Transaction expected to add substantially to FY09 EPS
EXTON, Pa., May 13 /PRNewswire-FirstCall/ -- Kensey Nash Corporation
(Nasdaq: KNSY) announced it has entered into a definitive agreement to sell
its endovascular business, including the ThromCat(TM), QuickCat(TM) and
SafeCross(TM) products, to Spectranetics Corporation (Nasdaq: SPNC). Kensey
Nash will receive up to $24 million in cash consisting of a $10 million
initial cash payment, $8.0 million in future product development milestone
payments, and a $6.0 million milestone associated with cumulative sales. In
addition, Kensey Nash will receive royalties on future sales of the
ThromCat(TM) and SafeCross(TM) products upon the transfer of product
manufacturing to Spectranetics. There will be no royalty payments related
to future sales of the QuickCat product. Under the terms of the
manufacturing agreement, Kensey Nash will manufacture the ThromCat and
SafeCross products for Spectranetics for an initial three-year period. The
QuickCat product will be manufactured by Kensey Nash for a minimum of six
months. Spectranetics will be exclusively responsible for worldwide sales
and marketing of all endovascular products.
The transaction, which is subject to customary closing conditions, is
expected to close by June 30, 2008.
The net after-tax improvement in annual earnings per share for fiscal
2009 is estimated to be in the range of $0.40 to $0.50, compared to fiscal
year 2008 earnings per share. The fiscal year 2008 comparison does not
include an anticipated one-time charge which will consist primarily of
severance and related costs, in an amount which will be determined after
the closing. This improvement reflects the anticipated savings in sales and
marketing expenses, partially offset by reduced margins, compared to fiscal
2008, on Endovascular product sales as a result of lower transfer pricing
to Spectranetics.
Joseph W. Kaufmann, President of CEO of Kensey Nash, commented, "As
previously announced, the Company has been exploring options to maximize
the value of our endovascular business. Spectranetics is an ideal partner
for us and is extremely well-positioned to maximize adoption of our
technologies in the thrombus removal and chronic total occlusion markets.
This partnership is structured similarly to our successful partnerships in
the biomaterials market and allows Kensey Nash to focus on core
competencies in R&D, regulatory, clinical development and manufacturing
while utilizing the strengths of our partners' existing well-established
sales and marketing organizations."
"Spectranetics is well respected as a market leader in treating
arterial blockages with its unique laser atherectomy platform," continued
Mr. Kaufmann. "The addition of our Thrombectomy and CTO products to
Spectranetics' business will create a market leading entity that combines
Spectranetics' well-established sales and marketing organization in the
thrombus management and CTO markets with Kensey Nash's product development
and manufacturing capabilities. Physicians and patients will continue to
benefit from the high levels of innovation, quality and service long
associated with Kensey Nash. For Kensey Nash, the transaction eliminates
the significant cost of our direct sales and marketing organization and
will reduce the cost of developing next generation devices. Of significant
importance, we will retain the ability to participate in the future growth
of these products," he concluded.
"The acquisition of the endovascular business of Kensey Nash will both
strengthen and broaden our existing presence in the treatment of thrombus
and chronic total occlusions," commented John G. Schulte, Spectranetics'
President and Chief Executive Officer. "The QuickCat aspiration catheter
and the ThromCat mechanical thrombectomy catheter provide a continuum of
options for treating thrombus and certainly complement laser ablation for
complex disease. The SafeCross wire, which utilizes radiofrequency energy,
fits nicely with our QuickCross(R) catheters for crossing total occlusions
when standard guidewires fail. Adding these products to our recently
specialized vascular intervention sales organization will leverage our
presence with the same physician customers already served prior to this
transaction. Throughout our due diligence, we were impressed with the
capabilities of the existing Kensey Nash endovascular products and are
truly excited about the next generation devices under development. We
believe our distribution capabilities combined with the product development
expertise of Kensey Nash represent a compelling opportunity to expand the
use of these products," Mr. Schulte concluded.
Conference Call and Webcast. Kensey Nash will provide further details
regarding this announcement on a conference call on May 13, 2008 at 9:00
a.m. Eastern Time. To participate in the conference call, interested
parties should dial 1-651-291-0900. In addition, a live webcast of the call
can be accessed by visiting the Investor Relations page under the
Conferences & Webcasts link of the Kensey Nash website at
http://www.kenseynash.com and clicking on Webcast. The teleconference call will
also be available for replay starting Tuesday, May 13th, 2008 at 11:00 a.m.
Eastern Time through Tuesday, May 20th, 2008 at 11:59 p.m. Eastern Time by
dialing 1-800-475-6701 with an access code of 923230.
About Kensey Nash Corporation. Kensey Nash Corporation is a leading
medical technology company providing innovative solutions and technologies
for a wide range of medical procedures. The Company provides an extensive
range of products into multiple medical markets, primarily in the
endovascular, sports medicine and spine markets. Many of the products are
based on the Company's significant expertise in the design, development,
manufacturing and processing of absorbable biomaterials, which has led to
partnerships to commercialize technologies. The Company is known as a
pioneer in the field of arterial puncture closure, as the inventor and
developer of the Angio-Seal(TM) Vascular Closure Device, which is licensed
to St. Jude Medical, Inc.
Cautionary Note for Forward-Looking Statements. This press release
contains forward-looking statements that reflect the Company's current
expectations about its prospects and opportunities. The Company has tried
to identify these forward looking statements by using words such as
"expect," "anticipate," "estimate," "plan," "will," "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, the Company's
dependence on major customers, including St. Jude Medical, Arthrex,
Spectranetics and Orthovita, and their success in selling KNC related
products in the marketplace, the impact of product recalls and other
manufacturing issues, and competition from other technologies, among other
important risks. For a more detailed discussion of these and other factors,
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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