Kensey Nash (NSDQ:KNSY) said it settled a royalties dispute with St. Jude Medical (NYSE:STJ) over the Angio-Seal vascular closure device, sending its shares up more than 20% on Wall Street today.
That’s more than KNSY shares lost after it revoked its guidance for fiscal 2012 late last year, based on its belief that St. Jude would drastically cut the royalty rate on sales of the device.
Today Exton, Pa.-based Kensey raised its guidance for the fiscal year ending June 30, raising its 3rd-quarter sales forecast from between $20.2 million and $20.8 million to a range of $21.7 million to $22.1 million. Diluted earnings per share for the period are expected to range between 33¢ and 35¢, up from 22¢ to 24¢.
The news sent KNSY shares up 21.6% to $29.90 as of about 11:35 today, more than recouping the 18% dive it took Dec. 16, 2011, after initially revoking its guidance. Shares closed at $21.94 that day.
The agreement calls for St. Jude to pay $39 million starting March 31 "in lieu of all future royalties for the Angio-Seal and all other related claim," according to a press release. The 12 quarterly installments will span the remaining life of the patents licensed to St. Jude through April 2014, according to the release. And the duo agreed to extend and expand a collagen supply agreement through 2017, maintaining Kensey as the exclusive outside supplier of collagen for the Angio-Seal device. That provision is worth about $31 million over the 5-year extension, Kensey Nash said.
"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," Kensey Nash president & CEO Joe Kaufmann said in prepared remarks.
Baxter wins $24M decision over Fresenius
A federal judge in California ordered Fresenius (NYSE:FMS) to pay more than $23.5 million in damages and royalties to Baxter (NYSE:BAX) for infringing a dialysis device patent.
In November 2007, a jury siding with Baxter on the violation of a patent for dialysis machines with touch-screen interfaces awarded $14.3 million in damages, to which a district judge later added nearly $6 million in interest and costs. The award has already accrued about $2.7 million in interest. The court also granted Baxter a 10 percent royalty on all machines sold before 2009, which could come to a vast sum as Fresenius allegedly sold billion of dollars worth, according to court documents.
In August 2011 Baxter asked the court to enforce the ruling, saying "Fresenius has avoided its obligation to pay Baxter the past damages award for far too long," according to court documents. Read more
Shareholders sue TranS1
TranS1 (NSDQ:TSON) said a shareholders lawsuit was filed against it in federal court in North Carolina, "on behalf of a class consisting of all persons other than the defendants who purchased TranS1 securities between February 21, 2008 and October 17, 2011," according to a regulatory filing.
"We are in the process of responding to this lawsuit. We are unable to predict what impact, if any, the outcome of this matter might have on our consolidated financial position, results of operations, or cash flows," according to the filing.
It’s not the only legal imbroglio for the spinal implant maker, which was subpoenaed in October 2011 by the U.S. Dept. of Health & Human Services as part of a larger probe into off-label arketing practices in the spine industry. Read more
Carl Zeiss logs win in patent fight with Signet Armorlite
A California federal jury found that Signet Armorlite Inc. infringed a patent for spherical spectacle optical lenses owned by Carl Zeiss Meditec (ETR:AFX). Read more
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