<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended: DECEMBER 31, 2000

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

            For the Transition Period From __________ to __________.


                         Commission File Number: 0-27120


                             KENSEY NASH CORPORATION
             (Exact name of registrant as specified in its charter)


          DELAWARE                                               36-3316412
(State or other jurisdiction                                   (IRS Employer
of incorporation or organization)                            Identification No.)


 MARSH CREEK CORPORATE CENTER, 55 EAST UWCHLAN AVENUE, EXTON, PENNSYLVANIA 19341
              (Address of principal executive offices and zip code)


       Registrant's telephone number, including area code: (610) 524-0188


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X  No
                                              ---    ---

         As of January 31, 2001, there were outstanding 10,460,242 shares of
Common Stock, par value $.001, of the registrant.


<PAGE>   2



                             KENSEY NASH CORPORATION

                         QUARTER ENDED DECEMBER 31, 2000


                                      INDEX


<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
PART I - FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS
                           Condensed Consolidated Balance Sheets
                             as of December 31, 2000 (Unaudited) and June 30, 2000.........................      3

                           Condensed Consolidated Statements of Operations
                             for the three and six months ended December 31, 2000
                             and 1999 (Unaudited)..........................................................      4

                           Condensed Consolidated Statements of Stockholders' Equity as of
                             December 31, 2000 (Unaudited) and June 30, 2000...............................      5

                           Condensed Consolidated Statements of Cash Flows
                             for the six months ended December 31, 2000 and 1999 (Unaudited)...............      6

                           Notes to Condensed Consolidated Financial Statements (Unaudited)................      7

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                           FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................................     10


PART II - OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS........................................................................     16
         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.........................................................     16


SIGNATURES ................................................................................................     17
</TABLE>



                                       2
<PAGE>   3
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------------------------------
                                                                          DECEMBER 31,      JUNE 30,
ASSETS                                                                        2000            2000
CURRENT ASSETS:
<S>                                                                       <C>             <C>
  Cash and cash equivalents                                               $ 14,047,476    $ 24,117,502
  Short-term investments                                                    12,136,297       7,603,308
  Trade receivables                                                          2,258,429       2,219,739
  Royalties receivable                                                       1,920,684       1,993,260
  Officer loans                                                                986,780         954,110
  Other receivables (including approximately $47,000 and $53,000 at
      December 31 and June 30, 2000, respectively, due from employees)         195,651         258,367
  Inventory                                                                  1,291,630         902,118
  Prepaid expenses and other                                                   577,252         471,666
                                                                          ------------    ------------
         Total current assets                                               33,414,199      38,520,070
                                                                          ------------    ------------

PROPERTY, PLANT AND EQUIPMENT, AT COST
  Leasehold improvements                                                     5,676,760       5,666,083
  Machinery, furniture and equipment                                         7,091,775       5,586,159
  Construction in progress                                                     521,169         354,551
                                                                          ------------    ------------

         Total property, plant and equipment                                13,289,704      11,606,793
  Accumulated depreciation                                                  (5,392,436)     (4,390,796)
                                                                          ------------    ------------
         Net property, plant and equipment                                   7,897,268       7,215,997
                                                                          ------------    ------------

OTHER ASSETS:
  Restricted investments                                                     2,081,651       2,081,651
  Property under capital leases, net                                             5,153           9,944
  Acquired patents, net                                                      3,331,212       3,355,953
  Goodwill, net                                                              3,315,209
                                                                          ------------    ------------
      Total other assets                                                     8,733,225       5,447,548
                                                                          ------------    ------------
TOTAL                                                                     $ 50,044,692    $ 51,183,615
                                                                          ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                        $    789,982    $  1,290,101
  Accrued expenses                                                             516,275         460,551
  Current portion of obligation under acquisition agreement
      and capital lease obligations                                            882,065          10,374
  Deferred revenue                                                             255,186          16,300
                                                                          ------------    ------------
         Total current liabilities                                           2,443,508       1,777,326
                                                                          ------------    ------------

OBLIGATION UNDER ACQUISITION AGREEMENT and
    OBLIGATION UNDER CAPITAL LEASES, long-term portion                       2,801,528           1,933
                                                                          ------------    ------------
         Total liabilities                                                   5,245,036       1,779,259
                                                                          ------------    ------------

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value, 100,000 shares authorized,
      no shares issued or outstanding at December 31 and June 30, 2000
  Common stock, $.001 par value, 25,000,000 shares authorized,
      10,459,725 and 10,455,499 shares issued and outstanding at
      December 31 and June 30, 2000, respectively                               10,460          10,455
  Capital in excess of par value                                            63,514,849      63,690,042
  Accumulated deficit                                                      (18,622,494)    (13,813,455)
  Accumulated other comprehensive loss                                        (103,159)       (482,686)
                                                                          ------------    ------------
      Total stockholders' equity                                            44,799,656      49,404,356
                                                                          ------------    ------------
TOTAL                                                                     $ 50,044,692    $ 51,183,615
                                                                          ============    ============
</TABLE>


