Angiotech to Sell Interventional Business to Argon Medical Devices

March 25, 2013—Angiotech Pharmaceuticals, Inc. (Vancouver, BC) announced that it had entered into a definitive agreement to sell certain of its subsidiaries to Argon Medical Devices, Inc. (Plano, TX) for $362.5 million. Argon will acquire all manufacturing, commercial, and administrative operations relating to Angiotech's interventional products business. Angiotech expects the transaction will close before the end of April 2013.

According to Angiotech's press release, the key product lines in the interventional business include Angiotech's BioPince full-core biopsy devices, the fully automatic Tru-Core II and semiautomatic SuperCore disposable biopsy instruments, T-Lok bone marrow biopsy devices, and Skater drainage catheters, among other products. Angiotech's interventional products business also manufactures components for other third-party medical device companies and operates manufacturing facilities in Wheeling, Illinois; Gainesville, Florida; and Stenlose, Denmark.

Angiotech will continue to operate its royalty business, which is composed of a portfolio of intellectual property relating to a variety of biomaterial, drug, and medical device technologies and technology applications. The most significant intellectual property in this portfolio is related to the use of the drug paclitaxel in treating certain conditions, including certain side effects that may occur coincident with the implantation of medical devices. Angiotech has licensed this aspect of its intellectual property portfolio to its partners Boston Scientific Corporation (Natick, MA) and Cook Medical (Bloomington, IN) for application in drug-eluting stents used to treat coronary and peripheral artery disease. Virtually all of Angiotech's Royalty Business revenue in 2012 was derived from royalties received from Boston Scientific and Cook Medical, stated the company.

According to Angiotech, the sale marks a culmination of turnaround efforts that were initiated upon concluding the company's 2011 restructuring. Angiotech will focus on its surgical products business, including the Quill knotless tissue closure device, Look brand sutures for general and dental surgery, Sharpoint UltraGlide and Microsurgical sutures, and ophthalmic products such as the Sharpoint brand ophthalmic surgical blades.

Angiotech will also retain all intellectual property, rights, assets and inventory related to its BioSentry (formerly Bio-Seal) product line. Coincident with the transaction, Angiotech concluded a 3-year manufacturing and supply agreement with Argon with respect to BioSentry. As part of this agreement, Argon will not have commercialization rights to BioSentry. Angiotech will continue the commercial launch activities for this product line in the United States, where it recently received regulatory approval.

The press release advised that the transaction is subject to approval of Angiotech shareholders. Shareholders representing approximately 70% of Angiotech's outstanding shares have signed voting agreements in connection with the transaction and have agreed to vote their shares in favor of the proposed transaction. 
The transaction is conditioned on, among other things, expiration of applicable waiting periods under the United States' Hart-Scott-Rodino Act.

Argon Medical Devices is a portfolio company of RoundTable Healthcare Partners (Lake Forest, IL), an operating-oriented private equity firm focused exclusively on the healthcare industry. RoundTable's announcement of the transaction noted that Angiotech had acquired the interventional products business from RoundTable in 2006 as part of Angiotech's purchase of RoundTable's American Medical Instruments Holdings, Inc. (“AMIH”) investment. In 2003, RoundTable created AMIH by combining the formerly independent Manan Medical, MD Tech, PBN Medical, and American Medical Instruments into a consolidated operating unit.