VANCOUVER, March 5 /PRNewswire-FirstCall/ -- Angiotech
Pharmaceuticals, Inc. (NASDAQ:ANPINASDAQ:TSX:NASDAQ:ANP) today
announced its financial results for the fourth quarter and year
ended December 31, 2008. "During 2008 we achieved solid sales
results in our Medical Products Business and were able to sustain
progress on our most important new technology initiatives despite a
challenging year for TAXUS," said Dr. William Hunter, President and
CEO of Angiotech. "Not only did we increase Medical Products sales
compared to 2007, but we were able to achieve this growth while
making reductions to our operating expenses. This has been a
challenging year with many factors including the turmoil in the
capital and credit markets impacting our company, and under those
circumstances I am proud of the results our team was able to
deliver in 2008." Fourth Quarter Financial Highlights Total revenue
was $62.1 million. - Net product sales were $46.1 million. -
Royalty revenue was $15.7 million. - Adjusted EBITDA (earnings
before interest, taxes, depreciation and amortization, adjusted to
exclude certain non-cash and non-recurring items) was $10.3
million. - Research and development expenses were $7.7 million, and
as adjusted to exclude non-cash stock-based compensation expenses
and non- recurring termination related costs were $6.9 million.
These results compare to $10.7 million and $8.8 million,
respectively, in the third quarter of 2008, reflecting a reduction
in expenses of 21.6% in a single quarter on an adjusted basis. This
reduction is in addition to the 49% reduction in research and
development expenses already reported in the third quarter as
compared to the second quarter of 2008. - Selling, general and
administrative expenses were $21.4 million, and as adjusted to
exclude non-cash stock-based compensation expenses, non-recurring
termination related costs and intellectual property litigation
costs, were $19.0 million. These results compare to $23.4 million
and $20.5 million, respectively, in the third quarter of 2008 and
to $26.8 million and $23.5 million, respectively, in the comparable
period of 2007. Importantly, we were able to achieve higher sales
during 2008 on lower absolute levels of selling, general and
administrative expenses as compared to 2007. - GAAP net loss and
net loss per share from continuing operations for the quarter were
$77.0 million and $0.90, respectively, compared to $27.9 million
and $0.29 for the fourth quarter of 2007. The increase in the net
loss of $49.1 million is due primarily to a write-down of goodwill
recorded during the quarter. Under GAAP, circumstances that could
indicate a "goodwill impairment" include significant declines in a
company's share price, adverse changes or outcomes in legal or
regulatory matters, technological advances that may significantly
impact a company's or a partner's products or services, or
unanticipated competition. Due to the continued decline in our
market value in the fourth quarter of 2008 and the further negative
indicators for the capital markets and the economy as a whole, we
updated our impairment tests of goodwill and acquired intangible
assets and concluded a further impairment had occurred in the
carrying amounts of goodwill associated with both our Medical
Products and Pharmaceutical Technologies segments. Accordingly, we
recorded an impairment charge to goodwill, which is a non-cash
accounting item, of $50.3 million in the fourth quarter of 2008, in
addition to the write-down of goodwill of $599.4 million recorded
in the third quarter of 2008, leaving no goodwill on our books as
of December 31, 2008. - As of December 31, 2008, cash, short and
long-term investments were $41.4 million and net debt was $535.2
million. Significant Recent Developments New Senior Secured Credit
Facilities. On March 2, 2009 we announced that we had completed a
financing transaction with Wells Fargo Foothill, LLC. The financing
includes a delayed draw secured term loan facility of up to $10
million, and a secured revolving credit facility with a borrowing
base derived from the value of certain of the Company's finished
goods inventory and accounts receivable, providing up to an
additional $22.5 million in available credit, subject to certain
terms and conditions. Any borrowings outstanding under the term
loan and revolving credit facility bear interest ranging from LIBOR
+ 3.25% to LIBOR +3.75%, with a minimum Base LIBOR Rate of 2.25%.
