HeartWare International Inc
), 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
HEARTWARE INTL (HTWR): Free Stock Analysis
THORATEC CORP (THOR): Free Stock Analysis
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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
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
) 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
We currently have a long-term 'Neutral' recommendation on
HeartWare, which carries a short-term Zacks #3 Rank (Hold).