Angiotech reports second quarter results



    VANCOUVER, Aug. 2 /CNW/ - Angiotech Pharmaceuticals, Inc. (NASDAQ:   ANPI,
TSX: ANP), a global specialty pharmaceutical and medical device company, today
announced its financial results for the second quarter ended June 30, 2007.
    "We continued to focus on the development and commercialization of our
key catalyst products during the second quarter," said Dr. William Hunter,
President and CEO of Angiotech. "In particular, we made significant strides in
building out our sales and marketing infrastructure, while at the same time
reaching important milestones such as securing a CE Mark for our Quill(R) SRS
product line."
    "Over the last quarter, we made good progress with the continued
implementation of our various growth, organizational change, and operational
improvement initiatives, while at the same time delivering solid operating
results," commented Thomas Bailey, Chief Financial Officer of Angiotech.

    
    Financial Highlights

    -  Total revenue, as adjusted for non-recurring items, was $75.3 million
       in the second quarter. Total revenue under generally accepted
       accounting principles ("GAAP") was $72.4 million.

    -  Net product sales, as adjusted, of $45.4 million increased
       $2.9 million, or 6.9%, as compared to the first quarter, and were
       derived principally from sales of our various single use, specialty
       medical devices, as well as from sales of medical device components
       to third parties.

    -  Royalty revenue was $29.9 million. This includes $28.4 million of
       royalty revenue derived from sales by Boston Scientific Corporation
       ("BSC") of paclitaxel-eluting coronary stent systems. This represents
       an average gross royalty rate of 7.6 percent for U.S. sales and
       5.5 percent for sales in other countries.

    -  Adjusted EBITDA (earnings before interest, taxes, depreciation and
       amortization, adjusted to exclude certain non-cash, non-recurring,
       and other items) was $15.6 million.

    -  GAAP net loss from continuing operations and net loss per share from
       continuing operations were $15.0 million and $0.18 respectively. Our
       GAAP results reflect several non-recurring items, including:
       in-process research and development expense of $8.0 million
       (the majority of which related to the extension of our research
       collaboration with CombinatoRx, Incorporated ("CombinatoRx"));
       costs accrued of $3.0 million relating to the discontinuation of our
       Contour Threads brand name; and restructuring costs of $2.1 million,
       the majority of which related to the closure of our manufacturing
       facility in Syracuse, New York.

    -  Adjusted net income from continuing operations and adjusted net
       income per share from continuing operations were $5.0 million and
       $0.06, respectively.

    -  An income tax recovery of $10.5 million as reported in our GAAP
       results was derived from several concurrent factors, including
       deductions related to the amortization of identifiable intangible
       assets, deductions relating to certain international financing
       structures, and provincial income tax credits.

    -  Cash and long-term investments were $144.2 million, and net debt was
       $437.2 million.
    

    Business Highlights

    Our focus for 2007 continues to be on our three main catalysts: Quill(R)
SRS, 5-FU CVC and Vascular Wrap(TM). From an operational perspective, we are
building out our global sales and marketing organization as well as organizing
our business operations for maximum capacity utilization, efficiency in the
supply chain, and ensuring that we have adequate manufacturing capacity in the
areas of anticipated growth in future years. We made significant advancements
on all of these fronts during the second quarter.

    
    Quill(R) SRS

    -  We secured European approval for CE mark of our Quill(R)
       Self-Retaining System (SRS) and expect to launch Quill(R) SRS
       commercially in Europe mid-year.

    Vascular Wrap(TM)

    -  We re-obtained the exclusive rights from Edwards Lifesciences
       Corporation to market and distribute our Vascular Wrap(TM)/ePTFE
       graft combination product candidate through our own sales force and
       distribution network in Europe.

    -  We initiated a pivotal human clinical trial in Europe designed to
       evaluate the safety and efficacy of the Vascular Wrap(TM) in the
       prevention of stenosis following surgical implantation of an ePTFE
       vascular graft in the upper extremity for vascular (AV) access in
       hemodialysis patients. It is expected that results from this study
       will serve as a base of European experience for CE Mark submission
       along with supporting data from a similar U.S. pivotal trial
       initiated in March.

    5-FU CVC

    -  Shortly after the end of the second quarter, we completed enrolment
       of our 5-FU CVC pivotal study. We expect to have preliminary data
       results compiled in the fall, and present the final data in
       early 2008.

