International markets were good to HeartWare International Inc. (NSDQ:HTWR) during the fourth quarter and full-year 2010, as the company posted large top-line increases, but the heart pump maker’s bottom-line gap widened as it spent to shepherd one device through the Food & Drug Administration and prepped another for animal studies.
The Framingham, Mass.-based device maker posted losses of $7.0 million, or 51 cents per share, on sales of $20.9 million during the three months ended Dec. 31. That’s a revenue increase of 70.9 percent but a net loss increase of 200 percent.
For the full year, HeartWare reported losses of $29.4 million, or $2.17 per share, on sales of $55.2 million, up 128.2 percent, 40.6 percent and 0.9 percent, respectively, compared with $20.9 million, or $2.15 per share, in losses on sales of $24.2 million.
President and CEO Doug Godshall cited increasing demand throughout the year for the top-line positives, noting in prepared remarks that "international markets accounted for approximately 69 percent of our revenues for the quarter."
"In the U.S., the rate of implant procedures remained variable, as hospital sites went through the re-initiation process to participate in the second allotment of 54 patients granted by the FDA in September under the continued access protocol for our bridge-to-transplant clinical study,” Godshall said. “In our 450-patient destination therapy study, we now have 30 of the planned 50 U.S. sites approved for implantation, and 78 patients have been randomized and enrolled in the study to date.”
Those trials were the main drivers of the profit gap during both Q4 and the full year. Fourth-quarter research & development costs jumped 127.2 percent to $11.5 million, with total operating expenses up 93.3 percent to $18.9 million. HeartWare’s full-year R&D spend rose 119.7 percent to $33.1 million, fueling an operating expenses surge to $59.8 million, up 89.6 percent.
HeartWare is developing a series of small, implantable pumps called ventricular assist devices that are designed either to provide a temporary “bridge” for heart transplant patients with end-stage heart failure or as a so-called "destination therapy" for patients who can’t get a heart transplant.
“Today, nearly 900 advanced heart failure patients globally have received the HVAD pump,” Godshall noted, adding that the company is focused on winning pre-market approval from the FDA for a bridge-to-transplant indication, expanding its destination therapy trial to a full 50 sites and readying its next-generation miniature VAD for animal studies that are "expected to commence this quarter.”
HTWR shares started the day down about 3.2 percent, to around $84.15, before rebounding slightly to $85.88 in early-morning trading.