Shares of HeartWare International (NSDQ:HTWR) are on watch in the wake of negative commentary from a Northland Capital Markets analyst.
Analyst Suraj Kalia cited "glaring inconsistencies" between statements made by a principal investigator for HeartWare International’s pivotal ENDURANCE trial for the company’s ventricular-assist device (VAD) as destination therapy and recent remarks made by the HeartWare CEO Doug Godshall on calls with financial analysts.
HeartWare trial principal investigator Dr. Joseph Rogers of Duke University told reporters that he plans to present the trial’s full results late next year. He also said he would prefer to compare the primary ENDURANCE results against those of a 360-patient "supplemental cohort" enrolled in a continued-access fashion with the same inclusion/exclusion criteria, but with "enhanced blood-pressure management."
But, Rogers’ remarks conflicted with statements made by HeartWare CEO Doug Godshall to financial analysts on an August 8 earnings call. During that call, Godshall told analysts that the ENDURANCE data set will be "co-mingled" with the supplemental cohort study that was approved by the FDA in June before presenting the final numbers, even though there are notable differences between the trials.
Patients in the recently approved trial will only be tracked for 1 year compared to 2 in ENDURANCE. The primary endpoints also differ and the new cohort will receive more intensively blood pressure management.
"What we found to be glaring inconsistencies between what the doc and what HeartWare is saying as to the final protocol on DT submission peeked our curiosity," analyst Kalia said.
Kalia noted that in the earnings call earlier this month HeartWare CEO Godshall said the company did not plan to present ENDURANCE data next year, hoping to avoid influencing perceptions. That was in direct conflict with Dr. Rogers’ statements to TheHeart.org.
Kalia further noted that that Godshall said HeartWare plans to aggregate data from both trials, but Dr. Rogers said he wants to compare original ENDURANCE data to the supplemental trial, which “would be the ultimate proof of whether the mAP hypothesis is valid.”
“Dr. Rogers, it seems, is unaware of any discussions to fully ‘integrate’ the data sets and acknowledged doing so would open the door to criticism that combining the two could potentially dilute the adverse-event rates acknowledged so far in ENDURANCE,” Kalia wrote. “HTWR, at least as we understand it, seems to imply that the edited protocol needs to be signed off by the FDA and then they are off to the races.”
In light of the clear disconnect, Northland Capital Markets maintained an "underperform" rating and $70 price target on HTWR. Shares closed at $80.75 on Friday, representing a 0.34% upward swing on the day.
