Navigation Links
ANGIOTECH PHARMACEUTICALS, INC. ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2010
Date:11/9/2010

ANGIOTECH PHARMACEUTICALS, INC. ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2010


Advanced Search Search

  
Close
  1. Send a release
  2. Member sign in
  3. Become a member
  4. For journalists
  5. Global sites
PR Newswire: news distribution, targeting and monitoring
  1. Products & Services
  2. Knowledge Center
  3. Browse News Releases
  4. Contact PR Newswire
Biotechnology, Medical Pharmaceuticals, Earnings Click to view news release full screen  

ANGIOTECH PHARMACEUTICALS, INC. ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2010

 

Updated and Amended Credit Facility and Forbearance Agreement with Wells Fargo Capital Finance, LLC Completed Facility to Provide Angiotech up to $35 Million of Liquidity during Recapitalization Transaction Process VANCOUVER, Nov. 9 /PRNewswire-FirstCall/ - Angiotech Pharmaceuticals, Inc. (NASDAQ: ANPI, TSX: ANP) today announced that it had released its financial results for the third quarter ended September 30, 2010.

In addition, Angiotech also announced today that it had entered into an updated and amended credit facility and Forbearance Agreement with Wells Fargo Capital Finance, LLC ("Wells Fargo"). The updated and amended credit facility will provide us with up to $35 million of liquidity, with the applicable interest rate and other material terms being consistent with our current credit facility with Wells Fargo, except that the updated and amended credit facility is expected to increase our borrowing base, thereby assuring us immediate access to approximately $25 million under the facility, and provides for amended levels of material financial covenants. The Amended and Restated Forbearance Agreement provides for the credit facility to be available under the amended terms through the earlier of April 30, 2011 or the completion of our previously announced recapitalization transaction, subject to certain terms and conditions described in more detail below.

"We are pleased to report our highest ever third quarter product sales, driven primarily by continued growth in sales of our Proprietary Medical Products and continued stability and improvement across all segments of our Base Medical Products business," said Dr. William Hunter, President and CEO of Angiotech. "Our innovations, in particular our proprietary Quill™ Knotless Tissue-Closure Device franchise, combined with the tremendous efforts of our people, have continued to produce satisfying results, even as we continue to address the challenges posed by declining royalties received from our partner Boston Scientific." Third Quarter Financial Highlights

  • Total revenue was $59.0 million.
  • Net product sales were $51.9 million. Sales of our Proprietary Medical Products were $17.3 million, or 33% of total product sales. Sales of our Base Medical Products were $34.6 million, or 67% of total product sales.
  • Royalty revenue was $7.1 million.
  • Research and development expenses were $6.2 million.
  • Selling, general and administrative expenses were $22.5 million.
  • Net loss and net loss per share were $18.5 million and $0.22, respectively.
  • As of September 30, 2010, cash and short-term investments were $31.3 million and net debt was $543.7 million.
  • Selected Non-GAAP Financial Measures

  • Certain financial measures in this press release are prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP"). In addition, certain financial measures presented below and in the appendix to this press release are non-GAAP, or adjusted, financial measures that exclude certain items. Management uses certain non-GAAP, or adjusted, financial measures to establish operational goals, and believes that these measures may assist investors in evaluating the results of our business and analyzing the underlying trends in our business over time. Investors should consider these non-GAAP adjusted financial measures in addition to, and not as a substitute for, or as superior to, financial measures prepared in accordance with GAAP. A reconciliation of the non-GAAP adjusted financial measures to the corresponding GAAP financial measures, and an explanation of our use of these non-GAAP adjusted financial measures and of the excluded items, are included in the appendix to this press release.
  • Adjusted revenue was $58.9 million.
  • Adjusted cost of goods sold was $25.6 million.
  • Adjusted research and development expenses were $6.1 million.
  • Adjusted selling, general and administrative expenses were $21.9 million.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, adjusted to exclude certain non-cash and non-recurring items) was $5.1 million.
  • Adjusted net loss and adjusted net loss per share for the quarter were $8.2 million and $0.10, respectively.
  •  Recent Highlights Proprietary Medical Products. Our Proprietary Medical Products include our Quill™ Knotless Tissue-Closure Device product line, Skater™ line of drainage catheters, Option™ inferior vena cava ("IVC") filter, HemoStream™ chronic dialysis catheter and BioPince™ full core biopsy device. Consistent with recent prior quarters, our Proprietary Medical Products continued to demonstrate higher revenue growth as compared to our overall product portfolio. Revenue for these products for the third quarter of 2010 increased by 18% compared to the third quarter of 2009 and foreign currency changes had minimal impact on revenue growth. Base Medical Products. Our Base Medical Products represent more mature finished medical device product lines in the biopsy, ophthalmology and general surgery areas, as well as medical device components manufactured by us and sold to other third-party medical device manufacturers who assemble those components into finished medical devices. Revenue from our Base Medical Products for the third quarter of 2010 increased by 1% compared to the third quarter of 2009. Excluding the impact of foreign currency changes, revenue growth would have been 3%. Royalty Revenue. We derive additional revenue from royalties paid to us by partners that develop, market and sell products incorporating certain of our proprietary technologies. Currently, the majority of our royalty revenues are derived from sales by Boston Scientific Corporation ("BSC") of TAXUS® coronary stent systems incorporating the drug paclitaxel.

