Profile: Thoratec Corp (THOR.O)

Thoratec Corporation (Thoratec), incorporated in 1976, is a manufacturer of mechanical circulatory support products for use by patients with heart failure (HF). The Company develops, manufactures and markets medical devices used for circulatory support. It also develops, manufactures and markets point-of-care diagnostic test systems and skin incision products. Thoratec operates in two operating divisions: Cardiovascular and International Technidyne Corporation (ITC), a wholly owned subsidiary. The Cardiovascular segment develops, manufactures and markets medical devices used for mechanical circulatory support (MCS). ITC designs, develops, manufactures and markets point-of-care diagnostic test systems and incision products. The Company conducts business both in the United States and internationally.

Cardiovascular Division

The Company’s primary Cardiovascular product lines include the ventricular assist devices (VADs), the Thoratec Paracorporeal Ventricular Assist Device (PVAD), the Thoratec Implantable Ventricular Assist Device (IVAD), the HeartMate Left Ventricular Assist System (HeartMate XVE) and the HeartMate II Left Ventricular Assist System (HeartMate II). The PVAD and the IVAD are collectively referred to as the Thoratec product line, and the HeartMate XVE and the HeartMate II are collectively referred to as the HeartMate product line. The PVAD, IVAD, HeartMate XVE and HeartMate II are approved by the United States Food and Drug Administration ( FDA) and Conformite Europeene (“CE”) Mark approved in Europe. In addition, for acute HF, the Company markets the CentriMag Blood Pumping System (CentriMag), which is manufactured by Levitronix LLC (Levitronix) and distributed by the Company in the United States under a distribution agreement with Levitronix. The Company also manufactures a vascular access graft for renal dialysis.

The PVAD is an external, pulsatile, ventricular assist device, approved by the FDA for bridge-to-transplantation (BTT), including home discharge and post-cardiotomy myocardial recovery, and provides left, right and biventricular MCS. The PVAD is a paracorporeal device that is less invasive than implantable VADs since only the cannula is implanted. The IVAD is an implantable, pulsatile, ventricular assist device approved by the FDA for BTT, including home discharge, and post-cardiotomy myocardial recovery and provides left, right, or biventricular MCS. The IVAD maintains the same blood flow path, valves and blood pumping mechanism as the PVAD, but has an outer housing made of a titanium alloy that makes it suitable for implantation.

The HeartMate XVE is an implantable, pulsatile, left ventricular assist device for intermediate and longer-term MCS and is approved in the United States, Europe and Canada for long-term support of patients ineligible for heart transplantation. Patients with a HeartMate XVE do not require anticoagulation drugs, other than aspirin, because of the product’s incorporation of textured surfaces and tissue valves. The system comprises the blood pump and a wearable controller and batteries.

The HeartMate II is an implantable, electrically powered, continuous flow, left ventricular assist device consisting of a miniature rotary blood pump designed to provide intermediate and long-term MCS. The HeartMate II is designed to provide 5 to 10 years of circulatory support for a range of advanced HF patients. Significantly smaller than the HeartMate XVE and with only one moving part, the HeartMate II is designed to operate quietly. In April 2008, the Company received FDA approval for the HeartMate II for BTT. In addition, the HeartMate II is in a Phase II pivotal trial in the United States for destination therapy (DT). In December 2008, the Company announced that the HeartMate II had demonstrated superiority in a pre-specified interim analysis to the HeartMate XVE, the control device in the DT pivotal study.