The term loan and the revolving credit facility include certain
covenants and restrictions with respect to our operations, require
us to maintain certain levels of Adjusted EBITDA and interest
coverage ratios, among other terms and conditions, and are secured
by the assets of the Company and its Canadian and U.S.
subsidiaries. The purpose of the financings is to provide
additional liquidity and capital resources for working capital and
general corporate purposes. Financial and Strategic Alternatives
Process. During approximately the last eight calendar quarters, our
royalty revenue has declined significantly, primarily due to lower
than expected royalties derived from sales by our partner Boston
Scientific Corporation ("BSC") of TAXUS(R) coronary stent systems.
This decline in royalty revenue has significantly impacted our
ability to fund our operations and service our debt obligations,
and has impacted our liquidity position. During 2008, our
management and Board of Directors determined to explore and pursue
various restructuring and cost reduction initiatives in order to
conserve our liquidity, as well as various financial and strategic
transactions that could potentially reduce or eliminate our
existing debt obligations and improve our working capital position.
On July 7, 2008, we announced that our Board of Directors had
authorized a transaction to create a new subsidiary, Angiotech
Pharmaceutical Interventions Inc. ("API"), and that we would
contribute certain business assets and intellectual property to
API, primarily consisting of business assets of Angiotech other
than the intellectual property and royalty revenue related to
TAXUS(R) coronary stent systems. In connection with this
transaction, we were to receive $200 to $300 million of new
financing from new investors to establish API, which financing was
targeted to reduce substantial amounts of our existing debt
obligations with equivalent amounts of convertible debt bearing
interest in additional equity of the newly created subsidiary in
kind, as opposed to cash. This transaction, if approved by our
shareholders and completed, would have substantially reduced our
annual cash pay interest obligations. On September 22, 2008, we
announced that we had postponed the planned shareholder vote
regarding the proposed API transaction. As of that date, given the
time required for more extended discussions to address concerns of
certain of our shareholders and bondholders, and given various
other factors impacting our business and cash position (including
lower expected revenues derived from BSC), we did not believe we
would be able to satisfy the transaction condition with respect to
the minimum level of cash and cash equivalents required to be held
at the time of the transaction's close. On September 22, 2008, we
also announced that we would pursue various initiatives to reduce
operating costs and further focus our business efforts. Our
remaining resources subsequent to these initiatives have been
focused primarily on our existing medical device products business,
with particular emphasis on certain existing product brands and on
selected new products that have recently launched, including
Quill(TM) SRS and the HemoStream(TM) Chronic Dialysis Catheter.
Since the September 22 announcement, Angiotech and its Board of
Directors have been pursuing other financing alternatives to
address the Company's working capital needs for its business
initiatives, as well as to address potential liquidity issues that
may arise relating to our current balance sheet structure. On
November 12, 2008, the API transaction was terminated. On November
21, 2008, we announced that we had engaged the Blackstone Group to
assist us in exploring various alternatives for our business and
capital structure, including, but not limited to, the secured
senior secured financing facilities discussed above, assisting us
in exploring various financial and strategic alternatives that
could generate significant capital to facilitate our ability to
refinance, reduce or eliminate our existing indebtedness,
evaluating various restructuring alternatives to pursue with the
holders of our Senior Floating Rate Notes due 2013 and our 7.75%
Senior Subordinated Notes due 2014 and assisting us in evaluating
proposals or potential proposals from various financial parties
regarding a significant investment of capital. Our cash inflows and
the amounts of expenditures that will be necessary to execute our
business plan are subject to numerous uncertainties, including but
not limited to: changes in drug-eluting coronary stent markets,
including the impact of new competitive entrants into such markets,
and the sales achieved in such markets by our partner BSC, the
timing and success of product sales and marketing initiatives and
new product launches, the timing and success of our research,
product development and clinical trial activities, the timing of
completing certain operational initiatives, our ability to effect
reductions in certain aspects of our budgets in an efficient and
timely manner, and changes in interest rates. These and other
uncertainties may adversely affect our liquidity and capital
resources to a significant extent and may force us to further
reduce our expenditures on research and development or on our
various new product and sales and marketing initiatives in order
for us to continue to service our debt obligations. Such further
reductions in our budgeted expenditures may have an adverse effect
on our new product development and sales growth initiatives and
reduce our ability to achieve the revenue growth targets, product
launch or new product development timelines in our current
operating plan. There can also be no assurance that such reductions
in expenditures will be adequate to provide enough cash flow to
continue to service our current level of debt obligations. In
particular, should our royalties received from BSC decline more
significantly than we expect in future periods as a result of new
competitive entrants into the U.S. drug-eluting stent market, our
liquidity may be adversely affected, and we may be forced to
explore alternative funding sources through debt, equity or other
public or private securities offerings, or to pursue certain
reorganization, restructuring or other strategic alternatives.