    Royalty revenue derived from sales of TAXUS stent systems by BSC for the third quarter of 2010 declined by 56% compared to the third quarter of 2009. The decline in royalty revenue is due to lower sales of TAXUS stent systems by BSC, which continue to be negatively impacted by competitive pressures in the drug-eluting coronary stent market. Royalty revenue for the quarter ended September 30, 2010 was based on BSC's net sales for the period April 1, 2010 to June 30, 2010 of $113 million, of which $66 million was in the U.S., compared to net sales of $226 million, of which $96 million was in the U.S., for the same period in the prior year. The average gross royalty rate earned in the three months ended September 30, 2010 on BSC's net sales was 6.0% for sales in the U.S. and 4.5% for sales in other countries, compared to an average rate of 6.2% for sales in the U.S. and 6.1% for sales in other countries for the same period in the prior year. The average gross royalty rates declined in the current period as a result of our tiered royalty rate structure for sales in certain territories including the U.S., E.U. and Japan, pursuant to which we receive lower royalty rates as end-user sales of paclitaxel-eluting stents decline in these territories. Transaction Agreements with Senior Subordinated Noteholders and Senior Floating Rate Noteholders. On October 1, 2010 we announced that we had not made our $9.7 million interest payment due to the holders (the "Subordinated Noteholders") of our 7.75% Senior Subordinated Notes (the "Subordinated Notes") on October 1, 2010 and that we were in discussions with certain Subordinated Noteholders to potentially restructure and reduce existing debt levels. On October 29, 2010 we announced that we had entered into a Recapitalization Support Agreement (the "Support Agreement") with the holders of approximately 73% of the aggregate principal amount of our Subordinated Notes (the "Consenting Noteholders") to effectuate a recapitalization that would result in a significant reduction of our debt. Upon completion, the recapitalization transaction would eliminate $250 million in total indebtedness and provide significant improvements to our credit ratios, liquidity and financial flexibility. Under the Support Agreement, the Consenting Noteholders have agreed to exchange their Subordinated Notes for new common stock in Angiotech (the "Exchange Offer"). The Exchange Offer will be open to all qualifying holders of the Subordinated Notes (the "Noteholders") and Noteholders participating in the Exchange Offer would receive 90% of the new common stock of Angiotech issued and outstanding following the completion of the recapitalization transaction, subject to potential dilution. The Noteholders that agree to the terms of the Support Agreement by November 30, 2010 will be entitled to receive, as additional consideration, 3.5% of the new common stock of Angiotech (distributed on a pro rata basis) issued and outstanding at the completion of the recapitalization transaction, subject to potential dilution.

    In addition, on October 29, 2010 we also entered into a support agreement (the "FRN Support Agreement") with holders of approximately 51% of the aggregate principal amount of our existing Senior Floating Rate Notes (the "Existing Floating Rate Notes") for the exchange of Existing Floating Rate Notes for new floating rate notes (the "New Floating Rate Notes"). The Exchange Offer will be open to all qualifying holders of the Existing Floating Rate Notes (the "FRN Noteholders"). The New Floating Rate Notes will be issued on substantially the same terms and conditions as the Existing Floating Rate Notes other than amendments to certain covenants related to the incurrence of additional indebtedness, and the definitions of permitted liens and change of control. The New Floating Rate Notes are also expected to be secured by a second lien over the property and assets of Angiotech and certain of its Subsidiaries, which currently secure the Company's revolving credit facility with Wells Fargo. Pursuant to the Support Agreement, the obligation of the Consenting Noteholders to complete the recapitalization transaction is conditional on the completion of the transactions contemplated under the FRN Support Agreement. Updated and Amended Credit Facility and Forbearance Agreement with Wells Fargo. On September 30, 2010, we entered into a Forbearance Agreement with Wells Fargo to preserve our existing revolving credit facility while we completed negotiations and transaction agreements with the Consenting Noteholders as described above. Under the Forbearance Agreement, Wells Fargo agreed to not immediately exercise any rights or remedies it has related to our failure to make our interest payment on October 1, 2010.

    Subsequently, on November 9, 2010, we announced that we had entered into an amendment and restatement to the Forbearance Agreement (the "Amended and Restated Forbearance Agreement") with Wells Fargo to continue to preserve our existing revolving credit facility during the period required to complete the proposed recapitalization transaction. Under the Amended and Restated Forbearance Agreement, Wells Fargo agreed to not immediately exercise any rights or remedies it has related to: (a) our failure to make our $9.7 million interest payment due to the Subordinated Noteholders on October 1, 2010; (b) our ongoing litigation with QSR Holdings, Inc.; or (c) any failure to deliver audited financial statements with an unqualified audit opinion with respect to the going concern assumption for the fiscal year ending December 31, 2010. The purpose of the credit facility amendment is to provide Angiotech with liquidity during the period required to complete the proposed recapitalization transaction and fulfill the liquidity requirement specified by the Support Agreement. We incurred amendment fees of $0.1 million to complete both the Forbearance Agreement and Amended and Restated Forbearance Agreement and $0.3 million to complete the amendment to the credit facility. We currently have no borrowings outstanding under the credit facility other than amounts specified under the letters of credit referred to below.

    The amendment to our existing credit facility with Wells Fargo provides for, among other changes:   (i)  an amendment of financial covenants pertaining to minimum EBITDA levels and fixed charge coverage ratios;   (ii)  an increase to the borrowing base available to secure loans by including in such borrowing base the value of certain real property, securities and intellectual property owned by the Company and its subsidiaries, in addition to accounts receivable and inventory, in each case subject to reserves, eligibility standards and advance rate formulas. As a result of such amendment, the amount of financing available to us under our amended revolving credit facility will immediately increase to approximately $25 million, which is net of $2.8 million of outstanding secured letters of credit under the credit facility;   (iii)  an amendment to the specified use of proceeds provisions to allow for certain secured and unsecured intercompany loans by our U.S. entities to our Canadian entities; and   (iv)  an amendment to permit the sale of certain assets of the Company.