See notes to consolidated financial statements



                                       3
<PAGE>   4

<TABLE>
<CAPTION>
KENSEY NASH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
------------------------------------------------------------------------------------------------------------
                                                    Three Months Ended                 Six Months Ended
                                                        December 31,                     December 31,
                                                ----------------------------    ----------------------------
                                                    2000            1999            2000            1999
<S>                                             <C>             <C>             <C>             <C>
REVENUES:
  Net sales                                     $  3,096,225    $  3,009,292    $  5,680,965    $  5,372,912
  Research and development                           115,000           8,199         116,843          42,597
  Royalty income                                   1,925,471       1,525,115       3,922,455       2,946,217
                                                ------------    ------------    ------------    ------------
       Total revenues                              5,136,696       4,542,606       9,720,263       8,361,726
                                                ------------    ------------    ------------    ------------

OPERATING COSTS AND EXPENSES:
  Cost of products sold                            1,611,932       1,637,289       3,326,755       3,065,397
  Research and development                         1,578,222       1,315,038       3,215,272       2,639,905
  Selling, general and administrative                794,903         809,125       1,311,530       1,340,445
  In-process research and development charge       7,593,597                       7,593,597
                                                ------------    ------------    ------------    ------------
       Total operating costs and expenses         11,578,654       3,761,452      15,447,154       7,045,747
                                                ------------    ------------    ------------    ------------

(LOSS) INCOME FROM OPERATIONS                     (6,441,958)        781,154      (5,726,891)      1,315,979
                                                ------------    ------------    ------------    ------------

OTHER INCOME:
  Interest income                                    480,360         212,851       1,019,062         436,851
  Interest expense                                   (75,907)       (117,879)       (101,610)       (232,532)
  Other                                                  400              25             400          (1,006)
                                                ------------    ------------    ------------    ------------
       Total other income - net                      404,853          94,997         917,852         203,313
                                                ------------    ------------    ------------    ------------

NET (LOSS) INCOME                               $ (6,037,105)   $    876,151    $ (4,809,039)   $  1,519,292
                                                ============    ============    ============    ============

BASIC and DILUTED EARNINGS PER SHARE            $      (0.58)   $       0.12    $      (0.46)   $       0.20
                                                ============    ============    ============    ============

WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING                              10,459,568       7,464,048      10,457,993       7,472,531
                                                ============    ============    ============    ============

DILUTED WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING                              10,459,568       7,611,669      10,457,993       7,571,119
                                                ============    ============    ============    ============
</TABLE>


See notes to consolidated financial statements.




                                       4
<PAGE>   5
<TABLE>
<CAPTION>
KENSEY NASH CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
-----------------------------------------------------------------------------------------------
                                                                     Capital
                                          Common Stock              in Excess
                                  ----------------------------       of Par       Accumulated
                                      Shares         Amount          Value          Deficit
<S>                               <C>             <C>             <C>             <C>
BALANCE, JUNE 30, 1997               7,198,251    $      7,198    $ 34,203,807    $(22,084,059)

   Exercise of stock options            61,021              61         556,174
   Shares issued under Patent
     Acquisition Agreement             200,000             200       2,837,400
   Net income                                                                          342,682
                                    ----------    ------------    ------------    ------------
BALANCE, JUNE 30, 1998               7,459,272           7,459      37,597,381     (21,741,377)
                                    ----------    ------------    ------------    ------------
   Exercise of stock options            11,438              11         100,071
   Net income                                                                        3,178,758
   Comprehensive loss
   Comprehensive income
                                    ----------    ------------    ------------    ------------
BALANCE, JUNE 30, 1999               7,470,710           7,470      37,697,452     (18,562,619)
                                    ----------    ------------    ------------    ------------
   Shares issued upon Secondary
     Offering                        2,959,000           2,959      25,745,766
   Exercise of stock options            25,789              26         246,824
   Net income                                                                        4,749,164
   Comprehensive loss
   Comprehensive income
                                    ----------    ------------    ------------    ------------
BALANCE, JUNE 30, 2000              10,455,499          10,455      63,690,042     (13,813,455)
                                    ----------    ------------    ------------    ------------
   Secondary Offering costs                                           (212,325)
   Exercise of stock options             4,226               5          37,132
   Net loss                                                                         (4,809,039)
   Comprehensive income
   Comprehensive loss
                                    ----------    ------------    ------------    ------------
BALANCE, DECEMBER 31, 2000          10,459,725    $     10,460    $ 63,514,849    $(18,622,494)
                                    ==========    ============    ============    ============

<CAPTION>

                                   Accumulated
                                      Other           Comprehensive
                                   Comprehensive         Income/
                                       Loss               (Loss)          Total
<S>                                <C>                <C>              <C>
BALANCE, JUNE 30, 1997                                                 $ 12,126,946