There can be no assurance that if we pursue such financing
activities that alternative sources of funding would be available
to us on attractive terms, if at all. In addition, we may not be
able to complete any restructuring, reorganization or strategic
activities on terms that would be favorable for us or our
shareholders. Capital markets conditions have deteriorated
significantly during 2008 and 2009, including a significant and
material decline in the level of corporate lending activity,
combined with a significant increase in the cost of any such
lending. Current market conditions may have a material impact on
our ability to secure any alternative source of funding, our
ability to secure interim financing or to complete any of the
activities as described on favorable terms, if at all. Fourth
Quarter Business Highlights Promoted Brand Strategy. Sales of our
currently marketed Promoted Brand products continued to demonstrate
higher revenue growth as compared to our overall product portfolio,
consistent with recent prior quarters. Revenue growth in our
Promoted Brand products was approximately 39%, contributing to an
aggregate growth rate of approximately 6% in total product revenue
in the fourth quarter of 2008 as compared to the fourth quarter of
2007. Revenue growth was approximately 46% for our Promoted Brand
products, and 12% for all products, respectively, for the full year
2008 as compared to 2007. We observed continued commercial progress
with our proprietary Quill SRS product line in the fourth quarter.
At the end of the quarter, we had 596 hospital customers, which
exceeded our goal of 500 hospital customers by the end of 2008.
Base Medical Products Sales. Sales of products outside of our
Promoted Brand product group were stable during the quarter and
indicated growth year over year. Revenue growth in our base
Surgical, Interventional and Specialties businesses (excluding
Promoted Brands) was approximately flat in the fourth quarter of
2008 as compared to the same period in 2007, and approximately 6%
for the full year 2008 as compared to 2007. FDA Approval Received
by our Partner BSC for TAXUS Liberte(R) and TAXUS Express Atom(TM)
Stents. On October 10, 2008, we announced that BSC had received
approval from the United States Food and Drug Administration
("FDA") to market and sell the second generation TAXUS Liberte(R)
Paclitaxel-Eluting Coronary Stent System in the United States. On
September 25, 2008, we announced that BSC had received approval
from the FDA to market and sell the Taxus Express2 Atom(TM)
Paclitaxel-Eluting Coronary Stent System in the United States. We
are entitled to receive royalties based on the commercial sale of
these products by BSC. Enrollment Completed for TAXUS PERSEUS
Clinical Trial. On October 8, 2008, we announced that BSC had
completed enrollment in the PERSEUS clinical trial, designed to
evaluate the third-generation TAXUS Element paclitaxel-eluting
coronary stent. The PERSEUS clinical program has enrolled nearly
1,500 patients at 100 U.S. and international centers since July
2007, and will compare the TAXUS Element Stent to the
prior-generation TAXUS Express2 Stent marketed in the United States
since 2004. Financial Information ---------------------- This press
release contains the condensed financial statements derived from
the audited consolidated financial statements for the year ended
December 31, 2008 and 2007. Full audited consolidated financial
statements and Management's Discussion and Analysis for the year
ended December 31, 2008, will be filed on Form 10-K on or before
March 16, 2009. Amounts, unless specified otherwise, are expressed
in U.S. dollars. Financial results are reported under U.S.
