HeartWare International Inc. is wasting little time shoring up its finances, disclosing a $4 million from Thoratec Corp., its one-time merger partner.
The Aug. 5 loan comes after the Framingham, Mass.-based heart pump maker and Thoratec calling off their proposed merger late last month, after running afoul of federal regulators concerned about possible anti-trust issues. As part of the merger pact, Thoratec said it would lend HeartWare up to $28 million to help fund operations until the deal closed.
That agreement, after being pared down to $20 million in available funding, survived the now-terminated merger. The loan arrives at a critical time for HeartWare, which began sales of its implantable heart pumps in Europe earlier this year while continuing trials of the device in the United States.
New financial data shows just how close to the edge HeartWare has gone. The company reported a $6.9 million net loss during the three months ended June 30, on about $3 million in sales. Overall, it racked up more than $90 million in accumulated losses in bringing the Ventricular Assist System to market and ended its latest quarter with only $5.9 million in cash and equivalents on hand.
Last week, HeartWare said a group of existing and new investors purchased over $24 million in stock through a private placement set to close Friday. HeartWare also secured commitments from those investors to purchase up to $35 million in additional stock, contingent on shareholders voting to allow the firm to issue 1.4 million new shares.
HeartWare officials said they expect proceeds from the private placement and money available through the Thoratec loan facility will be sufficient to support its operations through the end of 2010.
In addition to the Ventricular Assist System, HeartWare is working on a miniaturized ventricular assist device now being tested on animals. Like the company’s current product, the new device works to push blood from the heart through the body but uses an impeller rather than relying on centrifugal flow and is nearly one-third the size — creating the potential for implantation using significantly less invasive procedures.