The HeartMate II is about 40 percent smaller than its predecessor, MacKay points out, and is expected to last five years; more than twice as long as the older HeartMate XVE model.

"We estimate that DT approval for the superior HeartMate II will spur sales growth well beyond the current rate in the low-to-mid teens, albeit at a measured pace until the end of the decade," Mackay says.

He adds that he foresees the number of DT procedures ramping up from roughly 50 in 2003 to several thousand per year with HeartMate II, as THOR overcomes the obstacles that stand in the way of widespread use among the 25,000 to 30,000 Americans who are diagnosed with the most severe forms of heart failure each year.

Potential Negatives

MacKay says whether the $85,000 device constitutes a spending spree or money well spent is still not clear. Patients who need the heart pump clearly want it the company says, providing evidence that their quality of life is superior to taking pills. "I can rake leaves, mow the lawn and I feel wonderful," one HeartMate patient featured on THOR's website says.

A positive for reimbursement, MacKay says, is that third-party payers have accepted the commercial price of $84,000 for the pump, with most patients paying little out-of-pocket. In 2006, he notes, the Centers for Medicare and Medicaid Services (CMS) raised its reimbursement rate for DT by 5 percent to 10 percent, following a 30 percent hike in 2004, aligning Medicare payouts with the procedure's cost.

All Good News, Zable Says

Meanwhile, Zable of Natixis Bleichroeder, says his "hold" rating on THOR is "strictly based on valuation, not on fundamentals. "There's all good news here," Zable tells DOTmed.

For example, he says, "THOR has the smallest ventricular assist device on the market and is targeting a new population who might not have been able to be treated with previous products. For instance, women, or smaller people in general, or more sickly people." He adds he would expect some off-label use for DT before winning FDA approval.

Zable says he was most impressed that when he attended the 54th Annual American Society for Artificial Internal Organs conference last year, a premier world conference that promotes the development and application of artificial organs, "it was evident from speaking with clinicians that THOR is the market leader in the VAD space, being one of the select few companies with an approved device for Bridge to Transplant (BT) Therapy."

He adds that FDA's approval last spring of HeartMate II for BT therapy and its subsequent commercial launch has furthered the preeminence of THOR in this market. And because of the company's long history in the market and its breadth of products, THOR has relationships with every sizable VAD implanting center in the country, Zable says.

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