"We were pleased to observe continued sales growth in our Proprietary Medical Products business during the quarter, including continued acceleration of our important Quill(TM) SRS and HemoStream(TM) product lines," said Dr. William Hunter, President and CEO of Angiotech. "Despite the continued challenges we are experiencing in certain parts of our Base Medical Products business, the continued stabilization of our TAXUS(R)-derived royalty revenue, the possibility that Cook's Zilver(TM) paclitaxel-eluting peripheral stent may contribute additional royalty revenue and the recent FDA approval of our Option(TM) Inferior Vena Cava Filter leave us optimistic about the second half of 2009 and 2010."

Second Quarter Financial Highlights

- Total revenue was $64.6 million.

- Net product sales were $47.2 million. Sales of our Proprietary

Medical Products were $13.5 million, or 29% of total product sales.

Sales of our Base Medical Products were $33.7 million, or 71% of

total product sales.

- Royalty revenue was $17.0 million.

- Adjusted EBITDA (earnings before interest, taxes, depreciation and

amortization, adjusted to exclude certain non-cash and non- recurring

items) was $12.6 million.

- Research and development expenses were $6.8 million, and as adjusted

to exclude non-cash stock-based compensation expenses and other non-

recurring costs were $6.1 million.

- Selling, general and administrative expenses were $21.6 million, and

as adjusted to exclude non-cash stock-based compensation expenses,

certain litigation costs, non-recurring financing fees and other non-

recurring costs were $19.0 million.

- GAAP net loss and net loss per share for the quarter were ($11.9)

million and ($0.14), respectively.

- Adjusted net loss and adjusted net loss per share for the quarter

were ($1.8) million and ($0.02), respectively.

- As of June 30, 2009, cash and short-term investments were $52.3

million and net debt was $522.7 million.

Second Quarter Highlights

Proprietary Medical Products. Certain of our product lines, which we refer to as our Proprietary Medical Products, are marketed and sold by our two direct sales groups. We believe certain of these product lines contain technology advantages that may provide for more substantial revenue growth potential as compared to our overall product portfolio. Our significant currently marketed Proprietary Medical Products include (i) our Quill(TM) SRS wound closure product line, which is marketed and sold by our Surgical Products Sales Group, and (ii) our HemoStream(TM) dialysis catheter, our Skater(TM) line of drainage catheters, our BioPince(TM) full core biopsy device, our EnSnare(TM) retrieval device and our V+Pad(TM) hemostatic pad which are marketed and sold by our Interventional Products Sales Group. Our Proprietary Medical Products continued to demonstrate higher revenue growth as compared to our overall product portfolio, consistent with recent prior quarters. Revenue growth for these products in the second quarter of 2009 was approximately 15% as compared to the second quarter of 2008 and 4% as compared to the first quarter of 2009. Excluding the impact of foreign currency changes between the respective periods, the revenue growth figures indicated above would have been 21% and 3%, respectively.

Base Medical Products. Certain of our product lines, which we refer to as our Base Medical Products, represent more mature finished goods product lines in the ophthalmology, biopsy and general surgery areas, or medical device components manufactured by us and sold to other third-party medical device manufacturers who assemble those components into finished medical devices. Sales of our Base Medical Products are supported by a small group of direct sales personnel, as well as a network of independent sales representatives and medical product distributors. Sales of our Base Medical Products tend to exhibit greater volatility or slower relative growth, particularly our sales of components to third party medical device manufacturers, which may be impacted by customer concentration and the business issues that certain of our large customers may face, as well as to a more limited extent by economic and credit market conditions. Sales of our Base Medical Products declined by approximately 13% in the second quarter of 2009 as compared to the second quarter of 2008, and increased by approximately 2% as compared to the first quarter of 2009. Excluding the impact of foreign currency changes, revenue would have declined by 10% as compared to the second quarter of 2008. Foreign currency fluctuations did not have an impact on the change from the first quarter of 2009.

The decline in our Base Medical Products sales as compared to the second quarter of 2008 is due primarily to lower sales of medical device components to other third party medical device manufacturers, generally relating to certain customers that have postponed or cancelled orders, or implemented inventory reduction programs in response to changing economic and credit market conditions, and more particularly relating to cancelled orders for surgical needles by one of our largest customers. Manufacturing of surgical needles, as of November 2008, was fully transferred to our facility in Aguadilla, Puerto Rico from our facility in Syracuse, New York. We believe that the closure of our Syracuse production facility in November and the finalization of our move of surgical needle production to Aguadilla, combined with the difficult economic and credit market environment, may have negatively impacted our Base Medical Product sales during the second quarter of 2009 as compared to the second quarter of 2008. We currently expect that certain of our customers may increase their order levels later in 2009, however, there can be no assurance that we will record sales of surgical needles to these customers at levels observed in prior periods.