   Exercise of stock options                                                556,235
   Shares issued under Patent
     Acquisition Agreement                                                2,837,600
   Net income                                         $    342,682          342,682
                                                      ============      -----------
BALANCE, JUNE 30, 1998                                                   15,863,463
                                                                        -----------
   Exercise of stock options                                                100,082
   Net income                                         $  3,178,758        3,178,758
   Comprehensive loss                $   (241,402)        (241,402)        (241,402)
                                                      ------------
   Comprehensive income                               $  2,937,356
                                                      ============
                                     ------------                       ------------
BALANCE, JUNE 30, 1999                   (241,402)                        18,900,901
                                     ------------                       ------------
   Shares issued upon Secondary
     Offering                                                             25,748,725
   Exercise of stock options                                                 246,850
   Net income                                         $  4,749,164         4,749,164
   Comprehensive loss                    (241,284)        (241,284)         (241,284)
                                                      ------------
   Comprehensive income                               $  4,507,880
                                     ------------     ============      ------------
BALANCE, JUNE 30, 2000                   (482,686)                        49,404,356
                                     ------------                       ------------
   Secondary Offering costs                                                 (212,325)
   Exercise of stock options                                                  37,137
   Net loss                                           $ (4,809,039)       (4,809,039)
   Comprehensive income                   379,527          379,527           379,527
                                                      ------------
   Comprehensive loss                                 $ (4,429,512)
                                     ------------     ============      ------------
BALANCE, DECEMBER 31, 2000           $   (103,159)                      $ 44,799,656
                                     ============                       ============
</TABLE>


See notes to consolidated financial statements.


                                       5
<PAGE>   6
<TABLE>
<CAPTION>
KENSEY NASH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
-------------------------------------------------------------------------------------------------
                                                                        Six Months Ended
                                                                           December 31,
                                                                   -----------------------------
                                                                       2000            1999
<S>                                                                <C>             <C>
OPERATING ACTIVITIES:
  Net (loss) income                                                $ (4,809,039)   $  1,519,292
  Adjustments to reconcile net (loss) income to net cash used in
       operating activities:
       Depreciation and amortization                                    934,783         747,868
       In-process research and development charge                     7,593,597
  Changes in assets and liabilities which provided (used) cash:
       Accounts receivable                                               84,944      (1,611,101)
       Prepaid expenses and other current assets                       (105,586)       (161,741)
       Inventory                                                       (350,382)        (85,275)
       Accounts payable and accrued expenses                           (589,706)       (755,295)
       Deferred revenue                                                (288,850)       (381,596)
                                                                   ------------    ------------
       Net cash provided by (used in) operating activities            2,469,761        (727,848)
                                                                   ------------    ------------

INVESTING ACTIVITIES:
  Additions to property, plant and equipment                         (1,248,063)     (1,729,165)
  Acquisition of THM Biomedical, Inc.                                (6,771,087)
  (Purchase) sale of investments                                     (4,153,462)     (2,952,793)
                                                                   ------------    ------------
       Net cash used in investing activities                        (12,172,612)     (1,223,628)
                                                                   ------------    ------------

FINANCING ACTIVITIES:
  Principal payments under capital leases                                (5,898)        (15,930)
  Repayments of long term debt                                         (186,088)       (503,453)
  Secondary offering costs                                             (212,326)
  Exercise of stock options                                              37,137          41,544
                                                                   ------------    ------------
       Net cash used in financing activities                           (367,175)       (477,839)
                                                                   ------------    ------------

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                    (10,070,026)         17,941

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                       24,117,502       1,189,083
                                                                   ------------    ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                           $ 14,047,476    $  1,207,024
                                                                   ============    ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid for interest                                           $    101,610    $    117,879
                                                                   ============    ============
  Cash paid for income taxes                                       $               $
                                                                   ============    ============
</TABLE>


See notes to consolidated financial statements.


                                        6
<PAGE>   7

                             KENSEY NASH CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
NOTE 1  -- CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

      BASIS OF PRESENTATION

      The consolidated balance sheet at December 31, 2000, the consolidated
      statements of operations for the six months ended December 31, 2000 and
      1999 and the consolidated statements of cash flows for the six months
      ended December 31, 2000 and 1999 have been prepared by Kensey Nash
      Corporation (the "Company") and have not been audited by the Company's
      Independent Auditors. In the opinion of management, all adjustments (which
      include only normal recurring adjustments) necessary to present fairly the
      financial position, results of operations and cash flows at December 31,
      2000 and for all periods presented have been made.

      Certain information and note disclosures normally included in the
      Company's annual financial statements prepared in accordance with
      generally accepted accounting principles have been condensed or omitted.
      These consolidated financial statements should be read in conjunction with
      the financial statements and notes thereto included in the Company's June
      30, 2000 consolidated financial statements filed with the Securities and
      Exchange Commission on Form 10-K. The results of operations for the period
      ended December 31, 2000 are not necessarily indicative of operating
      results for the full year.

      CASH AND CASH EQUIVALENTS

      Cash and cash equivalents represent cash in banks and short-term
      investments having an original maturity of less than six months.

      EXPORT SALES

      There were no export sales from the Company's U.S. operations to
      unaffiliated customers in Europe for the three and six months ended
      December 31, 2000. Export sales totaled $116,562 and $231,595 for the
      three and six months ended December 31, 1999, respectively.

      EARNINGS PER SHARE

      Earnings per share are calculated in accordance with SFAS No. 128,
      Earnings per Share which requires the Company to report both basic and
      diluted earnings per share ("EPS"). Basic and diluted EPS are computed
      using the weighted average number of shares of common stock outstanding,
      with common equivalent shares from options included in the diluted
      computation when their effect is dilutive.