Generally Accepted Accounting Principals ("GAAP") unless otherwise
noted. All per share amounts are stated on a diluted basis unless
otherwise noted. Use of Certain Non-GAAP Financial Measures
------------------------------------------- Certain financial
results presented in this press release include non-GAAP measures
that exclude certain items. Adjusted net loss from continuing
operations, adjusted net loss per share from continuing operations
and adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") exclude certain non-cash and
non-recurring items such as, goodwill and financing charges, write
downs, acquisition related amortization charges, acquired
in-process research and development relating to license agreements
and acquisitions, stock-based compensation expense, foreign
exchange gains or losses relating to translation of foreign
denominated items and other non-recurring items. Adjusted net loss
from continuing operations, adjusted net loss per share from
continuing operations and Adjusted EBITDA also exclude litigation
expenses related to defending intellectual property claims.
Revenue, as adjusted, excludes non-recurring, non-operating revenue
derived from license agreements and other license revenue, net of
license fees due to licensors and excludes amounts accrued for
costs incurred. Adjusted net loss from continuing operations,
adjusted net loss per share from continuing operations, revenue, as
adjusted, and Adjusted EBITDA do not have any standardized meaning
prescribed by GAAP and therefore may not be comparable to similar
measures presented by other issuers. Management uses these non-GAAP
or adjusted operating measures to establish operational goals and
believes that these measures may assist investors in evaluating the
results of the business and analyzing the underlying trends in our
business over time. Investors should consider these non-GAAP
measures in addition to, not as a substitute for, or as superior
to, financial reporting measures prepared in accordance with GAAP.
We have provided a reconciliation of these measures to GAAP in the
attached tables. Conference Call Information
---------------------------- A conference call to discuss these
financial results will be held today, Thursday March 5, 2009 at
7:00 AM PT (10:00 AM ET). Dial-in information: North America
(toll-free): (800) 291-9234 International: (617) 614-3923 Enter
passcode: 52474180 A replay archive of the conference call will be
available until March 12, 2009 by calling (888) 286-8010 (in North
America) or (617) 801-6888 (International) and entering passcode
36405359. A live webcast will be available to all interested
parties through the Investors section of Angiotech's website:
http://www.angiotech.com/ ANGIOTECH PHARMACEUTICALS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands of
U.S.$, except Three months ended share and per share data) December
31, 2008
-------------------------------------------------------------------------
Reported Adjustments Adjusted REVENUE Royalty revenue $ 15,676 $ -
$ 15,676 Product sales, net 46,054 - 46,054 License fees 352 (352)
b -
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62,082 (352) 61,730
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EXPENSES License and royalty fees 2,774 - 2,774 Cost of products
sold 23,622 - 23,622 Research and development 7,723 (776) d 6,947
Selling, general and administrative 21,381 (2,420) e 18,961
Depreciation and amortization 8,421 (7,460) f 961 In-process
research and development - - -
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63,921 (10,656) 53,265
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Operating (loss) income (1,839) 10,304 8,465
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Other income (expenses): Foreign exchange gain (loss) (1,032) 1,032
h - Investment and other income (498) 544 i 46 Interest expense on
long-term debt (10,639) 559 j (10,080) Write-down and other
deferred financing charges (3,000) 3,000 k - Write-down / loss on
redemption of investments (10,964) 10,964 l - Write-down of assets
held for sale (1,283) 1,283 m - Write-down of goodwill (50,285)
50,285 n -
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(77,701) 67,667 (10,034)
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(Loss) income from continuing operations before income taxes
(79,540) 77,971 (1,569) Income tax (recovery) expense (2,577) 3,629
o 1,052
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-------------------------------------------------------------------------
(Loss) income from continuing operations (76,963) 74,342 (2,621)
