Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Thoratec (NASDAQ:THOR)

Q4 2013 Earnings Call

February 04, 2014 4:30 pm ET

Executives

Neil Meyer

Gerhard F. Burbach - Chief Executive Officer, President and Executive Director

Taylor C. Harris - Chief Financial Officer, Principal Accounting Officer and Vice President

Analysts

David H. Roman - Goldman Sachs Group Inc., Research Division

Bruce M. Nudell - Crédit Suisse AG, Research Division

Jason R. Mills - Canaccord Genuity, Research Division

Brooks E. West - Piper Jaffray Companies, Research Division

Lawrence Biegelsen - Wells Fargo Securities, LLC, Research Division

Steven M. Lichtman - Oppenheimer & Co. Inc., Research Division

Jayson T. Bedford - Raymond James & Associates, Inc., Research Division

Robert A. Hopkins - BofA Merrill Lynch, Research Division

Danielle Antalffy - Leerink Swann LLC, Research Division

Christopher T. Pasquale - JP Morgan Chase & Co, Research Division

Matthew O'Brien - William Blair & Company L.L.C., Research Division

Matthew Taylor - Barclays Capital, Research Division

Suraj Kalia - Northland Capital Markets, Research Division

Operator

Good day, and welcome to the Thoratec Corporation Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Neil Meyer, Director of Investor Relations. Please go ahead, sir.

Neil Meyer

Good afternoon, and thank you for joining us today. With me is Gary Burbach, President and Chief Executive Officer; and Taylor Harris, Vice President and Chief Financial Officer. Gary will discuss highlights from the fourth quarter and full year 2013, and Taylor will review the financial results for the quarter, as well as our 2014 outlook. We will then open the call to your questions.

Before turning the call over to Gary, I want to remind you that during the course of today's conference call and the question-and-answer session that follows, we may make projections or other forward-looking statements that are subject to the Safe Harbor provisions of the securities laws regarding future events or financial performance of the company. We caution you that these statements are only predictions and that actual results may differ materially. We also alert you to the risks contained in the documents we filed with the Securities and Exchange Commission, such as our annual and quarterly reports on Forms 10-K and 10-Q. We do not undertake any obligation to update or correct any forward-looking statements. Gary?

Gerhard F. Burbach

Thank you, Neil, and good afternoon. 2013 was an exciting and eventful year for Thoratec, highlighted by strong worldwide market growth for LVAD therapy, our successful launch of HeartMate II in Japan and robust revenue growth in our acute product line. We also reaped significant milestones with our pipeline opportunities that have positioned us to start pivotal clinical trials in the coming months for HeartMate III and HeartMate PHP. During my comments today, I will discuss our financial results for the fourth quarter and full year 2013, our market development strategies and an update on our product pipeline. Turning first to financial results for the fourth quarter, Thoratec generated revenues of $128.2 million, essentially unchanged compared with the fourth quarter of 2012. HeartMate II revenues increased 2% year-over-year, which was offset by a 4% decline in CentriMag revenues in continuation of the expected reduction in our legacy PVAD product line. In terms of geographic breakdown for the quarter, international revenues increased 7% compared with last year, driven by our Japanese launch, while U.S. revenues declined 2% due to competitive dynamics. Changes in foreign exchange favorably impacted overall revenue growth for the fourth quarter by 70 basis points. Earnings per share on a non-GAAP basis were $0.38, consistent with the fourth quarter of 2012.

For the full year 2013, worldwide revenues of $502.8 million increased 2% versus 2012. HeartMate II revenues increased 2% and CentriMag revenues grew 21%, partially offset by the decline in PVAD revenues of over $6 million. International growth of 23% in 2013 was particularly strong, while U.S. revenues declined 3% for the full year. Earnings on a non-GAAP basis for 2013 were $1.80 compared with $1.83 in 2012. We shipped a total of 1,020 chronic pumps during the fourth quarter, a decline of 4% compared with the fourth quarter of 2012, as growth in international volume was offset by a decline in U.S. units. Worldwide HeartMate II units declined 2% compared with the fourth quarter of 2012, with the remaining year-over-year decline in our chronic unit sales attributable to lower PVAD volumes. International HeartMate II units grew nearly 7% in the fourth quarter and 19% for the full year compared with prior-year periods, and was offset by declines in the U.S. Notably, full year HeartMate II unit volumes were flat on a worldwide basis compared with 2012 levels, despite the emergence of a significant new competitive launch in the U.S. throughout 2013. I would also note that the CMS national coverage decision covering Medicare reimbursement for LVAD therapy in the U.S. became effective in November. We did not observe any unusual patterns in HeartMate II volume throughout the fourth quarter that would suggest this MCD caused significant or disruptive changes at centers. Any broader impact from the MCD will depend, in large part, on private payer adoption, which is subject to periodic review cycles and individual plans.

CentriMag, our acute surgical product line, generated revenues of $11 million during the fourth quarter compared with $11.5 million during the prior-year period, while full year CentriMag revenue increased 21% to $43.3 million during 2013. The year-over-year decline during the fourth quarter was attributable primarily to lower nonpump revenue from initial capital purchases since we opened fewer new U.S. sites during the fourth quarter of 2013 compared with the prior year. However, underlying demand for CentriMag and PediMag pumps remain strong with a worldwide volume increase of 9% during the fourth quarter, highlighted by 12% international unit growth driven by strong performance in Germany and the United Kingdom. Moreover, we're actively pursuing an approval pathway for a 30-day indication for use in the U.S., along with exploring opportunities to successfully address the rapidly growing ECMO segment, both of which would expand the market opportunity for CentriMag going forward. Our strategic priorities for 2014 include continuing to broadened adoption of the therapy while establishing important drivers of growth in future years. Specifically, we expect our efforts to further penetrate the Destination Therapy end market in the U.S., and ongoing international expansion will support worldwide LVAD market growth. We will also drive increased adoption of CentriMag on a worldwide basis. And lastly, we will achieve critical milestones with respect to our product pipeline as we advance HeartMate III and HeartMate PHP in the clinical trials.