      COMPREHENSIVE INCOME

      Accumulated other comprehensive loss, shown in the consolidated statements
      of shareholders' equity at December 31, 2000 and June 30, 2000, 1999 and
      1998, is solely comprised of unrealized losses on the Company's
      available-for-sale securities. There was no unrealized gain or loss in the
      year ended June 30, 1998. The tax effect for 2000 and 1999 of other
      comprehensive income was not significant.

      RECENT PRONOUNCEMENTS

      SFAS No. 133, Accounting for Derivative Instruments and Hedging
      Activities, as amended, establishes new accounting and reporting standards
      for derivative financial instruments and for hedging activities. It
      requires an entity to recognize all derivatives as either assets or
      liabilities in the balance sheet, depending on the Company's rights or
      obligations under the applicable



                                        7
<PAGE>   8

      derivative contract, and to measure those instruments at fair value.
      Adoption of the new method of accounting for derivatives and hedging
      activities, which is required as of July 1, 2000, is not expected to have
      a material impact on the Company's financial position or operations.

      In December 1999, the Securities and Exchange Commission ("SEC") issued
      Staff Accounting Bulletin, SAB 101, Revenue Recognition in Financial
      Statements, as amended, with an effective date of October 1, 2000, which
      summarizes the SEC's views in applying generally accepted accounting
      principles to revenue recognition. This statement did not have a material
      impact on our consolidated financial statements.

NOTE 2  -- INVENTORY

      Inventory is stated at the lower of cost (determined by the average cost
      method, which approximates first-in, first-out) or market. Inventory
      primarily includes the cost of material utilized in the processing of the
      Company's products and is as follows:

                                 December 31,    June 30,
                                    2000          2000
                                 -----------    ---------

          Raw materials           $ 942,350     $ 823,570
          Work in process           342,486        78,548
          Finished Goods              6,794
                                 ----------     ---------
          Total                  $1,291,630     $ 902,118
                                 ==========     =========

NOTE 3 -- COMMITMENTS AND CONTINGENCIES

      The Company has pledged $2,081,651 in investments as collateral to secure
      certain bank loans to employees which were used by such employees for the
      payment of taxes incurred as the result of the receipt of Common Stock at
      the Company's Initial Public Offering in December 1995. In exchange for
      the Company pledging collateral for such loans, each affected employee has
      pledged their Common Stock as collateral to the Company. The balance
      outstanding on such employee loans was $2,046,055 at December 31, 2000.

NOTE 4 -- INCOME TAXES

      As of June 30, 2000, the Company had net operating loss carryforwards for
      federal and state tax purposes totaling $11.3 and $10.0 million,
      respectively. As such, no provision has been made for income taxes for the
      six months ended December 31, 2000. A portion of the NOL may be subject to
      various statutory limitations as to its usage.

NOTE 5 -- ACQUISITION OF THM BIOMEDICAL

      On September 1, 2000 the Company acquired THM Biomedical, Inc. ("THM"), a
      developer of porous, biodegradable, tissue-engineering devices for the
      repair and replacement of musculoskeletal tissues, for approximately $10.5
      million plus acquisition costs of approximately $228,000. The transaction
      was financed with $6.6 million of the Company's cash and a note payable to
      the shareholders of THM in the amount of $4.5 million (the "THM
      Obligation"). The THM Obligation is due in equal quarterly installments of
      $281,250 beginning on December 31, 2000 and ending on September 30, 2004.
      The present value of this obligation, $3,856,816, has been recorded in the
      Company's financial statements.

      The acquisition has been accounted for under the purchase method of
      accounting and THM's results of operations are included in those of the
      Company since the date of acquisition. The purchase price has been
      allocated to the assets acquired and liabilities assumed based on their
      estimated fair values on the date of acquisition. The allocation has
      resulted in goodwill of approximately $3.4 million, which



                                       8
<PAGE>   9

      is being amortized on a straight-line basis over 17 years. The following
      is a summary of the allocation (in thousands):

          Assets                                                $    400
          Accrued expenses and other liabilities                    (702)
          In-process research and development                      7,594
          Excess of cost over net assets acquired (goodwill)       3,371
                                                                --------
                                                                $ 10,663
                                                                ========

      A significant portion of the purchase price was identified as acquired
      in-process research and development ("IPR&D"). The valuation of IPR&D was
      performed in an independent appraisal using proven valuation procedures
      and techniques and represents the estimated fair market value based on
      risk-adjusted cash flows related to the IPR&D programs. The IPR&D consists
      of four primary research and development programs that are expected to
      reach completion between late 2002 and 2005. At the date of acquisition,
      the development of these programs had not yet reached technological
      feasability and the IPR&D had no alternative future uses. Accordingly,
      these costs were immediately expensed in the consolidated statement of
      operations on the acquisition date.

