Thoratec (Pleasanton, Caifornia) shares took as much as a 20% trouncing at one point yesterday after the company reported Friday that it had issued a notice to hospitals following 27 reports concerning wear and tear to its HeartMate II Left Ventricular Assist System (LVAD) for end-stage heart failure.

According to the company, wear and tear to the percutaneous lead connecting the HeartMate blood pump with the system controller can interrupt pump function, and in the reported cases lead to the need for pump replacement. Thus, Thoratec issued an Urgent Medical Device Correction notice. In five cases replacement wasn't an option and those patients died.

That notice went out to hospitals and identified the probability and symptoms of the problem, and recommended that the pump be replaced as soon as possible if damage to the percutaneous lead is confirmed. Hospitals were also requested to review the instructions for care of the percutaneous lead with their ongoing HeartMate II LVAS patients.

The company held a conference call yesterday to discuss concerns from the Friday announcement and to possibly put out any fires.

"This notice was a safety advisory only – and I want to be clear about what this correction notice does not involve," Gerhard Burbach President/CEO of Thoratec said during the conference call. "First there's no impact on product shipement activities and we're continuing to provide Heartmate IIs to customers. We're not asking for the devices to be returned; there's no underlying manufacturing defects and we don't expect to experience any material financial impact."

These reports occurred throughout five years of clinical experience with 1,972 implants. All patients who have undergone a replacement of the HeartMate II pump survived the operation and were alive at least 30 days postoperatively. The affected systems were distributed to 153 hospitals and distributors throughout the United States, Europe, Canada and other countries.

The device was given FDA approval earlier this year (Medical Device Daily, April 21, 2008). Prior to approval Thoratec won an approvable recommendation with conditions from the circulatory systems advisory panel of the FDA late last year for its HeartMate II (MDD, Dec. 4, 2007).

Questions concerning the mode of failure in LVD's popped up in Monday's conference call. A caller pointed out that pulsatile pumps have had a mode of failure for LVD since the 1980s and that this recent release isn't anything new in the clinical setting.

"I guess the fundamental question to start with is why are we seeing this press release now," the caller asked. "Why the necessity for it and what does it suggest for the durability of the Heart Mate II?"

Burbach responded saying that he wanted to have as much "open communication" and "transparency" as possible and the device would still be offered to customers.

Thoratec declined to provide any details about the patients who died or their use of the heart pump. The device includes an electrical cable to power the blood pump which passes through the patient's skin to an external controller that the patient wears on his or her waist. The controller is powered either by batteries or connected to an electrical power outlet. Blood flow is set through the pump based on the patient's need, and the controller monitors pump performance, sounding alarms if it detects dangerous conditions or a possible malfunction.

The system can operate on two external batteries, allowing the patient to move freely for up to three hours.

With a price tag of $80,000 HeartMate is covered for virtually all payers, public or private. For Medicare, implantation of VADs has been covered since the late-1990s under a National Coverage Determination for VADs used as BTT.

Other companies developing similar devices include Ventracor (Chatswood, Australia) and Abiomed (Danvers, Massachusetts). Analysts said the U.S. market for these products and Thoratec's pump is $3 billion.

The company has been on a financial roll as of late. In August the company reported that it had significantly higher revenues in for the quarter ending on June 28, 2008. Those figures were $82.6 million vs. the $57.3 million in 2Q07 (MDD, Aug. 11, 2008). But yesterday's news temporarily halted the company's momentum. Thoratec's shares were down 15% to $21.17 in mid-morning trading on Nasdaq. Earlier they fell as low as $20.18. By the markets close shares were at $21.68.