Turning first to market development, we believe Thoratec continues to be the clear leader with differentiated capabilities that will help support ongoing attractive growth in the worldwide LVAD market, particularly through further expansion of Destination Therapy. Our investments in market development cover a wide range of activities focused on 5 key areas: referral generation, center capacity development, global expansion, clinical data and outcomes improvement. While we believe Thoratec has made significant progress in each of these areas, we continue to see material opportunities that should support growth in the coming years. We have several initiatives designed to improve referral patterns through greater physician engagement and education about the therapy. During the fourth quarter, these activities included a successful advance heart failure therapy forum, a well-attended international conference for HeartMate II users in Asia and our first ever emerging thought leaders forum for implanting center surgeons and cardiologists. We actively track our market development results, and our collective efforts have driven approximately 60% growth in the number of referred patients implanted with the HeartMate II in the United States since 2011, including a strong focus on Destination Therapy patients. Moreover, greater than 1,000 physicians referred a patient for implant over the past year. We believe these outcomes demonstrate tangible success with advancing the therapy and that our knowledge from previous efforts will help to improve the effectiveness of future market development investments, which we view as a strong strategic priority. We're also advancing our Shared Care model, which allows for routine post implant care for HeartMate II patients in the local community rather than at the implant center. This collaborative model offers benefit to patients, community cardiologists and to the implanting center. As part of our efforts to grow awareness, we hosted a successful Shared Care summit in October for advanced referrers and potential new Shared Care sites covering patient selection, advanced device troubleshooting and patient management. We ended 2013 with over 80 fully trained Shared Care sites and expect to add approximately 40 new sites in 2014, as strong interest from all stakeholders is driving increased adoption of this model. With regard to center development, we continue to expand the base of implanting centers and ended 2013 with 365 HeartMate II centers worldwide, up from 323 centers in 2012. We added 6 centers in the U.S. during the fourth quarter for a total of 175, of which 128 have received Destination Therapy certification from the Joint Commission, which recently released revised standards for surgeon and cardiologist requirement that we believe should enable additional centers to confidently move forward with DT certification. We also opened 7 new centers outside the U.S. during the quarter and ended the year with 190 international centers. We believe there remains an opportunity to further expand our base of implanting centers over a multiyear period and expect the number of new centers open in the U.S. during 2014 will be similar to our center growth experience in 2013, as we will continue to be disciplined in our evaluation of the potential for a successful program when considering new centers. More importantly though, we also believe there is significant continued opportunity to increase penetration across our current base of centers, and we're focusing resources toward accomplishing this goal.

In terms of global expansion, our successful launch in Japan during 2013 represents our most significant new market opportunity, and we're very pleased to have a strong leadership position there. We opened 2 additional centers in Japan during the fourth quarter, bringing our total to 14 implanting centers. Japan was the largest contributor to our international unit growth in the fourth quarter, and our current annualized run rate of approximately 100 implants represents significant market expansion compared with the VAD market in Japan prior to the launch of HeartMate II. We expect solid Japanese market implant growth driven by our efforts to help build out the clinical infrastructure, and that over time, Japan will ultimately become one of the largest LVAD markets outside of the U.S. Realization of the full market opportunity in Japan will depend in part on receiving approval for a long-term indication, and we remain in active discussions with regulatory authorities on the pathway for this approval.

During 2014, we also plan to enter South America. We recently received approval for HeartMate II in Argentina and expect approval this year in Brazil as well, which we believe represents the most significant single country opportunity in the region over the long term. While we expect the contribution from South America to be modest this year, our expansion efforts will continue to broaden the foundation for further advancing the therapy on a worldwide basis. The breadth of clinical data on HeartMate II continues growing to unparalleled levels in the field of mechanical circulatory support. And our ongoing post market studies should further advance market expansion and improve clinical outcomes. We're particularly excited that data from our ROADMAP, RESIST and TRACE studies, along with data from the SSI registry examining driveline infection, should all be presented during 2014. In addition, the C Heart Failure study, designed to identify potential LVAD candidates among the population of CRT or ICD devices, has now enrolled patients at 4 European centers. While ongoing clinical data addresses a variety of aspects to better manage LVAD patients and improve adverse events, thrombus was an area of increased focus among recent clinical literature. In late November, the New England Journal of Medicine published an article authored by 3 large implanting centers, while The Journal of Heart and Lung Transplantation released a series of articles dedicated to the topic of thrombus, including a paper based on previously released data about pump exchange versus suspected device thrombosis in HeartMate II based on data collected by the INTERMACS registry. The New England Journal article generated attention due to its depiction of a rapid and increasing rate in the frequency of thrombosis with HeartMate II based on data from 3 specific centers. However, the broader INTERMACS data, based on experience at 132 centers, shows a relatively modest increase in thrombosis in recent years and was publicly disseminated well before the publication of the New England Journal of Medicine article. Our comprehensive internal data is consistent with the historical trends previously released by INTERMACS. Moreover, our more recent data shows stabilization in thrombosis rates with HeartMate II since 2012, in contrast to the still increasing rates suggested by the New England Journal of Medicine article.

Thoratec has always been an organization dedicated to improving patient outcomes, and we remain focused on improving all adverse event rates, including thrombus. There are many contributing factors to device thrombosis, including aspects of patient management and implant technique, and the individual center experience varies widely throughout our implanting base. We are actively engaged with centers in order to promote best practices around anti-coagulation protocols, implant technique and pump speed management, that we believe can help to lower thrombus rates with HeartMate II. We expect that additional clinical data about pump thrombosis will be released over the coming months, including at ISHLT in April, which will alter multiple perspectives, including results from centers experiencing lower levels of thrombosis, as well as suggestions for clinical best practices. More broadly, we believe it's important to consider that overall clinical performance for HeartMate II in the commercial era has improved compared with the clinical trial experience, including an increase in survival and reductions in adverse events such as stroke, bleeding and infection. Following the New England Journal of Medicine article and subsequent media attention, we have been in active communication with our centers and do not believe this issue had a material impact on our business during the fourth quarter. However, it remains too early to definitively assess the near-term impact, particularly with regard to referring physicians. And our 2014 outlook prudently assumes some level of potential market softness during the first half of the year, reflecting this uncertainty. Longer-term though, we are confident in the increasing role for LVAD in addressing advanced heart failure given the dramatic clinical benefit of the therapy for a very sick population.

