St Jude Medical To Pay Kensey Nash $39 Million In Royalty Settlement
March 19 2012 - 2:59PM
Dow Jones News
St. Jude Medical Inc. (STJ) has agreed to pay one of its
suppliers $39 million over two years following royalty disputes
over a component used in its vascular closure device, according to
a regulatory filing.
The supplier Kensey Nash Corp. (KNSY) will receive the amount in
12 equal quarterly payments beginning March 31 and ending in 2014.
The payments will be made in lieu of future royalties.
St. Jude said in a statement that it is "pleased that the two
companies have resolved all outstanding legal issues, including the
removal of any future royalty payments due to Kensey Nash by St.
Jude Medical."
Kensey supplies the collagen component in St. Jude's Angio-Seal
device, which stops bleeding during certain types of medical
procedures. As a result of the settlement, Kensey lowered its
fiscal 2012 guidance. It now expects full-year adjusted earnings
per share of $1.59 to $1.63 on revenue of $87.9 million to $89.1
million. In October, it projected $1.88 to $1.91 on revenue of $92
million.
The company also said that for fiscal year 2013, it expects
earnings of $2.00 a share on sales of $100 million. Analysts
surveyed by Thomson Reuters expect earnings of $1.74.
For Kensey, the agreement removed uncertainty in the market over
its supply agreement with St. Jude. According to the agreement,
Kensey will continue to be the exclusive outside supplier of
collagen for the Angio-Seal device through 2017.
Kensey shares rose 22% to $30 in recent trading. St. Jude shares
fell 0.3% to $42.75.
-By Anjali Athavaley, Dow Jones Newswires; 212-416-4912;
anjali.athavaley@dowjones.com
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