Net loss from discontinued operations, net of income taxes - - -
-------------------------------------------------------------------------
Net (loss) income for the period $ (76,963) $ 74,342 $ (2,621)
-------------------------------------------------------------------------
Basic and diluted net loss per common share from continuing
operations $ (0.90) $ (0.03)
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Weighted average shares outstanding (000's) - basic and diluted
85,118 85,118
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(in thousands of U.S.$, except Three months ended share and per
share data) December 31, 2007
-------------------------------------------------------------------------
Reported Adjustments Adjusted REVENUE Royalty revenue $ 27,158 $ -
$ 27,158 Product sales, net 43,935 (401) a 43,534 License fees 266
(266) b -
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71,359 (667) 70,692
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EXPENSES License and royalty fees 4,527 - 4,527 Cost of products
sold 23,578 (85) c 23,493 Research and development 13,556 (150) d
13,406 Selling, general and administrative 26,782 (3,276) e 23,506
Depreciation and amortization 8,826 (7,993) f 833 In-process
research and development 125 (125) g -
-------------------------------------------------------------------------
77,394 (11,629) 65,765
-------------------------------------------------------------------------
Operating (loss) income (6,035) 10,962 4,927
-------------------------------------------------------------------------
Other income (expenses): Foreign exchange gain (loss) 173 (173) h -
Investment and other income 511 155 i 666 Interest expense on
long-term debt (12,774) 558 j (12,216) Write-down and other
deferred financing charges - - - Write-down / loss on redemption of
investments - - - Write-down of assets held for sale - - -
Write-down of goodwill - - -
-------------------------------------------------------------------------
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(12,090) 540 (11,550)
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(Loss) income from continuing operations before income taxes
(18,125) 11,502 (6,623) Income tax (recovery) expense 6,788 3,626 o
10,414
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Loss) income from continuing operations (24,913) 7,876 (17,037)
Net loss from discontinued operations, net of income taxes (2,946)
2,946 -
-------------------------------------------------------------------------
Net (loss) income for the period $ (27,859) $ 10,822 $ (17,037)
-------------------------------------------------------------------------
Basic and diluted net loss per common share from continuing
operations $ (0.29) $ (0.20)
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Weighted average shares outstanding (000's) - basic and diluted
85,030 85,030
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a. Amounts accrued for costs incurred, and potential future costs,
related to our offer to accept returns of Contour Threads brand
product as part of consolidation and discontinuation of the Contour
Threads brand name, coincident with the launch of our Quill SRS
brand name. b. Non-recurring, non-operating license revenue. c.
Change in estimate of accounting for excess and obsolete inventory
resulting from the alignment during the fourth quarter of 2007 of
inventory policies across our various manufacturing operations. d.
Research and development adjustments:
---------------------------------------------------------------------
Three months Three months ended ended Dec 31, 2008 Dec. 31, 2007
------------- -------------- Stock-based compensation $ (125) $
(150) Termination and reorganization costs (338) - Non-recurring
research and development expenses and intellectual property license
agreement (313) -
---------------------------------------------------------------------
$ (776) $ (150) ------------- -------------- e. Selling, general
and administrative adjustments:
---------------------------------------------------------------------
Three months Three months ended ended Dec 31, 2008 Dec 31, 2007
------------- ------------- Stock-based compensation $ (333) $
(721) Termination and reorganization costs (1,245) (3,526)
Litigation expenses relating to defending intellectual property
claims (177) 971 Non-recurring financing fees (665) -
---------------------------------------------------------------------
$ (2,420) $ (3,276) ------------- ------------- f. Amortization of
acquisition related intangible assets and medical technologies. g.