I would like to turn now to our product pipeline where in the coming month, we will enter clinical trials for 2 important products, each with the potential to create significant value for Thoratec. Specifically, we expect to start CE Mark trials for both the HeartMate III and HeartMate PHP in the early part of 2014 that would position both products for commercialization in Europe during 2015. Based on the totality of data that we've observed throughout the development and testing phases, I'm very excited about the prospect that each of these products will meaningfully improve patient outcomes and expand our market opportunities. With respect to HeartMate III, we remain on schedule with our final preclinical testing, and the production of systems for the clinical trial is underway. We have commenced regulatory submissions in several countries including Germany, and we'll be conducting surgical training for European trial sites this month. Our goal is to fully enroll the 50-patient European trial throughout 2014, and we expect CE Mark approval in 2015 subsequent to the 6-month follow-up period. We plan to start the U.S. trial for HeartMate III during the second half of 2014. This trial will be a non-inferiority study compared with HeartMate II, and we are in final discussions with the FDA and CMS regarding a single-study design that would result in 2 separate approvals for short- and long-term use. We believe this trial design should help to improve the efficiency of our clinical pathway for HeartMate III, along with advancing a potential new regulatory and reimbursement template for future product generations. With regard to HeartMate PHP, our acute percutaneous support system, 2014 will be marked by the initiation of 2 pivotal trials. The first, a CE Mark study set to begin in the second quarter, will examine the use of PHP to provide prophylactic support of patients undergoing a high-risk PCI procedure. We have completed site selection for this trial and site initiation is underway. The second, an IDE study to begin late in 2014, will study urgent PHP support in patients suffering from cardiogenic shock. And we are engaged in productive discussions with the FDA concerning final details of the U.S. study design. We continue to believe that HeartMate PHP will offer clinicians an unparalleled technology for treating patients requiring acute hemodynamic support. In particular, our testing demonstrates the potential for substantial performance improvement over currently available acute support technologies and important clinical parameters such as flow, hemolysis, set-up time and ease-of-use.

In closing, 2013 was a year of significant progress, highlighted by robust full year market growth, geographic expansion and by meeting the challenge of significant new competition in the U.S. I believe that 2014 will be an even more exciting year as we embark on clinical trials for both the next-generation chronic LVAD technology and a new acute support product, which will further our success over the next several years. While our outlook expects that revenue will increase in 2014, we recognize that our financial performance will still not fully reflect the favorable underlying growth dynamics of our market. We expect this will be a temporary phenomenon and that our business should ultimately grow at or above market rates over time. These prospects of exciting product innovation and further acceleration of our revenue growth over the coming years makes me particularly optimistic about our future. I will now turn the call over to Taylor to review our financial results and details of our 2014 guidance. Taylor?

Taylor C. Harris

Thank you, Gary. Before reviewing our results, I want to remind you that non-GAAP net income excludes the tax affected impact of amortization and impairment of intangible assets, share-based compensation expense and acquisition-related expenses, including transaction costs, inventory fair market adjustments and contingent consideration adjustments. You can find the reconciliation between our GAAP and non-GAAP results in our earnings press release at www.thoratec.com.

Revenues for the fourth quarter of 2013 were $128.2 million compared with revenues of $128.5 million in the fourth quarter of 2012, and included a 70-basis-point benefit to revenue growth from favorable changes in foreign exchange rates. As expected, Pocket Controller upgrades and Japan's stocking activity declined on a sequential basis during the quarter, and we expect a minimal revenue impact from these items going forward. Full year 2013 revenue increased 2% to $502.8 million from $491.7 million during 2012, with a 40-basis-point positive impact from foreign exchange. Non-GAAP gross margin for the quarter was 65.5% compared with 71.7% in the prior year. Gross margin was negatively impacted in the quarter by a higher than anticipated charge for warranty and excess inventory related to our transition from the EP to the Pocket Controller, as well as the impact of the U.S. Medical Device Excise Tax, which was not in place during 2012. Without these items, fourth quarter gross margin would have been modestly favorable relative to the prior year. For the full year, non-GAAP gross margin was 69.3% in 2013 compared with 71.7% in 2012. Non-GAAP operating expenses for the fourth quarter were $52.9 million versus $57.6 million in the fourth quarter of 2012, a decline of 8%. In the fourth quarter of 2012, we disclosed over $6 million of one-time project expenses and incentive compensation, which did not recur in the fourth quarter of 2013, and was the primary driver of the year-over-year decline in both R&D and sales and marketing expense. Full year 2013 non-GAAP operating expenses totaled $204.9 million, an increase of 6% compared with 2012. The non-GAAP effective tax rate for the fourth quarter was 29.6%, bringing our full year non-GAAP effective tax rate to 28.1%. In 2013, our tax rate benefited from the recognition of federal R&D tax credits generated in both 2012 and 2013, a noncash benefit from reduction of reserves related to a prior year's tax return and a higher percentage of earnings generated in lower tax jurisdictions. Non-GAAP earnings per diluted share in the fourth quarter were $0.38, unchanged from the prior year, while full year 2013 earnings per diluted share were $1.80 versus $1.83 in 2012. Weighted average diluted shares outstanding for the quarter were 57.9 million compared with 59.4 million a year ago, reflecting our share repurchase activity over the past year. We repurchased $8.9 million of stock during the fourth quarter at an average price of approximately $36 per share. While we maintained a primary focus on preserving financial flexibility for strategic investments, we recently announced board authorization for a repurchase program of up to $200 million over a 2-year period, as we believe that our well-capitalized balance sheet and favorable cash flow profile will provide ongoing opportunity to evaluate repurchases as a way to return capital to shareholders. We intend to remain disciplined in our continuous evaluation of future repurchase activity, and we'll approach our ongoing capital deployment in a measured and opportunistic method going forward. Our guidance for 2014 is for revenue in the range of $520 million to $535 million. I would note that our fiscal 2014 fourth quarter result will include an extra week relative to 2013, which is reflected in our financial guidance for the year. Given that the extra week will occur during a seasonally slower holiday period, we expect the revenue impact will be less than that of the average business week. Our outlook assumes continued solid worldwide market growth, although at modestly lower levels than the strong growth experienced during 2013. This outlook reflects some potential for near-term impact related to the recent focus on HeartMate II thrombosis, although we fully anticipate working through any concerns with implant centers and the referral community over the next several months. As a result, our guidance assumes that worldwide VAD market growth will be notably stronger during the second half of 2014 than the first half, since we expect that any market impact from the thrombus issue will be concentrated in the early part of the year. This dynamic, along with the extra week included in our fiscal fourth quarter, are expected to skew the distribution of our revenues this year for the latter part of 2014. In the U.S., we expect market share in Bridge-to-Transplant will stay relatively consistent with levels experienced in the second half of 2013. And while Destination Therapy will continue to drive overall market growth, our expectations do consider that HeartWare will enroll its additional DT clinical trial. Outside the U.S., we remind you that HeartMate III clinical trial units will not generate revenue, although we do anticipate the opportunity for modest market share gains internationally. While HeartMate II will be the primary driver of revenue growth in 2014, we expect that our acute care product line will generate double-digit revenue growth supported by increases in unit volumes.

