cjgaddy
8 years ago
6-27-16: Medtronic to Acquire of HeartWare Intl. For $58/sh.
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=2180056
6-27-16: Medtronic plc (NYSE: MDT), the global leader in medical technology, and HeartWare International, Inc. (NASDAQ: HTWR), a leading innovator of less-invasive, miniaturized circulatory support technologies for the treatment of advanced heart failure, today announced that the companies have entered into a definitive merger agreement under which Medtronic will acquire HeartWare in a transaction valued at approx. $1.1 billion. Under the terms of the agreement, Medtronic will commence a tender offer for all outstanding shares of HeartWare common stock for $58.00 per share, in cash. The boards of directors of both Medtronic & HeartWare have unanimously approved the transaction. The acquisition is expected to close during Medtronic's 2nd fiscal qtr ending Oct. 28, 2016, subject to the satisfaction of customary closing conditions…
cjgaddy
8 years ago
1-13-16: Heartware sees 35% stock-plunge on bad news@JPMorgan, to $26.50.
By: Don Seiffert, Editor Boston Business Journal
A Framingham heart pump-maker already under fire from one investor over a proposed acquisition, Heartware Intl., saw its shares collapse by a third Tuesday after disappointing revenue news and even more worrying trial news.
http://www.bizjournals.com/boston/blog/bioflash/2016/01/framingham-s-heartware-sees-35-stock-plunge-on.html
Heartware (Nasdaq: HTWR) shares fell 35% to $26.50 Tuesday, their lowest point since 2010. The stock low gives the company, which had 585 employees worldwide when it last reported headcount a year ago, a market valuation of $458mm.
The drop was driven by news from its presentation at the JP Morgan Healthcare Conference in San Fransisco. Particularly, the company said it completed a review of problems that caused a temporary delay of its European trial of a newer, smaller pump called the MVAD Pump and now believes it could take a few months to fix and may even require the company to start the trial over. Enrollment of patients into the trial, which began in July 2015, was paused a couple months later due to a manufacturing problem. The company now says it believes there is a software issue with the MVAD Pump that caused potential blood clotting.
It’s more bad news for a company that’s seen significant opposition lately since a proposed $929mmn acquisition of an Israeli company developing a device to prevent heart failure called Valtech Cardio. When the company first announced plans for the acquisition last September, its had a market value that was more than twice the point at which it closed yesterday. Heartware now faces a proxy fight with activist investor Engaged Capital, in which the Florida investment firm is looking to replace 3 of the 8 current board members. Among other problems with the Valtech acquisition, Engaged points to several provisions in the merger agreement that would accelerate certain milestone payments to Valtech’s current shareholders if Heartware itself is acquired in the next 10 years, effectively lowering the value of the company as a whole.
Also Tuesday, the company gave a preliminary revenue estimate of $68mm for the final 3mos of 2015, lower than the $73.2m reported for the same period in 2014. The company said the drop in sales of its HVAD Pump is largely due to an unfavorable foreign exchange rate. The revenue estimate led to a downgrade by analysts at the investment firm, JP Morgan.
cjgaddy
9 years ago
10-12-15: Heartware Updates on MVAD Trial; May Not Restart as Expected
Heartware (NASDAQ: HTWR) disclosed the following on Tuesday 10-13-15:
On Oct. 12, 2015, HeartWare Intl., posted the following statement to the Investor Relations section of its corporate website (ir.heartware.com) in connection with its MVAD Ventricular Assist System CE Mark clinical trial:
“As previously disclosed on September 9, 2015, HeartWare paused its MVAD clinical trial to address an MVAD controller manufacturing process issue. HeartWare is in the process of implementing manufacturing improvements as well as software updates, which were also described on September 9, 2015.
“Subsequent to that action and following discussions with the Company’s trial investigators, HeartWare began investigating causes of reported adverse events in certain clinical trial patients. The events being analyzed are typical of those seen in other clinical trials for ventricular assist devices. HeartWare took similar actions successfully during its initial human study for the HVAD® System during the HVAD CE Mark clinical trial in 2007. Although HeartWare may not re-initiate enrollment in the MVAD clinical trial in November as it previously expected, HeartWare remains confident in its MVAD System and the potential for the MVAD design to meaningfully improve outcomes for ventricular assist patients. HeartWare intends to provide additional commentary related to the MVAD clinical trial on its third quarter financial results call and webcast scheduled for October 29, 2015. It has been, and remains, the intention of the Company to present and publish clinical data following the completion of enrollment and follow-up for all trial patients.”
http://www.streetinsider.com/Corporate+News/Heartware+%28HTWR%29+Updates+on+MVAD+Trail%3B+May+Not+Restart+as+Expected/10965359.html
cjgaddy
9 years ago
CEO D.Godshall presenting 9-9-15/8:50ET at Wells-Fargo
HeartWare Presentation At The 2015 Wells Fargo Healthcare Conference To Be Webcast
FRAMINGHAM, Sept. 3, 2015: Heartware Intl. Inc. (NASDAQ:HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced that its President & CEO, Doug Godshall, is scheduled to present at the 2015 Wells Fargo Healthcare Conference at 8:50amET on Wednesday, Sept. 9, 2015. The conference is being held Sept. 9-10, 2015 at The Hyatt Regency, Boston.
A live webcast of the company's presentation at the conference will be available via a link provided at http://www.heartware.com . . .
cjgaddy
9 years ago
4-30-15: HTWR Q1/Fins q/e3-31-15 Revs=$70mm
HeartWare International Reports $70.0mm In Q1/2015 Revenue
• 713 HeartWare® Systems sold worldwide in Q1/2015
• U.S. revenue increased 25% over Q1/2014 to $42.2mm
• Intl. revenue of $27.8mm; reflects unfavorable currency trends
• Next-gen. MVAD® System targeted for 1st clinical use in Q2 2015
• Conference call today at 8:00amET
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=2042157
FRAMINGHAM, April 30, 2015: HeartWare Intl. (NASDAQ: HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced revenue of $70.0mm for Q1 ended March 31, 2015, a 5% increase compared to $66.5mm in revenue for the same period of 2014. Currency fluctuations negatively impacted total revenue growth by approx. $5mm, or nearly 8%, in the Q1/15, as compared to the same period in 2014.
"Continued U.S. commercial expansion drove the second-largest unit sales quarter for HeartWare, although year-over-year U.S. growth was offset by a decrease in intl. unit sales when compared to the exceptionally strong intl. sales we achieved in Q1/14," said Doug Godshall, President and CEO. "We continue to see enthusiastic support of the HeartWare® System around the world, with the addition of 6 intl. and 5 U.S. customers during Q1, which increases our global customer base to more than 280 hospitals."