    The Amended and Restated Forbearance Agreement will terminate on the earliest to occur of:   (i)  the occurrence of another event constituting an Event of Default under the existing revolving credit facility;   (ii)  the occurrence of a Material Adverse Change as defined under the existing revolving credit facility, subject to exclusions for changes relating to the recapitalization plan;   (iii)  failure to attain certain intermediate milestones with respect to the recapitalization plan;   (iv)  termination of the Support Agreement or the FRN Support Agreement;   (v)  consummation of the recapitalization plan on terms and conditions not reasonably satisfactory to Wells Fargo under the existing revolving credit facility;   (vi)  failure to remain within the applicable grace period with respect to the non-payment of the interest payment due to the Subordinated Note holders on October 1, 2010; and   (vii)  April 30, 2011.

    The Support Agreement requires that, upon implementation of the recapitalization transaction, the existing revolving credit facility be amended, refinanced or replaced to provide not less than $25 million and not more than $35 million in liquidity. As a result, further consent from Wells Fargo under the revolving credit facility will be required in connection with the consummation of the proposed recapitalization transaction. If such consent is not obtained, we would be required to replace the existing revolving credit facility with a new revolving credit facility. QSR Holdings. On October 6, 2010, we announced that on October 4, 2010 we were notified that QSR Holdings, Inc. ("QSR"), as the representative for the former stockholders of Quill Medical, Inc. ("QMI"), made a formal demand to the American Arbitration Association naming us and our subsidiaries, QMI and Angiotech Pharmaceuticals (US), Inc. ("Angiotech US") as respondents. The arbitration demand alleges that we failed to satisfy certain obligations under the Agreement and Plan of Merger, dated May 25, 2006, by and among Angiotech, Angiotech US, Quaich Acquisition, Inc. and QMI (the "Merger Agreement"), and seeks either direct monetary damages or, in the alternative, extension for one calendar year of certain earn-out periods as more fully set forth in the Merger Agreement. In addition, on October 5, 2010, certain of the respondents were served with the Summons and Complaint in an action commenced in the United States District Court for the Middle District of North Carolina on October 1, 2010 by QSR, entitled QSR Holdings, Inc. v. Angiotech Pharmaceuticals, Inc., Angiotech Pharmaceuticals (US), Inc. and Quill Medical, Inc. (the "Federal Litigation"). The Complaint in the Federal Litigation alleges, among other items, that: (a) we breached certain contractual obligations under the Merger Agreement; (b) that certain misrepresentations or omissions were made by us during the initial negotiation of the Merger Agreement; and (c) tortious interference. QSR is seeking damages in an unstated amount together with punitive damages and/or attorneys fees to the extent allowed by law. Given the preliminary stages of these proceedings, it is not possible at this time to predict the outcome of the Federal Litigation or of any arbitration or other proceeding that may result from the Arbitration Demand. We intend to vigorously defend the Federal Litigation and any arbitration or other proceeding that may result from the Arbitration Demand. TAXUS® Paclitaxel-eluting Coronary Stent Clinical Results. Our partner BSC announced several clinical updates relating to paclitaxel-eluting coronary stents at the recently held Cardiovascular Research Foundation's annual Transcatheter Cardiovascular Therapeutics ("TCT") scientific symposium in Washington, D.C. On September 25, 2010 we announced that our corporate partner, BSC, released three-year follow-up data from the HORIZONS-AMI trial. The trial is designed to determine the safety and efficacy of the TAXUS® Express2™ Paclitaxel-Eluting Coronary Stent System compared to bare-metal stenting in patients experiencing an acute myocardial infarction ("AMI"), more commonly referred to as a heart attack. With 3,006 patients enrolled worldwide, HORIZONS-AMI is the largest randomized trial to compare the use of drug-eluting stents to bare-metal stents for AMI patients. HORIZONS-AMI demonstrated that the TAXUS Express Stent significantly reduced clinical and angiographic restenosis compared to an otherwise identical bare-metal Express® control stent. After three years follow-up, the primary efficacy endpoint of ischemia-driven target lesion revascularization ("TLR") was 9.4 percent for patients treated with TAXUS Express vs. 15.1 percent for bare-metal Express (p0.001), a relative reduction of 40 percent. On September 22, 2010 we announced that our corporate partner, BSC, had released results from an analysis of 1,166 patients from its PERSEUS clinical program comparing the performance of the TAXUS® Element™ Paclitaxel-Eluting Coronary Stent System in diabetic versus non-diabetic patients. Results demonstrated that despite the known increased risk of restenosis for diabetics versus non-diabetics in patients undergoing coronary revascularization, the TAXUS Element Stent had comparable levels of TLR and late loss in both diabetic and non-diabetic patients. On September 22, 2010 we announced that BSC had released comprehensive data from the TAXUS ATLAS clinical program, a series of global, prospective, single-arm trials evaluating the TAXUS® Liberté® Paclitaxel-Eluting Stent System in a variety of lesions and patient groups. Five-year results from the TAXUS ATLAS trial and four-year results from the TAXUS ATLAS Small Vessel and Long Lesion trials continue to show significant advantages for the thin-strut TAXUS Liberté Stent when compared to the first-generation TAXUS® Express® Stent. Zilver® PTX ® Clinical Results. On September 24, 2010 we announced that a summary of the final clinical trial results for the randomized study of Cook Medical, Inc.'s ("Cook") Zilver® PTX® Drug-Eluting Peripheral Stent ("Zilver PTX") for use in patients with peripheral arterial disease in the superficial femoral artery was presented at the TCT conference in Washington D.C. The study, which was the largest clinical trial to ever evaluate the performance of a drug-eluting stent in the treatment of peripheral vascular disease, met its 12-month primary endpoint showing non-inferior event-free survival and superior patency for the Zilver PTX as compared to balloon angioplasty. Cook Medical, a license holder of our proprietary paclitaxel technology, has developed Zilver-PTX, a self-expanding, highly durable nitinol stent that uses a proprietary technology to deliver a locally therapeutic dose of paclitaxel, a proven anti-restenotic drug, to the target lesion. We believe the data from this clinical trial supports Cook's Pre-Market Approval application submitted to the U.S. Food and Drug Administration earlier this year. Athersys Inc. In July, 2010 we announced that Athersys had announced positive results from its phase I clinical trial of MultiStem®. The study results, which represented at least four months of post-treatment patient data, demonstrated that MultiStem was well tolerated at all dose levels and also suggested improvement in heart function in treated patients. On September 23, 2010 we, along with our partner Athersys, Inc. ("Athersys") announced updated results from the phase I clinical trial of MultiStem®, Athersys' allogeneic cell therapy product, administered to individuals following an AMI, more commonly referred to as a heart attack. The updated study results were presented at the TCT conference held in Washington, D.C. The updated study results, based on four months of post-treatment patient data, also demonstrate that MultiStem was well tolerated at all dose levels and also suggest improvement in heart function in treated patients. Financial Information This press release contains financial data derived from the unaudited consolidated financial statements for the quarter ended September 30, 2010 and 2009. Full unaudited consolidated interim financial statements and Management's Discussion and Analysis for the three months ended September 30, 2010 will be filed on Form 10-Q on November 9, 2010 with the relevant regulatory agencies, as well as posted on our website at www.angiotech.com.

