Angiotech Pharmaceuticals Inc. (NSDQ:ANPI) deferred $9.7 million in interest payments on debt that were due Oct. 1, looking to "effectuate a transaction that would materially reduce the company’s existing debt levels," the company said.
The Vancouver-based company staked its fortunes to Boston Scientific Corp. (NYSE:BSX) and the Taxus drug-eluting stent for which Angiotech makes the drug paclitaxel.
But with Taxus sales in the cellar and still falling, Angiotech has struggled. Royalties from Taxus sales (Angiotech pulls in about 6 percent of net sales worldwide) were off by 50 percent during the three months ended on June 30, falling to $8.9 million compared with $16.9 million during the same period last year.
Now the company is looking to restructure its debt load, negotiating with the holders of its senior subordinated notes to improve its balance sheet.
"The transaction, if completed and approved, would provide for substantial improvement in the company’s credit ratios, liquidity and operating flexibility," according to a press release (PDF).
Angiotech has more than $25 million in cash on hand, according to the release, and Wells Fargo Capital Finance LLC has agreed to leave a revolving credit line in place. The company also faces a de-listing from the NASDAQ stock exchange Jan. 3, 2011, if it can’t get its share price back above $1, according to Reuters.
Angiotech shares were trading at 48 cents in early-morning activity, down 3 percent.
The company, looking to put some eggs in baskets other than Boston Scientific’s, is working with Athersys Inc. (NSDQ:ATHX) to develop MultiStem, a stem-cell-based cardiovascular treatment.