During Q1/15, 713 HeartWare® Ventricular Assist Systems were sold globally, which represents a 7% increase from 665 units sold in Q1/2014. During the quarter, U.S. revenue, generated through the sale of 381 units, was $42.2mm, a 25% increase from $33.8mm in Q1/2014. Revenue from international markets was $27.8mm, a decrease of 15% from $32.7mm in Q1/2014, while intl. unit sales decreased 6% to 332 units in Q1/15. Intl. unit sales decreased primarily in distributor territories, which have a greater tendency to fluctuate on a quarterly basis.
"During the quarter, we continued to advance our clinical trials for the HVAD System, with enrollment in the supplemental destination therapy study nearing completion; follow-up concluded for our Japan clinical trial; and commencement of HVAD LATERAL, a trial designed to evaluate a less-invasive thoracotomy implant technique," noted Mr. Godshall. "Regarding our pipeline, we recently completed training with investigators and are eager to commence first implants in the CE Mark study for our next-generation MVAD System later this quarter, and we plan to submit our Investigational Device Exemption protocol to FDA for review in the coming weeks."
. . .
GM% improved to 68.5% in Q1/2015, compared to 65.5% in Q1/2014, reflecting lower cost of goods and efficiencies associated with increased mfg.
. . .
Net loss for Q1/2015 was $14.5mm, or $.85 per basic & diluted share, compared to a net loss of $19.4mm, or $1.15 for Q1/2014.
. . .
At 3-31-15, HeartWare had ~ $174mm of cash, cash equivalents and investments, compared to $180mm at 12-31-14. . .
cjgaddy
9 years ago
2-26-15/HTWR Q4’14 Fins: Revs=$73.2mm +38%
• HeartWare Reports $73.2mm in Q4’14 Revs; 38% Incr. From Q4’13
• U.S. revenue of $41.5mmn, up 60% and Intl. revenue of $31.7mm, up 17%, compared to Q4’13
• Revenue for 2014 increased 34% to $278.4mm, from $207.9mm in ‘13
• Conference call today at 8:00amET
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=2020425
FRAMINGHAM, Feb. 26, 2015 HeartWare Intl. (NASDAQ: HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced revenue of $73.2mm for the fourth quarter ended Dec31, 2014, a 38% increase compared to $53.1mm in revenue for the same period of 2013. For FY14, the company generated revenue of $278.4mm, a 34% increase compared to revenue of $207.9 in 2013.
During Q4, 737 HeartWare® Ventricular Assist Systems were sold globally, compared to 524 units in the fourth quarter of 2013. U.S. revenue, generated through the sale of 382 units during Q4/’14, was $41.5mm, a 60% incr. from $25.9 million in Q4’13. Revenue from Intl. markets, derived through the sale of 355 units, was $31.7 million, an increase of 17% from $27.1 million in q4’13. Currency fluctuations offset total revenue performance in Q4 by approx. $1.9mm, or 3.7%, compared to the fourth quarter of 2013. . .
cjgaddy
9 years ago
1-13-15 PR/Prelim-Revs: Q4’14=~$73mm; full’14=~$278mm
1-13-15: HeartWare Announces Prelim. Q4’14 Revenues of ~73mm; up 38% from Q4 in 2013
• 2014 Prelim. Revenues ~$278mm; 34% incr. from 2013
http://www.prnewswire.com/news-releases/heartware-international-announces-preliminary-fourth-quarter-2014-revenues-300019689.html
FRAMINGHAM, Jan. 13, 2015: HeartWare International, Inc. (NASDAQ: HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced that it expects revenues for Q4/’14 will be ~$73mm, bringing expected 2014 revenues to ~$278mm.
"Our full-year revenue growth of 34% for 2014 above 2013 reflects the strong market penetration we have experienced to date for the HeartWare Ventricular Assist System in both the U.S. and intl. markets," said Doug Godshall, President and CEO. "Q4/2014 unit sales increased by ~9% sequentially compared to Q3/2014, a key driver of our strong revenue performance…”
cjgaddy
9 years ago
1-13-15: 1st Pt. Implanted in HVAD MEDIAN STERNOTOMY Trial
"HeartWare Begins HVAD LATERAL Study, A Clinical Trial Of Advanced Heart Failure Patients Implanted Via Less-Invasive Thoracotomy Technique"
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=2007206
FRAMINGHAM Jan. 13, 2015: HeartWare International, Inc. (NASDAQ: HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced the first patient implant in the HVAD LATERAL Study, a U.S. Investigational Device Exemption (IDE) clinical trial in which the HeartWare Ventricular Assist System, featuring the HVAD Pump, is implanted through a less-invasive thoracotomy procedure in patients with end-stage heart failure who are awaiting a heart transplant.
The HVAD LATERAL Study is designed to study the clinical outcomes of this surgical technique. Currently, commercially available ventricular assist systems are only approved by the U.S. FDA for use with implantation via median sternotomy, a common surgical approach in cardiac surgery which utilizes a vertical incision through the center of the patient's chest. With the less-invasive thoracotomy approach, the HVAD® Pump, which is smaller than other contemporary devices, is implanted using a small lateral thoracotomy incision between the patient's ribs on the left side of the chest.
"The thoracotomy implant technique holds considerable promise for making implantation easier for the surgeon and better tolerated by the patient," said Ed McGee, M.D., head of the heart transplant and assist device program and a professor in the Dept of Thoracic and Cardiovascular Surgery at Loyola Univ. Chicago Stritch School of Medicine, and a Co-Principal Investigator for the HVAD LATERAL Study. "Implantation via thoracotomy allows for preservation of a sternotomy for a heart transplant, making that subsequent surgery less difficult for the bridge-to-transplant patient.". . .
cjgaddy
9 years ago
CEO D.Godshall presenting 11-20-14 at CANACORD, 10amET Webcast
“HeartWare Presentation At The Canaccord Genuity 2014 Medical Technology & Diagnostics Forum To Be Webcast (11-20-14 10amET)”
FRAMINGHAM, Nov. 13, 2014 HeartWare Intl., Inc. (NASDAQ:HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced that CEO Doug Godshall is scheduled to present at the CANACCORD GENUITY 2014 Medical Technology & Diagnostics Forum at 10:00amET on Thursday, Nov. 20, 2014. The 1-day conference is being held at the Westin Grand Central, New York.