The CentriMag, manufactured by Levitronix is approved by the FDA to provide MCS for up to six hours for patients suffering from severe, but potentially reversible, cardiac failure and is based on Levitronix’s magnetically levitated bearingless motor technology. The Company has a distribution agreement with Levitronix, with an initial term effective through December 2011, to distribute the CentriMag in the United States. The CentriMag is 510(k) cleared by the FDA for use in patients requiring short-term extracorporeal circulatory support during cardiac surgery and Levitronix has CE Mark approval in Europe to market the product to provide support for up to 30 days. In November 2008, Levitronix received approval from the FDA for a humanitarian device exemption for the CentriMag Right Ventricular Assist System for temporary circulatory support up to 30 days for patients in cardiogenic shock due to acute right ventricular failure. The Vectra Vascular Access Graft (Vectra) is designed for use as a shunt between an artery and a vein, primarily to provide access to the bloodstream for renal hemodialysis patients requiring frequent needle punctures during treatment.

ITC Division

The ITC division develops, manufactures and markets two product lines: point-of-care diagnostic test systems for hospital point-of-care and alternate site point-of-care markets, including diagnostic test systems that monitor blood coagulation while a patient is being administered certain anticoagulants, and that monitor blood gas/electrolytes, oxygenation and chemistry status, and incision products, including devices used to obtain a patient’s blood sample for diagnostic testing and screening for platelet function. The ITC point-of-care product lines includes the HEMOCHRON Whole Blood Coagulation System (HEMOCHRON), the IRMA TRUpoint Blood Analysis System (IRMA), the AVOXimeter Whole Blood Co-Oximeter/Oximeter System (AVOXimeter), the ProTime Microcoagulation System (ProTime), the Hgb Pro Professional Hemoglobin Testing System (Hgb Pro), the Tenderfoot Heel Incision Device (Tenderfoot), the Tenderlett Finger Incision Device (Tenderlett) and the Surgicutt Bleeding Time Device (Surgicutt).

The HEMOCHRON is used to quantitatively monitor a patient’s coagulation status while the patient is being administered anticoagulants. It may be used in various hospital settings. It is used in the cardiovascular operating room and cardiac catheterization lab to monitor the drug Heparin, and in an anticoagulation clinic to monitor the drug warfarin. The system consists of a small portable instrument and disposable test cuvettes or tubes and delivers results in minutes. The IRMA is used to quantitatively monitor a patient’s blood gas, electrolyte and chemistry status. This instrument is a self-contained, portable system which uses disposable test cartridges and delivers results in minutes. The AVOXimeter is used to assess a patient’s oxygenation status and is commonly used in the cardiac catherization lab, the intensive care unit (ICU), the neonatal intensive care unit (NICU) and the emergency department. This portable instrument uses small, single-use test cuvettes and delivers results in less than 10 seconds.

The ProTime is designed to monitor blood clotting activity in patients on anticoagulation therapy, specifically warfarin. The system can be prescribed for patient use at home or can be used in the physician’s office or clinic. The system consists of a portable, quantitative instrument and disposable test cuvettes and delivers results in minutes. The Hgb Pro is used by professionals, mainly in the doctor’s office, to test for anemia. Hgb Pro delivers quick results from a small blood sample placed on a disposable test strip inserted into a hand-held test meter. The ProTime and Hgb Pro products are sold into the alternate site non-hospital point-of-care segment of the market comprised of physicians’ offices, long-term care facilities, clinics, visiting nurse associations and home healthcare companies.

The Company’s Tenderfoot, Tenderlett and Surgicutt are used by medical professionals to obtain a patient’s blood sample for diagnostic testing. The Tenderfoot is a heel stick used for infant testing; the Tenderlett is used for finger incisions, and the Surgicutt is used to perform screening tests to determine platelet function. These devices feature permanently retracting blades for safe incision with minimal pain. These products are sold to both the hospital point-of-care and alternate site point-of-care segments of the market.

The Company competes with AbioMed, Inc., Jarvik Heart, Inc., MicroMed Technology, Inc., SynCardia Systems, Inc., WorldHeart Corporation, Medtronic, Inc., Abbott Laboratories, Instrumentation Laboratory Company, Radiometer A/S, Becton Dickinson and Company, Inverness Medical Innovation, Inc. and Roche Diagnostics.