    Sales and Marketing

    -  Expansion of the sales and marketing team is on track in Europe,
       Asia, and the United States, with key personnel hired into the
       Surgical, Interventional and Specialties-OEM areas.

    Operations

    -  As part of our continuing effort to increase capacity utilization,
       reduce labour and other direct manufacturing costs and ensure
       adequate capacity in key growth areas, including Quill(R), we made
       the decision to close our manufacturing facility in Syracuse,
       New York and to transfer the product manufacturing and technical
       knowledge to our operations in Puerto Rico and Reading, Pennsylvania.
       The closure of the Syracuse facility will occur over the next twelve
       to eighteen months.

    Other Business Highlights

    -  Shortly after the end of the second quarter, Cook Incorporated
       ("Cook") and BSC announced several new human clinical trials of
       next-generation products incorporating our proprietary paclitaxel
       technology. These trials are of Cook's Zilver(R) PTX(TM)
       paclitaxel-eluting peripheral stent for use in arteries outside of the
       heart, and of BSC's TAXUS Petal(TM) bifurcation coronary stent and
       TAXUS Element(TM) platinum chromium coronary stent respectively.

    -  We announced the extension of our collaboration agreement with
       CombinatoRx from the initial two and a half year term to a total of
       five years. The collaboration will continue to focus on evaluating
       and identifying drug candidates that are combinations of known
       pharmaceutical compounds that could be useful to treat selected local
       diseases or in selected surgical or medical device applications.
    

    Financial Information and Certain Non GAAP Financial Measures
    -------------------------------------------------------------

    This press release contains the condensed financial statements derived
from the unaudited consolidated interim financial statements for the three-
and six-month periods ended June 30, 2007, and audited consolidated financial
statements for the year ended December 31, 2006. Full unaudited consolidated
interim financial statements and Management's Discussion and Analysis for the
three- and six-month periods ended June 30, 2007, will be filed with the
relevant regulatory agencies, as well as posted on our website at
www.angiotech.com.
    We completed the acquisition of the operations of American Medical
Instruments Holdings, Inc. ("AMI") on March 23, 2006. Because of the timing of
the AMI acquisition, our operating results for the three month period ended
June 30, 2006 include AMI's results of operations from the period of March 24,
2006 to June 30, 2006, as compared to the current quarter which reflects
combined results from the period of April 1, 2007 to June 30, 2007. Our
results for the quarter ended June 30, 2007 therefore reflect a slightly
shorter time period, and as a result do not reflect a comparable operating
period as compared to the second quarter of 2006.
    The results for the six month period ended June 30, 2007 fully include
the results of AMI. As AMI was acquired on March 23, 2006, the comparative six
month period ended June 30, 2006 only includes the results of the AMI
operations for the period March 23, 2006 to June 30, 2007.
    Amounts, unless specified otherwise, are expressed in U.S. dollars.
Financial results are reported under GAAP unless otherwise noted. All per
share amounts are stated on a diluted basis unless otherwise noted.
    Certain financial results presented in this press release include
non-GAAP measures that exclude certain items. Adjusted net income from
continuing operations, adjusted net income per share from continuing
operations and adjusted earnings before interest, taxes, depreciation and
amortization ("adjusted EBITDA") exclude acquisition related amortization
charges, acquired in-process research and development relating to license
agreements and acquisitions, stock-based compensation expense, foreign
exchange gains or losses relating to translation of foreign currency cash and
investment balances and other non-recurring items. Adjusted net income from
continuing operations, adjusted net income per share from continuing
operations and adjusted EBITDA also exclude litigation expenses related to
defending intellectual property claims. Revenue, as adjusted, excludes
non-recurring, non-operating revenue derived from license agreements and other
license revenue, net of license fees due to licensors and excludes amounts
accrued for costs incurred, and potential future costs, related to our offer
to accept returns of Contour Threads brand product as part of the brand name
consolidation and discontinuation. Adjusted net income from continuing
operations, adjusted net income per share from continuing operations, revenue
from continuing operations, as adjusted and adjusted EBITDA do not have any
standardized meaning prescribed by GAAP and therefore may not be comparable to
similar measures presented by other issuers. Management uses these non-GAAP or
adjusted operating measures to establish operational goals, and believes that
these measures may assist investors in analyzing the underlying trends in our
business over time. Investors should consider these non-GAAP measures in
addition to, not as a substitute for, or as superior to, financial reporting
measures prepared in accordance with GAAP. We have provided a reconciliation
of these measures to GAAP in the attached tables.