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=1989512
cjgaddy
9 years ago
HTWR reports Q3; revs=$68.3mm, +25% v. Q3’13; 675 HVADs Sold
HeartWare Int. Reports $68.6mm in Q3’14 Revenue; 25% Increase From Q3’13
- Record 675 HeartWare Ventricular Assist Systems (HVADs) sold worldwide in Q3
- U.S. revenue of $39.1mm, 39% growth from Q3’13
- Intl. revenue of $29.5mm, 11% growth from Q3’13
- Conference call today at 8:00amET
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=1983503
FRAMINGHAM, Oct. 30, 2014: HeartWare Intl., Inc. (NASDAQ: HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced revenue of $68.6 million for Q3 ended Sept. 30, 2014, a 25% increase compared to $54.8 million in revenue for the same period of 2013.
During Q3, 675 HeartWare Ventricular Assist Systems (HVADs) were sold globally, compared to 550 units in Q3 of 2013. U.S. revenue, generated through the sale of 361 units during Q3 of 2014, was $39.1 million, a 39% increase from $28.2 million in Q3 of 2013. Revenue from international markets was $29.5 million, an increase of 11% from $26.6 million in Q3 of 2013.
"Results for Q3 were quite encouraging, as we continue building out our global operations," said Doug Godshall, President and CEO. "On top of our strong commercial results, we advanced our clinical initiatives, including preparing our request to commence a CE Mark study of our next-generation MVAD System, which we expect to submit for regulatory review later this year or in early 2015. For the HVAD System, we also completed enrollment in our Japan study during the quarter, advanced enrollment in our U.S. Destination Therapy study and are finalizing plans to initiate a U.S. IDE study for the Thoracotomy implant technique later this year.. . .
cjgaddy
10 years ago
8-4-14: HeartWare’s hires new CMO: Dr. Katrin Leadley, MD
8-4-14: “HeartWare Intl. Announces Appointment Of Katrin Leadley, M.D., As Chief Medical Officer”
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=1954661
FRAMINGHAM, Aug. 4, 2014: HeartWare Intl. Inc. (NASDAQ: HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced the appointment of Katrin Leadley, M.D., as Chief Medical Officer of HeartWare, effective Sept. 1, 2014. Leadley brings to HeartWare extensive strategic leadership, with more than 20 years of clinical and industry experience at life sciences firms, including Quintiles, Boston Scientific Corporation and JenaValve Technology in Munich, where she spent the last three years as CMO leading the company's clinical, regulatory, scientific and medical activities.
"Katrin has a wealth of clinical program management experience, and we are confident she will be a great addition to our team," said Doug Godshall, President & CEO. "Her knowledge of cardiovascular device trials and her relationships with many of our international key opinion leaders will enable her to begin making contributions immediately. Katrin has proven experience in identifying new market opportunities, ensuring patient safety and executing clinical development plans and regulatory strategies to achieve product approvals and market introductions of new medical therapies. Katrin will help lead HeartWare through our next stage of clinical and commercial growth, as we advance our ongoing trials, initiate new studies and move toward obtaining regulatory approval of devices in our pipeline."
During her time at JenaValve, Leadley oversaw the company's global clinical programs and worldwide regulatory strategy. She provided leadership and guidance as the company's safety officer for all JenaValve products throughout the product lifecycle, and she offered medical guidance to the organization's Research & Development, marketing and physician training programs. She was also responsible for the company's scientific communications and for collaborating with key opinion leaders in the field.
Previously, Leadley spent 8 years at Boston Scientific – based in San Jose, California and Munich – where she most recently served as Global Senior Medical Director, Clinical Sciences. During her time at Boston Scientific, Leadley oversaw the implementation of worldwide policies and processes for the medical and clinical sciences function of the cardiovascular platforms. She also provided medical oversight and participated in preparing regulatory submissions and approvals in the U.S. and Europe.
In addition, Leadley has held managerial positions at several other life sciences companies based in California, including Advanced Stent Technologies in Pleasanton, Pulmonx in Palo Alto, and Quintiles/The Lewin Group in San Francisco.
Leadley earned her medical degree at Ludwig-Maximilian University Medical School in Munich. She has authored numerous scientific and medical publications and presented at industry conferences and events around the world. She also was awarded a National Institute of Health Postdoctoral Fellowship by the School of Public Health at the Univ. of California at Berkeley.
Leadley will succeed David Hathaway, M.D., who has held the position of CMO at HeartWare since 2008 and has decided to retire.
"HeartWare would like to recognize and express our gratitude toward Dr. David Hathaway who has provided excellent stewardship during the past 6 years," said Godshall. "Dave has played an integral role in leading us through the clinical process to obtain regulatory approval of the HeartWare® Ventricular Assist System in Europe and as a bridge-to-transplantation therapy in the U.S. HeartWare values Dave's numerous, meaningful contributions and wishes him well in his retirement, as our organization continues to grow and build upon the foundation he helped us create."
cjgaddy
10 years ago
7-31-14: StrongQ2 Can't Buoy HTWR/PPS given Recall News
7-31-14: “Strong Q2 Can't Buoy HeartWare As Shares Sink On Recall News”
http://www.massdevice.com/news/strong-q2-cant-buoy-heartware-shares-sink-recall-news?page=show
by Brad Perriello, Mass-Device
• A voluntary recall initiated yesterday pushes HeartWare shares down today, despite 2nd-quarter result that crushed expectations on Wall Street.
HeartWare Intl. (NSDQ:HTWR) shares took a hit today after the medical device company revealed a voluntary recall for its implantable heart pump. The share-price slide came despite 2nd-quarter results that beat Wall Street's expectations by a wide margin, as U.S. sales of HeartWare's left ventricular heart devices surged 47% in the U.S. and 38% overall.
Framingham, Mass.-based HeartWare said it booked a $1.7 million charge "for the extension of a prior field safety corrective action to replace certain older batteries," revealing that it started the recall yesterday. "Patients and caregivers are instructed that if a battery does not provide 2 hours of support or behaves unusually; that battery should no longer be used and should be replaced," according to the April 14 corrective action.
President & CEO Doug Godshall said the recall relates to the higher rate of battery-related complaints in Germany. After consulting German regulators, HeartWare decided to expand the field action "to include a voluntary recall of certain older batteries and replace them with new batteries which have gone through additional screening tests that were implemented last year." "Once we came to the decision to conduct this replacement in Germany, we determined that we should adopt the same policy in all countries. Existing HVAD patients with batteries built basically a year or longer ago, will simply replace them with newer batteries when they visit their physicians during their next routine visit. We anticipate it will take a few months to complete the replacement of those older batteries," Godshall told analysts during a conference call today. "As we progress – and with thousands of implants and ever-lengthening patient support times – we will continue to learn more about how to make our system better and how to manage it better. We remain committed to making improvements to enhance product performance and communicating information that may be helpful to our customers and their patients to ensure best possible outcomes."
