March 5, 2009 / 1:47 PM / in 9 years

UPDATE 2-Angiotech faces liquidity crunch, loss widens

* Liquidity in question as royalty revenue falls

* Adjusted loss per share $0.03 vs expected loss of $0.02

* Revenue $61.7 million vs $70.7 million

* 2008 includes $50.3 mln writedown of goodwill (In U.S. dollars. Recasts. Adds details)

TORONTO, March 5 (Reuters) - Angiotech Pharmaceuticals Inc ANP.TO ANPI.O said on Thursday that it might be forced to cut spending to meet its debt obligations as it reported a steeper fourth-quarter loss, due primarily to a writedown of goodwill and dwindling revenue from its stent coatings.

Angiotech, which makes the coating for Boston Scientific Corp’s BSX.N stents, said the continued fall in the revenue derived from stents could force it to seek alternative funding sources through debt, equity or other securities offerings, as well as to consider reorganization, restructuring or other strategic alternatives.

“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,” it said in a release.

Royalty revenue from the stents, tiny devices used to prop open arteries, dropped 42 percent during the quarter to $15.7 million.

The company, which has felt the growing effects from falling royalty revenue for eight quarters, canceled a key funding deal with two private equity investors last September, stoking liquidity concerns.

The latest liquidity warning came on Thursday as it reported its loss widened to $77 million, or 90 cents a share, from $27.9 million, or 29 cents a share, a year earlier.

The latest results included a $50.3 million writedown on goodwill.

Excluding noncash and nonrecurring items, the loss narrowed to $2.6 million, or 3 cents a share, from $17 million, or 20 cents a share.

Revenue, also adjusted for one-time items, fell to $61.7 million from $70.7 million.

Analysts on average were expecting a loss of 2 cents a share before items and revenue of $64.3 million, according to Reuters Estimates. ($1=$1.29 Canadian) (Reporting by Scott Anderson, editing by Dave Zimmerman)

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