    Amounts, unless specified otherwise, are expressed in U.S. dollars. Financial results are reported in accordance with U.S. GAAP unless otherwise noted. All per share amounts are stated on a fully diluted basis unless otherwise noted. Conference Call Information A conference call to discuss these financial results will be held today, Tuesday November 9, 2010 at 11:00 AM ET (8:00 AM PT).

    Dial-in information:

    North America (toll-free): (800) 510-9834
    International: (617) 614-3669
    Enter Passcode: 9442 9774

    An archived replay of the call will be available until November 16, 2010.
    North America (toll-free): (888) 286-8010
    International: (617) 801-6888
    Enter Passcode: 4734 7778
    A live webcast will be available to all interested parties through the Investors section of our website: www.angiotech.com/investors ANGIOTECH PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)   (in thousands of U.S. $, except per share data)   Three months ended September 30  Nine months ended September 30    2010  2009  2010  2009  REVENUE Product sales, net  $       51,868  $
    48,
        155,796  $
    41,976  Royalty revenue
    7,063 
    4,53
    28,257 
    48,638  License fees
    53 
    53
    158 
    25,503  58,984 
    3,244
    184,211 
    216,117  EXPENSES Cost of products sold
    26,808 
    25,958
    79,883 
    75,606  License and royalty fees
    1,170 
    2,463
    4,884 
    7,937  Research and development
    6,240 
    4,59
    19,900 
    7,526  Selling, general and administration
    22,489 
    7,924
    66,871 
    59,102  Depreciation and amortization
    8,297 
    8,285
    24,948 
    24,845  Write-down of assets held for sale

    700 
    8212 Escrow settlement recovery

    (4,710)
    821265,0
    04 
    59,22
    192,476 
    85,016  Operating income (loss)

    (6,020)
    4,018
    (8,265)
    31,101  Other income (expenses): Foreign exchange gain (loss)

    (518)
    1,269 
    (1,227) Investment and other (expense) income
    (126)
    4
    (512)
    74  Debt restructuring costs
    (2,978)
    8212
    (2,978)
    8212 Interest expense on long-term debt
    (9,833)
    (9,286)
    (27,779)
    (28,971 ) Write-down of investments and deferred financing charges

    (216)
    (643 ) Loan settlement gain

    1,180 
    8212 Total other expenses
    (12,934)
    (9,758)
    (29,03 )
    (30,767) (Loss) income before income taxes

    (18,954)
    (5,740)
    (37,301)
    334  Income tax (recovery) expense
    (454)
    2,062
    1,968 
    7,569  Net loss
           (18,500) $
    (7,802)      (39,269) $
    (7,235) Basic and diluted net loss per common share           (0.22) $
    (0.09) $          (0.46) $
    (0.08) Basic and diluted weighted average number of common shares outstanding (in thousands)
    85,174 
    85,13
    85,162 
    85,125  ANGIOTECH PHARMACEUTICALS INC. CONSOLIDATED BALANCE SHEETS
    (Unaudited)   (in thousands of U.S. $, except per share data)   September 30, 2010 December 31, 2009ASSETSCurrent assets Cash and cash equivalents         25,566  $
    49,542  Short-term investments
    5,746 
    7,780  Accounts receivable
    31,046 
    28,167  Income tax receivable
    1,657 
    ,090  Inventories
    38,010 
    35,541  Deferred income taxes, current portion
    3,974 
    4,284  Prepaid expenses and other current assets
    3,487 
    3,294  Total current assets

