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By Barry S. Cohen

Heart failure is a major issue. It's estimated that nearly six million people in the U.S. alone suffer from the disease and more than 600,000 new cases are diagnosed each year. About 300,000 Americans die of heart failure every year. Drugs help manage the disease, but the only true salvation for those people in the late stages of heart disease is a transplant. And there is a shortage of good hearts available for transplant.

There are two major players making implantable devices to treat heart failure: Thoratec (THOR) and its chief rival Heartware International (HTWR). Thoratec just reported results for the fourth quarter of 2012 and Heartware is scheduled to follow suit February 15.

Heart failure occurs when the heart muscle degenerates, reducing the pumping power of the heart. This, in turn, causes the heart to become too weak to pumps blood at a sufficient level to meet the body's demands.

Pleasanton, Calif.-based Thoratec is the world market leader, with the broadest product portfolio to treat the full range of clinical needs for patients suffering from advanced heart failure. The company's products include the HeartMate LVAS and Thoratec VAD, with more than 20,000 devices implanted in patients suffering from heart failure. Thoratec also manufactures and distributes the CentriMag and PediMag / PediVAS product lines.

The company's sales were up 17 percent for the fourth quarter of 2012, driven in large part by its HeartMate and CentriMag product lines. In fact, HeartMate, on unit growth of 20 percent, accounted for nearly $111 million in sales, nearly 86 percent of the company's total revenue of $128.5 million. For the year, revenues were $491.7 million, up 16 percent. For 2013, earnings per share (on a reported basis) are now projected in the range of $1.32 to $1.42 while adjusted earnings are expected in a band of $1.76 and $1.86.

The company said it is focusing on investing in longer-term strategic initiatives, including late-stage development activities related to HeartMate III™ and HeartMate PHP™, both of which it plans to bring into pivotal clinical trials later this year. Thoratec's plans to push to keep sales surging for its HeartMate II pump will move to Japan, now that regulators have signed off on the device. Plans call for a commercial launch to begin at the end of the 2013 first quarter.

Thoratec tried but failed to buy rival Heartware in 2009, but rumors persist they could make another run at their Framingham, Mass.-based challenger. In fact, Heartware may be ripe for picking. Although analysts project the company's fourth quarter revenues will be up more than 30 percent to $28.7 million, the company still isn't expected to make money. Last quarter, Heartware International booked revenue of $22.8 million The average EPS estimate for this quarter is -$1.64.

Heartware got some bad news last week when it reported that at least 11 of 2,900 implants involving its celebrated HVAD heart pump developed a troubling mechanical problem--a part that could become partially separated from the main unit after extended use.

No patient has had any health problems based on the malfunction, the company disclosed in a recent regulatory filing. But Heartware launched a "voluntary field correction" to make sure the breakdown isn't more widespread.

Thoratec itself has been mentioned as an acquisition target for some of the device companies seeking to gain a chunk of the ventricular pump market that could surpass $700 million in the U.S. Among the potential bidders could be Medtronic (MDT) and St. Jude Medical (STJ), For more information about stocks in this space, our real time trading reports help investors identify opportunities before they happen.

Source: Thoratec And Heartware Vying For Leadership In Implantable Heart Failure Devices