HeartWare takes another hit despite Q4, 2015 beats

HeartWare International (NSDQ:HTWR) shares took another hit today despite 4th-quarter results that topped expectations on Wall Street, as investors reacted to lower-than-expected sales volume overseas.

Fourth-quarter losses grew 1.1% to $-926,000, or -5¢ per share, for Framingham, Mass.-based HeartWare, which makes implantable heart pumps. Sales were off -7.0% to $68.1 million, compared with Q4 2014. Adjusted to exclude 1-time items, earnings per share were -53¢, a full 21¢ ahead of The Street, where analysts were looking for sales of $67.9 million.

Full-year losses surged 275.8% to -$72.8 million, or -$4.21 per share, compared with 2014. Sales were down -0.6% to $276.8 million, but adjusted EPS came in 13¢ ahead of the consensus forecast at -$2.89.

“We made substantial progress in expanding our commercial footprint in the past year, adding 55 new hospital centers globally. With a presence in 47 countries, and more than 300 commercial centers, we have an established network of customers from which to grow our business well into the future,” president & CEO Doug Godshall said in prepared remarks. “In 2015, we initiated enrollment in Lateral, our clinical trial to evaluate the thoracotomy implant technique, and we are working toward enrollment completion of this 145-patient study; we presented results from our first [destination therapy] clinical trial, Endurance, in which our HVAD system achieved the primary endpoint, and soon after, completed enrollment in our supplemental DT cohort, Endurance2, setting the stage for us to submit for the DT indication in mid-2016; we initiated the first human implants of the MVAD system; and we performed significant upgrades to our quality system.”

International sales were off -15.0% to $26.9 million for the 4th quarter and -9.5% for the full year, HeartWare said. Leerink Partners analysts said that could be taken as an indicator for the U.S. left ventricular assist device market after the HeartMate III device acquired by St. Jude Medical (NYSE:STJ) hits the market in mid to late 2017.

HeartWare’s program for its next-generation LVAD, the MVAD device, has been bedeviled by problems since late 2015. Last month the company said it can’t predict when it will be able to get its next-generation MVAD program back on line.

Today Godshall said the company will focus on “understanding and resolving the early clinical challenges” confronting the MVAD program.

“In 2016, our priorities include fortifying our HVAD system by working toward rollout of new, competitive enhancements and seeking an expanded DT indication; completing our remediation efforts related to the warning letter from FDA,” he said.

HTWR shares were down -7.7% to $29.93 apiece today in late-morning activity.

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