    Conference Call Information
    ---------------------------

    A conference call to discuss these financial results will be held today,
Thursday, August 2, 2007 at 8:00 AM PT (11:00 AM ET).

    Dial-in information:
    North America (toll free): (866) 578-5788
    International: (617) 213-8057
    Enter passcode: 78719252

    A replay archive of the conference call will be available until August 9,
2007 by calling (888) 286-8010 (in North America) or (617) 801-6888
(International) and entering Access Code 92205136.

    A live webcast will be available to all interested parties through the
Investors section of Angiotech's website: www.angiotech.com.

    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; 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 continue to integrate into
our business the operations of American Medical Instruments Holdings, Inc.
("AMI"); our ability to achieve the operational and other synergies and the
other commercial or financial benefits expected as a result of the acquisition
of 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 prospectus 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.

    Vascular Wrap(TM) is a trademark of Angiotech Pharmaceuticals, Inc.
    Quill(R) and Contour Threads(R) are registered trademarks of Quill
    Medical, Inc., a wholly-owned subsidiary of Angiotech Pharmaceuticals,
    Inc.
    TAXUS Petal(TM) and TAXUS Element(TM) are trademarks of Boston Scientific
    Corporation.
    Zilver(R) PTX(TM) are trademarks of Cook Incorporated.


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

    (in thousands of
     U.S.$, except share    Three months ended        Three months ended
     and per share data)       June 30, 2007             June 30, 2006
    -------------------------------------------------------------------------
                                  Adjust-                   Adjust-
                         Reported  ments  Adjusted Reported  ments  Adjusted
    REVENUE
    Royalty revenue       29,878            29,878  42,980            42,980
    Product sales, net    42,421   2,980 a  45,401  50,553            50,553
    License fees              53     (53)b       -      73     (73)b       -
    -------------------------------------------------------------------------
                          72,352   2,927    75,279  93,606     (73)   93,533
    -------------------------------------------------------------------------
    EXPENSES
    License and royalty
     fees                  4,268             4,268   6,050             6,050
    Cost of products
     sold                 25,085    (927)c  24,158  24,033            24,033
    Research and
     development          13,458    (781)d  12,677  11,833    (773)d  11,060
    Selling, general and
     administrative       24,363  (4,774)e  19,589  23,178  (3,809)e  19,369
    Depreciation and
     amortization          8,328  (7,459)f     869  10,389  (9,613)f     776
    In-process research
     and development       8,000  (8,000)g       -       -                 -
    -------------------------------------------------------------------------
                          83,502 (21,941)   61,561  75,483 (14,195)   61,288
    -------------------------------------------------------------------------
    Operating (loss)
     income              (11,150) 24,868    13,718  18,123  14,122    32,245
    -------------------------------------------------------------------------
    Other (expense)
     income:
    Foreign exchange
     (loss) gain            (505)    505 h       -   2,135  (2,135)h       -
    Investment and other
     (expense) income       (994)  1,933 i     939   1,813    (685)j   1,128
    Loss on sale/write-
     down of investments       -       -         -   1,064  (1,064)k       -
    Interest expense on
     long-term debt      (12,896)    568 l (12,328)(11,297)   (314)l (11,611)
    -------------------------------------------------------------------------
    Total other (expense)
     income              (14,395)  3,006   (11,389) (6,285) (4,198)  (10,483)
    -------------------------------------------------------------------------
    Income (loss) from
     continuing
     operations before
     income taxes        (25,545) 27,874     2,329  11,838   9,924    21,762
    Income tax (recovery)
     expense             (10,500)  7,857 m  (2,643)  9,669  (3,168)m   6,501
    -------------------------------------------------------------------------
    Income (loss) from
     continuing
     operations          (15,045) 20,017     4,972   2,169  13,092    15,261
    -------------------------------------------------------------------------
    Net loss from
     discontinued
     operations, net of
     income taxes           (170)    170         -    (342)    342         -
    -------------------------------------------------------------------------
    Net (loss) income
     for the period      (15,215) 20,187     4,972   1,827  13,434    15,261
    -------------------------------------------------------------------------