The recall covers serial number ranges BAT000001 to BAT039999 and BAT090000 to BAT099999, "which are more likely to exhibit premature or unrecognized deterioration of battery capacity," HeartWare said. "Implementation of this voluntary recall in other countries, including in the United States, will follow after communication with relevant regulatory authorities." The news sent HTWR sales down 11.2% to $82.99 apiece as of about 1:30pmET Eastern today, despite a strong showing for the 2nd quarter ended June 30.
HeartWare reported profits of $8.4mm, or 48¢/sh., on sales of $70.1mm for the quarter, marking a dramatic swing to black ink compared with Q2 2013's -$12.9mm in losses. Adjusted to exclude 1-time items (including a $13.7mm charge on HeartWare's $350mm CircuLite buy) losses per share were -29¢, a whopping 45¢ ahead of expectations on The Street, where analysts were looking for sales of $67mm. "We are pleased to announce another encouraging quarterly performance, with record sales and more than 300 units in both the U.S. as well as international markets for the 2nd consecutive quarter," president & CEO Doug Godshall said in prepared remarks. "More than 6,000 patients from 40 countries around the globe have received the HeartWare System as a treatment for their advanced heart failure, with patient support extending as long as 7 years. "In addition to our commercial efforts, we continue to make investments to advance our clinical trials, including enrolling the 2nd phase of our destination therapy study in the U.S., moving toward completion of enrollment of our Japan trial and preparing to initiate the clinical evaluation of our next-generation MVAD System," Godshall added. "As we continue to drive these programs forward, our highest internal priority remains addressing and remedying the observations raised by FDA following an inspection at our Miami Lakes, Fla., facility earlier this year."
cjgaddy
10 years ago
7-31-14: HeartWare Reports $70.1mm Q2’14 Revenue; +38% vs. Q2’13
- Record 674 HeartWare® Ventricular Assist Systems (HVAD’s) sold worldwide in Q2
- U.S. revenue of $36.9mm, 47% growth from Q2/2013
- Intl. revenue of $33.2mm, 29% growth from Q2/2013
- Conference call today at 8:00amET
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=1953486
FRAMINGHAM, July 31, 2014: Heartware Intl., Inc. (NASDAQ: HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced revenue of $70.1mm for Q2 ended June 30, 2014, a 38% increase compared to $50.8mm in revenue for the same period of 2013.
During Q2, 674 HeartWare® Ventricular Assist Systems were sold globally compared to 523 units in Q2 of 2013. U.S. revenue, generated through the sale of 338 units during Q2 of 2014, was $36.9mm, a 47% increase from $25.1mm in Q2 of 2013. Revenue from intl. markets was $33.2mm, an increase of 29% from $25.7mm in Q2 of 2013.
"We are pleased to announce another encouraging quarterly performance, with record sales and more than 300 units in both the U.S. as well as international markets for the second consecutive quarter," said Doug Godshall, President and CEO. "More than 6,000 patients from 40 countries around the globe have received the HeartWare System as a treatment for their advanced heart failure, with patient support extending as long as seven years.
"In addition to our commercial efforts, we continue to make investments to advance our clinical trials, including enrolling the second phase of our destination therapy study in the U.S., moving toward completion of enrollment of our Japan trial and preparing to initiate the clinical evaluation of our next-generation MVAD® System," Godshall said. "As we continue to drive these programs forward, our highest internal priority remains addressing and remedying the observations raised by FDA following an inspection at our Miami Lakes, Florida facility earlier this year."
For the 6 months ended June 30, 2014, revenue increased approximately 36% to $136.6mm, compared to $100.1mm in the first six months of 2013. Currency fluctuations benefitted revenue growth by approximately 3.1 and 2.6 percentage points in the 3 and 6 months ended June 30, 2014, respectively, as compared to the same periods in 2013. Gross margin% improved to 67.3% in Q2 of 2014, as compared to 62.9% in Q2 of 2013. The improvement compared to the same period in 2013 primarily reflects efficiencies associated with increased manufacturing throughput, partially offset by a charge of $1.7mm for the extension of a prior field safety corrective action to replace certain older batteries through a voluntary recall initiated yesterday, July 30, 2014.
Total operating expenses for Q2 of 2014 were $34.2mm, as compared to $41.4mm in Q2 of 2013. Total operating expenses for Q2 of 2014 include a $13.7mm reduction in the estimated fair value of the contingent consideration for CircuLite, which was acquired by HeartWare in December 2013. Research and development expense was $26.9mm for Q2 of 2014, as compared to $24.2mm in the same period of 2013. Increased development costs are primarily attributable to the acquisition of CircuLite, preparations for human clinical testing for the MVAD® System and associated peripherals, and increasing clinical activity.
Selling, G&A expenses were $20.9mm in Q2 of 2014, compared to $17.2mm in Q2 of 2013. The increase in selling, general and administrative expenses primarily reflects the acquisition of CircuLite, the expansion of sales and marketing activities, increased employee expenses and other administrative expenses. Net income for Q2 of 2014 was $8.4mm, or $0.49 per basic and $0.48 per diluted share, compared to a net loss of $12.9mm, or a loss of $0.79 per basic and diluted share, in Q2 of 2013. Net income for Q2 of 2014 includes a $13.7mm reduction in the estimated fair value of the contingent consideration for the CircuLite acquisition. This non-recurring benefit was the primary factor resulting in positive net income in Q2 of 2014. For the six months ended June 30, 2014, the company recorded a net loss of $11.1mm, or a $0.65 loss per basic and diluted share, compared to a $25.9mm net loss, or a loss of $1.66 per basic and diluted share, in the first six months of 2013. Non-GAAP net loss for Q2 of 2014 was $0.29 per basic and diluted share, compared to a loss of $0.79 per basic and diluted share in Q2 of 2013. Non-GAAP net loss for the six months ended June 30, 2014 was $0.99 per basic and diluted share, compared to a loss of $1.65 per basic and diluted share, in the first six months of 2013. See "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Net Income per Common Share." At June 30, 2014, HeartWare had $184mm of cash, cash equivalents and investments, an increase from $181mm at the end of the first quarter on March 31, 2014.