    109,486 
    29,698  Assets held for sale
    2,300 
    5,300  Property, plant and equipment
    50,538 
    46,879  Intangible assets
    151,104 
    73,019  Deferred financing costs
    9,510 
    ,409  Deferred income taxes, current portion
    2,125 
    4,624  Other assets
    1,737 
    3,754  Total assets      326,800  $
    374,683  LIABILITIES AND SHAREHOLDERS' DEFICITCurrent liabilities Accounts payable and accrued liabilities  $        44,593  $
    46,324  Income taxes payable
    4,901 
    ,858  Interest payable on long-term debt
    10,806 
    ,004  Total current liabilities
    60,300 
    3,186  Deferred leasehold inducement
    4,335 
    2,888  Deferred income taxes, non-current portion
    38,355 
    41,402  Other tax liabilities
    3,385 
    3,898  Long-term debt
    575,000 
    575,000  Other liabilities
    1,093 
    ,596  Total non-current liabilities
    622,168 
    24,784  Shareholders' deficit Share capitalAuthorized:   200,000,000 Common shares, without par value   50,000,000 Class I Preference shares, without par value   Common shares issued and outstanding:   September 30, 2010 - 85,176,449   December 31, 2009 - 85,138,08
    472,751 
    472,742  Additional paid-in capital
    35,030 
    33,687  Accumulated deficit
    (905,810)
    (866,541) Accumulated other comprehensive income
    42,361 
    46,825  Total shareholders' deficit
    (355,668)
    (313,287) Total liabilities and shareholders' deficit      326,800  $
    374,683  Forward Looking Statements Statements contained in this press release that are not based on historical fact, including without limitation statements containing the words "believes," "may," "plans," "will," "estimates," "continues," "anticipates," "intends," "expects" and similar expressions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and constitute "forward-looking information" within the meaning of applicable Canadian securities laws. All such statements are made pursuant to the "safe harbor" provisions of applicable securities legislation. Forward-looking statements may involve, but are not limited to, comments with respect to our objectives and priorities for the remainder of 2010 and beyond, our strategies or future actions, our targets, expectations for our financial condition and the results of, or outlook for, our operations, research and development and product and drug development. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Many such known risks, uncertainties and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, the following: general economic and business conditions in the United States, Canada and the other regions in which we operate; market demand; technological changes that could impact our existing products or our ability to develop and commercialize future products; competition; existing governmental legislation and regulations and changes in, or the failure to comply with, governmental legislation and regulations; availability of financial reimbursement coverage from governmental and third-party payers for products and related treatments; adverse results or unexpected delays in pre-clinical and clinical product development processes; adverse findings related to the safety and/or efficacy of our products or products sold by our partners; decisions, and the timing of decisions, made by health regulatory agencies regarding approval of our technology and products; the requirement for substantial funding to conduct research and development, to expand manufacturing and commercialization activities; and any other factors that may affect our performance. In addition, our business is subject to certain operating risks that may cause any results expressed or implied by the forward-looking statements in this press release to differ materially from our actual results. These operating risks include: our ability to attract and retain qualified personnel; our ability to successfully complete pre-clinical and clinical development of our products; changes in our business strategy or development plans; our failure to obtain patent protection for discoveries; loss of patent protection resulting from third-party challenges to our patents; commercialization limitations imposed by patents owned or controlled by third parties; our ability to obtain rights to technology from licensors; liability for patent claims and other claims asserted against us; our ability to obtain and enforce timely patent and other intellectual property protection for our technology and products; the ability to enter into, and to maintain, corporate alliances relating to the development and commercialization of our technology and products; market acceptance of our technology and products; our ability to successfully manufacture, market and sell our products; the availability of capital to finance our activities; our ability to restructure and to service our debt obligations; and any other factors referenced in our other filings with the applicable Canadian securities regulatory authorities or the Securities and Exchange Commission ("SEC"). For a more thorough discussion of the risks associated with our business, see the "Risk Factors" section in our annual report for the year ended December 31, 2009 filed with the SEC on Form 10-K, as amended, and our quarterly report for the second quarter of 2010 filed with the SEC on Form 10-Q. Given these uncertainties, assumptions and risk factors, investors are cautioned not to place undue reliance on such forward-looking statements. Except as required by law, we disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained in this press release to reflect future results, events or developments. Additional Information and Where to Find It This communication may be deemed to be solicitation material in respect of the proposed recapitalization transaction with holders of its Senior Subordinated Notes and Senior Floating Rate Notes, as announced on October 29, 2010. In connection with the proposed transaction, Angiotech intends to file relevant materials with the SEC, including a proxy statement on Schedule 14A. SHAREHOLDERS OF ANGIOTECH ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING ANGIOTECH'S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the SEC's web site, http://www.sec.gov, and Angiotech shareholders will receive information at an appropriate time on how to obtain transaction-related documents for free from Angiotech. Such documents are not currently available. Participants in Solicitation Angiotech and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the holders of Angiotech common shares in respect of the proposed recapitalization transaction. Information about the directors and executive officers of Angiotech is set forth in Angiotech's Annual Report on Form 10-K for the most recently ended fiscal year, which was filed with the SEC on March 16, 2010 (as amended by our Amendment #1 on Form 10-K/A, which was filed with the SEC on April 29, 2010). Investors may obtain additional information regarding the interest of such participants by reading the proxy statement regarding the acquisition when it becomes available.

