Good News for St. Jude Angio-Seal - Analyst Blog

Recently published results from the Cardiovascular and Interventional Radiological Society of Europe (“CIRSE”) vascular closure device registry further validated the safety and efficacy of medical devices major St. Jude Medical's (STJ) Angio-Seal vascular closure device. Organized by the CIRSE, the registry is evaluating the performance of vascular closure devices in interventional radiology (“IR”) procedures.

The CIRSE registry collected data from more than 1,100 patients enrolled at 28 sites across 10 European countries. The results validated the use of Angio-Seal devices in IR procedures and confirmed its safety and efficacy profile. According to the CIRSE registry, the devices were successfully deployed in roughly 97% of the procedures. The encouraging data, demonstrating the benefits of Angio-Seal, is expected to drive the use of the device by the physicians in IR.

Originally developed by Kensey Nash Corporation (KNSY), the Angio-Seal device was licensed to St. Jude, which exclusively manufactures and markets the product worldwide. The device consists of three resorbable components: a polymer anchor, a collagen sponge and a suture along with a delivery system, which works in tandem to close and seal the puncture, thereby, arresting artery bleeding.

St Jude and Kensey entered into an Angio-Seal component supply agreement in June 2005, which is slated to expire on Dec 31, 2010. Under this deal, Kensey is currently the exclusive supplier of collagen plugs (one of the key components of the Angio-Seal) and partial supplier of the anchor component. The company books a 6% royalty on Angio-Seal net sales by St. Jude.

Kensey forged a new two-year supply deal for Angio-Seal with St. Jude in June 2010. Under the two-year (effective Jan 1, 2011 to Dec 31, 2012) supply deal, Kensey will continue be the exclusive outside vendor of collagen plugs. However it will no longer supply polymer anchors. Nevertheless, the deal does not affect the existing royalty arrangements between Kensey and St. Jude.

Angio-Seal is currently the leading product in the vascular closure devices market in terms of sales, having generated more than $350 million in revenues for St. Jude in fiscal 2009. Since its inception, more than 15 million Angio-Seal devices have been utilized globally. Revenues from this device are expected to grow at a low-single digit rate annually moving forward. We are currently Neutral on St. Jude, which is supported by a short-term Zacks #3 Rank (Hold).