Meanwhile, revenues from our legacy PVAD product should continue to decline by approximately $5 million, with usage primarily restricted to BiVAD applications. We expect that gross margin in 2014 will be approximately 71%, an increase of roughly 200 basis points due to the impact of the charges we incurred in the second half of 2013 related to the transition to the Pocket Controller, as well as anticipated underlying efficiencies to be gained in 2014. We expect that this gross margin improvement will be weighted towards the second half of the year. We anticipate utilizing the expected increase in gross margin, as well as ongoing leverage and G&A expense, to fund the strategically important investments in sales and marketing and R&D, which we have discussed previously. These R&D investments are largely attributable to HeartMate III and HeartMate PHP clinical trial activity, increased investment in our fully implantable system and a full year of expense for the DuraHeart II program. We expect our tax rate for 2014 will be approximately 32%, which reflects an assumption for continuation of federal R&D tax credits. If no legislation were to pass, the negative impact to our tax rate would be approximately 100 basis points. We expect non-GAAP earnings per share for 2014 will be in the range of $1.72 to $1.82 based on shares outstanding remaining unchanged from fourth quarter 2013 levels. I would note that the expected normalization of our tax rate in 2014 unfavorably impacts our earnings per share guidance by approximately $0.10 for the full year. While we do not provide quarterly guidance, we expect earnings per share will be highest during the fourth quarter of 2014, consistent with our expected revenue trends throughout the year. The Thoratec team remains very excited about the upcoming year, during which we expect to reach important clinical milestones that will help shape our future growth. As Gary stated, 2014 remains a transition year for the company financially, and we look forward to further accelerating growth in 2015 and beyond as we realize the potential opportunities from our exciting pipeline products. Thank you, again, for joining us today, and we will now open the call to your questions. [Operator Instructions] Operator, we're now ready to begin the Q&A session.

Question-and-Answer Session

Operator

[Operator Instructions] We do have our first question from David Roman with Goldman Sachs.

David H. Roman - Goldman Sachs Group Inc., Research Division

I wanted to try to put some of your comments together with the guidance that you're providing here. So if I'm hearing you correctly, the guidance does contemplate some market weakness and potentially, some Thoratec specific weakness as it relates to the thrombosis concerns that came up in the end of 2013. But as of now, you haven't seen any impact from that dynamic and we're now sort of 2.5 months post when those data were released. And I'm just trying to put all those pieces together. What is it that you're seeing in your conversations with your customers that's leading you to think things are going to get worse from here?

Gerhard F. Burbach

Yes. So what we've seen to-date, we characterize as immaterial. We didn't say there was absolutely no impact, but we think the impact has been quite small. And I'd say that in the line of being kind of prudent, just in terms of the New England Journal print version only coming out here at the beginning of the year, and that we expect we'll have greater visibility to the referring community. And so we've been focused very much on the physicians and implanting centers, feel like that process of discussion has gone quite well and that it's going to take a more significant amount of time, though, to really have a similar process of education with the referring physician community. I do really want to incorporate that possibility of some modest level of impact into our guidance, particularly, as we mentioned in the first half of the year.

David H. Roman - Goldman Sachs Group Inc., Research Division

Okay. And then maybe just -- maybe a broader strategic question. You characterized 2014 as a transition year, or 2013, obviously, was fairly challenged given HeartWare's entrance into the U.S. market. When do you think we start to see a turn in the business? And as you're certain -- you talk -- how do you sort of think about long-term? Is that 1 year or 3 years, 5 years? Maybe just to help us sort of bridge the gap from 2014 to your longer-term outlook.

Gerhard F. Burbach

Yes. As Taylor mentioned, we do expect to see kind of increasing growth. And I would say that in 2015, we expect to see an uptick in growth versus 2014. We're obviously not providing specific guidance, which directionally, we feel like we expect to see increasing growth in '15 versus '14, and similarly, in '16 versus '15, as we see a number of positive growth catalysts evolving over that time period, including in the DT market. Of course, this year, we have the HVAD trial that will be enrolling. That should be a diminishing impact in 2015. And then more importantly, we have HeartMate III and HeartMate PHP, which will be going through the trial and approval process, and we expect those will be launching in Europe in the latter part of 2015, so having some impact in 2015, but a more significant impact in 2016.

Operator

We have our next question from Bruce Nudell with Credit Suisse.

Bruce M. Nudell - Crédit Suisse AG, Research Division

Gary, could you -- you've obviously scrubbed your data and really looked hard at the thrombus question. When patients are kind of optimally managed and when you have best positioning, right pump speed, right anti-coagulation, what kind of thrombus rate are you seeing? And are you absolutely certain that there's no kind of interplay between the inflow catheter changes you made and the thrombus issue as described in the various journal articles?

Gerhard F. Burbach

Right. Yes, I think the best characterization on that, Bruce, is looking at centers that have very good performance in terms of their thrombus rates. And we see significant range of centers, both of those with high volumes of implants, as well as a number that have lower volumes of implants, that are in the very low single-digit percentages of thrombus, so substantially, below what is in the broader INTERMACS database, and certainly, versus what was characterized in the New England Journal article. And importantly, and I'd, again, point to versus, I think the most significant difference versus that New England Journal article is versus that increasing rate of thrombus over time that's characterized in Figure 1 of that article. We've seen a stabilization since 2012 in the rates generally, not just at centers, but at -- these strong levels of performance, but across the full population, including those centers with higher rates of thrombus. In terms of your question around the inflow cannula where we transition to a sealed inflow and outflow cannula versus the historical versions that were unsealed, we've looked at that extensively both in terms of internal kind of lab and animal assessment, but more importantly, we've looked at that in terms of the actual clinical experience. And there's about a 12-month time period where each of those aspects of the system were in use in significant numbers as customers transition from the one to the other. And if you lay the experience, if you compare the experience with the sealed versus the unsealed over that time period, there's no difference in the thrombus rate. So that's a very strong clinical data point that shows over a very large population of patients. There's over 1,000 patients in kind of essentially those 2 arms of that retrospective analysis that shows no difference between those aspects of the device.

Bruce M. Nudell - Crédit Suisse AG, Research Division

And I guess, my follow-up is, it pertains to the next generation pump, the HeartMate III. Some have speculated that -- well, of course, we don't know what we have until it's in a broad human experience, but some have speculated that the heart -- the HVAD to HeartMate II size advantage will be important going forward. Could you just kind of scale the relative importance of the size of the device versus the functional characteristics of the device, and the interplay with geology, and how that's stacked up in your thinking as you sat down and designed the HeartMate III?

