Angiotech Overcomes Royalty Pain

Despite lower royalty revenue from stent sales, the company meets EPS expectations.
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Angiotech Pharmaceuticals


shares lifted Tuesday when the company said it met analysts' expectations for first-quarter earnings despite falling short on revenue.

On a GAAP basis, the Vancouver-based company earned $8 million, or 9 cents a share, in the quarter vs. $19.2 million, or 23 cents share, a year earlier. According to the company, the decrease was primarily due to lower royalty revenue from sales of

Boston Scientific's

(BSX) - Get Report

drug-eluting coronary stents.

Excluding certain charges, Angiotech earned 16 cents a share, in line with analysts' estimates. Minus certain litigation expenses, the company earned 19 cents a share. Shares closed Tuesday up 12 cents, or 0.8%, at $14.82.

Revenue for the quarter came in at $41.9 million, including $39.4 million in royalties from Boston's stents. Analysts were expecting Angiotech's top line to reach $49.25 million. Boston has a licensing agreement with Angiotech to use the drug paclitaxel to coat its stents, which are heart devices used to prop open vessels cleared of plaque. The drug is used to prevent vessel reclogging.

Separately, Angiotech has closed its acquisition of American Medical Instruments Holdings for $787.9 million in cash, plus an acquisition cost of $8.2 million. Angiotech will begin reporting American Medical Instruments results as a part of its overall results starting with the second quarter.