A federal judge in Delaware rubber-stamped Angiotech Pharmaceutical’s (OTC:ANPI) bankruptcy plan, writing that it’s the best deal possible and serves the interest of "international comity."
The settlement, already approved by the Supreme Court of British Columbia, is aimed at eliminating $250 million in debt under Canada’s Companies’ Creditors Arrangement Act. It will largely wipe out the company’s existing shareholders, apart from a group connected with its 2006 acquisition of Quill Medical Inc.
But it’s still "in the interests of the public and international comity" and "will not cause hardship to any party in interest that is not outweighed by the benefits," wrote Judge Kevin Gross of the U.S. Bankruptcy Court for Delaware, according to court documents.
The Vancouver-based maker of paclitaxel, the drug used in Boston Scientific Corp.’s (NYSE:BSX) Taxus coronary stents, filed for bankruptcy in late January. Earlier this month Angiotech said it would give creditors with claims of $5,000 to $31,250 10 days to decide whether to accept a $5,000 cash settlement. Creditors owed more than $31,250 could elect to receive a cash settlement of 16 cents on the dollar, up to $24,000. The countdown was slated to begin today, coincident with Angiotech’s annual shareholders meeting.
The meeting must have gone well, at least from the standpoint of getting the bankruptcy over with. Angiotech said 100 percent of the creditors agreed to the restructured pay deal and that it would submit the deal to the Canadian courts for approval.
Angiotech officials said recently that its net losses widened during the three months ended Dec. 31, 2010, rising to $11.8 million.
The company attributed the losses to a continued, downward slide of royalty revenues from Taxus sales, which declined by 59 percent during the quarter to just more than $6 million (compared to $13.5 million during Q4 2009). Angiotech reaps around 6 percent of the net sales of Taxus stents worldwide from royalties for BSX’s use of its product.
Since hitting a high-water mark in 2005, Angiotech’s royalty revenues from paclitaxel-eluting coronary devices have plummeted in subsequent years.
Boston Scientific is still the worldwide leader in drug-eluting stents, but a steady increase in competition from other DES makers like Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ) subsidiary Cordis Corp. and Medtronic Inc. (NYSE:MDT) has cut into those sales significantly.
ANPI stock was de-listed from the Toronto Stock Exchange March 3, after it failed to meet the market’s trading requirements.