THORATEC TO PAY $429m FOR HEARTWARE; VENTRACOR IMPACT
March 12th 2009 22:14
Monday February 16, 2009
Daily news on ASX-listed biotechnology companies
* ASX DOWN, BIOTECH UP: HEARTWARE UP 56%, UNIVERSAL DOWN 25%
* THORATEC TO PAY $429m FOR HEARTWARE; VENTRACOR IMPACT
* BIOGUDE BRIEF: THORATEC-HEARTWARE DEAL HURTS VENTRACOR
* CELLESTIS’ RECORD H1 PROFIT UP 769% TO $2.9m; 1¢ DIVIDEND
* UNIVERSAL BIO: IMPROVED BLOOD GLUCOSE METER DELAYS LAUNCH
* MESOBLAST COLLABORATES WITH SINGAPORE’S PARKWAY
* BIOMÉRIEUX LICENCE PUSHES LABTECH TO $740k H1 PROFIT
* CIRCADIAN HAS $42m CASH
* BIOPHARMICA PRESENTS HLS5 TO LORNE CANCER CONFERENCE
* RESONANCE APPOINTS DR STEWART WASHER DIRECTOR, CHAIRMAN
* BIOMD 1-FOR-2 RIGHTS ISSUE TO RAISE $859k
* ADVANCED OCULAR LOSES VLADO BOSANAC BEFORE MERGER
* AUSBIOTECH’S BIOBEERS
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HEARTWARE, VENTRACOR
Thoratec Corp will acquire Heartware for $US282 million ($A429 million) half in cash and half in Thoratec common stock.
Heartware said the purchase reflected a price of $A1.32 per Heartware Chess Depositary Instrument which last traded on February 12, 2009 at 66.5 cents.
Heartware said Thoratec would provide a convertible loan facility of up to $US28 million ($A43 million) to fund ongoing operations until the close of the transaction, which is expected in the second half of 2009.
Both companies’ boards have approved the transaction, which is subject to Heartware shareholder approval and other conditions, including US regulatory clearance.
Heartware’s corporate development director Howard Leibman told Biotech Daily the regulatory review, primarily examining competition issues, “could take some months”.
Mr Leibman said that the deal was based on Thoratec’s share price and changes in Thoratec’s price as well as the US-Australia exchange rate would affect the return to Heartware investors.
Mr Leibman said the 1500 Australian retail investors in Heartware would have about six months to decide whether to retain exposure to potential upside in Thoratec shares.
“Those who don’t want exposure to US stock can sell on the ASX,” Mr Leibman said.
Mr Leibman did not say how long Thoratec and Heartware had been involved in making the deal, but said once the decision was made “it came together very quickly”.
“Something like this takes a couple of months to put together,” Mr Leibman said.
“There had been friendly overtures for some time, but it all came together very quickly.”
Mr Leibman said that once the deal was completed, Heartware would retain a presence in Australia. The company is continuing clinical trials in Australian hospitals.
Thoratec’s president and chief executive officer Gary Burbach said the transaction was “a positive development for heart failure patients and the clinicians who treat them by combining Thoratec’s portfolio of commercially approved devices with Heartware’s innovative technologies”.
“The use of mechanical circulatory support for the treatment of heart failure is gaining increasing adoption as a result of the positive patient outcomes and clinician enthusiasm realized with the Heartmate II,” Mr Burbach said.
Heartware’s chief executive officer Doug Godshall said the deal was “a positive outcome for our stockholders, our employees and heart failure patients”.
Mr Burbach said the product pipeline and organizational capabilities of Thoratec and Heartware were “highly complementary” and the combination would “enable new, life-saving technologies to market more quickly and at a greater scale”.
“Thoratec already has clinical, regulatory and market development teams with a proven track record of developing devices, achieving regulatory approvals and realizing commercial success,” he said.
Ventracor chief executive officer Peter Crosby said the acquisition was unlikely to have a negative impact on his company’s efforts to raise funds.
“Some would argue it makes us more valuable because of the price they paid for Heartware,” Mr Crosby said.
He said Thoratec needed a pipeline of products, not another device earning revenue.
”What they need is a long-term pipeline. They want something for four years away,” Mr Crosby said.
He said he was unable to say what impact the deal might have on Ventracor and his attempts to find funds to continue the company’s trials or sell the assets to another party.
Heartware reached $1.10 before closing up 37 cents or 55.6 percent at $1.035.
Ventracor was in a voluntary suspension and last traded at 8.3 cents.
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