    ©2010 Angiotech Pharmaceuticals, Inc. All Rights Reserved. About Angiotech Pharmaceuticals Angiotech Pharmaceuticals, Inc. is a global specialty pharmaceutical and medical device company. Angiotech discovers, develops and markets innovative treatment solutions for diseases or complications associated with medical device implants, surgical interventions and acute injury. To find out more about Angiotech (NASDAQ: ANPI, TSX: ANP), please visit our website at www.angiotech.com. Appendix A: Presentation of Certain Non-GAAP Financial Information and Reconciliations to Corresponding GAAP Financial Measures The financial results presented in this press release may include any or all of the following non-GAAP, or adjusted, financial measures, which we believe provide important supplemental information to management and investors about our financial condition and results of operations: (1) adjusted earnings before interest expense, taxes, depreciation and amortization ("Adjusted EBITDA"), (2) adjusted net income (loss), (3) adjusted net income (loss) per share, (4) adjusted revenue, (5) adjusted costs of goods sold ("adjusted COGS") (6) adjusted research and development expense ("adjusted R&D expense"), and (7) adjusted selling, general and administrative expense ("adjusted SG&A expense"). Economic Substance of Non-GAAP Financial Measures Our non-GAAP adjusted financial measures exclude certain non-cash, non-recurring and non-operating items, which may be unpredictable, volatile and not directly correlated to our operating performance. We believe exclusion of these items from our GAAP financial measures may provide the following advantages: (i) improved understanding of trends underlying our business and performance; (ii) improved consistency across periods when measuring and assessing our operating performance; (iii) improved understanding of the cash flow and cash earnings generated by our business in a given period and as compared to prior periods; and (iv) improved comparability of our operating results to those of similar companies in our industry.

    Examples of these certain non-cash, non-recurring and non-operating items include: financing charges, asset write-downs, impairment charges, foreign exchange fluctuations, stock-based compensation expense, acquisition related amortization charges, integration and restructuring expenses, in-process research and development costs, retrospective adjustments driven by accounting policy changes, and certain extraordinary litigation expenses. A detailed discussion of the excluded items is provided below (see "Description of Adjustments" below).

    Investors are cautioned that Adjusted EBITDA, adjusted net income (loss), adjusted net income (loss) per share, adjusted revenue, adjusted COGS, adjusted R&D expense and adjusted SG&A expense do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other issuers. Our non-GAAP financial measures are supplemental metrics and should not be viewed as a substitute for, or superior to, financial reporting measures prepared in accordance with GAAP. We have prepared a reconciliation of our non-GAAP adjusted financial measures to the comparable GAAP-based financial measures in the tables included in this Appendix. Management compensates for certain material limitations that may be relevant to our use of certain non-GAAP financial measures by reviewing our operating performance in accordance with GAAP concurrent with our review of our operating performance relative to certain adjusted financial measures during each relevant disclosure period. Use of Non-GAAP Financial Measures Management uses Adjusted EBITDA, adjusted net income (loss), adjusted net income (loss) per share, adjusted revenue, adjusted COGS, adjusted R&D expense and adjusted SG&A expense when setting corporate and operational goals, and evaluating operating performance in connection with:

  • Presenting, comparing and assessing the financial results and forecasts reported to our Board of Directors.
  • Evaluating, managing and benchmarking our operating performance.
  • Analyzing underlying trends in our business.
  • Evaluating market position and performance relative to our competitors, many of which use the same or similar performance measures.
  • Establishing internal operating budgets.
  • Determining compensation under bonus or other incentive programs.
  • Enhancing comparability from period to period.
  • Assessing compliance with credit facility covenants.
  • Providing vital information in assessing cash flows to service our significant debt obligations.
  • Comparing performance with internal forecasts and targeted business models.
  • Evaluating and valuing potential acquisition candidates.
  • The adjustments used to compute our non-GAAP financial measures are consistent with those excluded from segmented operating results used by our chief operating decision makers to make operating decisions and assess performance. We have provided this information to enable investors to analyze our operating results in the same way that management uses this information to assess our business relative to other periods, our business objectives and similar companies in our industry. ANGIOTECH PHARMACEUTICALS, INC. CALCULATION OF ADJUSTED EBITDA
    (Unaudited)     Three months ended September 30 Nine months ended September 30 (in thousands U.S.$) 2010   2009   2010   2009   GAAP net loss  $ (18,500) $ (7,802) $ (39,269) $ (7,235) Interest expense on long-term debt
    9,833
    9,28
    27,779
    28,971  Income tax (recovery) expense
    (454)
    2,062
    ,968
    7,569  Depreciation and amortization
    9,318
    9,198
    27,89
    27,566  EBITDA
    97
    2,744
    8,374
    56,871  Adjustments: Non-recurring revenue, net of license fees (a)
    (53)
    (53)
    (158)
    (25,503) Restructuring related charges (b)
    ,43
    7
    3,727
    ,433  Technology acquisition related charges (c)
    8212
    427
    8212
    ,365  Non-recurring transaction fees (l)
    2,978
    8212
    3,909
    ,032  Stock-based compensation expense (d)
    442
    363
    ,35
    ,170  Litigation related expenses (g)
    8
    37
    3
    2,612  Foreign exchange (gain) loss (h)
    (3)
    518
    (1,269)
    ,227  Investment and other income and losses on asset disposals (j)
    2
    (46)
    7
    (74) Write-downs of investments and other long-lived assets (i)
    8212
    8212
    9
    8212 Write-downs and other non-cash deferred financing costs (f)
    8212
    8212
    8212
    43  Non-recurring manufacturing variances and product recall charges (m)
    (61)
    765
    288
    ,661  Non-recurring escrow settlement recovery (k)
    8212
    8212
    (4,710)
    8212 Non-recurring loan settlement gain (k)
    8212
    8212
    (1,180)
    8212 Adjusted EBITDA  $ 5,074  $ 15,256  $ 21,581  $ 42,437  RECONCILIATION OF GAAP NET LOSS TO NON-GAAP ADJUSTED NET (LOSS) INCOME