    Basic net (loss)
     income per common
     share from
     continuing
     operations            (0.18)             0.06    0.03              0.18
    Diluted net (loss)
     income per common
     share from
     continuing
     operations            (0.18)             0.06    0.03              0.18
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average
     shares outstanding
     (000's) - basic      85,014            85,014  84,651            84,651
    Weighted average
     shares outstanding
     (000's) - diluted    85,460            85,460  85,710            85,710
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    a.  Amounts accrued for costs incurred, and potential future costs,
        related to our offer to accept returns of Contour Threads brand
        product as part of the brand name consolidation and discontinuation.
    b.  Non-recurring, non-operating revenue as derived from other license
        revenue, net of license fees due to licensors.
    c.  Change in estimate of accounting for excess and obsolete inventory
        resulting from the alignment during the second quarter of 2007 of
        inventory policies across our various manufacturing operations.
    d.  Research and development adjustments:
        ---------------------------------------------------------------------
                                                Three months    Three months
                                               ended June 30,  ended June 30,
                                                        2007            2006
                                              -------------------------------
        Stock-based compensation                        (531)           (773)
        Termination and reorganization costs
         related to the integration of AMI              (250)              -
        ---------------------------------------------------------------------
                                                        (781)           (773)
        ---------------------------------------------------------------------

    e.  Selling, general and administrative adjustments:
        ---------------------------------------------------------------------
                                                Three months    Three months
                                               ended June 30,  ended June 30,
                                                        2007            2006
                                              -------------------------------
        Stock-based compensation                        (774)         (1,007)
        Termination and reorganization costs
         related to the integration of AMI            (1,846)              -
        Litigation expenses relating to
         defending intellectual property claims       (2,154)         (2,802)
        ---------------------------------------------------------------------
                                                      (4,774)         (3,809)
        ---------------------------------------------------------------------

    f.  Amortization of acquisition related intangible assets and medical
        technologies.
    g.  Non-recurring in-process research and development expense relating to
        payments to CombinatoRx and Rex Medical Inc.
    h.  Foreign exchange fluctuations on foreign currency net monetary
        assets.
    i.  Write off of uncollectible tax receivable and write off of certain
        capitalized costs.
    j.  Gain on sale of Palo Alto building - assets held for sale.
    k.  Gain on redemption of long-term, available-for-sale securities.
    l.  Amortization of deferred financing costs in 2007, and interest
        expense in 2006 related to the AMI transaction that was incurred in
        the first quarter prior to the consolidation of the results of the
        AMI operations acquired, which occurred in the second quarter of
        2006.
    m.  Tax effects of adjustments a. through l. for the period. Comparative
        for 2006 also includes non-recurring Quebec retroactive tax
        adjustment of $8.7 million.



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

    (in thousands of
     U.S.$, except share      Six months ended          Six months ended
     and per share data)       June 30, 2007             June 30, 2006
    -------------------------------------------------------------------------
                                  Adjust-                   Adjust-
                         Reported  ments  Adjusted Reported  ments  Adjusted
    REVENUE
    Royalty revenue       62,878            62,878  84,070            84,070
    Product sales, net    84,907   2,980 a  87,887  51,355            51,355
    License fees             525    (525)b       -     126    (126)b       -
    -------------------------------------------------------------------------
                         148,310   2,455   150,765 135,551    (126)  135,425
    -------------------------------------------------------------------------
    EXPENSES
    License and royalty
     fees                  9,709             9,709  12,563            12,563
    Cost of products
     sold                 47,877  (1,727)c  46,150  24,667            24,667
    Research and
     development          27,221  (3,890)d  23,331  21,488  (1,394)d  20,094
    Selling, general and
     administrative       47,818 (10,021)e  37,797  33,552  (8,216)e  25,336
    Depreciation and
     amortization         16,483 (14,734)f   1,749  12,555 (11,176)f   1,379
    In-process research
     and development       8,000  (8,000)g       -   1,042  (1,042)h       -
    -------------------------------------------------------------------------
                         157,108 (38,372)  118,736 105,867 (21,828)   84,039
    -------------------------------------------------------------------------
    Operating (loss)
     income               (8,798) 40,827    32,029  29,684  21,702    51,386
    -------------------------------------------------------------------------
    Other (expense)
     income:
    Foreign exchange
     (loss) gain            (403)    403 i       -   2,306  (2,306)i       -
    Investment and other
     income                7,808  (5,577)j   2,231   4,517    (685)k   3,832
    Loss on sale/write-
     down of investments  (8,157)  8,157 l       -    (413)    413 m       -
    Interest expense on
     long-term debt      (25,695)  1,126 n (24,569)(12,286)    675 n (11,611)
    -------------------------------------------------------------------------
    Total other (expense)
     income              (26,447)  4,109   (22,338) (5,876) (1,903)   (7,779)
    -------------------------------------------------------------------------
    Income (loss) from
     continuing
     operations before
     income taxes and
     cumulative effect of
     change in accounting
     policy              (35,245) 44,936     9,691  23,808  19,799    43,607
    Income tax (recovery)
     expense             (14,940) 10,301 o  (4,639) 14,058  (2,513)o  11,545
    -------------------------------------------------------------------------
    Income (loss) from
     continuing
     operations before
     cumulative effect of
     change in accounting
     policy              (20,305) 34,635    14,330   9,750  22,312    32,062
    -------------------------------------------------------------------------
    Net loss from
     discontinued
     operations, net of
     income taxes         (5,791)  5,791         -    (787)    787         -
    -------------------------------------------------------------------------
    Cumulative effect of
     change in accounting
     policy                    -                 -     399    (399)        -
    -------------------------------------------------------------------------
    Net (loss) income for
     the period          (26,096) 40,426    14,330   9,362  22,700    32,062
    -------------------------------------------------------------------------

