Thoratec (NSDQ:THOR) said today that it’s replacing CEO Gary Burbach with his predecessor in the corner office, Keith Grossman, and issued preliminary 3rd-quarter guidance.
Grossman was Thoratec’s CEO from 1996-2006, when Burbach took over, and has had a seat on the board since then. He was president & CEO of Conceptus until it was acquired for $1.1 billion by Bayer in 2013.
"Based on his exceptional track record, extensive industry experience, and depth of insight into Thoratec, Keith is uniquely qualified for this position. In addition to his broad-ranging operational and strategic experience, Keith’s leadership skills and passion make him the ideal choice to lead Thoratec into the future, and we are confident that under Keith’s direction, we can drive long-term growth and profitability and create significant value for shareholders," chairman Neil Dimick said in prepared remarks. "I also want to acknowledge the board’s sincere appreciation for Gary Burbach’s many contributions to Thoratec over the past nearly 9 years, a period of time in which the company made significant progress in developing the market for mechanical circulatory support as well as the next generation of MCS technologies. Gary has earned tremendous respect through his leadership, business acumen, and professionalism, and we wish him all the best in his future endeavors."
Burbach, who’s slated to stay on in an advisory role through the 1st quarter of 2016, presided over several key milestones for Thoratec, according to Leerink Swann analyst Danielle Antalffy.
“Burbach helped make significant advances at THOR, bringing the company’s 2nd-generation HeartMate II to market and – most importantly – developing the nascent and potentially much-larger Destination Therapy (DT) market," Antalffy wrote this morning in a note to investors.
Investors are likely to look favorably on the move, she added, based on Grossman’s extensive knowledge of the company and his record as a turn-around artist.
"With his experience as CEO previously and member of the board since 2006, Grossman clearly has extensive knowledge about the [left ventricular assist device] market and THOR’s business specifically, which should facilitate a quick and seamless transition. Grossman also brings a strong track record of turning companies around – most notably as CEO of Conceptus in which he drove re-accelerating sales growth, eventually selling the company to Bayer for $1.1B at $31 per share, up from a ~$12 share price when he joined," Antalffy wrote.
"I am honored to have the opportunity to lead Thoratec again, and in such a critical time in the history of the company," Grossman said in a statement. "Thoratec has a strong history of success and leadership through product innovation and clinical differentiation, and I am excited to build upon that foundation. By combining our exciting product development pipeline with a focus on superior execution, I am confident that we can capitalize on the substantial remaining opportunity for growth in our core markets, advance our mission of serving patients and deliver the promise of value for our shareholders."
Thoratec said it expects to post sales of $102 million to $107 million during the 3rd quarter. The release of a new pocket controller is expected to result in an $11 million pre-tax charge for warranty expenses "depending primarily upon customer response, which was not contemplated in previous guidance."
THOR shares opened at $25.90, down a tick from its $26.10 close Sept. 19, but had rebounded 1.0% to $26.42 apiece as of about 9:40 a.m. Eastern today.