Gerhard F. Burbach

Yes. I mean, certainly, both are important. Ultimately though, I think the best possible clinical outcomes will be the most important determinant of success. And I think that's particularly evident as you look at kind of what's played out in the market here with concerns around stroke, with the HVAD, more recently with some of the thrombus questions on the HeartMate II. And the HeartMate III is specifically designed to address that universe of adverse events, bring down the rates of thrombus, stroke, bleeding, to the minimal levels possible with some magnetically levitated base system. So we're very excited about what we've seen to-date in animals. We also, of course, have clinical experience with the underlying foundation technology with the CentriMag in an acute base system, which is clearly the best-in-class product in that acute universe of devices. So we feel very good about what we expect to see with the HeartMate III, really achieving a next level of clinical performance, similar to what we see -- we saw with HeartMate II versus the HeartMate XVE. HeartMate III also is a major step forward in terms of size versus the HeartMate II. So it will have significant improvements in terms of implantability. So with HeartMate III, we believe we're gaining very substantially in terms of both those core clinical outcomes, as well as implantability.

Operator

Our next question comes from Jason Mills of Canaccord Genuity.

Jason R. Mills - Canaccord Genuity, Research Division

First question is about the proposed trial for the U.S. HeartMate III device. Could you give us a little bit more detail on how the logistics of that trial might work? And really, what I'm getting at is if you have sort of one trial that's -- you're targeting to give you both short- and long-term indications. How do patients flow through that trial? And can you give us some sort of a verbal flowchart to help us understand how that trial is going to work and give us an indication of -- I assume you believe that it will be a more efficient trial or perhaps, sort of cut down the time it will take you to get both -- each -- maybe both the short or long -- and the long-term indication?

Gerhard F. Burbach

Right. Yes. So as we mentioned, it's still in process. But based on the pathway that we're on, and we certainly had multiple dialogues with the FDA so we do feel very good about this pathway being how we're going to go forward in the clinical trial, we have one set of inclusion, exclusion criteria for both of those approvals. So kind of an all comers that are entered into the trial based on that set of inclusion, exclusion criteria. There's been a follow-up at 6 months to move toward that short-term or Bridge indication. And then there's a subsequent follow-up at 2 years for Destination Therapy or long-term support. So clearly having one set of inclusion, exclusion and enrollment feeding into both approvals will make for a more efficient process of enrolling patients, getting the required number of patients enrolled in the trials to move towards those approvals. It is planned to be randomized against the HeartMate II in terms of the comparator.

Jason R. Mills - Canaccord Genuity, Research Division

Okay, that's helpful. Just to take it a step further, if one's -- or say, I'm a patient, I get enrolled, will I be immediately thrown in either a Bridge-to-Transplant or a DT bucket? Or why go through follow-up at the 6-month period of time either being included in a Bridge cohort?

Gerhard F. Burbach

Yes, you're not defined as one or the other when you enter into the trial.

Jason R. Mills - Canaccord Genuity, Research Division

Okay. Several questions on that, but I'll maybe ask more offline. As a follow-up question, Gary, pretty solid results relative to where consensus was in the U.S. Outside the U.S. though, it was a little below expectations. I'm wondering if you could give us a sense for what happened during the fourth quarter, specifically in Europe, where you think you lost share there and what you may be doing sort of in the first, second quarters here to reverse those trends?

Gerhard F. Burbach

Sure. So first, we don't think that we lost share. We think that share was relatively stable based on what we know at this point. And in terms of Europe, as always, Jason, I'd point to you to not focus on just a quarter, but to focus on kind of a bit more extended time horizon. You know how lumpy the market can be in any short time period. And if you look at the year, 2013, Europe had a very strong year in terms of market growth. So we certainly were very pleased with what we saw in the European market in 2013.

Operator

Our next question comes from Brooks West with Piper Jaffray.

Brooks E. West - Piper Jaffray Companies, Research Division

Gary, I wonder if I could just get you to speculate on HeartWare's comments around the impact of the November national coverage decision. A lot of us, I think, thought maybe that $2 million to $3 million of revenue might come over to you guys. Just curious to get your thoughts there. Do you think those patients just kind of went back into the queue for HeartWare or what might have happened there?

Gerhard F. Burbach

Yes, it's hard for me to speculate on that just not having had visibility to what was going on with their business. And on our side, we didn't see the kind of volatility they've described. We saw a pretty typical progression. So that makes it really difficult to kind of try to understand. I mean, I know what they described. But if there really was some kind of momentary dislocation, I guess, those patients could have potentially come over to us or they could have kind of remained to kind of in queue at those centers and been implanted in December with a HeartWare device versus being implanted in November. I guess, you have to ask them that question.

Brooks E. West - Piper Jaffray Companies, Research Division

Fair enough. And then my next question, wondering if you could provide a little bit more detail on the PHP trials, what the comparator might be? Some of those trials have been really difficult to enroll in the past. Any other thoughts you can provide there on both the SHOCK and the PCI indications?

Gerhard F. Burbach

Yes. So in Europe, the trial will be kind of a more straightforward trial without a kind of more difficult, randomized kind of approach. In the U.S., the intent would be to randomize against intra-aortic balloon pumps, which is currently still the predominant standard of care. And what we're looking towards, because I certainly understand your question regarding difficulty of enrollment, is identifying a patient population who are severely, acutely compromised but that still enter into the hospital environment in a way that enables their identification, consent and enrollment in the trial kind of in a methodical way. And we believe we do have that kind of population identified. We've been consulting with an advisory panel of physicians on this. And so that's where the focus is, that kind of severely compromised set of patients that are kind of in severe heart failure and -- but they still enable that kind of enrollment process.

Brooks E. West - Piper Jaffray Companies, Research Division

And just to follow up quickly there, you think, post SHOCK II results, that physicians would be willing to randomize to balloons?

Gerhard F. Burbach

That's what -- we do believe that they will, yes. I mean, we've had a lot of dialogue on that question, and we do believe that they will do that.

Operator

Our next question comes from Larry Biegelsen with Wells Fargo.

Lawrence Biegelsen - Wells Fargo Securities, LLC, Research Division

Gary, I thought maybe I'd ask you one that we get often asked. Maybe if you could -- it would be interesting to hear from you if you could compare and contrast MVAD to HeartMate III.

