Much Awaited FDA Nod for HeartWare - Analyst Blog
November 21 2012 - 7:00AM
Zacks
HeartWare International
Inc. (HTWR), a global provider of miniaturized ventricular
assist devices (VAD) for diagnosis of advanced heart failure,
recently disclosed that the U.S. Food and Drug Administration (FDA)
has granted clearance for its HeartWare Ventricular Assist System
as a bridge to heart transplantation device for patients with
end-stage heart failure.
The HeartWare system was the lead pipeline candidate of the
company. The news marks a milestone in the company’s operating
history as reflected in the bullish momentum of its stock price.
Shares of HeartWare surged 9.18% to close at $89.54 on November 20,
2012.
The FDA approval was eagerly awaited ever since HeartWare submitted
its Premarket Approval (PMA) application in December 2010. The
company obtained European CE Mark for the HeartWare system in 2009
and Australian Therapeutic Goods Administration (TGA) approval in
2011.
The FDA approval of HeartWare system will challenge the dominance
of Thoratec Corporation (THOR) in the
bridge-to-transplant (BTT) indication. Moreover, the first-mover
advantage of Thoratec in the domestic BTT market might come to
naught as HeartWare closes the technological gap, resulting in a
slower growth profile for Thoratec. HeartWare’s acquisition of
WorldHeart Corporation has already helped it establish a sound base
for expansion in the U.S. and offshore markets and overcome entry
barriers.
Based on statistics from the American Heart Association, roughly
5.8 million Americans suffer from heart failure. The numbers are
increasing as 0.6 million cases are diagnosed annually. Thus, the
approval will enable HeartWare to capture a sizeable market share
in the U.S.
To date, HeartWare relies heavily on the sale of its offerings in
the overseas market with revenues from the U.S. contributing
approximately 16% to company-wide revenues in the third quarter.
The clearance and subsequent commercialization efforts will enable
HeartWare to gain a foothold in the largest market for medical
devices.
We currently have a long-term ‘Neutral’ recommendation on
HeartWare, which carries a short-term Zacks #3 Rank (Hold).
HEARTWARE INTL (HTWR): Free Stock Analysis Report
THORATEC CORP (THOR): Free Stock Analysis Report
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