), a leader in mechanical circulatory assistance devices,
recently revealed that its board of directors has approved the
repurchase of as much as $150 million of its common stock. The
earlier authorization lapsed earlier this month.
Under the new authorization, Thoratec has inked an Accelerated
Share Repurchase deal for $75 million with
JPMorgan Chase & Co.
) to be launched as soon as possible. The remainder of the
program may be utilized by Thoratec any time before the end of
As per the Accelerated Share Repurchase deal, Thoratec will get
about 1.5 million shares at the start. The final count of shares
purchased by the company will rely on the end settlement using an
During the first three quarters of the current year, Thoratec
produced $109 million of operating cash flow, up 25% year over
year. It had cash and investments of $308 million as of September
Ventricular Assist Devices represent a multi-billion dollar
market opportunity. It is estimated that, in addition to the
bridge-to-transplant (BTT) market, the Destination Therapy (DT)
market in the U.S. may eventually attain a significant size.
Until HeartMate II came up as a viable option, the only treatment
was heart transplant surgery.
HeartWare International Inc.
), a global provider of miniaturized ventricular assist devices
(VAD) for diagnosis of advanced heart failure, disclosed on
November 20, 2012, 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 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.
However, there is no imminent competitive threat from HeartWare
in the DT segment, as its product is not expected to be launched
till 2015. We believe that DT will account for the major part of
growth in the Ventricular Assist Device (VAD) market.
Despite less visibility, Thoratec has expertise in product
development. The company is currently developing its next
generation HeartMate III. At the same time, HeartWare is expected
to close the technological gap. The company continues to do well
in overseas markets despite economic turmoil in Europe.
The stock currently retains a Zacks #1 Rank, which translates
into a short-term "Strong Buy" rating.
HEARTWARE INTL (HTWR): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
THORATEC CORP (THOR): Free Stock Analysis
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