      The following unaudited pro-forma financial information assumes that the
      acquisition had occurred as of the beginning of the earliest period
      presented:

                                              Six Months        Six Months
                                                 Ended             Ended
                                               12/31/00          12/31/99
                                              ------------     ------------
      Total revenue                           $ 10,987,158     $  8,668,041
                                              ============     ============
      Net income (loss)                       $  3,997,379     $ (5,980,129)
                                              ============     ============
      Basic and diluted earnings (loss)
       per share                              $       0.38     $      (0.80)
                                              ============     ============



      These pro forma results are based on certain assumptions and estimates.
      The pro forma results do not necessarily represent results that would have
      occurred if the acquisition had taken place at the beginning of the
      specified periods, nor are they indicative of the results of future
      combined operations.



                                       9
<PAGE>   10


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following discussion and analysis should be read in conjunction with
"Selected Consolidated Financial Data" and our financial statements and the
related notes included in this report.

OVERVIEW

We were founded in 1984, our common stock became publicly traded in December
1995 and we completed a secondary offering in May 2000.

Revenues

Our revenues consist of three components: net sales, research and development
revenue and royalty income.

Net Sales. Net sales is comprised of absorbable biomaterials products and
Angio-Seal(TM) devices manufactured by us.

         Biomaterials. The biomaterials component of net sales represents the
         sale of our biomaterials products to customers for use in the following
         markets: orthopedics, cardiology, drug/biologics delivery, wound care
         and dental. Historically, our biomaterials sales have represented
         primarily the absorbable collagen and polymer components of the
         Angio-Seal(TM) device supplied to St. Jude Medical, the licensee of the
         Angio-Seal(TM) product line. We have experienced significant sales
         growth in our biomaterials products in every fiscal year since 1998 due
         to sales to new customers, increased sales to existing customers, new
         product offerings, including sales of the dental products we recently
         acquired, and the expansion of our marketing activities. We believe
         this growth will continue because of greater acceptance by the medical
         community of biomaterials and technological advances which have
         expanded the applications for our biomaterials products.

         Angio-Seal(TM) Devices. In fiscal year 2000, we supplied St. Jude
         Medical with 6F Angio-Seal(TM) devices to supplement their production
         requirements. A final shipment of 6F Angio-Seal(TM) devices was made in
         the quarter ended September 30, 2000. St. Jude Medical has now
         transitioned the manufacturing of these devices to their facility. We
         do not expect any revenue from the manufacture of completed
         Angio-Seal(TM) devices in the future.

Research and Development Revenue. Historically, research and development revenue
has been derived solely from development work performed on the Angio-Seal(TM)
device. As anticipated, these research and development activities have
transitioned to St. Jude Medical and no significant Angio-Seal(TM) research and
development revenue is expected in the future. However, we do expect future
research and development grant revenue under contracts acquired in conjunction
with the THM Biomedical, Inc. acquisition completed during September 2000.

Royalty Income. We receive a royalty on every Angio-Seal(TM) device sold
worldwide. We anticipate sales of the Angio-Seal(TM) device will continue to
grow, particularly due to the recent launches of the new 6F and 8F
Angio-Seal(TM) devices in the U.S. and Europe. As a result, royalty income will
continue to be a significant source of revenue. The anticipated increase in unit
sales has been partially offset in our fiscal year 2001 by the reduction in our
royalty rate, from 12% to 9%, in accordance with our licensing agreements. This
rate reduction occurred during the second quarter of fiscal year 2001 when a
cumulative 1.0 million Angio-Seal(TM) devices were sold. The next contracted
rate reduction will occur when 4.0 million Angio-Seal(TM) devices are sold,
which we believe will not occur for several years.



                                       10
<PAGE>   11

Cost of Products Sold. We experienced an overall increase in gross margins
during fiscal year 2000 as our net sales increased and we were able to spread
our fixed costs of manufacturing over a greater number of units. We anticipate
our gross margins will continue to improve throughout fiscal year 2001 as our
sales levels increase and our product mix becomes more favorable. Specifically,
we have had a shift to higher margin sales of biomaterials products and the
elimination of sales of lower margin Angio-Seal(TM) devices during the second
fiscal quarter of fiscal year 2001.

Research and Development Expense. Research and development expense consists of
expenses incurred for the development of our proprietary technology such as our
newly renamed product, TriActiv(TM) Balloon Protected Flush Extraction System
(formerly known as the Aegis Vortex System), absorbable biomaterials products
and technologies as well as other development programs. While research and
development on the Angio-Seal(TM) product has become an insignificant portion of
our overall development costs, the progression of the TriActiv(TM) system into
the clinical trial phase and our continued development of proprietary
biomaterials products and technologies has offset this decrease. We anticipate
research and development expense will continue to increase as we pursue
commercialization of the TriActiv(TM) product as well as explore opportunities
for our other technologies.

Selling, General and Administrative. Selling, general and administrative
expenses include general and administrative costs as well as costs related to
the marketing of our products. During fiscal years 2001 and 2000, the costs of
our patent litigation are also included within selling, general and
administrative expenses. We anticipate the marketing component of selling,
general and administrative expenses, which has been insignificant in past fiscal
years, will increase as we evaluate opportunities for commercialization of the
TriActiv(TM) product and expand the marketing efforts for our biomaterials
business.