Non-recurring in-process research and development expense relating
to payments made to licensors and collaborators. h. Foreign
exchange fluctuations on foreign currency net monetary assets. i.
Realized loss on disposition of assets and other capitalized costs.
j. Amortization of deferred financing costs. k. Write-down of other
deferred financing charges. l. Realized loss on disposition of
investment and unrealized loss on write-down of investments. m.
Loss on write-down of assets classified as held for sale. n. Loss
on write-down of goodwill. o. Tax effects of adjustments a. through
n. for the period, including the reversal of tax reserves
previously booked. ANGIOTECH PHARMACEUTICALS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands of
U.S.$, except Year ended share and per share data) December 31,
2008
-------------------------------------------------------------------------
Reported Adjustments Adjusted REVENUE Royalty revenue $ 91,546 $ -
$ 91,546 Product sales, net 190,816 - 190,816 License fees 910
(910) b -
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283,272 (910) 282,362
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EXPENSES License and royalty fees 14,258 - 14,258 Cost of products
sold 101,052 (122) c 100,930 Research and development 53,192
(5,535) d 47,657 Selling, general and administrative 98,483
(11,959) e 86,524 Depreciation and amortization 33,998 (30,219) f
3,779 In-process research and development 2,500 (2,500) g -
-------------------------------------------------------------------------
303,483 (50,335) 253,148
-------------------------------------------------------------------------
Operating (loss) income (20,211) 49,425 29,214
-------------------------------------------------------------------------
Other income (expenses): Foreign exchange gain (loss) 540 (540) h -
Investment and other income 1,192 668 i 1,860 Interest expense on
long-term debt (44,490) 2,236 j (42,254) Write-down and other
deferred financing charges (16,544) 16,544 k - Write-down / loss on
redemption of investments (23,587) 23,587 l - Write-down of assets
held for sale (1,283) 1,283 n - Write-down of goodwill (649,685)
649,685 o -
-------------------------------------------------------------------------
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(733,857) 693,463 (40,394)
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(Loss) income from continuing operations before income taxes
(754,068) 742,888 (11,180) Income tax (recovery) expense (12,892)
19,919 p 7,027
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(Loss) income from continuing operations (741,176) 722,969 (18,207)
Net loss from discontinued operations, net of income taxes - - -
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Net (loss) income for the period $(741,176) $ 722,969 $ (18,207)
-------------------------------------------------------------------------
Basic and diluted net (loss) income per common share from
continuing operations $ (8.71) $ (0.21)
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Weighted average shares outstanding (000's) - basic and diluted
85,118 85,118
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-------------------------------------------------------------------------
(in thousands of U.S.$, except Year ended share and per share data)
December 31, 2007
-------------------------------------------------------------------------
Reported Adjustments Adjusted REVENUE Royalty revenue $ 116,659 $ -
$ 116,659 Product sales, net 170,193 2,579 a 172,772 License fees
842 (842) b -
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287,694 1,737 289,431
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EXPENSES License and royalty fees 18,652 - 18,652 Cost of products
sold 94,949 (2,065) c 92,884 Research and development 53,963
(4,582) d 49,381 Selling, general and administrative 99,315
(16,470) e 82,845 Depreciation and amortization 33,429 (29,971) f
3,458 In-process research and development 8,125 (8,125) g -
-------------------------------------------------------------------------
308,433 (61,213) 247,220
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Operating (loss) income (20,739) 62,950 42,211
-------------------------------------------------------------------------
Other income (expenses): Foreign exchange gain (loss) (341) 341 h -
Investment and other income 10,393 (5,422) i 4,971 Interest expense
on long-term debt (51,748) 2,242 j (49,506) Write-down and other
deferred financing charges - - - Write-down / loss on redemption of
investments (8,157) 8,157 m - Write-down of assets held for sale -
- - Write-down of goodwill - - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(49,853) 5,318 (44,535)
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-------------------------------------------------------------------------
(Loss) income from continuing operations before income taxes
(70,592) 68,268 (2,324) Income tax (recovery) expense (14,545)
18,066 p 3,521
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(Loss) income from continuing operations (56,047) 50,202 (5,845)
Net loss from discontinued operations, net of income taxes (9,893)
9,893 -
-------------------------------------------------------------------------
Net (loss) income for the period $ (65,940) $ 60,095 $ (5,845)
-------------------------------------------------------------------------
Basic and diluted net (loss) income per common share from
continuing operations $ (0.66) $ (0.07)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average shares outstanding (000's) - basic and diluted
85,015 85,015
-------------------------------------------------------------------------
-------------------------------------------------------------------------
a. Amounts accrued for costs incurred, and potential future costs,
related to our offer to accept returns of Contour Threads brand
product as part of consolidation and discontinuation of the Contour
Threads brand name, coincident with the launch of our Quill SRS
brand name. b. Non-recurring, non-operating license revenue. c.
