Healthcare Industry News: LVAS
News Release - December 12, 2007
WorldHeart Announces Strategic Alliance With AbiomedProvides for Collaboration on Marketing and Clinical Support
OAKLAND, Calif., Dec. 12 (HSMN NewsFeed) -- (Nasdaq: WHRT, TSX: WHT) -- World Heart Corporation (WorldHeart or the Company), a developer of implantable mechanical circulatory support systems for chronic heart failure patients, today announced that it has entered into a strategic alliance with ABIOMED, Inc. (Abiomed, Nasdaq: ABMD), a leading manufacturer of devices for acute circulatory support. The alliance brings together two of the pioneering companies in this industry, each with experienced teams, strong clinical relationships and unique, complementary products and technologies.
-- provide a secured convertible loan to WorldHeart of $5 million, funded in two tranches, accruing interest at 8% per annum, and convertible into WorldHeart common shares at Abiomed's option;
-- provide certain marketing and clinical support services to WorldHeart, and will receive a warrant for an aggregate of 3,400,000 common shares of WorldHeart as partial consideration for these clinical support and marketing services;
-- have the right of first refusal to act as an exclusive worldwide distributor for any future WorldHeart product; and
-- have the right to designate one nominee or observer to the WorldHeart Board of Directors.
"We are excited about the opportunities presented by this strategic alliance," said Jal S. Jassawalla, President and Chief Executive Officer of WorldHeart. "We believe this alliance creates a winning strategy by bringing together complementary technologies and broad device portfolios. Abiomed's extensive and experienced field support and marketing team is well positioned to promote and support WorldHeart's products. We are honored that they have chosen the Levacor(TM) Rotary VAD as the long-term implantable device of choice."
"We are excited about the opportunity to work with WorldHeart. They are well respected in the field of circulatory support and have an extensive network of loyal heart surgeons," commented Michael R. Minogue, Chairman, President and Chief Executive Officer of Abiomed. "Based on the analysis of our top scientists, and our due diligence with leading customers, we believe that the Levacor mag-lev rotary pump represents the best solution for long- term support applications, including bridge to transplant and destination therapy. Abiomed remains committed and focused on heart recovery for acute patients, especially with ImpellaŽ in the cath lab. However, we also recognize the unmet clinical need for patients suffering from chronic heart failure that can benefit from a long-term implantable LVAD."
WorldHeart and Abiomed, two of the longest established companies in the field, currently serve complementary segments of the circulatory support market. This alliance is expected to benefit heart failure patients and treatment providers, promoting synergies between the two organizations in a number of areas.
-- Products - WorldHeart's current and future products - the NovacorŽ pulsatile LVAS and the Levacor Rotary VAD - are designed to provide long-term support for chronic heart failure patients. Intended for use as a bridge to transplant or for destination (life-long) therapy, implant durations typically range from months to years.Abiomed markets a number of devices targeting primarily recovery applications, where support duration is measured in hours, days or months.The portfolios of the two companies collectively span the full spectrum of mechanical circulatory support needs, with implant durations ranging from hours to years, and from partial to total support.
-- Clinical Relationships - The recipients of WorldHeart's chronic support devices are under the care of heart failure cardiologists and cardiac surgeons. Abiomed's products are administered by interventional cardiologists as well as cardiac surgeons. Collectively, the two companies have access to a broad base of clinical customers addressing a wide range of cardiac conditions.
-- Marketing and Clinical Support - WorldHeart products, which have a long-standing reputation for high quality and reliability, are now expected to be more effectively marketed and supported. Abiomed has an extensive marketing capability, as well as one of the largest field support teams in the VAD industry. The two companies expect to be able to reach a broader customer base and provide an efficient and high level of clinical support.
-- Technology - The companies also expect to explore opportunities for technology collaborations. For example, the transcutaneous (across- the-skin) energy transfer system and implanted electronics developed for the AbioCor total heart potentially could be adapted to the Levacor, eliminating any wires through the skin to reduce the associated infection risk.
WorldHeart's Levacor VAD, a 4th-generation rotary VAD, is the only bearingless, fully magnetically levitated implantable centrifugal rotary pump to have seen clinical use. In contrast to 2nd and 3rd-generation pumps with blood-immersed mechanical or hydrodynamic bearings, the Levacor uses full magnetic levitation to suspend the spinning rotor, eliminating wear within the pump and allowing greater clearances around the rotor with more idealized flow patterns. This is expected to provide improved blood compatibility and reduced need for anticoagulation therapy, thus potentially reducing bleeding and thromboembolic complications, which remain a significant issue with 2nd and 3rd-generation systems. Current focus is on activities leading to the start of a U.S. clinical trial with the Levacor. These have included Pre-IDE submissions and subsequent productive discussions with the FDA regarding the clinical study design.
