Angiotech Pharmaceuticals, Inc. announced that Rex Medical LP has initiated arbitration and court proceedings against Angiotech Pharmaceuticals, (US), Inc. with respect to the parties’ respective rights and obligations under the License, Supply, Marketing and Distribution Agreement between Angiotech US and Rex, dated March 13, 2008.

Subsequent to various business discussions between the parties, Angiotech determined its need to deliver a notice to Rex, which stated Angiotech’s determination that in light of the company’s recent and substantially changed business, operating and liquidity conditions, it would not be commercially reasonable for Angiotech to continue with the existing structure of the Agreement. Subsequent to its receipt of said notice, Rex commenced arbitration proceedings in which it alleges that Angiotech wrongfully terminated the Agreement and are seeking monetary damages in excess of $3 million as well as costs, fees and expenses in connection with the arbitration proceeding.

In addition to the arbitration proceedings, Rex has initiated an action in the United States District Court for the Southern District of New York, entitled Rex Medical, LP v. Angiotech Pharmaceuticals (US), Inc., 1:10- cv -08746-CM (the “Federal Injunction Litigation”). The Petition in the Federal Injunction Litigation seeks temporary and preliminary injunctive relief in aid of the arbitration. Over Angiotech’s objection, Rex has been granted a temporary restraining order requiring Angiotech to continue performing under the Agreement pending the Court’s consideration of Rex’s petition for a preliminary injunction in aid of the arbitration. The Court is scheduled to hear arguments on Monday, November 29, 2010 at 10:00 a.m. with respect to a preliminary injunction.

Given the early stages of these proceedings, it is not possible at this time to predict the outcome of the Federal Injunction Litigation or the arbitration. The Company intends to vigorously defend both the Federal Injunction Litigation and the arbitration.