Conference Call and Webcast Information
HeartWare will host a conference call on Thursday, July 31, 2014 at 8:00amET to discuss its financial results, highlights from Q2 and the company's business outlook. The call may be accessed by dialing 1-877-407-0789 5 minutes prior to the scheduled start time and referencing "HeartWare." Callers outside the U.S. should dial +1-201-689-8562. A live webcast of the call will also be available in the Investor section of the company's website ( http://ir.heartware.com ). A replay of the conference call will be available through the above weblink immediately following completion of the call.
cjgaddy
10 years ago
6-4-14 Leerink: “FDA warning letter to HeartWare is as benign as possible”…
6-4-14: “Analyst says FDA warning letter to HeartWare is 'as benign as possible'”
By: Don Seiffert, BioFlash Editor - Boston Business Journal
http://www.bizjournals.com/boston/blog/bioflash/2014/06/analyst-says-fda-warning-letter-to-heartware-is-as.html
A Framingham heart pump maker’s stock fell just 2% after it said it received a warning letter from the U.S. FDA about deficiencies at its Florida manufacturing facility. The company said in a statement that the letter “does not require any action by physicians or patients and does not restrict use of HeartWare’s devices.” One analyst described the letter as being “as benign as possible within the context of (FDA) warning letters.”
The company said that during an inspection of its Miami Lakes, Fla., plant in January, FDA officials found issues that need to be addressed with its procedures for validating device design, procedures for implementing corrective and preventive action, maintaining records related to investigations and validation of computer software. The plant makes small, implantable heart pumps for patients with advanced heart failure. The HeartWare Ventricular Assist System features the company’s HVAD pump, and is approved in the U.S. for use in patients at risk of death from refractory end-stage left ventricular heart failure who are waiting for a transplant.
Danielle Antalffy, an analyst at Leerink Partners, wrote in a research note today that she isn’t changing her “outperform” rating and $120 price target on the stock — which is valued at $88.32 as of 2:15pm today — based on the news.
“While a warning letter is certainly a negative and HeartWare mgt. has noted they are making resolution its number one priority... (the letter) does not impact sales of HeartWare’s HVAD and does not prohibit ongoing enrollment in (an ongoing clinical trial),” she wrote.
Last month the company reported that it sold 665 HeartWare Ventricular Assist Systems during the 1st 3mos. of the year, a 38% increase from Q1/2013. It took it revenue of $66.5mm during the qtr.
= = = = = = = = =
6-4-14: “HeartWare Intl. Comments On FDA Warning Letter”
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=1937179
cjgaddy
10 years ago
4-27-14: “HeartWare: Saving Kids Waiting For Transplants” (KFSN-TV)
By Margot Kim (includes video)
http://abclocal.go.com/kfsn/story?id=9518504
4-27-14: FRESNO, (KFSN): When children experience heart failure, they often need a transplant to replace their defected organ, but waiting can take time. Now, there's a new device that helps the heart do its job -- without stopping a kid from being a kid.
It doesn't look like much, but a day out like this is big for 11-year-old Jacque Fair.
Last summer, Jacque and her mom found out she had heart failure and needed a transplant.
"It was a surprise," Jacque told ABC30.
"I had to step out of the room to be honest with you. It was a little much to take," Katrina Fair, Jacque's mom, told ABC30.
While she waits for a transplant, Jacque wears the HEARTWARE device.
"They used to be bigger, bulkier, so only adults could receive them," Mary Mehegan, RN, VAD Coordinator, St. Louis Children's Hospital, told ABC30. The pump is implanted in the heart and attaches to a battery pack outside the body. It takes blood out of the left ventricle and pumps it into the aorta -- helping the heart function when it's too weak to do so on its own. THE DEVICE IS SMALL ENOUGH TO BE USED IN KIDS and it is portable -- so patients don't have to stay in the hospital.
"It's a beautiful thing to let a child go home while they're still in heart failure," Mehegan said.
Jacque says the device has given her freedom.
"If I didn't have this, I'd probably be in the hospital, not allowed to do anything and taped up to the wall," Jacque said. She's looking forward to her transplant, but says she's happy she can still be a kid while she waits.
Patients have to be at least 65 pounds to receive the device. The HeartWare is a left ventricular assist device, commonly called an LVAD. It's been used in adults for years, but only recently in children. In fact, fewer than 10 children's hospitals in the nation have used these devices.
For more information, contact:
Jackie Ferman
Manager, Media Relations
St. Louis Children's Hospital
(314) 286-0304 slchmedia@bjc.org
cjgaddy
10 years ago
5-5-14: Baron Funds Comments on HeartWare Intl.
Holly LaFon
“We ( http://www.baronfunds.com ) also initiated a position in HeartWare International, Inc. (HTWR), which sells an implantable heart pump for the treatment of advanced heart failure. HeartWare's HVAD is the smallest and lightest pump available and is easier and less invasive to implant. HeartWare is rapidly taking share from its competitor who was first to market.
The NIH estimates up to 100,000 patients just in the U.S., as potential candidates for a left ventrical assist device. The global market is over double that. Only 6,300 devices were implanted globally in 2013, so this market is in a nascent stage of development. Barriers to entry are very high, due to long and arduous clinical and regulatory requirements and we think this will remain a duopoly. HeartWare has a next generation pump in trials that has the potential to be disruptive technology, which could accelerate market adoption and market share gain. They also are developing products that treat earlier stages of heart failure and offer less invasive treatments.
HeartWare did a little over $200mm in revenues last year, and we believe that will more than triple in the next 5 years. However, the company is not profitable and won't be until 2016. Wall Street values these businesses on revenues, which is something I am uncomfortable with, and we suspect that clinical trials and product rollout will have ups and downs, so we are prepared for a bumpy ride. But if this plays out how we expect, the stock could appreciate over three-fold in the next five years, so it's worth the agita…”
http://www.gurufocus.com/news/257952/baron-funds-comments-on-heartware-international
cjgaddy
10 years ago
Recall HWTR bought Circulite in Dec.2013… (SYNERGY Circulatory Support System)
= > http://www.circulite.net
12-1-13: “HEARTWARE ANNOUNCES ACQUISITION OF CIRCULITE, INC.”
• Acquisition expands HeartWare’s technology platform into partial support for less sick patients
• Investor Conference Call on Monday, Dec. 2, 2013 at 8amET
Framingham & Teaneck, Dec. 1, 2013: HeartWare International, Inc. (Nasdaq: HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced that it has acquired CircuLite, Inc. – developer of the SYNERGY® Circulatory Support System, designed to treat less sick, ambulatory, chronic heart failure patients who are not yet inotrope-dependent.
According to the terms of the merger agreement, HeartWare has acquired all of the issued and outstanding equity interests of CircuLite for consideration of $30 million, consisting of approximately $18 million in HeartWare common stock and cash of approximately $12 million to settle CircuLite’s debt and transaction expenses, plus certain contingent success payments due upon satisfaction of regulatory and commercial milestones not to exceed $320 million in the aggregate over a 10-year period.
