Published on March 17, 2012 at 4:04 AM
Kensey Nash Corporation (NASDAQ: KNSY) today announced that the Company has entered into a settlement agreement with St. Jude Medical which resolves all disputes between the two companies relating to the Angio-Seal vascular closure device licenses, as well as other related claims. As part of the settlement agreement, the companies also agreed to extend their collagen supply agreement through 2017 and expand the minimums to be provided over the contract term to five million units.
Under the terms of the agreement, Kensey Nash will receive $39 million from St. Jude, payable in 12 equal quarterly payments beginning March 31, 2012, in lieu of all future royalties for the Angio-Seal and all other related claims. The Company expects to recognize the $39 million as royalty revenue on a straight line basis beginning January 2012 through April 2014, which is the expiration of the last to expire of patents exclusively licensed by Kensey Nash to St. Jude under the settlement agreement and acknowledged by both parties to cover the Angio-Seal device. Additionally, Kensey Nash will continue to be the exclusive outside supplier of collagen for the Angio-Seal device through 2017. The approximate value of the minimum orders under the collagen supply agreement over the five year extension is $31 million.
"We are pleased the mediation process led to a fair and swift resolution for both parties, and we are excited that our long-term relationship with St. Jude will continue through at least 2017. This settlement eliminates the uncertainty that had existed with our royalty income and our role as a long term supplier of collagen," commented Joe Kaufmann, President and CEO.
SOURCE Kensey Nash Corporation