Severances and reorganization costs. In 2007, change in estimate of
accounting for excess and obsolete inventory resulting from the
alignment during the second quarter of 2007 of inventory policies
across our various manufacturing operations. d. Research and
development adjustments:
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Year-ended Year-ended Dec 31, 2008 Dec 31, 2007 -------------
------------- Stock-based compensation (795) (1,665) License fees
due to licensors related to non-recurring license revenue - (419)
Termination and reorganization costs (3,302) (849) Non-recurring
supply / distribution agreement termination costs (500) (899)
Non-recurring research and development expenses and intellectual
property license agreement. (938) (750)
---------------------------------------------------------------------
(5,535) (4,582) ------------- ------------- e. Selling, general and
administrative adjustments:
---------------------------------------------------------------------
Year-ended Year-ended Dec 31, 2008 Dec 31, 2007 -------------
------------- Stock-based compensation (1,641) (2,924) Termination
and reorganization costs (6,983) (8,365) Litigation expenses
relating to defending intellectual property claims (2,670) (4,931)
Non-recurring financing fees (665) - Non-recurring supply /
distribution agreement termination costs - (250)
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(11,959) (16,470) ------------- ------------- f. Amortization of
acquisition-related intangible assets and medical technologies. g.
Non-recurring in-process research and development expense relating
to payments made to licensors and collaborators. h. Foreign
exchange fluctuations on foreign currency net monetary assets. i.
Realized loss on disposition of assets and unrealized loss on
write- down of an intangible asset. In 2007, write-off of
uncollectible receivable and write-off of certain capitalized
costs, net of gain realized on recovery of investments. j.
Amortization of deferred financing costs. k. Write-down of other
deferred financing charges. l. Realized loss on disposition of
investment and unrealized loss on write-down of investments. m. Net
impact of loss and gain on redemption of investments of common
share holdings in Orthovita Inc. and NuVasive Inc. respectively. n.