“The partial-support system developed by CircuLite represents the industry’s most intriguing platform for the treatment of patients with earlier stage heart failure,” said Doug Godshall, President and CEO at HeartWare. “CircuLite has pioneered the partial-assist approach and demonstrated that this technique can significantly enhance the quality of life for this group of patients, which is believed to be a substantially larger population than the end-stage heart failure patients that HeartWare currently treats with our full-support Ventricular Assist Devices (VADs). CircuLite’s next generation endovascular system, which will be implanted collaboratively by cardiologists and surgeons in a hybrid cath lab setting, offers an extremely compelling interventional approach to circulatory support. While our HVAD® and MVAD® Systems offer minimally invasive treatment to end-stage heart failure patients, the SYNERGY platform offers even less invasive and ultimately interventional options to earlier-stage heart failure patients.”. . .
cjgaddy
10 years ago
5-1-14: HTWR’s Q1 Financials – revs=$66.5MM, 665 HVAD’s worldwide, now over 5,000 HVAD implants…
5-1-14: HeartWare Reports $66.5mm In Q1/’14 Revenue; 35% Increase From Q1/’13
- Record 665 HeartWare Ventricular Assist Systems sold worldwide in Q1; exceeds previous quarterly high of 549 units
- U.S. revenue of $33.8 million, 29% growth from first quarter 2013
- International revenue of $32.7 million, 42% growth from first quarter 2013
- Conference call today at 8:00 a.m. U.S. EDT
http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=1924745
FRAMINGHAM, Mass, May 1, 2014: HeartWare International, Inc. (NASDAQ: HTWR), a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, today announced revenue of $66.5 million for the first quarter ended March 31, 2014, a 35% increase compared to $49.2 million in revenue for the same period of 2013.
During the first quarter, 665 HeartWare® Ventricular Assist Systems were sold globally, a 38% increase from 482 units in the first quarter of 2013. U.S. revenue during the first quarter of 2014 was $33.8 million, a 29% increase from $26.2 million in the first quarter of 2013. Revenue from international markets, generated through the sale of 352 units, was $32.7 million, an increase of 42% from $23.1 million in the first quarter of 2013.
"Reflecting expanded global adoption, our team generated sales of more than 300 units in both the U.S. as well as international markets, for the first time in our history," said Doug Godshall, President and CEO. "We continue to see enthusiastic support of the HeartWare® System around the world, with the addition of 12 international and 5 U.S. customers during the first quarter, increasing our global customer base to nearly 250 hospitals."
"During the quarter, we continued to make investments in clinical trials related to the ongoing HVAD® destination therapy study, recently initiated Japan trial and upcoming MVAD® CE Mark studies," noted Mr. Godshall. "Additionally, enrollment in our supplemental destination therapy study in the U.S. continues to gain momentum, with 48 sites receiving Institutional Review Board approval and more than 80 patients currently enrolled."
Currency fluctuations benefitted revenue growth by approximately 2% in the first quarter in 2014, as compared to the same period in 2013.
Gross margin percentage improved to 65.5% in the first quarter of 2014 compared to 61.9% in the first quarter of 2013, reflecting efficiencies associated with increased manufacturing throughput. Total operating expenses for the first quarter of 2014 were $60.0 million, as compared to $38.6 million in the first quarter of 2013.
Research and development expense was $32.6 million for the first quarter of 2014, as compared to $22.1 million in the same period of 2013. Increased development costs are primarily attributable to the addition of a full quarter of expenses from CircuLite, which was acquired by HeartWare in December 2013, as well as preparations for human clinical testing for MVAD and associated peripherals and increasing clinical activity.
Selling, general and administrative expenses were $24.2 million in the first quarter of 2014, compared to $16.5 million in the first quarter of 2013. The increase in selling, general and administrative expenses reflects a full quarter of CircuLite expenses, the expansion of sales and marketing activities, increased employee expenses and other administrative expenses.
Net loss for the first quarter of 2014 was $19.4 million, or a $1.15 loss per basic and diluted share, compared to a $13.0 million net loss, or a loss of $0.87 per basic and diluted share, in the first quarter of 2013. Net loss decreased on a sequential quarter basis, from a net loss in the fourth quarter of 2013 of $22.0 million. The first quarter results included CircuLite's operations, as well as approximately $7.5 million of acquisition and restructuring related costs as set forth in this release under "Reconciliation of GAAP to Non-GAAP Net Loss per Common Share."
Non-GAAP net loss per share for the first quarter of 2014 was $0.70 per basic and diluted share, compared to a loss of $0.87 per basic and diluted share in the first quarter of 2013. See "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Net Loss per Common Share."
At March 31, 2014, HeartWare had $181 million of cash, cash equivalents and investments.
gobigthenGoBigger
10 years ago
HeartWare's Recall Receives FDA's highest-risk Class I label.
The FDA put its highest-risk Class I label on HeartWare's (Nasdaq: HTWR) recall of ventricular assist devices (http://www.massdevice.com/news/fda-bumps-heartwares-recall-highest-risk-massdevicecom-call).
===============================
Defective HeartWare VAS Injury Lawsuits
Patients implanted with HeartWare International’s Ventricular Assist System (VAS) have submitted dozens of adverse event reports to the U.S. Food and Drug Administration, including one patient who suffered a fatality from the device.
HeartWare International is an Australia-based company, and the FDA approved the VAS in November 2012. Nevertheless, more than 60 recipients have filed adverse event reports with the agency due to perceived malfunctions in the devices that sometimes produce fatal results.
For example, one recipient suffered a “controller fault alarm” after changing the batteries in the device. The VAS stopped pumping blood throughout the recipient’s body, causing her death.
Another VAS recipient’s autopsy revealed that the pump contained a blood clot.
Other recipients who survived their malfunctions found that a blood clot had formed in the device’s pump.
(http://www.rotlaw.com/heartware-ventricular-assist-system/)
===============================
Heartware Ventricular Assist System Pump Connector Failure Could Lead to Death: Manufacturer Reissues Warning Following FDA Class 1 Recall Issued (http://harmanlaw.com/heartware-ventricular-assist-system-pump-connector-failure-could-lead-to-death-manufacturer-reissues-warning-following-fda-class-1-recall-issued/).
===============================
HeartWare, Inc., Heartware Ventricular Assist System - Locking Mechanism of Pump Driveline Connector May Fail to Engage
Recall Class: Class I
Date Recall Initiated: Dec. 6, 2013
Product: HeartWare Ventricular Assist System
Catalog Numbers: 1100, 1101, 1102, 1103, 1104, and 1205.