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED DECEMBER 31, 2000 TO THREE MONTHS ENDED
DECEMBER 31, 1999

Revenues. Revenues increased 13% to $5.1 million in the three months ended
December 31, 2000 from $4.5 million in the three months ended December 31, 1999.
Net sales of products increased 3% to $3.1 million from $3.0 million for the
three months ended December 31, 2000 and 1999, respectively. As anticipated, we
had no sales of Angio-Seal(TM) devices to St. Jude Medical, as we made our final
shipment of 6F devices during the three months ended September 30, 2000. This
resulted in a $1.0 million decrease in Angio-Seal(TM) device sales in the three
months ended December 31, 2000 from the three months ended December 31, 1999.
This was offset by increased sales of biomaterials products as well as the
addition of dental product sales related to the first fiscal quarter acquisition
of THM Biomedical.

Research and Development Revenues. Research and development revenues increased
to $115,000 from $8,000 for the three months ended December 31, 2000 and 1999,
respectively. Research and development revenue for the three months ended
December 31, 2000 was generated under an articular cartilage development grant
acquired in conjunction with the THM Biomedical acquisition. Research and
development revenue for the same period a year earlier was generated by work
performed on the Angio-Seal(TM) product for St. Jude Medical. As St. Jude
Medical has transitioned the Angio-Seal(TM) research and development in-house,
we do not expect Angio-Seal(TM) research and development revenue in the future.

Royalty Income. Royalty income increased 26% to $1.9 million from $1.5 million
in the three months ended December 31, 2000 and 1999, respectively. This
increase comes despite the anticipated 25% reduction in the Angio-Seal(TM)
device royalty rate from 12% to 9% during the quarter and reflects greater units
sold as well as an increase in average selling price for the Angio-Seal(TM)
device. Royalty units



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<PAGE>   12

increased 39% as 114,000 Angio-Seal(TM) units were sold to end-users during the
three months ended December 31, 2000 compared to approximately 82,000 units sold
during the three months ended December 31, 1999. This unit increase was due to
St. Jude Medical's increased sales and marketing efforts and sales of both the
new 6F and 8F devices in the U.S. market. The new version of the 8F device was
introduced in the U.S. in September 2000.

Cost of Products Sold. Cost of products sold decreased 2% in the three months
ended December 31, 2000 from the three months ended December 31, 1999. While
sales increased 3% over the same period a year earlier, the decrease in cost of
products sold reflects favorable product mix as sales of biomaterials products
increased. We anticipate our gross margin will continue to improve through
fiscal year 2001 as our sales levels increase and our product mix continues to
be concentrated in high margin biomaterials products.

Research and Development Expense. Research and development expense increased to
20% to $1.6 million in the three months ended December 31, 2000 from $1.3
million in the three months ended December 31, 1999. While development of the
Angio-Seal(TM) product line has transitioned to St. Jude Medical, our
development efforts on the TriActiv(TM) product have significantly increased. We
also continued to expand our development efforts on our biomaterials products.
We expect research and development expense to increase as we investigate and
develop new products, conduct clinical trials and seek regulatory approvals for
our proprietary products.

Selling, General and Administrative. Selling, general and administrative expense
decreased 2% to $795,000 in the three months ended December 31, 2000 from
$809,000 in the three months ended December 31, 1999. This decrease was the
result of a reduction in legal expenses related to our patent infringement suit
offset by an increase in our sales and marketing efforts for the TriActiv(TM)
system and for our biomaterials products.

Net Interest Income. Interest expense decreased 36% to $76,000 in the three
months ended December 31, 2000 from $118,000 in the three months ended December
31, 1999. This was due to the repayment of $6.1 million of debt on June 1, 2000
with the proceeds from our secondary offering, offset by interest expense on the
$4.5 million obligation incurred in conjunction with the THM Biomedical
acquisition. Interest income increased 125% to $480,000 in the three months
ended December 31, 2000 from $213,000 in the three months ended December 31,
1999 due to an increase in average cash and investment balances resulting from
the proceeds of our secondary offering.

COMPARISON OF SIX MONTHS ENDED DECEMBER 31, 2000 TO SIX MONTHS ENDED
DECEMBER 31, 1999

Revenues. Revenues increased 16% to $9.7 million in the six months ended
December 31, 2000 from $8.4 million in the six months ended December 31, 1999.
Net sales of products increased 6% to $5.7 million from $5.4 million for the six
months ended December 31, 2000 and 1999, respectively. As anticipated, sales of
Angio-Seal(TM) devices decreased as we made our final shipment of 6F devices to
St. Jude in July 2000. This resulted in a $1.1 million decrease in
Angio-Seal(TM) device sales in the six months ended December 31, 2000 from the
six months ended December 31, 1999. This decrease was offset by increased sales
of biomaterials products as well as the addition of dental product sales related
to the first fiscal quarter acquisition of THM Biomedical.

