Angiotech announces filing of audited financial results for the year ended December 31, 2007 and restatement of results for the year ended December 31, 2006



    VANCOUVER, March 13 /CNW/ - Angiotech Pharmaceuticals, Inc. (NASDAQ:  
ANPI, TSX: ANP), a global specialty pharmaceutical and medical device company,
today announced the filing of its audited consolidated financial statements
and Management's Discussion and Analysis for the year ended December 31, 2007
and the restatement of its audited consolidated financial statements for the
year ended December 31, 2006.
    For the year ended December 31, 2007, the Company's net loss according to
GAAP was $65.9 million, as compared to $59.4 million reported in the
preliminary results announced on February 14, 2008. Of the $6.5 million
difference, $5.2 million relates to the finalization of the income tax
provision for 2007 and $1.9 million relates to the reversal of an unadjusted
difference related to the income tax provision for 2006 that was originally
recorded in 2007, but because of the restatement of the 2006 results described
below, is now being recorded in 2006. These two adjustments are partly offset
by a $0.5 million decrease in the 2007 net loss as compared to the
preliminarily reported amount, resulting from the reversal of several
immaterial non-tax unadjusted differences from 2006 which were originally
recorded in 2007 and are now being reflected in 2006 as a result of the
restatement.
    The restatement of the audited consolidated financial statements for the
year ended December 31, 2006 favourably affects net earnings by $6.1 million,
or $0.07 per share, and is primarily the result of errors in the Company's
income tax provision. These errors arose from using incorrect tax rates in
determining certain deferred tax balances, incorrect calculation of certain
tax credits and incorrect adjustment of changes in estimates between the 2005
income tax provision and the 2005 income tax returns. These errors decreased
the income tax provision by $7.3 million, net deferred income tax liability by
$1.9 million and current taxes payable by $5.4 million. The Company also
recorded certain other adjustments related to 2006 unadjusted differences that
were considered not to be material at the time the 2006 consolidated financial
statements were originally prepared, but because of the restatement are now
being recorded in the 2006 results. These adjustments decreased net income for
2006 by $1.2 million (net of an income tax recovery of $0.9 million). Several
of these immaterial adjustments were corrected in 2007, but because of the
restatement of the 2006 results, are now being reversed in the 2007 results.
Years prior to 2006 were not affected by these errors.
    As a result of the restatement of the 2006 results, the Company has
determined that a material weakness in its internal control over financial
reporting as it relates to its income tax provision existed as at December 31,
2007, because the Company did not maintain effective controls over the
accounting for income taxes, including the determination and reporting of
current income taxes payable, deferred tax assets and the related income tax
provisions. Specifically, the Company did not have sufficient personnel to
enable it to properly consider and apply generally accepted accounting
principles for income taxes, review and monitor the accuracy and completeness
of certain components of the income tax provision calculations and the related
deferred taxes and current income taxes payable and ensure that the rationale
for certain tax positions was appropriate.
    As a result of this material weakness, the Company has concluded that as
of December 31, 2007, the Company's internal control over financial reporting
was not effective. In addition, until remediated, this material weakness could
result in a future misstatement in tax-related accounts that would result in a
material misstatement to the Company's financial statements that would not be
prevented or detected.
    The Company plans to remediate the material weakness in internal control
described above to provide reasonable assurance that errors and control
deficiencies of this type will not recur. Specifically, the Company has
elected to outsource the preparation of its tax provision to a large
independent public accounting firm, commencing with the preparation of the
provision for the first quarter of 2008. This accounting firm, together with
the Company, will also review and redesign tax accounting processes and
controls, including increasing the level of review and discussion of
significant tax issues and improving the level of supporting documentation
concerning such issues. The Company will monitor the effectiveness of these
procedures and will make any changes that are deemed appropriate.

    Financial Information
    ---------------------

    This press release contains condensed financial information derived from
the audited consolidated financial statements for the years ended December 31,
2007 and 2006, which together with Management's Discussion and Analysis for
these same periods, will be filed with the relevant regulatory agencies, as
well as posted on our website at www.angiotech.com.
    The following table presents a reconciliation of the differences in items
reported in the preliminary 2007 unaudited financial results announced on
February 14, 2008 as compared to the audited consolidated statement of
operations for the year ended December 31, 2007. In addition, this table
presents a reconciliation of the differences in items restated in the
consolidated statement of operations for the year ended December 31, 2006 as
compared to results originally reported. Additional information regarding the
restatement, including a summary balance sheet, can be found in note 1(b) to
the December 31, 2007 audited consolidated financial statements. Amounts,
unless specified otherwise, are expressed in U.S. dollars. Financial results
are reported under U.S. generally accepted accounting principles. All per
share amounts are stated on a diluted basis unless otherwise noted.


