UPDATE 1-World Heart says will end its Levacor heart pump study

Fri Jul 29, 2011 12:53pm EDT

* To cut 42 pct of its workforce

* Says restructuring plan to result in $1.6-$2.3 mln cash expense

* Sees $1.0 mln in severance benefits

* Sees $3-$5 mln in addl charges

* Shares at year-low

July 29 (Reuters) - Heart devices maker World Heart Corporation said it will end its Levacor heart device study, for a delay related to changes previously made in the device, and said it would cut its workforce by 42 percent, sending its shares down to a year-low.

The device, Levacor Ventricular Assist Device, is a magnetically levitated centrifugal heart pump to provide unobstructed blood flow for adults who suffer from late-stage heart failure.

However, World Heart said it will keep providing technical support to existing Levacor VAD recipients and clinical centers.

In February, the company had suspended patient enrollment for its heart device study as it awaited regulatory approval for changes made in the device.

The company said it would now focus its resources on PediaFlow and MiFlow VADs, its minimally invasive ventricular assist devices that are currently in development.

In a regulatory filing, World Heart -- which had 65 full-time employees, as of March 15, -- said severance and benefit payments are expected to total about $1 million.

It also expects $3-$5 million in additional restructuring charges related to inventory and equipment write-downs.

The company expects about $1.6-$2.3 million of aggregate cash expenditures because of the restructuring plan. About $1.5-$2.0 million of this may be in the third and fourth quarters of 2011 and the remainder in 2012.

World Heart shares fell 39 percent to a year-low of 52 cents on Friday on Nasdaq. (Reporting by Shailesh Kuber in Bangalore; Editing by Joyjeet Das)