Details of Financial Terms
WorldHeart and its wholly owned subsidiary, World Heart Inc., have signed a definitive note purchase agreement with Abiomed to issue a 8% secured convertible promissory note for the principal sum of $5 million, which funds will be used primarily for working capital purposes. The note will be funded in two tranches: $1 million was funded immediately and $4 million is scheduled to be funded on or about January 3, 2008. After the second anniversary, the note is payable on demand, or at WorldHeart's option subject to fulfillment of certain conditions. The note is convertible into common shares of WorldHeart, in whole or in part, at approximately $1.75 per share, resulting in an approximately 19.9% ownership interest in WorldHeart upon conversion. Conversion is at the option of Abiomed, at any time, and is subject to certain limitations for the purposes of compliance with the shareholder approval rules of the NASDAQ Stock Market and the Toronto Stock Exchange. The transaction also includes a warrant for up to 3,400,000 common shares of WorldHeart, at an exercise price of $0.01 per share, as partial consideration for clinical support and marketing services. The warrant is exercisable over a period of 60 months, subject to the same limitations as the convertibility of the note for the purposes of shareholder approval.
WorldHeart continues to pursue and explore additional funding alternatives to support its longer-term operations and business.
WorldHeart is a developer of long-term mechanical circulatory support systems with broad-based next-generation technologies. The Company is headquartered in Oakland, California, USA with additional facilities in Salt Lake City, Utah and Herkenbosch, Netherlands. WorldHeart's registered office is Ottawa, Ontario, Canada.
Based in Danvers, Massachusetts, Abiomed, Inc., is a leading provider of medical devices that provide circulatory support to acute heart failure patients across the continuum of care in heart recovery. Their products are designed to enable the heart to rest, heal and recover by improving blood flow and/or performing the pumping function of the heart.
Teleconference and Webcast Information
WorldHeart will host a joint conference call to discuss the alliance. Jal S. Jassawalla, President and Chief Executive Officer of World Heart Corporation and Michael R. Minogue, Chairman, Chief Executive Officer and President of Abiomed, Inc. will participate. Interested parties may join the teleconference at 10:00 a.m. EST, December 12, 2007, by dialing 866-356-4441 (for North America callers) or 617-597-5396 (for callers outside of North America) and indicating passcode 37457013 at least 10 minutes prior to the start time. A telephonic replay of the call will be available for one month beginning approximately one hour after the call's conclusion at 888-286-8010 or 617-801-6888, accessed with passcode 23506939. Additionally, the presentation will be Webcast, and can be accessed through the Company's website - www.worldheart.com - by first selecting Investor Relations, then selecting Investor Events and finally selecting the Webcast link.
WorldHeart intends to mail to all shareholders a proxy statement that will contain important information regarding this transaction as well as other matters. The shareholders are advised to review the proxy statement for further information regarding the participants in the solicitation (including their direct or indirect interests, if any). When available, copies of the proxy statement, and other relevant documents, will be available for free at the Securities and Exchange Commission's web site and the Company's web site at worldheart.com.
Any forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include statements regarding the Company's expectations with respect to the potential benefits of its strategic alliance with Abiomed, including the ability to reach a broad base of clinical customers and efficiently market the Company's products, the Company's future development plans for its next- generation Levacor VAD, including the timing and scope of clinical trials, the potential scope of use and clinical benefits of these devices, as well as other statements that can be identified by the use of forward-looking language, such as "believes," "feels," "expects," "may," "will," "should," "seeks," "plans," "anticipates," or "intends" or the negative of those terms, or by discussions of strategy or intentions. Investors are cautioned that all forward-looking statements involve risk and uncertainties, which could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including without limitation: the need for additional longer-term financing; delays in development, preclinical qualification, regulatory approvals and clinical trials, particularly the Levacor VAD; destination therapy adoption rate for VADs; and other risks detailed in the Company's filings with the United States Securities and Exchange Commission, including its Annual Report on Form 10-KSB for the year ended December 31, 2006, as amended, and it most recent Quarterly Report on Form 10-QSB for the quarter ended September 30, 2007.
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