September 24, 2008
Angiotech Announces Cost Cutting Plans
Angiotech Pharmaceuticals, a specialty pharmaceutical and medical device company, has announced that it is pursuing various initiatives to reduce operating costs and to further focus its business efforts, pending continued exploration of alternatives to the company's balance sheet and current capital structure.
Options to be explored, among others, include determining whether the company will be able to consummate its previously announced transaction with Ares Management and New Leaf Venture Partners, or other potential transaction alternatives with Ares and New Leaf.In addition, Angiotech has also announced plans to withdraw its outstanding tender offers for its senior floating rate notes and its senior subordinated notes, pending resolution of these discussions and actions.
The announced reorganization and cost reduction initiatives are, in certain cases, in addition to the selected expense reduction actions announced in April 2008, and are actions the company believes are necessary to provide the opportunity for Angiotech to be able to achieve its previously stated goal of achieving positive consolidated free cash flow (after the incurrence of net interest expense) during the fourth quarter of 2008.
Specifically, the company expects to focus remaining investment and resources on its most promising near term product opportunities, including Quill SRS and certain new interventional radiology products, including the HemoStream chronic dialysis catheter, the Option inferior vena cava filter and the Bio-Seal lung biopsy system, and therefore to further reduce spending on certain research and development relating to various earlier stage new product initiatives.
In connection with these initiatives and developments, Angiotech expects to record a significant reduction in the amount of goodwill and intangible assets held on its balance sheet during the third quarter of 2008.
William Hunter, CEO of Angiotech, said: "While our extensive discussions since we announced the transaction with various shareholders and bondholders have been useful, during this period events have impacted our business and the capital markets, and we will take every action necessary to prepare our company for the future and to provide the best opportunity for our most important near term initiatives to continue, regardless of the timing of completing any financing or strategic transaction."