Research and Development Revenues. Research and development revenues increased
174% to $117,000 from $43,000 for the six months ended December 31, 2000 and
1999, respectively. Research and



                                       12
<PAGE>   13

development revenue for the six months ended December 31, 2000 was generated
under an articular cartilage development grant acquired in conjunction with the
THM Biomedical acquisition. Research and development revenue for the same period
a year earlier was generated by work performed on the Angio-Seal(TM) product for
St. Jude Medical. As St. Jude Medical has transitioned the Angio-Seal(TM)
research and development in-house, we do not expect Angio-Seal(TM) research and
development revenue in the future.

Royalty Income. Royalty income increased 33% to $3.9 million from $2.9 million
in the six months ended December 31, 2000 and 1999, respectively. This increase
comes despite the anticipated 25% reduction in the Angio-Seal(TM) royalty rate
from 12% to 9% during the second fiscal quarter and reflects greater units sold
as well as an increase in average selling price for the Angio-Seal(TM) device.
Royalty units increased 30% as 211,000 Angio-Seal(TM) units were sold to
end-users during the six months ended December 31, 2000 compared to
approximately 162,000 units sold during the six months ended December 31, 1999.
This unit increase was due to St. Jude Medical's increased sales and marketing
efforts and sales of both the new 6F and 8F devices in the U.S. market. The new
version of the 8F device was introduced in the U.S. in September 2000.

Cost of Products Sold. Cost of products sold increased 9% to $3.3 million in the
six months ended December 31, 2000 from $3.1 million in the six months ended
December 31, 1999. This increase reflects greater net sales of products as well
as increased manufacturing expenses. We anticipate our gross margin will improve
through fiscal year 2001 as our sales levels increase and our product mix
becomes more favorable, reflecting the shift to higher margin biomaterials
product sales.

Research and Development Expense. Research and development expense increased 22%
to $3.2 million in the six months ended December 31, 2000 from $2.6 million in
the six months ended December 31, 1999. While development of the Angio-Seal(TM)
product line has transitioned to St. Jude Medical, our development efforts on
the TriActiv(TM) product have significantly increased. We also have continued to
expand our development efforts on our biomaterials products. We expect research
and development expense to increase as we investigate and develop new products,
conduct clinical trials and seek regulatory approvals for our proprietary
products.

Selling, General and Administrative. Selling, general and administrative expense
decreased 2% in the six months ended December 31, 2000 from the six months ended
December 31, 1999. This decrease was the result of a reduction in legal expenses
related to our patent infringement suit offset by an increase in our sales and
marketing efforts for the TriActiv(TM) product and for our biomaterials
products.

Net Interest Income. Interest expense decreased 56% to $102,000 in the six
months ended December 31, 2000 from $233,000 in the six months ended December
31, 1999. This was due to the repayment of $6.1 million of debt on June 1, 2000
with the proceeds from our secondary offering, offset by interest expense on the
$4.5 million obligation incurred in conjunction with the THM Biomedical
acquisition. Interest income increased 133% to $1.0 million in the six months
ended December 31, 2000 from $437,000 in the six months ended December 31, 1999
due to an increase in average cash and investment balances resulting from the
proceeds of our secondary offering.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by our operating activities was $2.5 million in the six months
ended December 31, 2000 compared to net cash used by our operating activities of
$728,000 in the six months ended December 31, 1999. In the six months ended
December 31, 2000, changes in asset and liability balances used $1.2 million of
cash. The net loss of $4.8 million was offset by the $7.6 million and $935,000
non-cash charges for the write-off of in-process research and development and
depreciation and amortization, respectively. In the six months ended December
31, 1999, changes in asset and liability balances resulted in a $3.0



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<PAGE>   14

million use of cash, offset by net income of $1.5 million and non-cash
depreciation and amortization of $748,000.

Our cash, cash equivalents and short-term investments were $26.2 million at
December 31, 2000. In addition, we had $2.1 million in restricted investment
accounts. We have pledged $2.1 million in investments as collateral to secure
bank loans made to employees to pay taxes incurred by these employees when they
received common stock at the time of our initial public offering. In exchange
for our pledging this collateral, the employees have pledged their common stock
to us as collateral.

We have a $3.3 million capital spending plan for fiscal year 2001, of which $1.2
million has been expended primarily on machinery, equipment and leasehold
improvements. These expenditures are related to the continued expansion of our
manufacturing capabilities, principally for our biomaterials product lines.

In September 2000, we acquired the assets and assumed certain liabilities of THM
Biomedical, Inc., a company engaged in the development of bioabsorbable tissue
engineering devices, for a purchase price of approximately $10.5 million. The
purchase price consisted of a $6.6 million cash payment at closing and
$1,125,000 annually for the subsequent four years. The annual amounts are due in
quarterly payments of $281,250, the first of which was made on December 31,
2000. The present value of the payments, $3.8 million, was recorded as a
liability at September 30, 2000. The transaction was accounted for under the
purchase method. The purchase price was allocated amongst assets acquired and
liabilities assumed, $400,224 and $702,351, respectively, as well as a $7.6
million allocation to in-process research and development. The remainder of the
purchase price, $3.4 million, was allocated to goodwill and will be amortized
over 17 years.

