From Earlier: Kensey Nash Announces Mediated Settlement With St. Jude Medical in Angio-Seal License Disputes and 5 Year Extension and Expansion of Collagen Supply Agreement
Kensey Nash Corporation (NASDAQ: KNSY) on Friday announced that the Company has entered into a settlement agreement with St. Jude Medical (NYSE: STJ) 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.
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