Serial Numbers: HW001 to HW 11270 and HW20001 to HW 20296.
Affected products were manufactured from March 6, 2006 through October 17, 2013 and distributed from March 17, 2006 through November 29, 2013.
Use: The HeartWare Ventricular Assist System is used as a bridge to cardiac transplantation in patients who are at risk of death from advanced heart failure. The System includes various internal and external components including but not limited to the internal pump, external controller, power sources, and the driveline connecting the pump to the controller. The HeartWare Ventricular Assist System, also known as HeartWare Ventricular Assist Device (HVAD), is designed for in-hospital and out-of-hospital settings, including transportation by fix-wing aircraft or helicopter.
Recalling Firm:
HeartWare Inc.
14400 NW 60th Avenue
Miami Lakes, Florida 33014
Reason for Recall:
The company received reports where the driveline connector locking mechanism has failed to engage as a result of a faulty manufacturing assembly process. This failure could result in the pump stopping and potentially lead to serious adverse health consequences, including death.
Public Contact:
Physicians with questions related to this recall or have affected products and need to schedule a driveline connector repair should contact HeartWare Clinical Support at (888) 494-6365, 24 hours a day, seven days a week, or by email at FSCA@heartware.com.
Patients: See below.
FDA District: Florida District Office
More Information about this Recall:
On December 12, 2013, HeartWare, Inc. sent an initial Urgent Medical Device Correction letter to their customers.
The firm will be sending an updated Urgent Medical Device Correction letter to physicians affected by this recall. This letter will provide updated actions to be taken by the physician. Letters for patients will be sent to physicians to be hand-delivered to their patients.
ACTIONS TO BE TAKEN:
PATIENTS:
If the driveline becomes disconnected from the patient controller, a “VAD Stopped” (high priority) alarm will alert you. As instructed in the Patient Manual, immediately reconnect the driveline to the controller and contact your doctor or VAD Coordinator.
Your driveline connection will be inspected by your doctor or VAD Coordinator. Should the inspection identify a locking mechanism that fails to engage, your physician will arrange for a permanent repair by a HeartWare Clinical Engineer as soon as possible. Once the driveline connector has been checked or repaired, the locking mechanism should function properly. Do NOT attempt to disconnect or inspect the driveline yourself.
PHYSICIANS:
Please promptly arrange a follow up visit with patients having the affected HVAD to inspect the driveline connector.
At implant and at each routine clinic visit, please inspect the patient’s driveline connector for proper locking and to ensure that the connector assembly remains secure. During the inspection, pull back the protective boot and slide the locking mechanism back and forth to verify free movement of the mechanism. If the locking mechanism of the driveline connector does not move freely or fails to engage, please push the connector back into the controller and immediately contact a HeartWare Clinical Engineer to perform a permanent field repair.
Please give the patient recall letter to your patients who have an affected device and explain what they should do if an unintentional driveline disconnect occurs.
About Class I Recalls:
Class I recalls are the most serious type of recall and involve situations in which there is a reasonable probability that use of these products will cause serious adverse health consequences or death.
Health care professionals and consumers may report adverse reactions or quality problems they experienced using these products to MedWatch: The FDA Safety Information and Adverse Event Reporting Program either online, by regular mail or by FAX.
http://www.fda.gov/MedicalDevices/Safety/ListofRecalls/ucm395252.htm
gobigthenGoBigger
10 years ago
The FDA puts its highest-risk Class I label on HeartWare's recall of ventricular assist devices (http://www.massdevice.com/news/fda-bumps-heartwares-recall-highest-risk-massdevicecom-call).
===============================
Defective HeartWare VAS Injury Lawsuits
Patients implanted with HeartWare International’s Ventricular Assist System (VAS) have submitted dozens of adverse event reports to the U.S. Food and Drug Administration, including one patient who suffered a fatality from the device (http://www.rotlaw.com/heartware-ventricular-assist-system/).
===============================
Heartware Ventricular Assist System Pump Connector Failure Could Lead to Death: Manufacturer Reissues Warning Following FDA Class 1 Recall Issued (http://harmanlaw.com/heartware-ventricular-assist-system-pump-connector-failure-could-lead-to-death-manufacturer-reissues-warning-following-fda-class-1-recall-issued/).
===============================
HeartWare, Inc., Heartware Ventricular Assist System - Locking Mechanism of Pump Driveline Connector May Fail to Engage
Recall Class: Class I
Date Recall Initiated: Dec. 6, 2013
Product: HeartWare Ventricular Assist System
Catalog Numbers: 1100, 1101, 1102, 1103, 1104, and 1205.
Serial Numbers: HW001 to HW 11270 and HW20001 to HW 20296.
Affected products were manufactured from March 6, 2006 through October 17, 2013 and distributed from March 17, 2006 through November 29, 2013.
Use: The HeartWare Ventricular Assist System is used as a bridge to cardiac transplantation in patients who are at risk of death from advanced heart failure. The System includes various internal and external components including but not limited to the internal pump, external controller, power sources, and the driveline connecting the pump to the controller. The HeartWare Ventricular Assist System, also known as HeartWare Ventricular Assist Device (HVAD), is designed for in-hospital and out-of-hospital settings, including transportation by fix-wing aircraft or helicopter.
Recalling Firm:
HeartWare Inc.
14400 NW 60th Avenue
Miami Lakes, Florida 33014
Reason for Recall:
The company received reports where the driveline connector locking mechanism has failed to engage as a result of a faulty manufacturing assembly process. This failure could result in the pump stopping and potentially lead to serious adverse health consequences, including death.
Public Contact:
Physicians with questions related to this recall or have affected products and need to schedule a driveline connector repair should contact HeartWare Clinical Support at (888) 494-6365, 24 hours a day, seven days a week, or by email at FSCA@heartware.com.
Patients: See below.
FDA District: Florida District Office
More Information about this Recall:
On December 12, 2013, HeartWare, Inc. sent an initial Urgent Medical Device Correction letter to their customers.
The firm will be sending an updated Urgent Medical Device Correction letter to physicians affected by this recall. This letter will provide updated actions to be taken by the physician. Letters for patients will be sent to physicians to be hand-delivered to their patients.
ACTIONS TO BE TAKEN:
PATIENTS:
If the driveline becomes disconnected from the patient controller, a “VAD Stopped” (high priority) alarm will alert you. As instructed in the Patient Manual, immediately reconnect the driveline to the controller and contact your doctor or VAD Coordinator.