    
                       ANGIOTECH PHARMACEUTICALS, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)

    (in thousands of
     U.S.$, except
     per share data)     December 31, 2007            December 31, 2006

                      As
                   Reported                       As Pre-
                   (Prelim-   Adjust-             viously  Restate-     As
                    inary)     ments   Revised   Reported    ments   Restated
    -------------------------------------------------------------------------
    Statement of
    ------------
     Operations
     ----------
    License and
     royalty fees   18,652         -    18,652    25,605      381 a.  25,986
    Cost of
     products
     sold           95,529    (580) b.  94,949    68,067    1,476 b.  69,543
    Selling,
     general
     and
     administra-
     tive           99,713    (398) c.  99,315    78,732      201 c.  78,933
    Operating
     (loss)
     income        (21,717)      978   (20,739)   60,222    (2,058)   58,164

    Income (loss)
     from
     continuing
     operations
     before
     income taxes
     and
     cumulative
     effect of
     change in
     accounting    (71,570)      978   (70,592)   22,173    (2,058)   20,115
    Income tax
     expense
     (recovery)    (23,608)   9,063 d. (14,545)   10,279  (8,187) d.   2,092
    Net loss from
     discontinued
     operations,
     net of taxes  (11,395)   1,502 e.  (9,893)   (7,708)        -    (7,708)
    Net (loss)
     income for
     the period    (59,357)   (6,583)  (65,940)    4,585     6,129    10,714

    Basic net
     (loss)
     income per
     common share
     from
     continuing
     operations      (0.56)    (0.10)    (0.66)     0.14      0.07      0.21
    Diluted net
     (loss) income
     per common
     share from
     continuing
     operations      (0.56)    (0.10)    (0.66)     0.14      0.07      0.21



                                                  December 31,   December 31,
                                                         2007           2006
                                                  ---------------------------
    a.)  Royalty expense adjustments:
           Reclassification of royalty expense
            from selling, general and administrative        -            577
           Reclassification of royalty expense to
            cost of products sold                           -           (196)
                                                  ------------- -------------
                                                            -            381
                                                  ------------- -------------
    b.)  Cost of products sold adjustments:
           Overvaluation of inventory in 2006 and
            its reversal in 2007                         (580)           580
           Reclassification of royalty expense to
            cost of products sold (note a)                  -            196
           Net impact of fair value change of
            inventory on acquisition                        -            700
                                                  ------------- -------------
                                                         (580)         1,476
                                                  ------------- -------------
    c.)  Selling, general and administrative
          adjustments:
           Stock-based compensation in 2006 and
            its reversal in 2007                          282           (282)
           Reverse travel costs related to
            acquisitions previously capitalized
            as goodwill                                     -            380
           Reclassify royalties that had been
            expensed in general and administrative
            (note a)                                        -           (577)
           Litigation expenses related to 2006 and
            its reversal in 2007                         (680)           680
                                                  ---------------------------
                                                         (398)           201
                                                  ---------------------------
    d.)  Income tax expense from continuing
          operations adjustments:
           Tax adjustment related to finalization
            of the 2007 income tax provision            5,184              -
           Correction of income tax error in 2006
            and its reversal in 2007                    1,900         (7,298)
           Reclassify income tax expense from
            discontinued operations                     1,502              -
           Tax effect on the adjustments of a.
            through c. in 2006 and its reversal
            in 2007                                       477           (889)
                                                  ------------- -------------
                                                        9,063         (8,187)
                                                  ------------- -------------
    e.)  Net loss from discontinued operations
          adjustment:
           Reclassify income tax expense to
            continuing operations (note d)              1,502              -
                                                  ------------- -------------
                                                  ------------- -------------
    


    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," "estimate," "continue," "anticipates,"
"intends," "expects" and similar expressions, constitute "forward-looking
statements" within the meaning of the U.S. 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 strategies or future actions, our targets, expectations for our
financial condition and the results of, or outlook for, our operations,
research 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 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, both nationally and in the 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 regulations and changes in, or the failure
to comply with, governmental regulations; adverse results or unexpected delays
in drug discovery and clinical development processes; 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 and to expand commercialization activities or
consummate acquisitions; the accuracy of our estimations of the size of the
market, and the potential market, for our products in specific disease areas;
sales numbers and future guidance publicly provided by Boston Scientific
Corporation regarding sales of their paclitaxel-eluting coronary stent
products; and any other factors that may affect performance. In addition, our
business is subject to certain operating risks that may cause the actual
results expressed or implied by the forward-looking statements in this report
to differ materially from our actual results. These operating risks include:
our ability to attract and retain qualified personnel; our ability to
successfully complete preclinical and clinical development of our products;
changes in 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 ability of Boston Scientific
Corporation to successfully manufacture, market and sell their
paclitaxel-eluting coronary stent products; the continued availability of
capital to finance our activities; our ability to achieve the financial
benefits expected as a result of the acquisition of American Medical
Instruments Holdings, Inc. ("AMI"); and any other factors referenced in our
annual information form and other filings with the applicable Canadian
securities regulatory authorities or the SEC. Given these uncertainties,
assumptions and risk factors, readers are cautioned not to place undue
reliance on such forward-looking statements. 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.

    About Angiotech Pharmaceuticals

    Angiotech Pharmaceuticals, Inc. is a global specialty pharmaceutical and
medical device company with over 1,500 dedicated employees. 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.





For further information:

For further information: Deirdre Neary, Manager, Investor Relations and
Corporate Communications, Angiotech Pharmaceuticals, Inc., (604) 222-7056,
dneary@angio.com

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