $138 million OUS; low-voltage at $133 million US; $160 million OUS, atrial fibrillation products at $73 million US and $83 million OUS; and cardiovascular products at $88 million US and $131 million OUS; and finally neuromodulation products at $67 million US and $11 million OUS..........
With respect to our cardiovascular business, we expect that St. Jude Medical's cardiovascular program will return to sustainable double digit sales growth in 2009 and beyond. We look forward to presenting you with more on this topic next week. This presentation will include a review of the four new product lines we acquired with Radi Medical Systems, a new indication in our vascular closure program, the impact of our new Angio-Seal Evolution product line, details on the progress we are making with the Trifecta Stented tissue valve program together with the timing of our anticipated entry into the pericardial segment of the tissue valve market, and a discussion of other new initiatives........
Source: Seekingalpha

Vascular Closure

Lets take a look at the vascular closure hemostat range starting with a look at the market with Kensey Nash. There is a full presentation available HERE but key slides featured below.