Gerhard F. Burbach

Okay. I mean, I guess there's 2 primary differences that are fairly evident. The one that we view as the most important is the internals of the system where they have a hydrodynamically based system, kind of a variant on HVAD, it's kind of a different implementation of that type of technology as we understand it, versus with the HeartMate III, where we have a magnetically levitated system with much larger gaps and we believe will have a much stronger profile in terms of clinical performance in terms of some of these adverse events I talked about earlier. The second is, of course, size where the MVAD is smaller than the HeartMate III. And so time will tell how does that translate into potential implantation advantages. Certainly, the HeartMate III is a substantial leap forward from the HeartMate II in terms of implantation, so kind of the room for continued benefit there is certainly declining. But I think those are kind of the 2 most fundamental differences.

Lawrence Biegelsen - Wells Fargo Securities, LLC, Research Division

And then another question on the competitive front that we're often asked about. HeartWare's pursuing a thoracotomy IDE. What's your view on whether that could actually help move share for them and your interest in a thoracotomy approach next?

Gerhard F. Burbach

Sure. Yes, our view is kind of currently, that based on clinical benefits that we see with the HeartMate II, some of the other capabilities that we're bringing in terms of the service and support infrastructure to help build practices, as well as the indication for use being still confined to Bridge in terms of the HVAD device, that, that we don't expect to see any kind of fundamental impact in terms of share from that approach.

Lawrence Biegelsen - Wells Fargo Securities, LLC, Research Division

And then, is -- are you guys going to pursue that approach with HeartMate III?

Gerhard F. Burbach

We will, over time, pursue a less invasive strategy with HeartMate III.

Operator

Our next question comes from Steven Lichtman with Oppenheimer.

Steven M. Lichtman - Oppenheimer & Co. Inc., Research Division

Gary, you mentioned that you think the MCD relative to DT certification will help in terms of centers feeling more confident in the process. Can you expand on that? Did you see some holdback from centers in '13? And what's your outlook overall in terms of DT certification moving noticeably higher here?

Gerhard F. Burbach

Yes. Yes, so we did see a slowdown in the process of bringing online new centers while that MCD was uncertain. And so we do feel like it's had a positive impact in terms of getting some of those centers on track and on board in the later part of 2013, and also gives us more confidence in terms of achieving our objective for new centers in 2014. That said, we're not really projecting or expecting that all of a sudden, the floodgates are going to open up and we're going to be bringing on board lots of new centers. We're trying to be very much focused on high-quality centers that aren't just going to buy the HeartMate II system, put it on the shelf and implant a couple of patients a year. We're really looking -- given that each one of these centers takes a lot of time, especially for our clinical team, to get them up to speed using the device effectively, we really want them to be centers that are going to start to build a very meaningful Destination Therapy practice over time. So we're expecting a similar rate of new centers, around 10 or so, in the U.S. But the expectation is that we're going to have high-quality centers, and also, hopefully, that this enables some of the centers that maybe haven't been as aggressive here over the last year, 1.5 years, in terms of pursuing Destination Therapy certification in helping them to get through that process here as we go forward. Because there are still over 40 of the centers in the United States today that have HeartMate II that are not yet DT certified.

Steven M. Lichtman - Oppenheimer & Co. Inc., Research Division

And then secondly, on Japan, what's the outlook for HeartMate II for 2014? And when should we hear from the agency there on a longer-term indication?

Gerhard F. Burbach

Sure. So we expect to see solid growth for HeartMate II in 2014. Obviously, not what we saw in '13 when we launched, but still, well ahead of our overall international growth rates. And then in terms of continuing down the -- you have approval pathway, moving beyond Bridge to Destination Therapy, certainly, we expect here, during 2014, and hopefully, in the first half of the year, to have clarity around that pathway, can we move down that pathway without an additional clinical trial in Japan, which is what we're hoping to accomplish. So hopefully here, over the course of the next couple of quarters, we'll have clarity on that.

Operator

Our next question comes from Jayson Bedford with Raymond James.

Jayson T. Bedford - Raymond James & Associates, Inc., Research Division

I guess, getting back to the guidance and the modest impact that you've assumed from the thrombus dynamic here in the first half of '14, you mentioned that it had an immaterial impact in 4Q. But are you seeing more of an impact in January? I'm just wondering if this is the cause for some increased conservatism.

Gerhard F. Burbach

Yes. Jason, we don't kind of factor a month into developing our guidance. We talk about a quarter being too short of a time period to really start developing trajectories based off of. So certainly, a month, that would be even more strongly the case. So we're not seeing kind of anything notably different in January than in Q4. We're very focused on that process, education, et cetera. But as I mentioned, it's really only been a few weeks since the print edition of the New England Journal came out and there's a broad base of referring physicians out there. So it's -- we do feel like there's a number of months to really work through the process of educating, kind of maintaining confidence in the therapy, not pulling back in terms of what's the acuity of the patients the physicians are willing to refer, making sure that we maintain that momentum that we've seen in terms of continuing to broaden the use of the therapy.

Jayson T. Bedford - Raymond James & Associates, Inc., Research Division

Okay. That's fair. I guess, switching gears a little bit more broadly on the P&L. OpEx growth has kind of outpaced sales growth over the last few years, and I understand you're carrying most of the responsibility in growing this market. But at what point do you decide to temper the spending a little bit and kind of let more drop to the earnings line?

Gerhard F. Burbach

Yes. Certainly, we feel like we're making very sound investments, not only in driving near-term market growth, kind of maintaining the momentum behind the market, but also in terms of these technologies that we're bringing forward in our product roadmap. And we're at a point in time right now where there's a number of things happening simultaneously on that front with both HeartMate III and HeartMate PHP going into clinical trials, fully implanted system, ramping into its kind of high spending phase. So -- and in a period where we're facing a competitive entrant, where we're kind of taking the brunt of that impact in kind of reducing our growth rate. So as I mentioned, we see kind of sequential improvements in top line growth as we look at '15 and '16, kind of moving out here from '14. We don't see those same kind of additive demands on the OpEx side of the equation on top of the things that we're kicking off this year. So certainly, again, we're not giving specific guidance for '15 and '16, but I think kind of directionally, the factor are starting to move in a positive direction as you look at '15 and '16.

Maybe I'll just kind of add on to that, kind of just philosophically, Jason, even though I know you're off the line. We've tried to convey our perspective being the first priority, really, being making the appropriate sound investments that are going to drive the ability to realize what we view as a very significant ongoing opportunity in the chronic mechanical circulatory support market and now, increasingly, as we move forward with PHP, on the acute side, which we view in its own right as a very, very significant opportunity. And then in the short term, we're not going to make earnings growth the prime priority as we pursue that objective. That said, we do view that over time, clearly, we need to return to earnings growth as a part of realizing that potential. Okay.

Operator

Our next question comes from Bob Hopkins with Bank of America.