    (Unaudited)   (in thousands U.S. $) Three months endedSeptember 30 Nine months endedSeptember 30   2010 2009 2010 2009 GAAP - net loss  ($ 18,500) ($ 7,802) ($ 39,269) ($ 7,235) Non recurring revenue (a)
    (53)
    (53)
    (158)
    (25,503)   Technology acquisition related charges (c)
    8212
    427
    8212
    ,365    Non-recurring restructuring related charges (b)
    ,43
    7
    3,727
    ,433    Non-recurring transaction fees (l)
    2,978
    8212
    3,909
    ,032    Stock based compensation expense (d)
    442
    363
    ,35
    ,170    Litigation related expenses (g)
    8
    37
    3
    2,612    Write-down of investments & other long-lived assets (i)
    8212
    8212
    9
    8212   Write-down and other deferred financing charges (f)
    737
    708
    2,193
    2,719    Foreign exchange (gain) loss (h)
    (3 )
    518
    (1,269)
    ,227    Acquisition related intangible asset amortization expense (e)
    7,565
    7,5
    22,7
    22,344    Losses on asset disposals (j)
    5
    39
    2
    72    Non-recurring manufacturing variances (m)
    8212
    765
    8212
    ,661    Non-recurring charges related to product recall (m)
    (61)
    8212
    288
    8212   Non-recurring escrow settlement recovery (k)
    8212
    8212
    (4,710)
    8212   Non-recurring loan settlement gain (k)
    8212
    8212
    (1,180)
    8212   Estimated tax impact of non-GAAP adjustments (n)
    (2,758)
    (2,941)
    (8,599)
    (3,706) Adjusted net (loss) income
      (8,154)         7   (19,816) $       (809)RECONCILIATION OF GAAP NET (LOSS) INCOME PER SHARE TO NON-GAAP ADJUSTED NET (LOSS) INCOME PER SHARE
    (Unaudited)     Three months ended September 30 Six months ended September 30   2010   2009   2010   2009     Basic and diluted Basic and diluted GAAP - net loss per share  $
    (0.22) $
    (0.09) $
    (0.46) $
    (0.08) Non recurring revenue (a)
    (0.00)
    (0.00)
    (0.00)
    (0.30)   Technology acquisition related charges (c)
    8212
    .
    8212
    .02    Non-recurring restructuring related charges (b)
    .02
    .
    .04
    .02    Non-recurring transaction fees (l)
    .03
    8212
    .05
    .01    Stock based compensation expense (d)
    .
    .
    .02
    .01    Litigation related expenses (g)
    .
    .
    .
    .03    Write-down of investments & other long-lived assets (i)
    8212
    8212
    .
    8212   Write-down and other deferred financing charges (f)
    .
    .
    .03
    .03    Foreign exchange (gain) loss (h)
    (0.00)
    .
    (0.01)
    .01    Acquisition related intangible asset amortization expense (e)
    .09
    .09
    .27
    .26    Losses on asset disposals (j)
    .
    .
    .
    .00    Non-recurring manufacturing variances (m)
    8212
    .
    8212
    .02    Non-recurring charges related to product recall (m)
    (0.00)
    8212
    .
    8212   Non-recurring escrow settlement recovery (k)
    8212
    8212
    (0.06)
    8212   Non-recurring loan settlement gain (k)
    8212
    8212
    (0.01)
    8212   Estimated tax impact of non-GAAP adjustments (n)
    (0.03)
    (0.03)
    (0.10)
    (0.04) Adjusted net (loss) income per share
    $    (0.10)    0.00  $    (0.23)    (0.01)RECONCILIATION OF GAAP REVENUE TO NON-GAAP ADJUSTED REVENUE
    (Unaudited)   (in thousands U.S. $) Three months ended September 30 Nine months endedSeptember 30   2010   2009   2010   2009   GAAP - revenue
    58,984
    3,244
    84,2
    216,117  Non-recurring revenue (a)
    (53)
    (53)
    (158)
    (25,503)   Non-recurring sales provision related to product recall (m)
    (61)
    8212
    32
    8212Adjusted revenue
    $    58,870  $    63,191    184,185    190,614 RECONCILIATION OF GAAP COGS TO NON-GAAP ADJUSTED COGS
    (Unaudited)   (in thousands U.S. $) Three months ended September 30 Nine months ended September 30   2010 2009 2010 2009   GAAP - COGS  $
    26,808  $
    25,958  $
    79,883  $
    75,606  Non-recurring manufacturing variances (m)
    8212
    (765)
    8212
    (1,661)   Non-recurring restructuring related charges (b)
    (1,180)
    8212
    (2,167)
    8212   Non-recurring charges related to product recall (m)
    8212
    8212
    (156)
    8212Adjusted COGS
       25,628  $    25,193  $    77,560     73,945 RECONCILIATION OF GAAP RESEARCH & DEVELOPMENT EXPENSE TO NON-GAAP ADJUSTED RESEARCH & DEVELOPMENT EXPENSE
    (Unaudited)   (in thousands U.S. $) Three months ended September 30 Nine months endedSeptember 30   2010   2009   2010 2009   GAAP - research and development expense  $
    ,240  $
    4,596  $
    9,900  $
    7,526    Technology acquisition related charges (c)
    8212
    (427)
    8212
    (1,365)   Stock based compensation expense (d)
    (119)
    (103)
    (344)
    (318) Adjusted research and development ex
    pense $    6,121  $     4,066     19,55    15,843 RECONCILIATION OF GAAP SELLING, GENERAL & ADMINISTRATION EXPENSE TO NON-GAAP ADJUSTED SELLING, GENERAL & ADMINISTRATIVE EXPENSE
    (Unaudited)   (in thousands U.S. $) Three months ended September 30 Nine months endedSeptember 30   2010   2009   2010 2009 GAAP - selling, general and administration expense  $
    22,489  $
    7,924  $
    ,871  $
    59,102    Non-recurring restructuring related charges (b)
    (250)
    (167)
    (1,218)
    (1,433)   Stock based compensation expense (d)
    (323)
    (260)
    (1,007)
    (852)   Litigation related charges (g)
    (18)
    (371)
    (163)
    (2,612)   Non-recurring transaction fees (l)
    8212
    8212
    (931)
    (1,032) Adjusted selling, general and adminst
    ration expense    21,898      17,126     63,552     53,173  For an explanation of the adjustments used to derive our non-GAAP financial measures, please refer to the corresponding discussion in the "Description of Adjustments" section below.

