Cardiovascular disease is the number one killer in the modern world. Approximately 14 million people in Europe currently suffer from heart failure, with more than 3.6 million new cases reported each year.
MicroMed produces a small heart assist pump known as the HeartAssist5. This tiny pump assists a heart that is not capable of adequate perfusion.
Read the MicroMed HeartAssistRemote™ Brochure
MicroMed has perfected the next generation of LVAD, or left ventricular assist device. The MicroMed HeartAssist5 LVAD has been launched in Europe. Approval of an FDA investigational device exemption bridge to transplant trial, known as an IDE BTT trial, is expected by MicroMed in the first half of 2012. The tiny HA5 implants above the diaphragm and includes “true flow” measurement and remote monitoring.
The public company MicroMed Cardiovascular was purchased by David Mackstaller and Rodger Ford in early 2008. The company then turned inward as a private company to develop and launch the MicroMed HeartAssist5 LVAD.
Background
MicroMed Cardiovascular Inc. (MMCV) was a pioneer in the accelerating field of mechanical circulatory support. MicroMed makes a powerful implantable electric pump—the DeBakey VAD—that increases the cardiac output of a patient with a failing left ventricle. The term VAD, or ventricular assist device, is shorthand for a pump that supports a heart.
The DeBakey VAD and its related technology were developed in an exclusive partnership with NASA. In 1998 the DeBakey VAD became the first device of its kind to be used in humans. Since then it has been implanted more than 485 times. This is exceeded only by Thoratec’s HeartMate II and HeartWare’s HVAD.
In April 2007, MicroMed had a market cap of approximately $175 million. But when several unanticipated circumstances converged, a “perfect storm” struck MicroMed and its stock fell to a market cap of 1 million over a six-month period.
In the calm before the storm, MicroMed had completed a redesign of two components of its Generation 3 DeBakey VAD, an improvement that could further propel it ahead of its competition. MicroMed was relying on its major shareholder, Absolute Capital Management, to support the rollout of the fully approved Generation 3 DeBakey VAD in Europe and the expansion of FDA trials in the United States. In early 2007 Absolute, a hedge fund, began to ignore funding requests from MicroMed.
As the sub-prime debacle gained momentum nationwide, hedge funds began to suffer. An internal dispute erupted within Absolute’s top management. Absolute’s chairman resigned and wrote a revealing letter to Barron’s. The financial magazine reported on the situation, and Absolute’s value immediately declined. Share prices plummeted 90 percent over a four-week period. The collapse of Absolute sealed the fate of MicroMed: Absolute was sinking and taking MicroMed with it.
Absolute Capital Shares: 28 – September 24, 2007
MicroMed Share Price: March 2007 – February 2008
Absolute’s Founder: Florian Homm
In desperation, Absolute considered wholesaling its small cap companies in a bundle. Before that strategy could be implemented, David Mackstaller and Rodger Ford acquired all of Absolute’s interests in MicroMed. Absolute’s collapse provided Mackstaller and Ford the opportunity to instantly acquire MicroMed without having to pay the cumulative price of time or money—more than $102 million.
The field of mechanical circulatory support, such as booster pumps for failing hearts or heart replacements in SynCardia’s case, is relatively new. More than 50 VADS were developed between 1980 and 2007. MicroMed’s DeBakey VAD promised to become the technology leader in small, implantable electric cardiac assist pumps.
Since 1998 there has been a flurry of activity as others raised hundreds of millions in an attempt to join the implantable VAD field. They all wanted a piece of the projected 2012 $3.5 billion worldwide market.
Predictably, the VAD industry is now in a phase of unforgiving consolidation. Most of the early entrants have fallen by the wayside, leaving only Thoratec, HeartWare and MicroMed in the VAD field and SynCardia with the only artificial heart. This market consolidation is at the heart of MicroMed’s opportunity. With funding from internal and external investors, MicroMed can expand its market share.
MicroMed is poised to secure a large share of the growing VAD market. The early successes achieved with VADs have accelerated their adoption. It is believed that VADs will soon be used earlier and more frequently as the standard of care for a class of heart failure patients.
The Modern MicroMed HA5 LVAD
When compared to all other full-flow LVADS, the HA5 is one of only two that implant above the diaphragm. True Flow Measurement makes remote monitoring possible. A feature comparion of the Thoratec Heart Mate II, the HeartWare HVAD and the MicroMed HeartAssist5 (HA5) clearly illustrates the features of each device and the overwhelming advantages of the HA5.