    Basic net (loss)
     income per common
     share from
     continuing
     operations            (0.24)             0.17    0.12              0.38
    Diluted net (loss)
     income per common
     share from
     continuing
     operations            (0.24)             0.17    0.12              0.37
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average
     shares outstanding
     (000's) - basic      85,008            85,008  84,593            84,593
    Weighted average
     shares outstanding
     (000's) - diluted    85,488            85,488  85,777            85,777
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    a.  Amounts accrued for costs incurred, and potential future costs,
        related to our offer to accept returns of Contour Threads brand
        product as part of the brand name consolidation and discontinuation.
    b.  Non-recurring, non-operating revenue as derived from license
        agreements with Histogenics Corporation ($0.4 million in 2007) and
        other license revenue, net of license fees due to licensors.
    c.  Change in estimate of accounting for excess and obsolete inventory
        resulting from the alignment during the second quarter of 2007 of
        inventory policies across our various manufacturing operations, and
        non-recurring supply/distribution agreement termination costs.
    d.  Research and development adjustments:
        ---------------------------------------------------------------------
                                                  Six months      Six months
                                               ended June 30,  ended June 30,
                                                        2007            2006
                                              -------------------------------
        Stock-based compensation                        (973)         (1,394)
        License fees due to licensors related
         to non-recurring license revenue               (419)              -
        Termination and reorganization costs
         related to the integration of AMI              (849)              -
        Non-recurring supply/distribution
         agreement termination costs                    (899)              -
        Non-recurring in-process research and
         development expense relating to the
         signing of a technology and
         intellectual property license
         agreement with an inventor                     (750)
        ---------------------------------------------------------------------
                                                      (3,890)         (1,394)
        ---------------------------------------------------------------------

    e.  Selling, general and administrative adjustments:
        ---------------------------------------------------------------------
                                                  Six months      Six months
                                               ended June 30,  ended June 30,
                                                        2007            2006
                                              -------------------------------
        Stock-based compensation                      (1,392)         (1,886)
        Termination and reorganization costs
         related to the integration of AMI            (3,385)              -
        Litigation expenses relating to
         defending intellectual property claims       (4,994)         (6,330)
        Non-recurring supply/distribution
         agreement termination costs                    (250)              -
        ---------------------------------------------------------------------
                                                     (10,021)         (8,216)
        ---------------------------------------------------------------------

    f.  Amortization of acquisition related intangible assets and medical
        technologies.
    g.  Non-recurring in-process research and development expense relating to
        payments to CombinatoRx. and Rex Medical Inc.
    h.  Non-recurring in-process research and development expense, relating
        primarily to $1.0 million payment due under license agreement with
        Poly-Med, Inc
    i.  Foreign exchange fluctuations on foreign currency net monetary
        assets.
    j.  Write off of uncollectible tax receivable and write off of certain
        capitalized costs, net of gain realized on recovery of investments.
    k.  Gain on sale of Palo Alto building - assets held for sale.
    l.  Net impact of loss and gain on redemption of investments of common
        share holdings in Orthovita Inc. and NuVasive, Inc., respectively.
    m.  Loss on redemption of investments.
    n.  Amortization of deferred financing costs.
    o.  Tax effects of adjustments a. through n. for the period, including
        the reversal of tax reserves previously booked. Comparative for 2006
        also includes non-recurring Quebec retroactive tax adjustment of
        $8.7 million.



