VANCOUVER, Oct. 29 /PRNewswire-FirstCall/ - In
September 2010, Angiotech Pharmaceuticals, Inc. (NASDAQ: ANPI; TSX:
ANP) ("Angiotech" or the "Company") entered into confidentiality,
non-disclosure and non-use agreements (as amended, the
"Confidentiality Agreements") with certain beneficial holders of
and/or investment advisors with investment discretion over the
Company's 7.75% Senior Subordinated Notes (the "Subordinated
Noteholders") in order to facilitate discussion of a possible
recapitalization transaction. Pursuant to the Confidentiality
Agreements, Angiotech disclosed information, including certain
non-public information (the "Non-Public Information"), to such
Subordinated Noteholders' financial and legal advisors. The
Confidentiality Agreements require that Angiotech now disclose
certain of the Non-Public Information.
As previously announced on October 1, 2010,
Angiotech determined, in connection with discussions with the
Subordinated Noteholders, that it would not make interest payments
totaling approximately $9.7 million due to holders of Angiotech's
7.75% Senior Subordinated Notes on October 1, 2010. As
described in Angiotech's press release on October 29, 2010,
Angiotech has reached an agreement with the Subordinated
Noteholders on the material terms of a recapitalization
transaction. Upon implementation, the proposed
recapitalization transaction is expected to eliminate $250 million
in total indebtedness and provide significant improvements to
Angiotech's credit ratios, liquidity and financial flexibility.
Angiotech has not made any determination as to
whether the Non-Public Information disclosed pursuant to the
Confidentiality Agreements may be deemed material to existing or
potential investors in making an investment decision or for any
other purpose.
Angiotech does not, as a matter of course,
publish its business plans, budgets or strategies or make publicly
available projections or forecasts of its anticipated financial
position, results of operations, capital expenditures or capital
requirements. The Non-Public Information provided to the
Subordinated Noteholders was not prepared for public disclosure and
is included in this press release only because such information was
made available to the Subordinated Noteholders. Subject to
applicable securities law, Angiotech does not intend to or
anticipate that it will, and disclaims any obligation to, furnish
updated business plans, budgets, strategies, projections or
forecasts or similar forward looking information to holders of
securities issued by Angiotech or to include such information in
documents required to be filed with the applicable United States or
Canadian securities regulatory authorities or otherwise make such
information publicly available.
The projections and other forward looking
financial information found herein were not, when made, and are
not, historical facts but are forward looking statements about the
objectives, strategies, financial conditions, results of operations
and businesses of Angiotech and its subsidiaries and are subject to
important risks, uncertainties and assumptions. The forward
looking statements and projections set out in this press release
are, in the case of Angiotech's Base Medical Products and
Proprietary Medical Products businesses, based upon Angiotech's
reasonable estimates, assumptions and expectations about these
businesses and the markets in which Angiotech operates at the time
such information was prepared, or in the case of Angiotech's
Royalty business, are derived based upon certain publicly available
information, including analyst reports and other sources, regarding
expectations for certain products, in particular for sales of
paclitaxel-eluting stents by certain of our partners from which we
derive or expect to derive royalty revenue pursuant to intellectual
property licensing agreements with those partners. In each
case, such projections or forward looking statements are subject to
significant business, economic, competitive and other uncertainties
and contingencies (including those set out under the heading "Risk
Factors" contained in Angiotech's Annual Report on Form 10-K for
the year ended December 31, 2009, as updated in Angiotech's most
recent Form 10-Q and Management's Discussion and Analysis for the
six months ended June 30, 2010), which are beyond Angiotech's or
our partners' control.
In addition, forward looking statements reflect
numerous assumptions by Angiotech and industry analysts with
respect to future events, economic, competitive and regulatory
conditions, financial market conditions and future business
decisions, including, but not limited to: (i) a successful
recapitalization transaction; (ii) the absence of a material
adverse effect on Angiotech's business on a going forward basis
resulting from any recapitalization transaction or otherwise; (iii)
a continuation of business arrangements on substantially the same
basis as existed prior to the recapitalization transaction; (iv)
the availability of liquidity and capital resources in the future
to fund certain investments in sales, marketing, working capital
and research and development; and (v) Angiotech's estimates as to
future product sales, royalty revenue and estimates of operating
expenses and working capital necessary to support Angiotech's
various business initiatives.
The results, estimates, projections, events or
other forward looking information predicted in any forward looking
statements may differ materially from actual results or
events. Known or unknown risks, trends or uncertainties may
affect Angiotech's businesses. In addition, the information
in this news release does not contemplate the outcome if Angiotech
is unable to complete the proposed recapitalization transaction or
is unable to generate or access additional liquidity and capital
resources to support its business and investment initiatives, and
therefore pursues alternative options such as a prolonged
Companies' Creditors Arrangement Act (Canada) ("CCAA")
proceeding or other similar proceedings.
Angiotech has developed the following financial
projections for its Base Medical Products Segment and its
Proprietary Medical Products Segment. The following
projections are not comparable with historical business unit
revenue figures as reported in prior quarterly results, as certain
products included in our Proprietary Medical segment in our
previous historical results have been included as part of our Base
Medical Products Segment for purposes of the projections
below. All figures are illustrated in millions of U.S.
dollars.
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REVENUE |
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2010E |
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2011E |
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2012E |
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2013E |
Base Segment |
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$171 |
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$173 |
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$182 |
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$191 |
Proprietary Segment |
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$50 |
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$87 |
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$131 |
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$162 |
TOTAL |
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$221 |
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$260 |
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$313 |
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$353 |
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ADJUSTED CASH EBITDA |
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2010E |
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2011E |
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2012E |
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2013E |
Base Segment |
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$42 |
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$45 |
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$49 |
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$52 |
Proprietary Segment |
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($38) |
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($35) |
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($28) |
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$6 |
TOTAL |
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$4 |
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$10 |
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$21 |
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$58 |
Angiotech has derived, based primarily on
publicly available analyst and industry reports, the following
financial projections for its Royalty Segment. All figures
are illustrated in millions of U.S. dollars.
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ROYALTY SEGMENT |
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2010E |
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2011E |
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2012E |
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2013E |
Total Revenue |
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$32 |
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$35 |
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$46 |
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$56 |
Total Adjusted Cash EBITDA |
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$26 |
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$29 |
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$38 |
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$46 |
Angiotech has developed the following
consolidated financial projections. Net cash flow prior to
financing as illustrated below excludes the effect of any future
financing transaction that may provide additional liquidity and
capital resources to the Company for investment in working capital
and its various business initiatives. Furthermore, net cash
flow prior to financing includes estimates for certain monthly
restructuring-related professional fees in 2010E but excludes all
restructuring-related charges, fees and expenses thereafter.
These expenses are expected to be significant and will vary
depending on the time or process required to complete the proposed
recapitalization transaction. All figures are illustrated in
millions of U.S. dollars.
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CONSOLIDATED |
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2010E |
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2011E |
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2012E |
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2013E |
Revenue |
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$253 |
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$295 |
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$359 |
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$409 |
Adjusted Cash EBITDA |
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$29 |
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$39 |
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$59 |
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$105 |
Net Cash Flow Prior to
Financing |
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($2) |
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($19) |
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$25 |
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$78 |
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 2nd 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.
©2010 Angiotech Pharmaceuticals, Inc. All Rights
Reserved.
About Angiotech
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.
SOURCE Angiotech Pharmaceuticals, Inc.
Copyright . 29 PR Newswire