HeartWare International (NSDQ:HTWR) said it expects to report 4th-quarter revenues of roughly $53 million, missing the consensus view on Wall Street of $58 million and sending its share price down sharply in pre-market trading.
HTWR shares were down 8.5% to $94.46 today in pre-market trading as of about 9:15 a.m. The news was a slight boon for rival Thoratec‘s (NSDQ:THOR) stock; THOR shares were up 0.9% to $38.18 apiece as of about 9:40 a.m.
HeartWare predicted sales for 2013, the 1st full year its left ventricular assist device has been on the U.S. market, of $208 million. The Framingham, Mass.-based company won premarket approval from the FDA for a bridge-to-transplant indication for its LVAD in November 2012.
"Our full-year revenue growth of 87% for 2013 above 2012 reflects the first complete year of commercialization of the HeartWare ventricular assist system in the U.S. and represents the strong market penetration we have experienced to date," president & CEO Doug Godshall said in prepared remarks. "Fourth-quarter 2013 revenues were derived roughly evenly between domestic and international sales, with October and December being notably stronger than November in the U.S."
Leerink Partners analyst Danielle Antalffy said the results could mean a softer market for LVAD devices like HeartWare’s and Thoratec’s HeartMate II pump.
"We’re inclined to believe the miss is a mix of both HTWR-specific issues and broader market weakness versus expectations. While we believe HTWR’s explanation that soft patient volumes in November combined with lost sales over confusion stemming from CMS’ NCD and requirements for private-pay patients, we also believe that – without the final data point from THOR [outperform] – Street expectations for LVAD volume growth may have been too lofty, coming in modestly higher than our projection," Antalffy wrote in a note to investors yesterday. "Despite the 4Q13 miss, we continue to view the long-term LVAD market as attractive – with HTWR well positioned – and continue to like HTWR heading into a catalyst-rich 2014."
The November slump was likely driven by confusion among heart surgeons about a national coverage decision finalized by the Centers for Medicare & Medicaid Services Oct. 30 that called reimbursement into question. On the other hand, HeartWare likely gained from a report in the New England Journal of Medicine detailing increased blood clot rates in patients implanted with its HeartMate II device. (Yesterday Thoratec president & CEO Gary Burbach told an audience at the J.P. Morgan Healthcare conference that the study failed to capture the full picture because it only reported data from 3 centers).
