Date: Jan 15, 2014 Author: Don Seiffert Source: bizjournals (
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The HeartWare Ventricular Assist Device (HVAD) is a small pump approved in the U.S. to be implanted in patients with left ventricular heart failure who are awaiting a transplant.
Don Seiffert
BioFlash Editor- Boston Business Journal
HeartWare International's shares fell slightly from an all-time high this morning after the medical device company said revenues from its small heart pump were lower than many analysts were expecting.
The Framingham company has been trading at more than $90 a share since it reported quarterly revenues in mid-November that were 140 percent higher than the same period a year earlier. The $54.8 million in revenue for its third quarter was almost entirely attributed to sales of the company's HeartWare Ventricular Assist Device (HVAD), a small pump approved in the U.S. in November 2012 to be implanted patients with left ventricular heart failure who are awaiting a transplant.
But after the close of market's yesterday, HeartWare gave a preview of what it expects to report for revenue for the fourth quarter, setting the bar at $53 million. According to analysts as Leerink Partners, that's significantly less than the consensus estimate of $58 million for the quarter, and will mean the company's full-year revenues will come in at $208 million, also less than analyst estimates.
President and CEO Doug Godshall explained in a presentation at the JPMorgan Healthcare Conference late Tuesday that HVAD sales were hurt by confusion over which patients qualified for reimbursement for the device under new rules issued Oct. 30 by the Centers for Medicare & Medicaid Services. Leerink analyst Danielle Antalffy wrote in a research note that indeed, for a couple weeks in early November there were "several million dollars worth of HVAD implants were lost" to HeartWare's competitor, California-based Thoratec.
But Antalffy added that the revenue slide was "exacerbated by particularly low overall (heart) patient volumes in November." She said there's a lot of potentially positive news to come out of the company in coming months, much of it related to a new pump now in human trials which is one-third smaller than HVAD, called MVAD. But she also said she's expecting a relaunch of the Synergy heart pump, designed for less-sick heart patients, which was acquired by HeartWare when it bought New Jersey-based CircuLite last December. That acquisition cost HeartWare $18 million in stock and about $12 million in cash, and includes future milestone payments of up to $320 million over the next 10 years. CircuLite's Synergy pump is undergoing an upgrade to resolve problems with blood clots which caused sales to be temporarily suspended.
After an after-hour stock slump of nearly 10 percent Tuesday evening, HeartWare's stock was down just 3 percent to $100 a share as of 11 a.m. today. That's just shy of its all-time high of $105 hit earlier this week. As of the beginning of 2013 the company has 396 employees, and added 63 with the acquisition of CircuLite.
