February 14, 2008 / 2:00 PM / in 10 years

Angiotech promises better year after weak results

TORONTO (Reuters) - Angiotech Pharmaceuticals Inc ANP.TO ANPI.O promised a better performance in 2008 on Thursday after capping off 2007 with a fourth-quarter loss that nearly doubled because of falling royalty revenues for its drug-coated stents and flat results at its medical products division.

Angiotech, which makes the coating for Boston Scientific Corp.'s (BSX.N) stents, said it lost $21.3 million, or 20 cents a share, for the quarter, compared with a loss of $11.7 million, or 6 cents a share, for the year-before quarter.

Revenue was $71.4 million, down from $93.3 million.

The company's shares were down 34 cents, or 10.3 percent, at $2.97 on the Toronto Stock Exchange at noon on Thursday.

"It was a real growing pains year for the business, but we are pretty excited to get on with 2008 and pretty excited to control our own destiny and see the benefits of the things that we have done over the last year," William Hunter, president and chief executive, said during a conference call.

"We realize that we will be judged by performance here not by expectation and by rhetoric and we look forward to showing you evidence of this growth throughout the year."

Adjusted to exclude noncash and nonrecurring items, the company reported a loss of $7.5 million, or 9 cents, for the quarter. That compares with an adjusted profit of $12 million, or 14 cents, a year earlier.

Adjusted to take account of nonrecurring revenue relating to some of its license agreements, revenue for the quarter was $70.7 million, down from $83.2 million.

Analysts were calling for an average loss of 4 cents a share and revenue of $71.4 million before items, according to Reuters Estimates.

Royalty revenues were $27.2 million, down from $38.5 million. Product sales, of which medical products are the major provider, were $43.9 million, compared with $44.7 million.

The company said it expects 2008 revenue from its AMI medical products arm, which it bought two years ago, to rise by 15 percent.

Angiotech bought AMI, a maker of custom medical needles, in February 2006 for $785 million to reduce its heavy reliance on royalty sales of stents, the tiny devices used to prop open arteries.

Desjardins Securities analyst Maher Yaghi, who noted the company's AMI numbers were in line with his expectations, said a better-than-expected performance from the medical products division is needed, adding that if it doesn't come more drastic measures will be needed by mid-year to turn results around.

"Overall I was hoping for better numbers. You can get by with the numbers that they reported for another quarter or two," he said. "But after that I think we have to expect some kind of restructuring or cuts if results don't improve."

Reporting by Scott Anderson; Editing by Peter Galloway

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