Royalty Revenue. We generate significant revenue derived from royalties paid to us by partners that develop, market and sell products incorporating certain of our proprietary technologies. Currently, our principal revenues in this segment are from royalties derived from sales by Boston Scientific Corporation ("BSC") of TAXUS(R) coronary stent systems incorporating the drug paclitaxel. TAXUS stents have been evaluated by the industry's most extensive randomized, controlled clinical trial program, with patient follow- up out to five years in some cases. BSC's controlled clinical trial results have been supplemented by data on more than 35,000 patients enrolled in post-approval registries. To date, approximately 11 million TAXUS stents have been implanted globally, making them the world's most frequently used coronary stents.

Royalty revenue derived from sales of TAXUS stents by BSC for the second quarter of 2009 decreased by 32% as compared to the second quarter of 2008. The decrease in royalty revenues was a result of lower sales of TAXUS stents by BSC, driven primarily by the entry of new competitors into the drug-eluting coronary stent market during the second half of 2008. As compared to the first quarter of 2009, our royalty revenue derived from sales of TAXUS stents increased by 7.9%. The second quarter of 2009 represented the second consecutive quarter where modest increases in our TAXUS-derived royalty revenue were observed, indicating that sales levels for TAXUS may have stabilized after several quarterly periods of significant decline.

Royalty revenue for the second quarter of 2009 was based on BSC's net sales for the period January 1, 2009 to March 31, 2009 of $252 million, of which $119 million was in the United States, compared to net sales of $353 million for the second quarter of 2008, of which $195 million was in the United States. The average gross royalty rate earned in the three month period ended June 30, 2009 on BSC's net sales was 6.6% for sales in the United States and 6.2% for sales in other countries.

Option(TM) Inferior Vena Cava Filter. In June 2009, we announced that the United States Food and Drug Administration ("FDA") had granted 510(k) clearance for the Option(TM) Inferior Vena Cava ("IVC") Filter, for use in both permanent and retrievable indications. We commenced commercial sales of the Option IVC Filter in the United States in July 2009.

IVC filters are implanted in patients that are at high risk for developing pulmonary embolism, which can be a life threatening condition. IVC filters are implanted in the inferior vena cava and are designed to catch clot material to prevent it from reaching the lungs, while allowing blood to continue to flow normally. Patients at high risk for pulmonary embolism are typically patients undergoing a significant surgical procedure, trauma patients or patients that have experienced a previous embolic event. IVC filters have been shown in several studies to significantly reduce the risk of pulmonary embolism and related mortality in certain high risk patient populations. In certain cases, once the risk of an embolic event has passed, the IVC filter will be removed in a subsequent surgical procedure. We believe the Option IVC Filter may have a number of potential competitive benefits, which include a unique filter design that may reduce the potential for filter migration after implantation, thereby making the product safer for patients, insertion potential through either the femoral or jugular route, which may make the product easier for a physician to use, and the use of non-thrombogenic material which reduces the risk of blood clots occurring in the filter. We also believe the unique design of the Option IVC Filter may allow physicians to remove or retrieve the device from patients more easily, or after longer periods of time have passed as compared to existing competitive IVC filters.

The Option IVC Filter was approved based upon the results of a United States multi-center prospective clinical trial. The purpose of the clinical trial was to evaluate the device's safety and efficacy in preventing pulmonary emboli, and to assess the ability to retrieve the device from the body up to 175 days following implantation. The results, representing a total of 100 patients, were presented at the 2009 Society of Interventional Radiology in San Diego, CA on March 9, 2009. Successful filter implantation was achieved in 100% of the subjects and the retrieval rate in the study was 92.3%. Clinical success, which was achieved in 88% of subjects, was defined as placement of the filter without subsequent pulmonary embolism, significant filter migration or embolization, symptomatic caval thrombosis or other complications requiring filter removal or invasive intervention.

The Option IVC Filter was licensed in March 2008 from our partner Rex Medical L.P. ("Rex Medical"). We are obligated to pay royalties and milestone payments to Rex Medical derived from our sales of the Option IVC Filter. We made a milestone payment of $2.5 million to Rex Medical upon 510(k) clearance of the Option IVC Filter during the second quarter of 2009 and recorded the payment as an intangible asset.