Robert A. Hopkins - BofA Merrill Lynch, Research Division

So I just wanted to follow up a little bit on the guidance for 2014 and see if you'd be willing to talk about the assumptions you're making on just global LVAD market growth. I think you mentioned that it will be a little stronger in the back half. So just curious, what kind of growth you're assuming here for the full year? And then if you wouldn't mind being a little more explicit in terms of saying like what kind of growth you see in the first half versus the second half given the comments you made?

Gerhard F. Burbach

Sure. Yes. So it is still solid double-digit growth but down slightly from 2013 in terms of the growth that we're assuming in our guidance. And the key factors there on the side of bringing it down are Japan, while we expect to still see robust growth, we had a launch and kind of on a worldwide market basis, that contributed over a point of growth in 2013. Similarly, in Germany, we're going to have the HeartMate III trial. HeartWare is indicating they're going to be enrolling the MVAD trial. Those will both be non-revenue units in Germany, which, collectively, is well over a point of worldwide market growth. And then I already mentioned, kind of being prudent here in terms of our short-term expectations around the U.S. market growth here in the first half of the year. So those are kind of the factors overall that impact the year being down slightly versus 2013 on a market growth perspective. And then first half versus second half, we are expecting that to be kind of probably a few share points -- or not share points, a few growth points in terms of the difference between the first half and the second half.

Robert A. Hopkins - BofA Merrill Lynch, Research Division

So high single digits in the first half and then better in the back half. Is that a rough way to think about the way you're assuming the market grows throughout the year?

Taylor C. Harris

Yes, Bob, it's the -- I think that's reasonable.

Robert A. Hopkins - BofA Merrill Lynch, Research Division

Okay. And then last on your comments on the upcoming meeting in April, the ISHLT, you talked about some presentations that you expected that will highlight lower rates of thrombosis. And I just want to make sure I knew exactly what you guys are anticipating that's going to come. So could you just elaborate a little bit on what you expect? And are there any papers that may show higher rates of thrombosis? Just want to make sure we're prepared for what you guys are expecting.

Gerhard F. Burbach

Sure. So there's a multicenter paper that we know is in preparation from a number of the centers that have had lower rates of thrombosis, and it's also looking to not just identify what are the rates, but also what are the practices that they believe are a part of achieving those outcomes. We do believe there are also some individual center experiences on the positive side of the equation. We don't know, specifically, presentations that would be from centers with higher rates, but it's certainly reasonable to expect that there could be some of those as well.

Operator

Our next question comes from Danielle Antalffy with Leerink Partners.

Danielle Antalffy - Leerink Swann LLC, Research Division

I was hoping to follow up on the market growth and I guess, more specifically, Thoratec's growth in 2014. If we think about -- so first of all, maybe let's start, where are we right now with split between DT and BTT for Thoratec's volumes? And then how do we think about DT market growth, specifically, if you could talk about the growth you expect to drive given the headwinds with HeartWare's trial enrolling, the potential impact of the thrombus paper on referrals, and then take out the clinical impact and what the real core underlying growth is, if you don't factor in that impact from clinical? If that makes sense. Sorry, that's a convoluted way of asking it.

Gerhard F. Burbach

Okay. Let's see. I'm not sure if I followed that all, but let me try at least to start, and then you can hit me with your follow-up or Taylor can add in. So the first part, in terms of HeartMate DT-Bridge split, we saw about 60% of our implant activity being Destination Therapy in 2013. So we saw a continued progression on that front. In terms of growth in 2014 for the market and for Thoratec, we expect that to be driven by Destination Therapy. As you point out, we do expect to lose some share on the DT side to the HeartWare HVAD trial. So that's on the order of 5 share points when you look at the enrollment of that trial. And I'm not sure if I follow, if that answered your question, or if not, maybe you can...

Danielle Antalffy - Leerink Swann LLC, Research Division

Yes, it did. And then, I guess, my second question there was what would core growth be? So if we think about the DT market, and I guess, I'm talking more about the market globally now, than specifically in the U.S., you mentioned the headwind, the clinical implants that won't contribute to revenue, how do you view the market as growing? Is it still a double-digit growth market? What are your latest thoughts on pump volumes? I think you'd said, by 2015, I can't remember right now, but pumps getting to 10,000 pumps by 2015 or something like that? Any updated thoughts there and how to think about the core underlying market growth, x all of those factors.

Gerhard F. Burbach

Okay. So in 2013, the worldwide growth was in the mid to upper teens. And so as we look at '14, we expect the worldwide growth to be a few points below that. I think it's probably the easiest way to describe it on a macro basis, with a continued expectation, as you look at a multiyear horizon of mid-teen growth, with some variance around that on a year-to-year basis. So in '13, we're slightly above -- we're kind of mid to upper teen. But I think in terms of kind of what's a longer time horizon kind of view, our view hasn't changed in that regard. And clearly, catalyst impact, HeartMate III moving towards approval is a positive catalyst towards that as you look at a multiyear horizon.

Danielle Antalffy - Leerink Swann LLC, Research Division

Got it. Okay. And one last question, if I could, on pricing in the U.S. I think you mentioned you're moving to volume-based discounts. How do we think about pricing going forward for the HeartMate II?

Gerhard F. Burbach

Yes, Danielle. So we have had volume-based contracts in place. There's really no change there, and we've had very stable pricing over the last several years. So we don't anticipate any changes that are material in any way in the pricing outlook, at least for 2014.

Operator

And next, we have Chris Pasquale from JPMorgan.

Christopher T. Pasquale - JP Morgan Chase & Co, Research Division

I just want to follow up on the gross margin in the quarter, and if you could describe a little bit more clarity on what triggered the charge related to the Controller transition. It doesn't seem like that was contemplated in the guidance, and if you quantify that sort of in dollar terms?

Gerhard F. Burbach

Sure, Chris. So we had anticipated some level of gross margin weakness in the second half of the year relative to the first. But you're right, the charge was higher than we had anticipated. There were 2 components of it. The first was relative to the Pocket Controller, where we've seen a higher level of warranty activity than we did historically with the EP Controller. The second was with the EP Controller, as we looked at our inventory balance at the end of the year and then thought about our anticipated utilization going forward, because we have had a strong transition away from that product, we felt like our inventory on hand was higher than what we were going to utilize so we took a charge against that inventory. So those 2 components added up to about $8 million in the quarter, which was significant, that obviously affected gross margin in the fourth quarter. I would note our guidance for 2014 is back to 71% for gross margin for the full year.

Christopher T. Pasquale - JP Morgan Chase & Co, Research Division

In Japan, how many pumps did you sell in the quarter?

