A Medical Device Daily

Kensey Nash (Exton, Pennsylvania) yesterday reported a plan that would see the company leave the embolic protection sector, primarily in carotid stenting.

Pointing to a slow-growing market with extremely high costs, the company will discontinue its TriActiv system platforms and the ProGuard system. The abandoned systems provide embolic protection, by capturing and removing the debris created by a percutaneous coronary intervention or to stop it from floating downstream into blocked arteries.

"The cost associated with continuing these [systems] was not justified," Joseph Kaufmann, president/CEO of Kensey Nash said in a conference call.

The company's board approved the exit strategy in late June, Kaufmann said. Factors behind the decision cited by the company include slow growth in the carotid stent marke — in a press statement saying that the "embolic protection market dynamics are negative"; ongoing market resistance to balloon technology versus filter technology; and a reduction in the number of patients identified as benefiting from embolic protection.

"Unfortunately our efforts in the embolic protection markets have not been commercially successful, despite good clinical data, and we needed to make this decision," Kaufmann said. "We now have the opportunity to focus our company on the two core endovascular markets of thrombectomy and chronic total occlusions, in addition to our strong biomaterials business, which present better opportunities to add value to Kensey Nash.

"The management and the board of directors will continue to evaluate the performance of all of our business segments to ensure we are serving the best interests of our shareholders and employees," Kaufamann said.

In discontinuing TriActiv and ProGuard the company estimated that it will save $11.6 million a year.

Charges incurred by the company will include staff severance payouts, clinical trial and other contract cancellation costs. The total of these charges is anticipated to be about $5.1 million, of which about $4.4 million or 24 cents a share tax-effected, and $700,000, or 4 cents a share tax-effected, recorded in FY07 and FY08, respectively.

About three years ago, the company was singing a far different tune about the systems and touted the market for these types of embolic protection systems. It was then estimated at $100 million worldwide and was expected to grow substantially for the next several years as next-generation products are developed and indications are expanded (MDD, August 3, 2004).

The overall market for carotid stents has not been pushed by reimbursement, with CMS earlier this year declining to expand its payments for a broader range of applications.

The company said that it plans to continue with its thrombosis protection products and that its lead product opportunity will come from the ThromCat thrombectomy catheter system and its QuickCat extraction catheter.

"The outlook for Kensey Nash is very bright," Kaufmann said. "We do believe the ThromCat and QuickCat will be very successful for [the company]."

The products are used for vascular clearance. He put the opportunity for the Thromcat at $100 million to $150 million worldwide, and for the QuickCat at about $75 million.

"These products are very simple to use," Kaufmann said.

In the U.S., the ThromCat system is indicated for mechanical removal of thrombus from synthetic hemodialysis access grafts and native vessel dialysis fistula, and is sold through Kensey Nash's direct sales force.

In Europe the ThromCat system is a mechanical thrombectomy catheter designed to remove blood clots in patients. The ThromCat system is a fully disposable catheter system that incorporates Kensey Nash's HeliFlex technology to flush, macerate and extract thrombus. An internal rotating helix creates a powerful vacuum to draw thrombus into the catheter and then macerate it, while simultaneously flushing the vessel to aid in the thrombus removal.

The ThromCat system is sold through a direct sales force in Germany and through a distribution network covering the European Union and certain other parts of the world.

The QuickCat catheter is an aspiration system indicated for the removal of blood clots from vessels in the arterial system. The device is fully disposable system that rapidly removes thrombus from the body.

Kensey Nash provides solutions and technologies for a range of medical procedures. The company provides an range of products, primarily in the endovascular, sports medicine and spine markets.

The company also is the developer of the Angio-Seal vascular closure device, which is licensed to St. Jude Medical (St. Paul, Minnesota).