Vascular Solutions Inc. (VASC, Financial) filed Annual Report for the period ended 2010-12-31.
Vascular Solutn has a market cap of $178 million; its shares were traded at around $10.58 with a P/E ratio of 29.4 and P/S ratio of 2.6. Hedge Fund Gurus that owns VASC: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns VASC: John Buckingham of Al Frank Asset Management, Inc., Mario Gabelli of GAMCO Investors.
Under the terms of the Device Supply Agreement, we agreed to manufacture and supply the Products to King and King agreed to purchase the Products from us for King s exclusive commercialization, distribution, sale and use of the Products in the Field. King does not have any minimum purchase obligations under the Device Supply Agreement. The Device Supply Agreement does not limit our ability to manufacture the Products for our own commercialization, distribution, sale and use outside of the Field. The transfer prices are fixed for each Product under the Device Supply Agreement and are adjusted for cost and inflation increases according to a market index. Upon the first commercial sale by King of a Thrombi-Gel hemostat (which occurred in May 2007), King made a one-time, non-refundable milestone payment to us of $1.0 million. Upon the first commercial sale by King of a Thrombi-Paste hemostat product, King will be required to make another one-time, non-refundable milestone payment to us of $1.0 million. As directed by King, we have discontinued the regulatory work necessary to obtain surgical approvals for the Thrombi-Gel and Thrombin-Paste products until further notice. King has agreed to reimburse us for our expenses to-date. If, after undertaking and completing the development and regulatory plans with respect to the Thrombi-Gel and Thrombi-Paste products, such development and regulatory efforts have not resulted in regulatory approval for surgical use, we have agreed to make a one-time, non-creditable, non-refundable payment of $2.5 million to King for both the Thrombi-Gel products and Thrombi-Paste products if they are not approved by the FDA for surgical use. We believe the probability of making these one-time payments to King is remote. Under the Device Supply Agreement, King also has certain rights of first refusal with respect to any hemostatic devices for use in the Field that we may develop on our own or at the request of King. The Device Supply Agreement has an initial term of 10 years, followed by successive automatic one-year extensions, subject to termination by the parties under certain circumstances, including termination by King without cause anytime after the third anniversary of its execution upon two years prior written notice to us.
Our growth depends in large part on the continuous introduction of new and innovative products, together with ongoing enhancements to our existing products, through internal product development, technology licensing and strategic alliances. We recognize the importance of, and intend to continue to make investments in, research and development. We incurred expenses of $9,524,000 in 2010, $7,847,000 in 2009, and $6,333,000 in 2008 for research and development activities, which constituted 12%, 11% and 10%, respectively, of net sales. R&D activities include research, product development and intellectual property. We expect that our R&D expenditures will be approximately 10 to 12% of net sales in 2011.
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Vascular Solutn has a market cap of $178 million; its shares were traded at around $10.58 with a P/E ratio of 29.4 and P/S ratio of 2.6. Hedge Fund Gurus that owns VASC: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns VASC: John Buckingham of Al Frank Asset Management, Inc., Mario Gabelli of GAMCO Investors.
Highlight of Business Operations:
We were incorporated in the state of Minnesota in December 1996, and began operations in February 1997. In 2000 we received FDA clearance for our first product, the Duettâ„¢ sealing device, which is used to seal the puncture site following catheterization procedures. We completed our initial public offering in 2000 by raising net proceeds of approximately $44.0 million at an offering price of $12.00 per share. In 2001, we made the strategic decision to develop additional products and to de-emphasize our Duett product. We have grown from net revenue of $6.2 million in 2000 solely from sales of our Duett product to net revenue of $78.4 million in 2010 from sales of over 50 products we have developed and launched since 2002. This increase in revenue represents a compound annual growth rate of 29% and is driven by our commitment to the development and launch of multiple new devices to diagnose and treat vascular conditions.Under the terms of the Device Supply Agreement, we agreed to manufacture and supply the Products to King and King agreed to purchase the Products from us for King s exclusive commercialization, distribution, sale and use of the Products in the Field. King does not have any minimum purchase obligations under the Device Supply Agreement. The Device Supply Agreement does not limit our ability to manufacture the Products for our own commercialization, distribution, sale and use outside of the Field. The transfer prices are fixed for each Product under the Device Supply Agreement and are adjusted for cost and inflation increases according to a market index. Upon the first commercial sale by King of a Thrombi-Gel hemostat (which occurred in May 2007), King made a one-time, non-refundable milestone payment to us of $1.0 million. Upon the first commercial sale by King of a Thrombi-Paste hemostat product, King will be required to make another one-time, non-refundable milestone payment to us of $1.0 million. As directed by King, we have discontinued the regulatory work necessary to obtain surgical approvals for the Thrombi-Gel and Thrombin-Paste products until further notice. King has agreed to reimburse us for our expenses to-date. If, after undertaking and completing the development and regulatory plans with respect to the Thrombi-Gel and Thrombi-Paste products, such development and regulatory efforts have not resulted in regulatory approval for surgical use, we have agreed to make a one-time, non-creditable, non-refundable payment of $2.5 million to King for both the Thrombi-Gel products and Thrombi-Paste products if they are not approved by the FDA for surgical use. We believe the probability of making these one-time payments to King is remote. Under the Device Supply Agreement, King also has certain rights of first refusal with respect to any hemostatic devices for use in the Field that we may develop on our own or at the request of King. The Device Supply Agreement has an initial term of 10 years, followed by successive automatic one-year extensions, subject to termination by the parties under certain circumstances, including termination by King without cause anytime after the third anniversary of its execution upon two years prior written notice to us.
Our growth depends in large part on the continuous introduction of new and innovative products, together with ongoing enhancements to our existing products, through internal product development, technology licensing and strategic alliances. We recognize the importance of, and intend to continue to make investments in, research and development. We incurred expenses of $9,524,000 in 2010, $7,847,000 in 2009, and $6,333,000 in 2008 for research and development activities, which constituted 12%, 11% and 10%, respectively, of net sales. R&D activities include research, product development and intellectual property. We expect that our R&D expenditures will be approximately 10 to 12% of net sales in 2011.
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