Boston Scientific to sell its cardiac and vascular surgery businesses

The company’s case volume in the first quarter increased to 31,765 cases, up 32%, compared with the same period in 2008. The customer base of oncology and pathology practices in the US increased to more than 950 active clients at March 31, 2009, from 900 active clients at December 31, 2008.

With our nineteenth consecutive quarter of revenue growth, and 56 new pathology clients within the quarter, we continue to demonstrate the strength of our brand within the pathology community, said Ron Andrews, vice chairman and chief executive officer of the company. Our record of solid revenue growth combined with our third consecutive quarter of operating profit and the new strength of our balance sheet, places Clarient at an important inflection point. We are now extremely well positioned to take advantage of opportunities that strengthen our menu in key cancers and expand our geographic reach. The capital market crisis has left many biotech companies with promising new tests and no way to raise the necessary capital to bring their discoveries to market. This has created an opportunity for Clarient to use its powerful commercial engine to facilitate commercialization of these new advanced tests. In executing this phase of our strategy, we will maintain a focus on profitability by applying an investment discipline with a bias for accretive growth.

The company’s operating income for the first quarter of 2009 was $0.8 million compared with an operating loss of $0.1 million for the same period of 2008.

In the current quarter of 2009, the company benefited from a $1.5 million gain on discontinued operations from the satisfaction of post-closing conditions related to the divestiture of its instrument systems business in March of 2007.

Adjusted EBITDA (defined below) for the 2009 first quarter was $2.2 million, compared to adjusted EBITDA of $1.0 million in the first quarter of 2008.

Operating expenses were $12.6 million for the first quarter of 2009, up 46% from $8.7 million in the same quarter of 2008. The increase in operating expenses was largely driven by an increase in the hiring of 14 sales representatives, increased bad debt expense, higher stock compensation expense, and legal and accounting expenses related to certain business development activities.

At March 31, 2009, the company’s cash and cash equivalents totaled $4.7 million compared to $1.8 million at December 31, 2008.

The company’s balance sheet is markedly stronger, due to our private placement of up to $50 million in convertible preferred stock with Oak Investment Partners, said Ray Land, senior vice president and chief financial officer of the company. We expect to complete the second tranche of $10.1 million on or about May 14, 2009, which will allow us to extinguish most of the Company’s outstanding debt and provide working capital to fuel Clarient’s continued growth. The private placement also allows the Company to avoid $12 million in interest expense, fees, and amortization expense for the remainder of 2009.

Land reiterated the company’s expectations for annual revenue in the range of $93 million to $98 million, as well as positive adjusted EBITDA and operating income for the year.

Today, Clarient offers community pathologists more than 320 tests to identify and characterize more types of cancer than ever before, Andrews concluded. With our new breast cancer test now on the market, a solid pipeline of new tests on the horizon, and growing relationships with the pathology community, pharma and academia, we believe Clarient is well positioned to fulfill our vision of being the leading molecular pathology company in the industry. Our mutual goal is to assist clinicians in their efforts to treat patients more efficiently and effectively, through earlier and more complete diagnoses, and by providing pertinent molecular information to clinicians to take advantage of the growing number of targeted therapies.