Thoratec Corp. (THOR): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Thoratec Corp.'s 2014-second quarter earnings dropped 34.1% year over year to $0.29 and lagged the Zacks Consensus Estimate by $0.02. Revenues also fell 9.5% to $118.1 million in the quarter and missed the mark. The company faced difficult quarterly comparisons in the businesses across Europe and Japan and a decline in HeartMate II sales. For fiscal 2014, the company lowered its adjusted earnings per share guidance to $1.25 $1.35 and revenue guidance to a range of $455 to $470 million. We maintain our Neutral recommendation on Thoratec and set a target price of $24.00.

Overview:

Thoratec Corporation, incorporated in 1976 under the name Thoratec Laboratories, is headquartered in Pleasanton, California. The company is a leading provider of mechanical circulatory support ("MCS") systems for victims of advanced heart failure (HF). Heart failure is a terminal and degenerative condition. While a heart transplant is considered to be the best solution, only a few thousand donor hearts are available worldwide each year.

Thoratec provides three main product lines HeartMate, CentriMag, and PVAD and IVAD. All these products have been cleared by U.S. Food and Drug Administration ("FDA") and received Conformit Europ ene ("CE") Mark approval in Europe.

Heartmate (88.4% of revenues in 2013): The company supplies HeartMate II Left Ventricular Assist Device ("LVAD") under this product line. This second generation LVAD II is an implantable, electrically powered, continuous flow device. It consist of a rotary blood pump that is designed to provide intermediate and long-term MCS and support a broad range of advanced HF patients. It has the quality to operate more quietly than pulsatile devices.

CentriMag (8.6%): CentriMag is an extracorporeal full-flow acute surgical support platform. It incorporates a polycarbonate pump, based on magnetically levitated bearingless motor technology. The product has received FDA approval for use up to six hours for patients requiring short-term extracorporeal circulatory support during cardiac surgery. It also has CE Mark approval for use up to 30 days for both cardiac and respiratory failures. The company also offers PediMag and PediVAS extracorporeal full-flow acute surgical support platforms under this product line. It has a polycarbonate pump, based on magnetically levitated bearingless motor technology. It is designed to help pediatric patients with acute surgical support.

PVAD and IVAD (2.5%): The company supplies Paracorporeal Ventricular Assist Device ("PVAD") and Implantable Ventricular Assist Device ("IVAD") under this product line. PVAD is an external and pulsatile VAD. It provides left, right, and biventricular MCS. It is a paracorporeal device and FDA approved for bridge-to-transplant (BTT) therapy. IVAD is an implantable, and pulsatile VAD and provides left, right or biventricular MCS. It maintain the same blood flow, valves and blood pumping mechanism as PVAD, but with an outer housing made of a titanium alloy that makes it suitable for implantation. It is FDA approved for BTT.

(Remaining 0.5% revenues accounted for Other product sales)


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: BTT , HF , THOR

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