Angiotech shifts focus with new company

By Scott Anderson

TORONTO (Reuters) - Angiotech Pharmaceuticals Inc (ANP.TO: Quote) (ANPI.O: Quote) moved on Monday to reduce its cumbersome debt load created by the 2006 purchase of American Medical Instruments by forming a new subsidiary and raising more than $300 million in a notes offering.

The specialty pharmaceutical and medical device company said it would create Angiotech Pharmaceutical Interventions (API), to focus on the company's business other than its Taxus coronary stent system, on which it has relied too heavily in the past.

Areas of specialty for the new company will include its Quill SRS technology and its drug-eluting central venous catheter.

Angiotech also said private equity investors Ares Management and New Leaf Venture Partners will inject between $200 million and $300 million into the new company through a note purchase agreement.

Existing Angiotech shareholders are expected to hold an initial ownership stake of between 52 percent and 68 percent in API depending on the size of the financial commitment of the two partners.

Proceeds will be used to reduce Angiotech's debt, incurred when Angiotech bought AMI, a maker of custom medical needles, in February 2006 for $785 million.

Company Chief Financial Officer Tom Bailey said about $575 million in debt remains from the AMI purchase.

About two-thirds of the company's new balance sheet will consist of the API business and the rest derived from the royalty revenue from the Taxus stents.