    We also report certain product sales revenue growth rate figures excluding the impact of foreign exchange rate fluctuations on current period revenues. Significant foreign exchange rate fluctuations can distort revenue growth, depending upon the strength of the U.S. dollar relative to the foreign currencies in which we generate revenues. We generate significant revenues in several foreign jurisdictions in multiple foreign currencies including Euro
    '/>"/>

    SOURCE Angiotech Pharmaceuticals, Inc.
    Copyright©2010 PR Newswire.
    All rights reserved


    Related biology technology :

    1. Angiotech Pharmaceuticals, Inc. Releases Selected Projected Financial Information
    2. ANGIOTECH PHARMACEUTICALS ANNOUNCES CONFERENCE CALL AND WEBCAST
    3. Angiotech Pharmaceuticals, Inc. Announces Commencement of Arbitration and Litigation Proceedings by QSR Holdings, Inc. Against the Company And Certain of Its Subsidiaries
    4. Angiotech Pharmaceuticals, Inc. announces financial results for the second quarter ended June 30, 2010
    5. Angiotech Pharmaceuticals and partner Athersys announce positive results from phase I study of MultiStem(R) in heart attack patients
    6. Angiotech Pharmaceuticals Announces Conference Call and Webcast
    7. Angiotech announces exclusive distribution agreement with B. Braun for Angiotechs proprietary Quill(TM) SRS product line
    8. Angiotech Pharmaceuticals, Inc. announces financial results for the fourth quarter ended December 31, 2009
    9. Angiotech Pharmaceuticals Announces Conference Call and Webcast
    10. Angiotech Pharmaceuticals, Inc. Announces Conference Call and Webcast
    11. Angiotech Pharmaceuticals announces the commercial launch of the Option(TM) Inferior Vena Cava Filter in the United States
    Post Your Comments:
    *Name:
    *Comment:
    *Email:
    (Date:6/27/2016)... June 27, 2016 /PRNewswire/ - BIOREM Inc. (TSX-V: BRM) ("Biorem" ... by its major shareholders, Clean Technology Fund I, LP ... States based venture capital funds which together ... (on a fully diluted, as converted basis), that they ... their entire equity holdings in Biorem to TUS Holdings ...
    (Date:6/27/2016)... NC (PRWEB) , ... June 27, 2016 , ... ... mission to bring innovative medical technologies, services and solutions to the healthcare market. ... and implementation of various distribution, manufacturing, sales and marketing strategies that are necessary ...
    (Date:6/24/2016)...  Regular discussions on a range of subjects including policies, ... entities said Poloz. Speaking at a lecture to ... he pointed to the country,s inflation target, which is set ... "In certain areas there needs ... economic goals, why not sit down and address strategy together?" ...
    (Date:6/23/2016)... ... 2016 , ... Mosio, a leader in clinical research patient ... and Retention Tips.” Partnering with experienced clinical research professionals, Mosio revisits the hurdle ... and strategies for clinical researchers. , “The landscape of how patients receive and ...
    Breaking Biology Technology:
    (Date:6/2/2016)... , June 2, 2016 ... Manned Platforms, Unmanned Systems, Physical Infrastructure, Support & Other ... provider visiongain offers comprehensive analysis of the ... this market will generate revenues of $17.98 billion in ... acquired DVTEL Inc, a leader in software and hardware ...
    (Date:5/12/2016)... May 12, 2016 WearablesResearch.com , a ... the overview results from the Q1 wave of its ... wave was consumers, receptivity to a program where they ... a health insurance company. "We were surprised ... says Michael LaColla , CEO of Troubadour Research, ...
    (Date:4/26/2016)... and LONDON , April 26, ... of EdgeVerve Systems, a product subsidiary of Infosys ... announced a partnership to integrate the Onegini mobile ...      (Logo: http://photos.prnewswire.com/prnh/20151104/283829LOGO ) ... customers enhanced security to access and transact across ...
    Breaking Biology News(10 mins):