A New England Journal of Medicine report last year detailing sharp increases in the rate of blood clots helped take market share away from Thoratec (NSDQ:THOR) and its HeartMate II implantable heart pump, company officials said yesterday.
"We expected thrombus to create some headwind here in the first half of the year," CEO Gary Burbach told analysts during an earnings call yesterday. "So there was an impact there, in terms of market growth, but I’d describe it as relatively modest. And then similarly, with market share, we believe, as I mentioned, that both in the U.S. and outside the U.S., in Europe in particular, in our core direct markets, that we saw some impact in terms of some market share loss."
The NEJM report, based on data from 3 centers that implanted 895 HeartMate II LVADs in 837 patients from January 2004 through May 2013, found a total of 72 confirmed cases of pump thrombosis in 66 patients and another 36 cases of suspected pump thrombosis. The data showed a sharp spike in thrombosis rates in March 2011. The news sent THOR shares down 6.5% to a $39.37 close in abbreviated trading Nov. 29.
Yesterday Burbach said Thoratec expects the headwinds from the article to dissipate during the 2nd half of the year.
"We were expecting some impact, just given the reaction that occurred after the article came out. Certainly, I think some of the impact being more significant is how [high] profile it was. That it was a publication in the New England Journal, which is kind of at the very high end of the medical literature, and picked up by the New York Times and other high-profile media. So it got a tremendous amount of attention in that regard," he said. "So I think that distinguished it a bit and increases the difficulty of working through the process of recalibrating the clinical community. So it’s something that we are highly focused on, and we do continue to believe that as we work through the course of the year, that we’ll be able to moderate that impact."
Thoratec posted profits of $18.2 million, or 32¢ per share, on sales of $125.7 million for the 3 months ended March 29, for flat profit growth on a 6.8% sales increase. Adjusted to exclude 1-time items, earnings per share were 41¢, 2¢ ahead of analysts’ consensus forecast.
Thoratec also beat the consensus view for revenues of $122.7 million, and affirmed its guidance for the rest of the year, but investors still pushed share prices down 6.5% to $30.71 apiece as of about 12:50 p.m. today.
Thoratec said it still expects to report adjusted EPS of $1.72-$1.82 this year, on sales of $520 million to $535 million.