After kicking off 2024 with the news that it had begun restructuring its manufacturing footprint, and following last summer’s sell-off of two product portfolios, AngioDynamics is putting more of its vascular devices on the chopping block.
The Latham, New York-based company has inked a deal to sell off its peripherally inserted central catheter (PICC), midline and tip location products to Spectrum Vascular, it announced late Thursday. The deal saw Spectrum shell out $34.5 million at the deal’s closing while pledging to pay another $5.5 million in earnout payments based on the products’ sales over the next two years. AngioDynamics will also net a $5 million milestone payment once the devices’ production has been transferred to a third-party manufacturer.
Meanwhile, AngioDynamics announced that it has stopped selling the Uniblate and StarBurst radiofrequency ablation devices, plus its Syntrax line of support catheters.
Together, the sold-off and discontinued assets were responsible for about $50 million of AngioDynamics’ annual revenue last fiscal year, with the lion’s share coming from the PICC, midline and tip location products. However, with the slimdown also heralding the elimination of “certain sales, marketing and operational expenses,” AngioDynamics said it’s expecting the changes to have an ultimately positive impact on gross margins for its fiscal year 2024—while having a “slightly dilutive” effect on earnings per share.
In the deal announcement, AngioDynamics CEO Jim Clemmer said that the sale to Spectrum marks “another significant milestone in our transformation” and will support the company’s goal of optimizing its portfolio to focus only on the highest-growth markets for vascular devices.
“This transaction, combined with the discontinuation of our radiofrequency ablation and Syntrax products, further strengthens our balance sheet, optimizes our product portfolio and deepens our strategic focus on driving growth and profitability within our NanoKnife, Mechanical Thrombectomy and Auryon businesses,” Clemmer said.
The CEO noted that the newly announced changes build on both AngioDynamics’ recently laid-out restructuring plan and another asset sale it conducted last year.
That sale saw the company agree last June to exchange its dialysis product portfolio and BioSentry tract sealant system biopsy product—which together had added around $32 million to AngioDynamics’ total annual sales—for $100 million in cash from Merit Medical Systems. AngioDynamics said at the time that the funds would go toward paying down debts and investing in new paths toward profitability and growth.
Just a few months later, alongside the release of its fiscal second-quarter earnings report in January, the devicemaker announced that it had initiated a restructuring of its manufacturing operations, with plans to transition to an entirely outsourced model. With that change, Clemmer suggested that AngioDynamics would be able to achieve profitability by its fiscal year 2027.
The cost-cutting moves come as AngioDynamics falls further into the red. It wrapped up its fiscal year 2023 at the end of May with net sales of $338.8 million, and though that marked an increase of more than 7% year over year, the company also saw its net loss nearly double during the same period, from $26.5 million in 2022 to $52.4 million last year. After the first half of this year, meanwhile, its net loss was already sitting at $29 million.