HeartWare International (NSDQ:HTWR) shares gained more than 11% yesterday after the medical device company reported surging revenues and 1st-quarter losses that bettered analysts’ forecasts.
HeartWare reported losses of -$19.4 million, or -$1.15 per share, on sales of $66.5 million for the 3 months ended March 31, for sales growth of 35.0% compared with the same period last year. Adjusted to exclude 1-time items, losses per share were -70¢, 20¢ ahead of Wall Street’s consensus estimate.
HTWR shares gained 11.1% yesterday on the news, closing at $94.43 apiece. The stock opened today at $95.14 per share, up 0.8%.
"Reflecting expanded global adoption, our team generated sales of more than 300 units in both the U.S. as well as international markets, for the first time in our history," president & CEO Doug Godshall said in prepared remarks. "We continue to see enthusiastic support of the HeartWare system around the world, with the addition of 12 international and 5 U.S. customers during the first quarter, increasing our global customer base to nearly 250 hospitals."
In a separate release, HeartWare said it notified patients and healthcare providers about an increase in complaints about the batteries used in the HVAD device. No deaths due to faulty batteries have been reported, but 3 deaths between January 2011 and March 31 "were potentially related to power source management," the company said.
"Of those, 2 patient deaths occurred after both sources of power were simultaneously disconnected; the 3rd patient had batteries that far exceeded their expected useful life. A 4th death was originally reported as possibly related to power management, but was later determined to be more likely related to an accidental disconnection of the driveline," according to the release.
Godshall told analysts during a conference call that the correction letter was intended to remind customers about
"The main purpose of the action was to ensure that patients were 1st reminded of what they were trained on when they received the implant, simple things like always have 2 power sources, don’t walk around with 1 battery attached, don’t detach both batteries at the same time – the kind of behaviors that we’ve noticed have led to unfortunate outcomes for a few patients," Godshall said. "And also, given that as time goes on, we all know batteries will sometimes atrophy and we want to make sure its clear that patients understand how to identify a battery that needs to be taken out of service and not inadvertently sort of remove the wrong battery from their controller when that 1 is performing well and be able to identify the 1 that’s not."
Last month HeartWare issued a Class I recall after receiving 8 complaints of failed locking mechanisms in the HVAD’s patient driveline connectors, which connect the implanted circulatory assist device to an external controller that powers and monitors the device. No injuries or deaths related to the issue were reported.
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