..........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