                       ANGIOTECH PHARMACEUTICALS, INC.
                       CALCULATION OF ADJUSTED EBITDA
                                 (Unaudited)

                                    Three months ended      Six months ended
                                           June 30,              June 30,
    (in thousands of U.S.$)            2007       2006       2007       2006
    -------------------------------------------------------------------------

    Net (loss) income on a
     GAAP basis                     (15,215)     1,827    (26,096)     9,362
    Interest expense on
     long-term debt                  12,896     11,297     25,695     12,286
    Income tax (recovery) expense   (10,649)     9,578    (18,830)    13,967
    Depreciation and amortization     9,524     11,591     18,775     13,838
    -------------------------------------------------------------------------
    EBITDA                           (3,444)    34,293       (456)    49,453
    -------------------------------------------------------------------------
    Adjustments:
      Net loss from discontinued
       operations, excluding
       depreciation, amortization
       and income tax expense
       included above                   159        242      9,379        642
      In-process research and
       development                    8,000          -      8,000      1,042
      Non-recurring research and
       development costs                  -          -        750          -
      Non-recurring revenue, net
       of license fees                  (53)       (73)      (106)      (126)
      Stock-based compensation        1,305      1,780      2,364      3,280
      Litigation expenses             2,154      2,802      4,994      6,330
      Foreign exchange loss (gain)      505     (2,135)       403     (2,306)
      Investment and other income      (939)    (1,128)    (2,231)    (3,832)
      Severance                       1,846          -      3,984          -
      Supply/distribution agreement
       termination costs                250          -      2,199          -
      E&O inventory adjustment          927                   927          -
      Contour Threads potential
       return costs accrual           2,980          -      2,980          -
      Write-off of capitalized costs    280                   280          -
      Write-off of uncollectible
       tax receivable                 2,250          -      2,250          -
      Gain on sale of Palo Alto
       building                           -       (685)         -       (685)
      Gain realized on recovery
       of investment                      -     (1,064)    (7,510)    (1,064)
      Accrued interest income          (597)         -       (597)         -
      Net loss on redemption of
       investments                        -          -      8,157      1,477
      Cumulative effect of change
       in accounting policy               -          -          -       (399)
    -------------------------------------------------------------------------
    Adjusted EBITDA                  15,623     34,032     35,767     53,812
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                       ANGIOTECH PHARMACEUTICALS, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)

    As at                                                    June   December
    (in thousands of U.S.$)                              30, 2007   31, 2006
    -------------------------------------------------------------------------
    ASSETS
    Cash and short-term investments                       112,298    108,617
    Accounts receivable                                    25,408     25,231
    Inventories                                            36,286     33,619
    Deferred income taxes                                  11,775      5,372
    Other current assets                                    4,605      6,303
    Assets from discontinued operations, current portion    3,507      2,365
    -------------------------------------------------------------------------
    Total current assets                                  193,879    181,507
    -------------------------------------------------------------------------
    Long-term investments                                  31,869     53,840
    Property and equipment, net                            58,072     59,783
    Intangible assets, net                                235,938    244,955
    Goodwill                                              641,943    630,770
    Deferred income taxes                                   6,463      4,804
    Deferred financing costs                               14,718     14,845
    Other assets                                              704        255
    Assets from discontinued operations                     4,961     15,116
    -------------------------------------------------------------------------
    Total assets                                        1,188,547  1,205,874
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities                                    85,403     67,950
    Liabilities from discontinued operations                3,692      4,226
    Long-term debt                                        575,000    575,000
    Deferred income taxes                                  57,544     71,813
    Other tax liabilities                                   5,538          -
    Other long-term liabilities                             4,229      4,052
    Stockholders' equity                                  457,141    482,833
    -------------------------------------------------------------------------
    Total liabilities and stockholders' equity          1,188,547  1,205,874
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





For further information:

For further information: Analysts and Investors: Deirdre Neary, Manager,
Investor Relations and Corporate Communications, Angiotech Pharmaceuticals,
Inc., (604) 222-7056, dneary@angio.com; Media: Jodi Regts, Manager, Investor
Relations and Corporate Communications, Angiotech Pharmaceuticals, Inc., (604)
221-7930, jregts@angio.com

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