DSM agrees to pay US$360 million for Kensey Nash

Welcome back to the Medical Technology Blog, we have a great post today provided by our medical newsletters team-leader, Lawrence Miller, Lawrence is all the editor Medical Industry Week, please read on…

Kensey Nash’s Board of Directors has accepted a US$360 million (EUR 275 million), US$38.50 per share offer, from Royal DSM, a Netherlands-based company active in health, nutrition and materials. The offer is subject to customary conditions, including antitrust clearance, and is expected to be completed by the end of the second quarter of 2012.

Kensey Nash operates across five major segment areas, namely spine (15 per cent of first quarter 2012 revenue), sports medicine (30 per cent), CMF and trauma (16 per cent), cardiovascular (17 per cent) and general surgery (9 per cent). The company produces biomaterials for tissue repair and regeneration, as well as devices and equipment for the delivery of biomaterials and cardiovascular procedures. The strategy involves developing core materials and then working with established medical device companies in selected markets. Key products include the AngioSeal reabsorbable closure device, polylactic acid screws and anchors, bone cement and collagen minerals and collagen patches for general surgery.

Kensey’s collagen/ECM platform is supported by partnerships with St Jude Medical (cardiovascular), Arthrex (orthopaedics/sports medicine), Stryker (spine) and Synthes (CMF and trauma/general surgery). The reabsorbable polymers partnerships include orthopaedic/sports medicine (Arthrex, Orteq and Stryker), spine (Medtronic) and CMF and trauma (Athrex). Kensey’s Bone composites are supported by alliances in spine (Stryker, Synthes, Medtronic and Zimmer) and CMF and trauma (Synthes).

In 2012, Kensey expects to record revenues of US88.5 million, and EBITDA of US$30 million. This is set to rise in 2013 to US$100 million and EBITDA of US$36 million. The growth is expected to come from existing products, entry into new markets and the resulting impact of Kensey’s recent settlement with St Jude Medical over the AngioSeal product line. For DSM, the deal represents an opportunity to expand into two new growth platforms of life sciences and material sciences with a portfolio of products spanning the Bio-Passive (medical coatings and polymers), Bio-Active (reabsorbable polymers and drug- delivery) and Bio-Interactive (therapeutic materials and regenerative medicine).

The much changed DSM has spent the last five years developing a coatings and material drug-delivery business focused on cardiovascular and ophthalmic applications, and has subsequently strengthened these areas and also moved into developing spinal applications. The company, which relocated its HQ to Berkeley, CA, in 2010, is pinning its growth hopes on the cardiovascular, orthopaedic and ophthalmic markets for expansion. The process will involve expanding and developing its range of biomaterials further, whilst at the same time growing an emerging drug-delivery business. DSM will also look at opportunities for regenerative medicine and tissue engineering.

Article Source: Medical Industry Week

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