License, Distribution, Development and Supply Agreements with Haemacure Corporation. In June 2009, we announced that we had entered into license, distribution, development and supply agreements for fibrin and thrombin technologies with Haemacure Corporation ("Haemacure"). The collaboration provides us with access to technology for certain of our surgical product candidates which are currently in preclinical development. As part of this collaboration, we have agreed to provide to Haemacure a senior secured bridge financing facility. The senior secured bridge loan will provide $2.5 million to Haemacure in multiple draw-downs throughout 2009. The loan will be senior to all of Haemacure's existing and future indebtedness, subject to certain exceptions, will bear interest at an annual rate of 10%, compounded quarterly, and will have a term of two years. We may, at our sole discretion, during a period of two years, advance up to an additional $1 million to Haemacure from time to time, in multiple draw-downs, for a total loan amount of $3.5 million. The senior secured bridge loan also has certain equity conversion features and rights to board representation upon conversion. As of June 30, 2009, $1.2 million of the loan has been drawn upon by Haemacure and a further $0.6 million of the loan, which had been accrued at June 30, 2009, was drawn upon subsequent to June 30, 2009. Of the total of $1.8 million paid and accrued, $1.2 million has been classified as other assets and $0.6 million has been classified as prepaid expenses and other current assets.

New TAXUS Regulatory Approvals and Clinical Data. In July 2009, we announced that our partner BSC, had received approval from the FDA to market its TAXUS Liberte Long(TM) paclitaxel-eluting coronary stent system, a next-generation paclitaxel-eluting stent specifically designed for treating more diffuse coronary artery disease with a single coronary stent. At 38 mm, it is the longest available paclitaxel-eluting stent, providing physicians an option that can potentially reduce the number of stents used in more complex cases, simplifying procedures and reducing costs. It affords a more efficient treatment option for the estimated 8 to 10 percent of patients with long lesions. BSC plans to launch the product in the United States in August 2009. In May 2009, we announced that our partner BSC, had received approval from the FDA to market its TAXUS(R) Liberte(R) Atom(TM) paclitaxel-eluting coronary stent system, a next-generation paclitaxel-eluting stent specifically designed for treating small coronary vessels. It was approved for use in vessels as small as 2.25 mm in diameter and joins the TAXUS Express Atom(TM) stent as the only drug-eluting stents ("DES") approved for small vessel use in the United States.

In May 2009, we announced that our partner BSC had launched the platinum chromium TAXUS Element(TM) paclitaxel-eluting coronary stent system in select markets worldwide. The platinum chromium TAXUS Element paclitaxel-eluting coronary stent system is the third- generation BSC coronary stent platform that incorporates our research, technology and intellectual property related to the use of paclitaxel. The TAXUS Element stent features BSC's proprietary platinum chromium alloy, which is designed to enable thinner stent struts, increased flexibility and a lower stent profile while improving radial strength, recoil and radiopacity. In addition, the TAXUS Element stent platform incorporates new balloon technology intended to improve upon BSC's market-leading Maverick(R) balloon catheter technology.

New Independent TAXUS Clinical Data. In May 2009 we announced that our partner BSC had welcomed the publication of an article in the Journal of the American College of Cardiology (JACC) reviewing data on more than 19,000 patients from the Swedish national registry who were evaluated for restenosis, or the re-narrowing or arteries, after percutaneous coronary intervention ("PCI"). The Swedish Coronary Angiography and Angioplasty Registry holds data on all patients undergoing PCI in Sweden. The objective of this independent study was to evaluate restenosis rates of DES's in patients with and without diabetes in a real-world setting. The article reported that patients who received a TAXUS Liberte paclitaxel-eluting stent had numerically lower incidences of repeat procedures to treat restenosis at two years as compared to patients treated with 'olimus- based DES's, including Johnson & Johnson, Inc.'s Cypher(R) Stent and Medtronic Inc.'s Endeavor(R) Stent.

In the patients with diabetes, the TAXUS Liberte demonstrated a statistically significant lower restenosis rate compared to the Endeavor, which had more than two times the risk of repeat procedures. The JACC article reported that both the TAXUS Liberte stent and BSC's first-generation paclitaxel-eluting stent, the TAXUS Express, were the only stents in the study showing no increased risk of restenosis for patients with diabetes as compared to those without diabetes. Data for both the Cypher and Endeavor stents indicated significant increased risk of restenosis in patients with diabetes. In addition, the study showed that the TAXUS Liberte had an approximately 23 percent lower restenosis rate at two years compared to the prior-generation TAXUS Express.

The Swedish registry study included four DES brands: TAXUS Liberte, TAXUS Express, Cypher and Endeavor.