Your driveline connection will be inspected by your doctor or VAD Coordinator. Should the inspection identify a locking mechanism that fails to engage, your physician will arrange for a permanent repair by a HeartWare Clinical Engineer as soon as possible. Once the driveline connector has been checked or repaired, the locking mechanism should function properly. Do NOT attempt to disconnect or inspect the driveline yourself.
PHYSICIANS:
Please promptly arrange a follow up visit with patients having the affected HVAD to inspect the driveline connector.
At implant and at each routine clinic visit, please inspect the patient’s driveline connector for proper locking and to ensure that the connector assembly remains secure. During the inspection, pull back the protective boot and slide the locking mechanism back and forth to verify free movement of the mechanism. If the locking mechanism of the driveline connector does not move freely or fails to engage, please push the connector back into the controller and immediately contact a HeartWare Clinical Engineer to perform a permanent field repair.
Please give the patient recall letter to your patients who have an affected device and explain what they should do if an unintentional driveline disconnect occurs.
About Class I Recalls:
Class I recalls are the most serious type of recall and involve situations in which there is a reasonable probability that use of these products will cause serious adverse health consequences or death.
Health care professionals and consumers may report adverse reactions or quality problems they experienced using these products to MedWatch: The FDA Safety Information and Adverse Event Reporting Program either online, by regular mail or by FAX.
http://www.fda.gov/MedicalDevices/Safety/ListofRecalls/ucm395252.htm
cjgaddy
10 years ago
HTWR Q4 Results & CC Feb.27 8amET
“HeartWare Schedules 4th Quarter Conference Call And Webcast”
FRAMINGHAM, Mass., Feb. 4, 2014: HeartWare International, Inc. (NASDAQ:HTWR) has scheduled a conference call to discuss its financial results for the three months ended Dec. 31, 2013, at 8:00am U.S. Eastern Standard Time on Thursday, Feb. 27, 2014. The Company plans to release the financial results prior to the conference call.
The conference call with management will discuss the Company's financial results, highlights from the 4th quarter and business outlook. The call may be accessed by dialing 1-877-941-4774 five minutes prior to the scheduled start time and referencing "HeartWare." For callers outside the U.S., please dial +1-480-629-9760.
A live webcast of the call will also be available in the Investor section at the Company's website ( http://ir.heartware.com/ ).
aproimos
10 years ago
01-31-2014 A Heartier Ventricular-Assist Market
Raymond James sees growth for the duopoly of Thoratec and Heartware.
Raymond James & Associates
We believe the ventricular-assist-device market remains one of the more exciting subsectors in our medical-device universe.
Ventricular-assist-device (VAD) is a duopoly market with high barriers to entry and established reimbursement, and has generated consistent midteens market growth over the last three years (well above the low-/mid-single-digit growth profiles of most other segments of the medical device industry). We expect this growth to continue, and for interest in the space to expand over the next few years as both Thoratec (ticker: THOR) and Heartware International (HTWR) [both rated at Outperform] advance the therapy with smaller next-generation devices that should improve clinical outcomes and could lower the overall cost of the therapy.
While Heartware has outperformed year-to-date (up 6% year-to-date versus S&P 500 down 3% year-to-date), Thoratec is down 5% on concerns around initial 2014 guidance and a lingering impact from the higher thrombosis rates highlighted by the media in late November. Our view is that sentiment has turned overly negative on Thoratec and, despite lowering estimates, we believe the risk/reward at this level is favorable. We believe the thrombosis concerns are manageable and are optimistic that 2014 guidance could act as a clearing event for the stock.
We attended two trade shows [Society of Thoracic Surgeons (STS) and the American Association of Heart Failure Nurses (AAHFN)] over the last 10 days and came away comfortable with our positive industry thesis. A few takeaways: 1) We got confirmation from a handful of constituents that November market-share dynamics were impacted partially by confusion associated with the implementation of the Centers for Medicare and Medicaid Services' (CMS) new NCD (national coverage decision), which is consistent with Heartware's recent comments; 2) Our sense was that the HeartMate II (HM2) thrombosis headlines in November were not having much of an impact on overall volumes or market share; 3) Similar to sentiment that we have picked up at previous industry meetings, surgeons appear to favor the size of the Heartware VAD (HVAD), while VAD coordinators remain more comfortable with the safety record of the HM2. Interestingly, one surgeon mentioned to us that he splits his bridge-to-transplant (BTT) volume evenly between the two devices in order to maintain a favorable rapport with both manufacturers; 4) While still a small proportion of U.S. implants (relative to Europe), interest in using a thoracotomy technique with the HVAD seems to be growing; 5) We felt that there were similar levels of "buzz" for both mechanical VAD (MVAD) and HM3 and believe the industry is genuinely excited about next-generation, potentially better, VADs; 6) Increasing awareness among community cardiologists/heart-failure specialists remains an important driver of longer-term VAD growth.
Based on Heartware's preliminary fourth-quarter results, we estimate that the worldwide VAD market (excluding Centrimag [Thoratec]) generated sales of $663 million in 2013, up 17.5% year-over-year (up 15% on a unit basis). By our math, this represents the sixth straight year of 15%-plus unit growth. We estimate that Heartware exited the year with about 25% share of the
U.S. market (40% of BTT), although normalizing for a soft month of November, market share was likely a little higher. We are comfortable with our fourth-quarter estimates for Thoratec ($127 million revenue, 41 cents adjusted earnings per share), but given Heartware's reported implant softness in November, we would be not be surprised to see some modest upside to Thoratec's top line.
We expect the trend of midteens market growth to continue in 2014, but we lower our estimates modestly. We model world-wide market growth of 13% year-over-year (in units). Our underlying market-segment assumptions are: 4% growth in BTT; 23% destination therapy (DT) growth; and 15% international growth. We lowered our BTT growth assumption to more closely match the market's low-/mid-single-digit growth profile from 2010-2012 (versus 8% in 2013). As such, we lowered our 2014 Thoratec revenue and EPS estimates to reflect slower BTT market growth and modest share losses, somewhat offset by higher growth in Japan and DT. We leave our Heartware estimates largely unchanged as lower BTT market growth is offset by higher DT pricing for the HVAD.
While we can certainly point to sources of conservatism in these estimates, we are nonetheless below consensus. In terms of potential upside, 2014 DT market growth could be faster as Heartware has effectively been out of this segment for six quarters and the presence of a second player (even if it's only a clinical trial) may accelerate growth. We note that Heartware's BTT approval in late 2012 drove faster market growth in 2013 (up 8% BTT market growth in 2013 versus about 5% in 2012).
-- Jayson Bedford
-- Michael Rich
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Mean Weimaraner
9 years ago
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