Angiotech Announces Results For 2008 Second Quarter

"Our operating businesses continued to deliver results in the second quarter, with our Medical Products segment sales exceeding $50 million," said Dr. William Hunter, President and CEO of Angiotech. "Our various promoted brands again exhibited strong sales performance in the quarter, and we believe that we can achieve our full year objectives for sales growth, margin improvement and new product introductions."

Significant Recent Developments

On July 7, 2008, we announced that our Board of Directors authorized a transaction to establish separate operating and royalty businesses. For further information, please refer to the preliminary proxy statement filed with the SEC on July 22, 2008, available at www.sec.gov .

Second Quarter Financial Highlights

- Total revenue was $76.1 million.

- Net product sales were $50.5 million.

- Royalty revenue was $25.5 million.

- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, adjusted to exclude certain non-cash and non-recurring items) was $5.9 million.

- GAAP net loss and net loss per share from continuing operations were $26.1 million and $0.31, respectively.

- Adjusted net loss from continuing operations and adjusted net loss per share from continuing operations (GAAP net loss as adjusted to exclude certain non-cash and non-recurring items) were $7.4 million and $0.09, respectively.

- As of June 30, 2008, cash and cash equivalents and long-term investments were $81.0 million and net debt was $494.0 million.

Second Quarter Business Highlights

- Promoted Brand Strategy. Sales of our group of currently marketed promoted brand products continued to demonstrate higher revenue growth as compared to our overall product portfolio, consistent with the prior quarter. Revenue growth in our group of promoted brand products was approximately 54%, contributing to an aggregate growth rate of approximately 11% in total product revenue in the second quarter of 2008 as compared to the comparable quarter of 2007. During the second quarter, we launched our HemoStream chronic dialysis catheter in the U.S. as part of our promoted brands group, taking our total number of promoted brands available for sale to six, and we expect HemoStream to begin to contribute to sales of our Interventional business more significantly in the second half of 2008 and thereafter.

- Base Medical Products Sales. Sales of products outside of our promoted brand product group also experienced growth during the quarter. Revenue growth in our base Surgical, Interventional and Specialties businesses (excluding promoted brands) was approximately 6% in the second quarter of 2008 as compared to the second quarter of 2007, reflecting the continued benefits of the realignment of our sales force completed at the end of 2007 and continued customer stability and growth in our Specialties business, which primarily sells medical devices and medical device components to other third party medical device makers.

- Quill SRS. Adoption of our Quill Self Retaining System ("SRS") product line continued in the second quarter, consistent with the trends observed in the first quarter of 2008. On June 13, 2008, we announced the market launch of Monoderm, a new line of our Quill SRS product line made from a rapidly resorbing polymer, which is intended primarily for superficial wound closure applications. The product is now available for distribution and sale in the U.S. and Europe.

- 5-FU Central Venous Catheter. On April 17, 2008 our 5-FU-eluting central venous catheter (CVC) product received 510(k) marketing clearance from the U.S. Food and Drug Administration (FDA). We currently expect to commercially launch our 5-FU CVC in the U.S. in the second half of 2008 under the brand name MicrobX.

- Bio-Seal Lung Biopsy Tract System. On June 3, 2008, we announced the completion of our U.S. clinical trial enrolment for our novel Bio-Seal lung biopsy tract plug. Bio-Seal is a novel technology designed to reduce the incidence of post-operative pneumothorax (collapsed lung) in patients who undergo lung biopsy procedures. The primary endpoint of the Bio-Seal study is a reduction in the incidence of pneumothorax in patients undergoing lung biopsy procedures when compared with patients who do not receive the Bio- Seal product. The product has already received CE Mark approval and is available for commercial sale in Europe.

- Zilver PTX Paclitaxel-eluting Peripheral Stent. On June 11, 2008, our partner Cook Group Incorporated reported positive interim results from the registry arm of a clinical study designed to measure the efficacy of the Zilver PTX in treating peripheral arterial disease (PAD). The results were reported by trial investigators at the 2008 SVS Vascular Annual Meeting, and revealed clinical improvement, excellent durability and fracture resistance, high rates of event-free survival ("EFS") and freedom from target lesion revascularization ("TLR"). Interim data was compiled at six and 12 months using 435 patients and 200 patients, respectively. The corresponding EFS rates were 94 percent and 84 percent, and freedom from TLR was 96 percent and 88 percent. Evaluation of stent x-rays is ongoing, and currently suggests stent fractures in approximately one percent of cases at six months and less than two percent of cases at 12 months. In addition, the Zilver PTX stent exhibited no safety concerns and results were better than expected for TASC class C and D lesions, occlusions, in-stent restenosis and lesions greater than seven centimeters. Follow-up to the registry arm of the study is expected to continue through two years. -- www.cnxmarketlink.com