Thoratec shed almost one-third of its value after reporting abysmal second quarter earnings. The advanced heart failure device company attributed most of the miss to a New England Journal of Medicine article that came out late last year and linked the company's HeartMate II left ventricular assist device to an increasing rate of pump thrombosis.
Thanks to its banner HeartMate device, Thoratec handed in another quarter of solid revenue growth, but a spike in costs kept its net income from moving upward.
A formal recall of Thoratec's backup power device used with its HeartMate pumps is now in place, and the FDA slapped a Class I status on the effort, its most serious designation, which means the issue can result in serious injury or death.
Four patients died and 5 others faced brief scares due to problems involving a backup controller used with Thoratec's HeartMate pumps. The company issued a safety alert to hospitals detailing the issue.
Thoratec's revenue stagnated at the end of 2013, but net income grew substantially, thanks in part to the effects of a tax credit. The California company's HeartMate pumps continue to provide the bulk of its revenue.
Jarvik Heart won Japanese regulatory approval for its left ventricular assist device, bringing its heart pump rivalry with Thoratec to Asia. Japan's Pharmaceuticals and Medicines Devices Agency signed off on the Jarvik 2000 Heart based on Japanese and U.S. clinical trial data, approving it as a bridge to transplant.
Thoratec's robust HeartMate pump-sales face a new challenge: research that ties the device to life-threatening blood clots.
California's Thoratec grew revenue in its 2013 third quarter, thanks largely to the company's HeartMate pumps. But the product line's rapid sales climb may be slowing.
Thoratec's HeartMate heart pumps supercharged revenue toward another double-digit increase in the 2013 second quarter. The question to ask now is, how long will the surge last?
Unsatisfied with all its HeartMate success, Thoratec is spending cash to further its share of the left ventricular assist device market, shelling out up to $56.5 million for Terumo's investigational DuraHeart II.