AngioDynamics (NSDQ:ANGO) said it’s putting $11 million on the table for the licensing rights to resorbable microspheres developed by EmboMedics, marking its return to the embolization market it helped build.
Latham, N.Y.-based AngioDynamics, which yesterday reported declining numbers for its fiscal 3rd quarter, said the deal with EmboMedics calls for an initial $2 million equity investment and another possible $9 million investment and an exclusive option to buy.
"AngioDynamics previously helped to build the embolics market, and with worldwide rights to a margin accretive, truly novel technology, we are poised to emulate that success. We believe resorbable microspheres represent the future of embolotherapy, allowing for more options in the treatment of patients, and we are excited about the prospect of bringing this technology to our customers worldwide," president & CEO Joseph DeVivo said in prepared remarks.
EmboMedics expects to file for 510(k) clearance from the FDA for the resorbable microspheres by January 2016, according to AngioDynamics.
"EmboMedics has focused on advancing minimally-invasive embolization with resorbable technologies, improving the patient experience by designing biodegradable materials that will no longer remain in the arteries indefinitely," EmboMedics co-founder & CEO Omid Souresrafil said in a press release. "We are excited to partner with AngioDynamics, leveraging our technology with its world class sales force and distribution network as we look to introduce our product to the global marketplace."
Share price slides on fiscal Q3 numbers
ANGO shares were down 8.9% to $16.62 apiece in mid-day trading today after the company missed Wall Street’s forecast for its fiscal 3rd-quarter results.
AngioDynamics reported losses of -$4.3 million, or -12¢ per share, on a sales decline of -1.8% to $86.6 million for the 3 months ended Feb. 28. That compares with profits of $4.5 million during Q3 2014, the company said.
Adjusted to exclude 1-time items, earnings per share reached 12¢, 4¢ below expectations on The Street.
"We delivered mixed financial results in the fiscal 2015 third quarter," DeVivo said. "Facing an extremely difficult operating environment, coupled with a decision to withdraw from the market our Morpheus PICC product line, we delivered at the low end of our expectations, excluding currency effects. Otherwise our team continues to execute well, driving more of our top line to higher growth thanks to our focus on innovative products that improve patient outcomes and reduce overall healthcare costs."
AngioDynamics also said it decided to scrap its Morpheus peripherally inserted central catheter after recalling the device during the quarter. A cost-benefit analysis after the recall, "coupled with the favorable market response to the company’s BioFlo product offerings," prompted the move, the company said.
CFO Mark Frost said that although the Morpheus cancellation "will drive longer-term strategic benefits," the short-term impact and foreign currency headwinds mean a lowered outlook for the rest of the year. AngioDynamics now expects to post adjusted EPS of 57¢ to 60¢ on sales of $356 million to $360 million, down from $362 million to $368 million.
"We are anticipating revenue to range from $90 million to $94 million in the 4th quarter, 3% at the top end on a constant currency basis and excluding our supply agreement," Mr. Frost continued. "Adjusted EPS without amortization is expected to be 13¢ to 16¢."