Gerhard F. Burbach

It was down from the third quarter level, so I believe it was in the mid-20s. Now, going forward, so in that -- that was anticipated. We have had stocking activity that we talked about in the second and the third quarter. So going forward, we're probably not going to give country-specific disclosure for Japan, but we have felt good about getting up to that annualized rate of about 100 implants. And that certainly informs the way we're thinking about 2014 growth off of that level.

Christopher T. Pasquale - JP Morgan Chase & Co, Research Division

Okay. And then just lastly, as we think about the impact of the extra selling week, I understand that, that time of the year is probably not the busiest, but is it fair to assume that, that's adding maybe 1 point to 1.5 points to reported growth for the year?

Gerhard F. Burbach

Yes, more like 1 point, probably, slightly over 1 point.

Taylor C. Harris

Yes.

Operator

Our next question comes from Matthew O'Brien with William Blair.

Matthew O'Brien - William Blair & Company L.L.C., Research Division

I was hoping we could follow up a little bit on the last question about Japan. When I look at, you mentioned 14 centers, I think that you have up and running now, if there are about 30 patients per center, call it around 400 patients, there could be good candidates. But it sounds like you're backing up a little bit in terms of the growth rate from Japan specifically for 2014. Is that a function of something else within that market that's different than you expected or is it the DT or launcher medication that you need to really accelerate that market? Because I thought we had thought about Japan as being something similar to Germany over time.

Gerhard F. Burbach

Yes. To achieve that level, we definitely need a long-term indication. So for now, we're operating within the confines of a shorter-term indication. So we still expect to see strong growth, as I mentioned, substantially higher than kind of the international average growth. But definitely, getting to that long-term indication is fundamental to realize that kind of long-term opportunity.

Matthew O'Brien - William Blair & Company L.L.C., Research Division

Okay. And then just one quick follow-up. You mentioned South America, and again, I know it's a bit longer-term opportunity, but can you give us a sense for the impact here in 2014, and then maybe how we should think about that market developing over the next 2, 3 years?

Gerhard F. Burbach

Yes. So very small in 2014. I mean, I would think of it in terms of maybe $1 million or so. So very modest this year.

Matthew O'Brien - William Blair & Company L.L.C., Research Division

And then after the next couple of years, maybe 3 years from now?

Gerhard F. Burbach

Yes. We'll have to still wait a little bit to give you that kind of visibility.

Operator

Our next question comes from Matt Taylor with Barclays.

Matthew Taylor - Barclays Capital, Research Division

I just wanted to ask on the thrombosis issue, whether the 3 centers are really some additional centers that were involved in reporting higher rates in the New England Journal, whether you have seen any shift in their utilization patterns post the publication or in recent periods.

Gerhard F. Burbach

Yes. We don't really kind of provide specifics around individual centers' activities. I will say that all of them continue to be kind of solid users of HeartMate II. So there hasn't been a kind of, what I would call a fundamental change in terms of their use of the product.

Matthew Taylor - Barclays Capital, Research Division

Okay. We talked a little bit about this before, but there's a number of different factors that different physicians have theorized that may be causing this. Do you have yet a formalized plan aside from communication and education around the issue to potentially isolate those factors and help bring thrombosis rates down?

Gerhard F. Burbach

Yes. So the 3 areas that we're feeling are the most significant clinical contributors that kind of make an impact in a higher -- a center with a higher rate of issues or a lower rate of issues are anti-coagulation, implant technique and pump speed management. So those are the 3 areas that our clinical team is actively focused on, engaging accounts, physicians, on working on best practices in those areas.

Operator

We'll now take our last question from Suraj Kalia with Northland Securities.

Suraj Kalia - Northland Capital Markets, Research Division

So, Gary, 3 questions. I'm not sure if you talked about the REVIVE-IT study. I would love to get some color on that.

Gerhard F. Burbach

We have not talked about REVIVE-IT. So, as you know, REVIVE-IT is an NIH-sponsored study. The University of Michigan is the primary contractor. We're a subcontractor on that study so we're really just supporting their efforts. At this point, they continue to screen patients. They are making some adjustments to the protocol in terms of the informed consent, also in terms of some of the best practices in terms of thrombosis diagnosis and management. So that's all underway prior to entering the randomization phase of that study.

Suraj Kalia - Northland Capital Markets, Research Division

Fair enough. And, Gary, in terms of PHP, love to get some color on the strategy of going high-risk PCI in Europe and cardiogenic shock in the U.S.

Gerhard F. Burbach

Yes. So for -- we felt that we do need -- that ultimately, the most significant indication that will really drive kind of major market adoption and opportunity for this platform is around cardiogenic shock. And that the place to drive that kind of a very structured randomized trial would be in the U.S. And then also, it was clear that the FDA was not particularly interested in a high-risk PCI study and that they really were going to require something like this trial for a device like the PHP. We do still believe that high-risk PCI is an interesting application. You've seen that with the Impella devices that, that has been a significant part of the success of that franchise. So we certainly do want to still pursue the use of the device in that situation. And so European trial focused on that was a good complementary strategy to the U.S. cardiogenic shock trial. I will note that we are planning to do a small pilot patient series in a -- in the European domain prior to launching the cardiogenic shock IDE study in the U.S. to really confirm our expectations around the clinical impact on those patients before we enter the IDE trial.

Suraj Kalia - Northland Capital Markets, Research Division

Fair enough. And finally, Gary, I know this is -- I'm jumping too far ahead, but to the extent that you can talk about this, for the HeartMate III trial in the U.S., are you going to be monitoring LDH levels? Is anti-coagulation going to be the same? And are you going to be monitoring MAP [ph] levels?

Gerhard F. Burbach

Sure. We'll certainly be monitoring LDH levels. And anti-coagulation protocol, at the beginning, I don't expect will be substantially different. Hopefully, with positive success, it will migrate downward over the course of the trial with experience that the centers have with the device. And relative to MAP, I don't believe that we're expecting to do any particular management of that, anything like what we've seen with the HVAD.

Okay. Operator, I believe that's our last question.

Operator

That does conclude our questions, and I'd like to turn the call over to Gary Burbach for closing remarks.

Gerhard F. Burbach

Okay. Good. I just want to thank everyone for your time and for joining us today, and we'll look forward to keeping you updated over the course of 2014.

Operator

Once again, that does conclude our call and we appreciate your participation.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Thoratec Management Discusses Q4 2013 Results - Earnings Call Transcript

Check out Seeking Alpha’s new Earnings Center »

This Transcript
All Transcripts