Wednesday, December 16, 2009

WSJ: Thoratec (THOR) - Giving a Heart a Hand

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The position we had in Thoratec (THOR) was closed out in July 2009 around $25 as the stock (and market) was in the dumps - that was really the only moment since March 2009 that it appeared the market could roll over (almost a head and shoulders for those who remember the time and are technically inclined).  Then Goldman Sachs (GS) and Intel (INTC) beat estimates back to back and the rest was history - off to the races for almost every stock, charts be damned.  While Thoratec joined the party, it has since come back to Earth and in fact is in the process of filling an early November 2009 gap in its chart; currenly trading at $28.  The stock is always quite rich, but that has not been a disqualifier for almost any stock in the current environment...




Thoratec had sort of fallen off my radar, but this story in the Wall Street Journal reminded me of the unique story.
  • Thousands of heart-failure patients die each year because they aren't able to get a transplanted organ. Now, many medical experts are touting the benefits of a new mechanical pump that gives a patient's own heart a new lease on life.
  • Patients surgically implanted with the new pump, known as a left-ventricular assist device, or LVAD, had a survival rate of 58% after two years, according to a recent study. That's not as good as a heart transplant, which offers a survival rate of about 70% after 10 years. But it surpasses the life-saving abilities of many earlier technologies, including an older version of the LVAD that had a two-year survival rate of 24%. LVADs don't replace the heart but take over for its main pumping chamber.
  • Patients in the recent clinical trial, as well as one earlier study of the first-generation LVAD, were especially sick. Many medical centers that implant LVADs are beginning to see better long-term survival rates with patients not so close to death's door.
  • The newest LVAD is currently approved only as a stopgap measure to keep patients alive until a donor heart is available. But data from the 200-patient study, published this month in the New England Journal of Medicine, are widely expected to lead the U.S. Food and Drug Administration to approve the new version of the pump, called Heartmate II, for use as permanent therapy—possibly early next year. Both versions of the LVAD are marketed by Thoratec Corp., of Pleasanton, Calif.
  • Another new LVAD is being developed by HeartWare International Inc., of Framingham, Mass. The device is on the market in Europe but analysts say it is probably at least a couple of years away from approval in the U.S.
  • Recent improvements in surgery, drugs and devices mean many heart patients are surviving much longer than they were a decade or two ago, but "when they get to the end of the line, all we've really had is a heart transplant," Dr. Starling says. "Now we're going to see use of LVADs grow in the U.S."
  • But Dr. Starling and other doctors say growth of LVADs will be gradual. The pumps are complex and costly—the Heartmate II device itself runs about $80,000, and with implant surgery the total cost is about $150,000, some doctors say, roughly the same as the cost of a heart transplant. Experts generally agree that more research is needed on how best to manage LVAD patients and to determine who is best suited for the machines. The Heartmate II is expected to last about five years before needing replacing.
  • ....because of a lack of donors, only about 2,100 such procedures (heart transplants) are done in the U.S. each year. Currently nearly 3,000 patients are on a waiting list for a new heart, many with little certainty about when or if one will become available before they die. Thousands more patients aren't eligible for the waiting list because of age, other health problems such as cancer or other factors, many of whom could be candidates for an LVAD.
  • For patients, living with an LVAD presents a host of unique challenges. For one, Heartmate II doesn't create a pulse; instead, it pumps blood though the body in a continuous flow. That means the pulse of a patient's own heart can be hard to detect and it makes blood pressure difficult to measure. Some medical experts are concerned that a lack of a strong pulse could result in damage to the brain, kidneys and other organs. So far, those potential side effects haven't materialized, but doctors want to see how patients fare on the devices over several years.
  • LVAD patients wear a vest that holds two battery packs, which must be replaced and recharged every four to five hours. They wear a controller on their belt that is connected to the implanted LVAD through a conduit that pierces the skin and requires daily dressing changes. At night, they plug the device into the wall to keep it powered while they sleep. Electric utility companies, ambulance squads and hospital ERs typically need to know about LVAD patients in their towns to be able to respond effectively in case of power failures or medical emergencies.
  • Truman Fallaw, a 74-year-old retired bank officer from Columbia, S.C., was unable to walk 60 feet to pick up his mail and back without pausing to catch his breath. Just over a year ago, his doctors recommended the LVAD.  "At that point I was so ill, that I knew that my life was short," Mr. Fallaw says. "I was willing to do anything to extend my life." Less than two months after the procedure, he boarded a plane for a business trip to Dallas.
  • Mr. Fallaw says he's had to give up swimming and showers because of the difficulty of keeping the LVAD's external controller dry. And it can be a problem at airport security. Soon after he got the pump, security staff at the airport in Columbia, S.C. asked him to unbutton his shirt, loosen his trousers and pull up his undershirt to prove that the LVAD's controller, which he carries on his belt, actually "entered my body."

[May 8, 2009: Thoratec Executes Well in Healthcare Space]
[Feb 19, 2009: Thoratec Acquires Heartware]
[Feb 6, 2009: Thoratec Beats; Market Yawns]
[Dec 5, 2008: Thoratec with Positive Data]
[Oct 30, 2008: Thoratec Smashes Earnings; Somehow Guides Up]
[Aug 4, 2008: One for the Radar - Thoratec]

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