We plan to continue to spend substantial amounts to fund clinical trials, to
gain regulatory approvals and to continue to expand research and development
activities, particularly for the TriActiv(TM) system and our biomaterials
products. We believe cash generated from operations will be sufficient to meet
our operating and capital requirements for the next twelve months.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our interest income and expense are sensitive to changes in the general level of
interest rates. In this regard, changes in interest rates affect the interest
earned on our cash, cash equivalents and investments as well as interest paid on
our debt.

Our investment portfolio consists primarily of high quality U.S. government
securities and certificates of deposit with an average maturity of one year or
less. We mitigate default risk by investing in what we believe are the safest
and highest credit quality securities and by monitoring the credit rating of
investment issuers. The portfolio includes only marketable securities with
active secondary or resale markets to ensure portfolio liquidity and there are
limitations regarding duration of investments. These available-for-sale
securities are subject to interest rate risk and decrease in market value if
interest rates increase. At December 31, 2000, our total portfolio consisted of
approximately $12.1 million of investments, with maturities ranging from three
months to ten years. We generally hold securities until maturity and therefore
do not expect our results of operations or cash flows to be materially impacted
due to a sudden change in interest rates.

FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS

This document and other documents filed by the Company with the Securities and
Exchange Commission (SEC) have forward-looking statements. In addition, the
Company's senior management may make



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<PAGE>   15
forward-looking statements orally to analysts, investors, the media and others.
Forward-looking statements might include one or more of the following:

-  Projections of revenues, income earnings per share, capital expenditures,
   capital structure or other financial items;

-  Descriptions of plans or objectives of management for future operations,
   products or services, including future acquisition objectives;

-  Forecasts of future economic performance; and

-  Descriptions of assumptions underlying or relating to any of the foregoing

Forward-looking statements can be identified by the fact that they do not relate
strictly to historical or current facts. They often include words such as
"believe", "expect", "anticipate", "intend", "plan", "estimate", or words of
similar meaning, or future conditional verbs such as "will", "would", "should",
"could" or "may". Such statements give the Company's expectations or predictions
of future conditions, events or results. They are not guarantees of future
performance. By their nature, forward-looking statements are subject to risks
and uncertainties. There are a number of factors, many of which are beyond the
Company's control, that could cause actual conditions, events or results to
differ significantly from those described in the forward-looking statements.
Some of these factors are described as "Risks Related to our Business" below.
Factors relating to the regulation and supervision of the Company are also
described or incorporated in the Company's Annual Report on Form 10-K filed with
the SEC. There are other factors besides those described or incorporated in this
report or in the Form 10-K that could cause actual conditions, events or results
to differ from those in the forward-looking statements.

Forward-looking statements speak only as of the day they are made. The Company
does not undertake to publicly update or revise forward-looking statements to
reflect circumstances or events that occur after the date the forward-looking
statements are made.

RISKS RELATED TO OUR BUSINESS

There are many risk factors that could adversely affect the Company's business,
operating results and financial condition. These risk factors, described in
detail in the Company's Annual Report on Form 10-K, include but are not limited
to:

-  the success of our biomaterials products;

-  our dependence on our biomaterials customers for marketing and obtaining
   regulatory approval for their products;

-  our ability to obtain regulatory approvals for the TriActiv(TM)system;

-  subsequent to regulatory approval, the successful commercialization of the
   TriActiv(TM) system;

-  our reliance on revenues from the Angio-Seal(TM) product line;

-  the performance of St. Jude Medical as the manufacturer, marketer and
   distributor of the Angio-Seal(TM) product;

-  our ability to obtain any additional required funding for future development
   and marketing of the TriActiv(TM) product as well as our biomaterials
   products;

-  the competitive markets for our products and our ability to respond more
   quickly than our competitors to new or emerging technologies and or changes
   in customer requirements;

-  the acceptance of our products by the medical community;

-  our dependence on key vendors and key personnel;

-  the use of hazardous materials which could expose us to future environmental
   liabilities;

-  our failure to expand our management systems and controls to support
   anticipated growth;

-  the ownership of our stockholders may be diluted by future acquisitions or
   strategic alliances;

-  risks related to our intellectual property, including patent and proprietary
   rights and trademarks; and

-  risks related to our industry including potential for litigation, ability to
   obtain reimbursement for our products and our products exposure to extensive
   government regulation.



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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

         On January 23, 2001, the Company provided an update on its ongoing
         patent infringement suit against Perclose, Inc., involving Kensey Nash
         U.S. Patent Nos. 5,676,689 and 5,861,004. The U.S. District Court,
         Eastern District of Pennsylvania, has entered a Markman hearing order
         regarding claims interpretation in favor of Perclose. The parties are
         preparing a joint stipulation, pursuant to which the Court would enter
         a judgement of non-infringement in favor of Perclose, which will permit
         the parties to seek an expedited review of the Markman decision from
         the U.S. Court of Appeals for the Federal Circuit. The Company intends
         to appeal the District Court's decision.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.
         A.       Exhibits.

                  None

         B.       Reports on Form 8-K.

                  None




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                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                            KENSEY NASH CORPORATION


Date:    February 14, 2001                  By: /s/ Wendy F. DiCicco
                                               ---------------------------------
                                               Wendy F. DiCicco
                                               Chief Financial Officer




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