UPDATE: Angiotech Sees 3Q Loss; Lowers 2007 Outlook
- CNN
10/19/2007 - Shares of Angiotech Pharmaceuticals Inc. (ANPI) fell sharply Friday after the company warned that third-quarter results would be below expectations, forcing it to cut its outlook for 2007.
As reported, Angiotech, the original developer of paclitaxel-coated stent, marketed by partner Boston Scientific Corp. (BSX) under the name Taxus, expects to post a loss on revenue of $68 million in its third quarter ended Sept. 30. According to Thomson First Call, the mean earnings estimate for the period was 6 cents a share on revenue of $77 million.
The warning coincides with a third-quarter loss and job cuts at Boston Scientific, which is trying to bring its expenses back in line with revenue after reporting a 22% decline of Taxus sales in the quarter.
On Nasdaq Friday, Angiotech's stock has plunged $2.53, or 34%, to $5.00 on about 920,000 shares. The stock is down about 40% year-to-date and 47% in the last 12 months.
In an interview, Bill Hunter, president and chief executive of Angiotech, said the results from Boston Scientific filled in the last "piece of the puzzle" for Angiotech, hence its pre-announcement.
"Utilization of drug-eluting stents has been under pressure for almost two years now because of concerns of thrombosis (blood-clotting). And that story has been evolving for quite some time," Hunter told Dow Jones.
The specialty pharmaceutical company said net product sales for the third quarter were $41.4 million, while royalty revenue was $26.6 million, including $ 24.9 million of royalty revenue derived from sales by Boston Scientific.
Adjusted EBITDA for the third quarter was $7.2 million.
For 2007, Angiotech expects royalty revenue of $118-$120 million, based on third-quarter paclitaxel-eluting stent sales of $448 million. Medical-product sales for the year are now projected at $171-$173 million, down from its previous range of $190-$210 million.
The company said its original full-year outlook for sales revenue derived from certain new product lines was $10-$30 million, though it now expects to begin generating more substantial revenue from these sources starting in 2008, rather than in the second half of 2007.
As a result of revenue delays, Angiotech said it now expects adjusted EBITDA for the year of $47-$50 million, down from its previous projection of $85-$95 million.
Hunter said it was about two years ago that the thrombosis "scare" began when a group of investigators made a presentation at a scientific meeting showing a potentially higher rate of blood clotting in drug-eluting stents over bare-metal stents. He said those same investigators, after a two-year follow-up, found that there is no difference in safety between the two devices, but that data didn't get much press.
"If you understand the biology of drug-eluting stents, they give you the most benefit over time and their biggest risk occurs early. A benefit comes over a two- to five-year period because you're saving someone from having a repeat procedure," Hunter explained.
Another issue for Angiotech is revenue from new products, namely its vascular wrap, which is expected to be a significant contributor to revenue in the second half of this year. It underestimated how long it would take European regulators to approve the device.
"In Europe there's no mandated timeline to respond to submissions, so whenever we give a timeline on a product like that it's really our best guess," he said. "In many ways the new product revenue is not a case of if, it's a case of when. But it's not going to be this year."
Hunter said the company isn't contemplating any job cuts. Indeed, he said Angiotech is adding jobs and its goals haven't changed. "This is the classic case of a company that had a very successful first product and is now trying to take that and turn it into a sustainable business capable of launching many products," he said, adding that product development in healthcare spans five to 10 years. "It takes time."
If you or a loved one have been injured during surgical placement of a stent or have been injured as a result of an implanted drug eluting stent (drug coated stent) such as the Boston Scientific Taxus stent or the Johnson & Johnson Cypher stent you may be entitled to compensation. To learn more about the stent recalls, for information regarding your legal rights, or the possiblilty of a class action lawsuit contact our stent lawyers for a free, confidential, case evaluation today. Fill out our online case evaluation form or call us toll free at 1-800-856-6405. |
