Angiotech Pharmaceuticals, Inc. has entered into a definitive agreement to acquire the Lifespan ePTFE vascular graft business, located in Laguna Hills, California, from Edwards Lifesciences Corporation for $14 million in cash. The transaction is subject to approval from Edwards Lifesciences' board of directors.

According to a company release, the agreement includes a distribution arrangement with Edwards, whereby Edwards will retain certain rights to distribute the existing Lifespan product line globally for a period of up to five years as well as become the exclusive distributor of Angiotech's Vascular Wrap paclitaxel-eluting mesh products as packaged in combination with the Lifespan vascular graft products in the European Union for a period of up to three years following regulatory approval.

Angiotech has the right at any time to exercise co-distribution rights to the standalone Lifespan product line in the United States, and can also co-distribute the standalone products in the European Union after a period of three years. Angiotech has retained all distribution rights with respect to Vascular Wrap products packaged in combination with ePTFE vascular grafts in the United States, and with respect to any standalone Vascular Wrap products worldwide. Angiotech expects the transaction to close in the fourth quarter of 2005.

"Our transaction and partnership with Edwards significantly enhances the financial potential of Angiotech's Vascular Wrap product development programme for an investment of $14 million. In a single step, we have secured a near-term distribution relationship for our Vascular Wrap product in the European Union as well as an additional future revenue opportunity for Angiotech, as we now can potentially generate revenue from the direct sale by Angiotech of ePTFE vascular grafts as well as our Vascular Wrap product, should our product development efforts prove successful. In addition, this is a non-dilutive transaction, as at the current revenue levels this operation is expected to be a positive contributor to our cash flow and earnings while we conduct clinical studies and pursue various regulatory approvals for the Vascular Wrap product," said Tom Bailey, vice president, business development of Angiotech.

As peripheral vascular disease has increased, the number of bypass procedures has also increased. Typically in a bypass procedure, vascular surgeons circumvent a clogged artery using either a vein harvested from a patient's body or a synthetic graft made from synthetic materials, such as ePTFE, that have optimal stability and resistance to degradation. Over the last 20 years, ePTFE has become the gold standard for synthetic vascular grafts.

The Edwards Lifespan ePTFE product line has over 75 product iterations and includes vascular grafts of various sizes and lengths. Edwards's distribution network for the products includes a full line vascular sales force in excess of 20 direct sales representatives in both the US and Europe supplemented by a number of independent distributors.