Loss on write-down of assets classified as held for sale. o. Loss
on write-down of goodwill. p. Tax effects of adjustments a. through
o. for the period, including the reversal of tax reserves
previously booked. ANGIOTECH PHARMACEUTICALS, INC. CALCULATION OF
ADJUSTED EBITDA (Unaudited) Three months ended Year ended (in
thousands December 31, December 31, of U.S.$) 2008 2007 2008 2007
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Net loss on a GAAP basis $ (76,963) $ (27,859) $ (741,176) $
(65,940) Interest expense on long-term debt 10,639 12,774 44,490
51,748 Income tax expense (recovery) (2,577) 9,734 (12,892)
(16,152) Depreciation and amortization 9,327 9,902 38,174 37,907
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EBITDA (59,574) 4,551 (671,404) 7,563 Adjustments: Net loss from
discontinued operations, excluding depreciation, amortization and
income tax expense included above - - - 11,122 In-process research
and development - 125 2,500 8,125 Non-recurring research and
development 313 - 938 750 Non-recurring revenue, net of license
fees (353) (266) (912) (426) Stock-based compensation 458 871 2,439
4,588 Litigation expenses 177 (971) 2,670 4,931 Foreign exchange
loss (gain) 1,032 (173) (540) 340 Investment and other income 498
(511) (1,255) (4,814) Severance 1,583 3,526 10,407 8,964
Supply/distribution agreement termination costs - - - 2,199 E&O
inventory adjustment - 665 - 2,645 Contour Threads return costs
accrual - - - 2,579 Write off of capitalized costs - (981) 500
(300) Write off uncollectible tax receivable - - - 2,250 Gain
realized on recovery of investment - - - (7,510) Accrued interest
income - - - (597) Non-recurring financing costs 665 - 665 -
Write-down and other deferred financing charges 3,000 - 16,544 -
Write-down / loss on redemption of investments 10,964 - 23,587
8,157 Write-down of assets held for sale 1,283 - 1,283 - Write-down
of goodwill 50,285 - 649,685 -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Adjusted EBITDA $ 10,331 $ 6,836 $ 37,107 $ 50,566
-------------------------------------------------------------------------
ANGIOTECH PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited) As at December 31, December 31, (in thousands of
U.S.$) 2008 2007
-------------------------------------------------------------------------
ASSETS Cash and short-term investments $ 39,800 $ 109,225 Accounts
receivable 25,524 22,678 Inventories 38,594 33,647 Deferred income
taxes 3,820 5,964 Other current assets 5,234 7,070
-------------------------------------------------------------------------
Total current assets 112,972 178,584
-------------------------------------------------------------------------
Long-term investments 1,561 6,557 Assets held for sale 8,422 -
Property and equipment, net 49,108 59,187 Intangible assets, net
195,477 225,889 Goodwill - 659,511 Deferred financing costs 11,363
13,600 Other assets 6,294 6,780
-------------------------------------------------------------------------
Total assets $ 385,197 $ 1,150,108
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY Current liabilities
$ 61,415 $ 62,940 Long-term debt 575,000 575,000 Deferred income
taxes 40,577 59,368 Other tax liabilities 3,145 4,693 Other
long-term liabilities 4,933 6,035 Stockholders' (deficit) equity
(299,873) 442,072
-------------------------------------------------------------------------
Total liabilities and stockholders' (deficit) equity $ 385,197 $
1,150,108
-------------------------------------------------------------------------
-------------------------------------------------------------------------
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
U.S. Private Securities Litigation Reform Act of 1995 and
"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 2009 and
beyond, our strategies or future actions, our targets, expectations
for our financial condition and the results of, or outlook for, our
operations, research, development, 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 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,
both nationally and in the 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 regulations and
changes in, or the failure to comply with, governmental
regulations; 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 and to expand manufacturing and
commercialization activities or consummate acquisitions; and any
other factors that may affect performance. In addition, our
business is subject to certain operating risks that may cause the
actual 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 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 continued
availability of capital to finance our activities; and any other
factors referenced in our other filings with the SEC and applicable
Canadian regulatory authorities. 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, 2007
filed with the SEC on Form 40-F and our quarterly report for the
three months ended September 30, 2008 filed with the SEC on Form
10-Q. Given these uncertainties, assumptions and risk factors,
readers 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. (C)2009 Angiotech Pharmaceuticals,
Inc. All Rights Reserved. About Angiotech Pharmaceuticals Angiotech
Pharmaceuticals, Inc. is a global specialty pharmaceutical and
medical device company with over 1,500 dedicated employees.
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:ANPINASDAQ:TSX:NASDAQ:ANP), please
visit our website at http://www.angiotech.com/. DATASOURCE:
Angiotech Pharmaceuticals, Inc. CONTACT: DeDe Sheel, Investor
Relations and Corporate Communications, Angiotech Pharmaceuticals,
Inc., (415) 293-4412,
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